Progressive(PGR) - 2025 Q1 - Quarterly Report

Financial Performance - Net premiums earned increased to $19,409 million in Q1 2025 from$ 16,149 million in Q1 2024, representing a growth of 14%[7] - Total revenues rose to $20,409 million in Q1 2025, up from$ 17,243 million in Q1 2024, marking an increase of 13%[7] - Net income for Q1 2025 was $2,567 million, compared to$ 2,331 million in Q1 2024, reflecting a growth of 10%[7] - The company reported a comprehensive income of $3,466 million in Q1 2025, significantly higher than$ 2,123 million in Q1 2024, an increase of 63%[7] - Total underwriting revenue for the first quarter of 2025 was $19,696 million, an increase from$ 16,385 million in the same period of 2024, driven by net premiums earned of $19,409 million[76] Assets and Liabilities - Total assets as of March 31, 2025, were$ 111,409 million, up from $105,745 million at the end of 2024, indicating a growth of 5%[9] - Total liabilities increased to$ 82,455 million as of March 31, 2025, compared to $80,154 million at the end of 2024, a rise of 3%[9] - Cash, cash equivalents, and restricted cash increased to$ 207 million as of March 31, 2025, from $168 million at the end of Q1 2024, a rise of 23%[14] - The total investment portfolio increased from$ 69.038 billion in Q1 2024 to $83.664 billion in Q1 2025, an increase of 21.2%[21] - Total available-for-sale securities fair value was$ 79.696 billion as of March 31, 2025, compared to $64.957 billion as of March 31, 2024, representing a growth of 22.7%[20] Investment Performance - The company reported net investment income of$ 807 million for the three months ended March 31, 2025, representing a 32% increase year-over-year compared to $612 million in the same period of 2024[35] - The total fixed maturities fair value was$ 77.101 billion as of March 31, 2025, compared to $63.630 billion as of March 31, 2024, reflecting a rise of 21.1%[25] - The fair value of U.S. government obligations rose from$ 38.563 billion in Q1 2024 to $44.318 billion in Q1 2025, an increase of 14.5%[20] - The fixed-income portfolio's total return increased to 2.2% in Q1 2025, compared to 0.8% in Q1 2024[188] - The duration of the fixed-income portfolio was 3.4 years as of March 31, 2025, within the acceptable range of 1.5 to 5.0 years[202] Capital and Dividends - Total capital at March 31, 2025, was$ 35.8 billion, an increase of $3.4 billion from year-end 2024[94] - The company declared cash dividends of$ 0.10 per common share in both Q1 2025 and Q1 2024, maintaining dividend consistency[11] - The debt-to-total capital ratio improved to 19.2% at March 31, 2025, down from 24.0% a year earlier[121] - The total carrying value of debt was $6,894 million as of March 31, 2025, compared to$ 6,890 million as of March 31, 2024[63] - The company had no borrowings under its $300 million line of credit during the periods presented[64] Underwriting and Claims - The total losses and loss adjustment expenses for Q1 2025 were$ 12,804 million, compared to $10,972 million in Q1 2024, indicating an increase in claims costs[76] - The combined ratio for Personal Lines improved to 85.7% in Q1 2025 from 85.0% in Q1 2024, while the Commercial Lines combined ratio increased to 87.5% from 91.8%[77] - The underwriting profit margin for Q1 2025 was 14.0%, slightly up from 13.9% in Q1 2024[95] - The company experienced$ 70 million of unfavorable development in its Commercial Lines business, primarily due to higher than anticipated severity in commercial auto for California and New York[70] - Catastrophe losses incurred in Q1 2025 totaled $459 million, with Texas accounting for nearly 40% of these losses[145] Market Trends and Strategy - The company expects near double-digit rate increases for personal property and core commercial auto products through the remainder of 2025[90] - The company plans to continue focusing on insuring lower-risk properties and exiting non-owner-occupied home markets throughout 2025[102] - New personal auto applications increased by 32% in Q1 2025 compared to the same period last year[100] - The personal auto policy life expectancy decreased by 5% year-over-year for Q1 2025, indicating increased shopping and competitiveness in the marketplace[110] - The company plans to non-renew up to 115,000 property policies in Florida, with completion expected by the end of Q2 2025[182]