Progressive(PGR) - 2025 Q2 - Quarterly Results

Financial Highlights Progressive reported robust financial performance in June and Q2 2025, marked by significant net income growth and increased policies in force across all business lines June and Q2 2025 Performance Summary Progressive reported significant growth for June and the second quarter of 2025, with net income surging 40% in June and 118% for the quarter year-over-year, driven by strong premium growth and a 15% increase in companywide policies in force Key Financial Metrics (June & Q2 2025 vs 2024) | (millions, except per share amounts and ratios) | June 2025 | June 2024 | Change | Quarter 2025 | Quarter 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net premiums written | $6,605 | $5,749 | 15% | $20,076 | $17,902 | 12% | | Net premiums earned | $6,954 | $5,777 | 20% | $20,310 | $17,209 | 18% | | Net income | $1,124 | $803 | 40% | $3,175 | $1,459 | 118% | | Per share available to common shareholders | $1.91 | $1.37 | 40% | $5.40 | $2.48 | 118% | | Combined ratio | 86.6 | 86.2 | 0.4 pts | 86.2 | 91.9 | (5.7) pts | Policies in Force (as of June 30) | (thousands) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Personal Lines | | | | | Agency – auto | 10,423 | 8,965 | 16% | | Direct – auto | 15,245 | 12,576 | 21% | | Total Personal Lines | 36,126 | 31,192 | 16% | | Commercial Lines | 1,189 | 1,118 | 6% | | Companywide | 37,315 | 32,310 | 15% | Financial Statements This section details Progressive's comprehensive income statements for June and year-to-date periods, along with earnings per share and investment portfolio performance Monthly Comprehensive Income Statement (June 2025) For the month of June 2025, Progressive generated total revenues of $7.58 billion, resulting in a net income of $1.12 billion, supported by $6.95 billion in net premiums earned and $179 million in net realized gains on securities, leading to a total comprehensive income of $1.58 billion Income Statement - June 2025 (in millions) | | Amount | | :--- | :--- | | Revenues: | | | Net premiums earned | $6,954 | | Investment income | $295 | | Total net realized gains on securities | $179 | | Total revenues | $7,575 | | Expenses: | | | Losses and loss adjustment expenses | $4,689 | | Total expenses | $6,199 | | Income before income taxes | $1,376 | | Net income | $1,124 | | Total comprehensive income | $1,578 | - The provision for income taxes included a tax benefit of $45 million, primarily related to the distribution of deferred compensation[4] Year-to-Date Comprehensive Income Statement (as of June 30, 2025) For the six months ended June 30, 2025, Progressive's net income increased significantly to $5.74 billion from $3.79 billion in the prior year period, driven by a 19% rise in net premiums earned to $39.72 billion, with total comprehensive income reaching $7.07 billion Year-to-Date Income Statement (in millions) | | 2025 | 2024 | | :--- | :--- | :--- | | Net premiums written | $42,282 | $36,864 | | Revenues: | | | | Net premiums earned | $39,719 | $33,358 | | Investment income | $1,685 | $1,303 | | Total revenues | $42,413 | $35,377 | | Expenses: | | | | Losses and loss adjustment expenses | $26,409 | $23,567 | | Total expenses | $35,195 | $30,577 | | Income before income taxes | $7,218 | $4,800 | | Net income | $5,742 | $3,790 | | Total comprehensive income | $7,070 | $3,690 | Earnings Per Share & Investment Results For June 2025, diluted earnings per share (EPS) was $1.91, with year-to-date diluted EPS reaching $9.77, while the investment portfolio generated a total return of 1.2% for the month and 4.3% year-to-date Per Share Results | | June 2025 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | | Net income available to common shareholders | $1,124M | $5,742M | $3,773M | | Diluted EPS | $1.91 | $9.77 | $6.42 | | Comprehensive income attributable to common shareholders | $1,578M | $7,070M | $3,673M | | Diluted Comprehensive EPS | $2.68 | $12.03 | $6.25 | Investment Results (FTE Total Return) | | June 2025 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | | Fixed-income securities | 1.0% | 4.3% | 1.2% | | Common stocks | 4.9% | 5.3% | 13.8% | | Total portfolio | 1.2% | 4.3% | 1.7% | Supplemental Information (Segment Performance) This section provides detailed segment-level performance, highlighting net premiums written growth and combined ratios for Personal Lines, Commercial Lines, and companywide operations Monthly Segment Performance (June 2025) In June 2025, the Personal Lines business saw strong net premium written growth of 17%, driven by a 22% increase in the Direct channel, with the Property business reporting the lowest combined ratio at 75.1, contributing