Progressive Insurance has reported 5 percent increases in both net premiums written and earned in May 2010 compared with May 2009, but net income dropped by 19 percent in May 2010 compared with the same month in the previous year.
Catastrophe losses primarily from storm activity in Oklahoma, Nebraska, Wyoming and Texas, contributed in part to the company’s performance in May. Progressive experienced $26.6 million in catastrophe losses last month, or 2.4 combined ratio points, a significant increase over the $4.4 million, or 0.4 points, reported for the same month in 2009.
In a financial report for May 2010 released by the company on June 15, Progressive reported net premiums written year-to-date of nearly $6.4 billion and net premiums earned of just under $6 billion. Its combined ratio year-to-date is 91.7. For the month of May, Progressive’s combined ratio came in at 95.6.
In a letter to shareholders describing the company’s performance in the first quarter of this year, President and Chief Executive Officer Glenn M. Renwick said the “momentum building through 2009, notably in our Agency Business, has carried through well so far in 2010.” He also noted that direct auto business “remains a strong source of growth, especially in Internet sales.”
Premium growth of 7 percent in the first quarter of 2010 was the best the company has seen over the last 19 quarters, Renwick said. The combined ratio for the first quarter was just under 91.
Renwick said the company is undertaking a “multi-year focus on retaining customers,” the goal of which is “to increase the average policy life of auto customers by a specified fixed amount per year for the next several years.”
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