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Progressive Q4 combined ratio falls to 88.4%

Driving Cadillac Mountain

Progressive recorded a four-point improvement in its combined ratio during the fourth quarter of 2020, as net premiums written by the carrier dipped slightly to $9.5bn.

The Ohio-based carrier reported a combined ratio of 88.4%, while net income for the period rose by 57% to $1.7bn, or $2.85 per share.

Within the insurer’s disclosure for the month of December, it reported a 53% increase in net income, which surged to $706mn, and a 16% decline in the volume of net premiums written.

Progressive’s combined ratio during December also improved by 4.2 points year on year to 85.2%.

Within its monthly breakdown of premiums written, there was a near-10% rise in the volume of policies in force across all lines of business.

Direct auto and property were the two business segments that recorded the largest year-over-year (YoY) rise in policies in force, which stood at 13%.

The number of personal lines policies in force during December rose by 10%, YoY, while total commercial lines policies in force increased by 9%.

Progressive noted also in its Q4 results disclosure that underwriting activity figures for December and for the quarter included one fewer week of vehicle underwriting activity, compared with 2019.

The carrier reports its results as investors await further information on the impact of Covid-19 on the auto insurance market.

Earlier this month, the National Highway Traffic Safety Administration (NHTSA) reported that traffic deaths in the third quarter of 2020 jumped by 13.1% YoY, as drivers returned to the road.

Traffic deaths and car usage plummeted earlier during 2020, and auto insurers returned millions of dollars of premiums as drivers stayed off the road in response to coronavirus lockdowns.

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