Exhibit 99
|
NEWS RELEASE |
| The Progressive Corporation | Company Contact: | |
| 6300 Wilson Mills Road | Patrick Brennan | |
| Mayfield Village, Ohio 44143 | (440) 395-2370 | |
|
http://www.progressive.com
|
PROGRESSIVE REPORTS AUGUST RESULTS
MAYFIELD VILLAGE, OHIO — September 10, 2009 — The Progressive Corporation today reported the following results for August 2009:
| (in thousands) |
August
2009 |
August
2008 |
Change | ||||
| Policies in Force: | |||||||
|
Agency – Auto |
4,293.9 | 4,347.4 | (1 | )% | |||
|
Direct – Auto |
3,065.8 | 2,736.0 | 12 | % | |||
|
Total Personal Auto |
7,359.7 | 7,083.4 | 4 | % | |||
|
Total Special Lines |
3,493.2 | 3,401.7 | 3 | % | |||
|
Total Personal Lines |
10,852.9 | 10,485.1 | 4 | % | |||
|
Total Commercial Auto |
526.6 | 554.9 | (5 | )% | |||
Progressive offers insurance to personal and commercial auto drivers throughout the United States. Our Personal Lines business writes insurance for private passenger automobiles and recreational vehicles. Our Commercial Auto business writes primary liability, physical damage, and other auto-related insurance for automobiles and trucks owned by small businesses.
See the “Income Statements” and “Supplemental Information” for further month and year-to-date information.
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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENT
August 2009
(millions – except per share amounts)
(unaudited)
| 1 |
For a description of our reporting and accounting policies, see Note 1 to our 2008 audited consolidated financial statements included in our 2008 Shareholders’ Report, which can be found at www.progressive.com/annualreport . |
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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENTS
August 2009 Year-to-Date
(millions – except per share amounts)
(unaudited)
- 3 -
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENT – OTHER INFORMATION
August 2009
(millions – except per share amounts)
(unaudited)
The following table sets forth the comprehensive income (loss) for the period:
|
Current
Month |
Year-to-Date | |||||||||||
| 2009 | 2008 | |||||||||||
|
Net income |
$ | 55.0 | $ | 652.5 | $ | 401.5 | ||||||
|
After-tax changes in (excluding cumulative effect adjustment 1 ): |
||||||||||||
|
Net unrealized gains (losses) on securities |
87.6 | 473.7 | ||||||||||
|
Portion of OTI losses recognized in other comprehensive income |
0 | (15.5 | ) | |||||||||
|
Total net unrealized gains (losses) on securities |
87.6 | 458.2 | (500.4 | ) | ||||||||
|
Net unrealized gains on forecasted transactions |
(.2 | ) | (1.6 | ) | (2.0 | ) | ||||||
|
Comprehensive income (loss) |
$ | 142.4 | $ | 1,109.1 | $ | (100.9 | ) | |||||
|
Per share |
$ | .21 | $ | 1.65 | $ | (.15 | ) | |||||
|
|
| 1 |
In June 2009, we recorded a $189.6 million ($291.8 million pretax) cumulative effect of change in accounting principle in accordance with the new accounting guidance for other-than-temporary impairments we adopted during the second quarter 2009. |
The following table sets forth the investment results for the period:
|
Current
Month |
Year-to-Date | ||||||||
| 2009 | 2008 | ||||||||
|
Fully taxable equivalent total return: |
|||||||||
|
Fixed-income securities |
1.2 | % | 8.0 | % | (2.9 | )% | |||
|
Common stocks |
3.6 | % | 16.6 | % | (10.7 | )% | |||
|
Total portfolio |
1.3 | % | 7.9 | % | (4.2 | )% | |||
|
Pretax recurring investment book yield |
3.4 | % | 3.8 | % | 4.7 | % | |||
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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
August 2009
($ in millions)
(unaudited)
|
Current Month |
|||||||||||||||||||||||
| Personal Lines Business |
Commercial
Auto |
Other
Businesses 1 |
Companywide
Total |
||||||||||||||||||||
| Agency | Direct | Total | Business | ||||||||||||||||||||
|
Net Premiums Written |
$ | 609.4 | $ | 427.6 | $ | 1,037.0 | $ | 112.0 | $ | .3 | $ | 1,149.3 | |||||||||||
|
% Growth in NPW |
2 | % | 12 | % | 6 | % | (10 | )% | NM | 4 | % | ||||||||||||
|
Net Premiums Earned |
$ | 558.8 | $ | 376.1 | $ | 934.9 | $ | 121.4 | $ | 1.8 | $ | 1,058.1 | |||||||||||
|
% Growth in NPE |
(1 | )% | 8 | % | 2 | % | (10 | )% | NM | 1 | % | ||||||||||||
| GAAP Ratios | |||||||||||||||||||||||
|
Loss/LAE ratio |
74.2 | 72.9 | 73.7 | 72.9 | NM | 73.5 | |||||||||||||||||
|
Expense ratio |
