Progressive Insurance Company reported net income for April increasing 8 percent over the same period last year.
The Mayfield, Ohio-based company reported April profits of $159.6 million compared with $147.6 million for the same month in 2005.
Both net premium written and net premium earned rose 4 percent for the month compared with April of 2005.
The combined ratio remained virtually flat at 85.9.
Bear Stearns analyst David Small said the results exceeded expectations. Personal auto premium per policy in both the agent and direct channels was higher than forecasted, and the overall accident-year loss ratio was lower than anticipated.
“While this is only one month, the results suggest that Progressive was less aggressive in lowering price than in previous months,” Mr. Small wrote.
He suggested that management may have concluded that lower pricing was not necessary to produce the top line growth required, and that lower pricing was not increasing demand for the product.
“If this is the case, it could be positive for personal auto players in general, particularly Allstate, as it may indicate one of the largest and more price aggressive companies may be backing off a bit,” he wrote.
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