Progressive Returns to Positive Net Income in Q2

Second quarter net income at Progressive Corp. was $345.4 million, reversing a loss of nearly $543 million during the same quarter in 2022, as net income in June was about $41 million compared to a loss of nearly $437 million in June 2022.

In releasing June and quarterly results, Progressive said a regularly scheduled reserve review in its personal auto products accounted for most of its unfavorable prior accident year reserve development of $137.8 million in June.

Mayfield Village, Ohio-based Progressive said prior and current accident year increases were due primarily to higher severity on previously closed claims. Unfavorable adjustments in commercial auto products were predominantly in Progressive’s transportation network company business, the company said.

However, the combined ratio for Q2 increased 4.8 points to a near break-even 100.4. During the month of June, Progressive said it absorbed catastrophe losses related to severe weather throughout the U.S. The combined ratio for its property business was 157.3, Progressive reported. The results signaled trouble to investors and sent shares of Progressive falling, reported Bloomberg.

Progressive has said its goal is a combined ratio of 96 for 2023. The insurer’s combined ratio was 99 in May.

Compared to the prior year periods, net premiums written were up 11% in June to about $4.32 billion, and up 18% for Q2 to about $14.72 billion. Total NPW growth in personal lines was 15% to $3.37 billion.

Year-to-date 2023 results show net income of about $793 million compared to a net loss of $229 million a year ago.