Progressive's Q4 Earnings, Revenues Beat on Higher Premiums

Core Insights - The Progressive Corporation reported a fourth-quarter 2024 earnings per share of $4.08, exceeding the Zacks Consensus Estimate by 19% and reflecting a year-over-year increase of 37.8% [1] - Operating revenues for the quarter rose 20.3% year over year to $20.3 billion, surpassing the consensus estimate by 2.5% [2] Financial Performance - Net premiums written reached $18.1 billion, a 20% increase from $15.1 billion in the previous year [3] - Net premiums earned grew 21% to $19.1 billion, exceeding the Zacks Consensus Estimate of $18.7 billion [3] - The combined ratio improved by 80 basis points to 87.9% compared to the prior-year quarter [3] Full-Year Highlights - For the full year, operating revenues increased 21.6% to $75.1 billion, driven by a 20.7% rise in net premiums earned and a 49.7% increase in net investment income [4] - Total expenses rose 13% to $64.7 billion, influenced by higher losses, policy acquisition costs, and underwriting expenses [4] - The combined ratio improved by 610 basis points to 88.8% for the full year [4] Policy Growth - Policies in force in the Personal Lines segment increased 18% year over year to 33.8 million [5] - The Direct Auto segment saw a 25% increase to 14 million policies, while Agency Auto increased 17% to 9.8 million [5] - The Commercial Auto segment rose 4% year over year to 1.1 million policies [5] Financial Metrics - Progressive's book value per share was $43.67 as of December 30, 2024, a 29.2% increase from $33.80 a year earlier [6] - Return on equity improved to 36.4% from 30% in the previous year [6] - The total debt-to-total capital ratio improved by 420 basis points to 21.2% [6]