to a companywide combined ratio of 86.6 Segment Performance - June 2025 | Segment | Net Premiums Written Growth | Combined Ratio | | :--- | :--- | :--- | | Personal Lines | | | | Agency Vehicles | 13% | 86.4 | | Direct Vehicles | 22% | 88.7 | | Property | 6% | 75.1 | | Total Personal Lines | 17% | 87.2 | | Commercial Lines | 2% | 83.0 | | Companywide Total | 15% | 86.6 | - Net catastrophe losses for the month were 3.2% of net premiums earned, with nearly half related to severe weather in Texas[10] Year-to-Date Segment Performance (as of June 30, 2025) Year-to-date, companywide net premiums written grew 15%, led by the Personal Lines Direct channel with 22% growth, while the Agency vehicle business was the most profitable segment with a combined ratio of 83.2, despite the Property segment being significantly impacted by catastrophes Segment Performance - Year-to-Date 2025 | Segment | Net Premiums Written Growth | Combined Ratio | | :--- | :--- | :--- | | Personal Lines | | | | Agency Vehicles | 14% | 83.2 | | Direct Vehicles | 22% | 88.0 | | Property | 1% | 85.4 | | Total Personal Lines | 18% | 85.9 | | Commercial Lines | 1% | 87.1 | | Companywide Total | 15% | 86.1 | - Total favorable development on prior accident years' loss reserves was $607 million for the first six months of 2025[12] Balance Sheet and Key Metrics This section presents Progressive's condensed balance sheet as of June 30, 2025, along with key financial metrics such as book value per share and return on equity Condensed Balance Sheet and Key Metrics (as of June 30, 2025) As of June 30, 2025, Progressive held total assets of $115.5 billion and total shareholders' equity of $32.6 billion, maintaining a strong financial position with a debt-to-total capital ratio of 17.5%, a book value per common share of $55.62, and a trailing 12-month return on average common shareholders' equity of 37.7% Condensed Balance Sheet (in millions) | | June 30, 2025 | | :--- | :--- | | Assets | | | Total investments | $88,610 | | Total assets | $115,480 | | Liabilities & Equity | | | Loss and loss adjustment expense reserves | $41,154 | | Total liabilities | $82,876 | | Shareholders' equity | $32,604 | | Total liabilities and shareholders' equity | $115,480 | Key Financial Metrics | Metric | Value | | :--- | :--- | | Book value per common share | $55.62 | | Trailing 12-month ROE (Net Income) | 37.7% | | Debt-to-total capital ratio | 17.5% | | Fixed-income portfolio duration | 3.4 years | | Weighted average credit quality | AA- | - The company repurchased 14,367 common shares in June 2025 at an average cost of $272.33 per share[14] Company Commentary and Events This section provides management commentary on specific financial reporting nuances and outlines key upcoming investor relations events Commentary and Events The company noted that the June net premiums written growth rate was inflated by 2-3% due to a monthly closing process nuance, which did not affect the quarterly growth rate, and has scheduled its Q2 2025 investor conference call for August 5, 2025, with July results planned for release on August 20, 2025 - The companywide net premiums written growth rate for June is higher by about 2-3% due to a nuance with the monthly closing process where May 31 was reported in June 2025, though the second quarter 2025 growth rate was unaffected[15] - Upcoming Events: - Q2 2025 Investor Relations Conference Call: Tuesday, August 5, 2025, at 9:30 a.m. ET - Form 10-Q Filing: Monday, August 4, 2025 - July 2025 Results Release: Wednesday, August 20, 2025[16][17] Forward-Looking Statements and Risk Factors This section includes a Safe Harbor statement, emphasizing that forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially Risk Factors The report includes a Safe Harbor statement cautioning investors that forward-looking statements are not guarantees of future performance and are subject to various risks and uncertainties, including the ability to price risks and set loss reserves accurately, the impact of catastrophes and climate change, competition, regulatory changes, and the performance of investment portfolios - The report contains forward-looking statements that are subject to risks and uncertainties which could cause actual results to differ materially from projections[21] - Key risk factors include, but are not limited to: - Ability to underwrite and price risks accurately - Impact of severe weather, catastrophe events, and climate change - Effectiveness of reinsurance programs - Highly competitive nature of property-casualty insurance markets - Performance of fixed-income and equity investment portfolios - Compliance with complex and changing laws and regulations[24]