21.8 | 22.5 | 22.1 | 21.4 | NM | 22.0 | |||||||||||||||||
|
Combined ratio |
96.0 | 95.4 | 95.8 | 94.3 | NM | 95.5 | |||||||||||||||||
|
Actuarial Adjustments 2 |
|||||||||||||||||||||||
|
Reserve Decrease/(Increase) |
|||||||||||||||||||||||
|
Prior accident years |
$ | (.4 | ) | ||||||||||||||||||||
|
Current accident year |
(16.7 | ) | |||||||||||||||||||||
|
Calendar year actuarial adjustment |
$ | (9.8 | ) | $ | (4.8 | ) | $ | (14.6 | ) | $ | (2.5 | ) | $ | 0 | $ | (17.1 | ) | ||||||
| Prior Accident Years Development | |||||||||||||||||||||||
|
Favorable/(Unfavorable) |
|||||||||||||||||||||||
|
Actuarial adjustment |
$ | (.4 | ) | ||||||||||||||||||||
|
All other development |
26.2 | ||||||||||||||||||||||
|
Total development |
$ | 25.8 | |||||||||||||||||||||
|
Calendar year loss/LAE ratio |
73.5 | ||||||||||||||||||||||
|
Accident year loss/LAE ratio |
75.9 | ||||||||||||||||||||||
| Statutory Ratios | |||||||||||||||||||||||
|
Loss/LAE ratio |
73.5 | ||||||||||||||||||||||
|
Expense ratio |
20.6 | ||||||||||||||||||||||
|
Combined ratio |
94.1 | ||||||||||||||||||||||
| 1 |
Primarily includes professional liability insurance for community banks and Progressive’s run-off businesses. Effective August 1, 2009, we secured reinsurance for 100% of the risk associated with writing professional liability insurance for community banks. This is an interim measure prior to the completion of the sale of this business to an affiliate of the American Bankers Association, the sponsor of this insurance program. |
The other businesses generated an underwriting profit of $1.2 million for the month. Combined ratios and % growth are not meaningful (NM) due to the low level of premiums earned by, and the variability of loss costs in, such businesses.
| 2 |
Represents adjustments solely based on our corporate actuarial reviews. |
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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
August 2009 Year-to-Date
($ in millions)
(unaudited)
|
Year-to-Date |
|||||||||||||||||||||||
| Personal Lines Business |
Commercial
Auto |
Other
Businesses 1 |
Companywide
Total |
||||||||||||||||||||
| Agency | Direct | Total | Business | ||||||||||||||||||||
|
Net Premiums Written |
$ | 5,068.6 | $ | 3,408.0 | $ | 8,476.6 | $ | 1,076.0 | $ | 14.0 | $ | 9,566.6 | |||||||||||
|
% Growth in NPW |
(1 | )% | 9 | % | 3 | % | (12 | )% | NM | 1 | % | ||||||||||||
|
Net Premiums Earned |
$ | 4,903.4 | $ | 3,221.4 | $ | 8,124.8 | $ | 1,090.3 | $ | 16.0 | $ | 9,231.1 | |||||||||||
|
% Growth in NPE |
(1 | )% | 8 | % | 2 | % | (9 | )% | NM | 1 | % | ||||||||||||
| GAAP Ratios | |||||||||||||||||||||||
|
Loss/LAE ratio |
71.1 | 71.5 | 71.2 | 65.3 | NM | 70.5 | |||||||||||||||||
|
Expense ratio |
21.2 | 20.9 | 21.1 | 21.2 | NM | 21.1 | |||||||||||||||||
|
Combined ratio |
92.3 | 92.4 | 92.3 | 86.5 | NM | 91.6 | |||||||||||||||||
|
Actuarial Adjustments 2 |
|||||||||||||||||||||||
|
Reserve Decrease/(Increase) |
|||||||||||||||||||||||
|
Prior accident years |
$ | (7.7 | ) | ||||||||||||||||||||
|
Current accident year |
(37.8 | ) | |||||||||||||||||||||
|
Calendar year actuarial adjustment |
$ | (28.5 | ) | $ | (12.7 | ) | $ | (41.2 | ) | $ | (4.3 | ) | $ | 0 | $ | (45.5 | ) | ||||||
| Prior Accident Years Development | |||||||||||||||||||||||
|
Favorable/(Unfavorable) |
|||||||||||||||||||||||
|
Actuarial adjustment |
$ | (7.7 | ) | ||||||||||||||||||||
|
All other development |
57.7 | ||||||||||||||||||||||
|
Total development |
$ | 50.0 | |||||||||||||||||||||
|
Calendar year loss/LAE ratio |
70.5 | ||||||||||||||||||||||
|
Accident year loss/LAE ratio |
71.0 | ||||||||||||||||||||||
| Statutory Ratios | |||||||||||||||||||||||
|
Loss/LAE ratio |
70.4 | ||||||||||||||||||||||
|
Expense ratio |
20.9 | ||||||||||||||||||||||
|
Combined ratio |
91.3 | ||||||||||||||||||||||
| Statutory Surplus | $ | 5,530.8 | |||||||||||||||||||||
|
NM = Not Meaningful |
|||||||||||||||||||||||
| 1 |
The other businesses generated an underwriting profit of $4.2 million. |
| 2 |
Represents adjustments solely based on our corporate actuarial reviews. |
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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
BALANCE SHEET AND OTHER INFORMATION
(millions – except per share amounts)
(unaudited)
| 1 |
