Progressive Corp. posted a full-year 2022 net income of $721.5 million, down about 78% from the previous year’s net income of $3.35 billion, due to their portfolio losses.
However, CEO Tricia Griffith in a letter to shareholders said the insurance business grew solidly into 2022, with net personal, commercial, and property premiums recorded increasing. growth of 9%, 17% and 8%, respectively.
“We made trade-offs in the second half of the year and prioritized profitability over growth, focused on cost management, primarily our media budget, and continued to manage rates,” Griffith wrote. She said Progressive acted faster than competitors, implementing rate increases starting in 2021, and as a result, the Personal Stream business ended in 2022 at a combined rate of 96.
The CEO said Progressive has been watching as the market has caught up with the ranking actions they’ve taken before, and she said: “As our competitiveness improved, so did the Line business. Our end of the year 2022 with growth in both premiums and policies in force.”
Commercial Lines ended at an aggregate rate of 91.1 in 2022 but Real Estate “fell short of expectations,” Griffith said, with an aggregate rating of 110.5, of which 26 points were attributable to losses. disastrous. Hurricane Ian in the third quarter accounted for about 30% of Progressive’s total property disaster damage. For 2022, Progressive incurs a loss of approximately $560 million on Personal Lines and $15 million on Commercial Lines.
By 2022, the insurer is focused on growing in states that are less affected by disasters, limiting growth to coastal and hail-prone properties, Griffith said.
“Additionally, we experienced an average price increase of about 19% across our Real Estate portfolio in 2022, with higher increases in Florida and hail-prone states, such as Colorado and Oklahoma. We will continue to adjust rates to achieve our profit target in our Real Estate business,” Griffith said.
The total actual net loss on equities amounts to nearly $2 billion for 2022. Griffith said the company thinks its investments are conservative but “it’s very difficult to escape the volatility seen across the board.” both the fixed-income market and the stock market.
“We believe there is a chance the market will continue to be volatile in the first half of 2023 and believe our current position will enable us to find strong investments if valuations continue to improve. good,” she said.
