The pandemic hasn’t stopped the insurer from seeing a rise in its profitability.
The short-term impact from the pandemic on Progressive auto insurance may turn out to be a rise in underwriting profitability while premium growth shrinks.
S&P Global Market Intelligence conducted a monthly earnings report analysis on the insurer.
The analysis revealed that Progressive auto insurance saw improvement in its personal vehicle combined ratio, but at the same time its premium growth was applying the brakes. That impact was recorded on both the month-to-month and year-over-year data for March and April. The insurer’s combined ratio for March was 74.7 percent and in April was 79.4 percent. It hasn’t seen monthly combined ratios that low since 2010. Comparatively, in March 2019, the figure was 87.1 percent and in April it was 86.7 percent.
Still, there were also considerable improvements seen in those two months compared to the data recorded in January and February, before the pandemic created outbreaks in the United States. January’s combined ratio was 92.8 percent and February’s combined ratio was 89.9 percent.
The Progressive auto insurance loss ratio saw a substantial improvement from March to April.
The insurance company’s premium rebate plan led to the worsening of the combined ratio. In April, Progressive recorded its $506.5 million in rebates as expenses. This increased the company’s expense ratio by 13.9 percent.
The firm has been working on a growing market share in private car insurance over the last few years due to its premium growth rates. That insurer’s premium growth rates are substantially higher than the average in the US industry. In 2019, for instance, it saw a 14.7 percent year over year premium growth. The industry average during the same period of time was only 2.8 percent.
However, that growth rate saw a considerable slowing in March, which saw a growth rate of only 1.1 percent, and in April, when the growth rate rose to 5.3 percent but was still far below where it had previously been.
The Progressive auto insurance monthly reports illustrate trends experienced by that particular insurer. That said, they may also provide a glimpse into what other US insurers are experiencing across the first few months of the year, as the pandemic took hold and impacted them in a spectrum of new and unexpected ways.