Progressive Q4 Net Income Up 141% as Combined Ratio Exceeds Goal for 2023

Progressive Corp. said fourth quarter 2023 net income jumped to nearly $2 billion compared to about $826 million a year ago during the same period.

The Mayfield Village, Ohio-based insurer reported some quarterly and year results as it announced its monthly tally for December of $901.2 million in net income.

Progressive recorded a fourth quarter 2023 combined ratio of 88.7 and a full-year combined ratio of 94.9—exceeding its goal of 96 for 2023. Personal lines improved on its 2022 combined ratio of 96 by logging a combined ratio of 93.8 for 2023.

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Net income for all of 2023 was $3.9 billion compared to the prior-year total of $721.5 million, which was down about 78% from net income of $3.35 billion for the year 2021 due to losses in its investment portfolio. Investment income rebounded in 2023 to about $1.9 billion versus about $1.3 billion in 2022. A net realized loss on securities of about $1.9 billion in 2022 was reversed to a gain of about $353 million in 2023.

Fourth quarter net premiums written increased 21% to about $15.1 billion.

Net premiums written in 2023 saw growth in personal, commercial and property of 24%, 8%, and 18%, respectively.

For the month of December, Progressive said it benefited from a “significant” decrease in incurred frequency in personal auto. In fact, the incurred frequency for the month was the lowest Progressive has seen in at least 20 years.

“We believe that underwriting actions, a shift in the mix of business to a more preferred tier of customers, mild weather conditions, and the change in our monthly accounting closing calendar, among other factors, contributed to the unusually low frequency during the month,” Progressive said.