Progressive Corp. reported a 12% rise in third-quarter net income to $2.62 billion, even after recording a $950 million policyholder credit expense for its Florida automobile customers. The insurer said the credit represents its current estimate of excess permitted profit from 2023 through 2025.
The company, the largest personal auto insurance writer in Florida, said it expects to provide the credits early in 2026 to policyholders active at the end of this year. At the close of the third quarter, Progressive counted about 2.7 million policyholders in the state.
“The estimated liability will continue to be refined through the end of the fourth quarter 2025, given the continuing exposure to potential significant storm activity through the Atlantic hurricane season, which continues into late November 2025, and the other factors that impact reserve development through the first quarter of 2026 on losses for applicable accident years,” the company said in a statement.
Third-quarter net premiums written rose 10% to $21.38 billion, while the combined ratio worsened slightly to 89.5, up from 89.0 in the same period last year. Company-wide policies in force grew 12% year over year to 38.1 million.
Despite the income increase, Progressive’s results fell short of Wall Street expectations. The insurer reported adjusted earnings per share (EPS) of $4.45, below analysts’ consensus estimate of $5.05, while revenue also missed projections of $21.8 billion.
Investor response was swift. Shares of Progressive Corp. (NYSE: PGR) traded at $223.08 on the morning of Oct. 15, down 7.24% from the previous close, after initially plunging 4.3% in premarket trading. Analysts attributed the selloff to concerns about the insurer’s profitability amid rising claims costs and ongoing inflation in repair and labor expenses.
In September alone, Progressive’s combined ratio rose sharply to 100.4%, indicating that claims and expenses outpaced premiums for the month, MarketMinute reported. September’s net income also fell 48% compared with a year earlier, highlighting ongoing cost pressures across the auto insurance sector.
BestWire reported that Progressive has implemented rate adjustments in Florida and other key markets - most recently in December and June - to address cost pressures. The company will hold its third-quarter earnings conference call on Nov. 4.
Operating entities of Progressive Corp. maintain a Best’s Financial Strength Rating of A+ (Superior) and A (Excellent).
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