Loss and loss adjustment expense reserves are stated gross of reinsurance recoverables on unpaid losses of $286.5 million. |
| 2 |
As of August 31, 2009, we held certain hybrid securities and recognized a change in fair value of $10.5 million as a realized loss during the period we held these securities. |
| 3 |
Includes $6.8 billion of short-term investments and U.S. Treasury securities prior to settling $27.6 million of net security transactions outstanding as of month-end. |
| 4 |
Includes $27.6 million of net unsettled security transactions (as discussed in note 3 above). |
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Monthly Commentary
| • |
The Company has no additional commentary regarding August’s results. |
Upcoming Events
We are currently scheduled to release September results on Wednesday, October 14, 2009, before the market opens.
About Progressive
The Progressive Group of Insurance Companies, in business since 1937, is one of the country’s largest auto insurance groups, the largest seller of motorcycle policies and a market leader in commercial auto insurance based on premiums written.
Progressive is committed to becoming consumers’ #1 choice for auto insurance by providing competitive rates and innovative products and services that meet drivers’ needs throughout their lifetimes, including superior online and in-person customer service, and best-in-class, 24-hour claims service, such as its concierge level of claims service available at service centers located in major metropolitan areas throughout the United States.
Progressive companies offer consumers choices in how to shop for, buy and manage their auto insurance policies. Progressive offers its products, including personal and commercial auto, motorcycle, boat and recreational vehicle insurance, through more than 30,000 independent insurance agencies throughout the U.S. and online and by phone directly from the Company. Private passenger auto products and prices are different when purchased directly from Progressive or through independent agencies. To find an agent or to get a quote, go to http://www.progressive.com .
The Common Shares of The Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR. For more information, including a guide to interpreting the monthly reporting package, visit http://www.progressive.com .
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Statements in this release that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. These risks and uncertainties include, without limitation, uncertainties related to estimates, assumptions, and projections generally; inflation and changes in economic conditions (including changes in interest rates and financial markets); the financial condition of, and other issues relating to the strength of and liquidity available to, issuers of securities held in our investment portfolios and other companies with which we have ongoing business relationships, including counterparties to certain financial transactions; the accuracy and adequacy of our pricing and loss reserving methodologies; the competitiveness of our pricing and the effectiveness of our initiatives to retain more customers; initiatives by competitors and the effectiveness of our response; our ability to obtain regulatory approval for requested rate changes and the timing thereof; the effectiveness of our brand strategy and advertising campaigns relative to those of competitors; legislative and regulatory developments; disputes relating to intellectual property rights; the outcome of litigation pending or that may be filed against us; weather conditions (including the severity and frequency of storms, hurricanes, snowfalls, hail, and winter conditions); changes in driving patterns and loss trends; acts of war and terrorist activities; our ability to maintain the uninterrupted operation of our facilities, systems (including information technology systems), and business functions; court decisions and trends in litigation and health care and auto repair costs; and other matters described from time to time in our releases and publications, and in our periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding pending loss and loss adjustment expense reserves becomes known. Reported results, therefore, may be volatile in certain accounting periods.
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