Adverse reserve development of $330 million in January: Progressive

Progressive Corp. said net income for the month of January was $449.4 million compared to $25.8 million in the same month in 2022 as securities gains were $245.6 million after a loss of $348 million in January 2022.

Net premiums written in January increased 16% to approximately $5.3 billion. Net premiums increased 22% to approximately $4.3 billion in personal insurance.

The insurer reported a combined ratio of 96 for January compared to 92.9 for the same month last year.

Primarily due to December 2022 car accidents settling for more than reserved, Progressive said it experienced an adverse reserve development from previous accident years of 6.5 points — or about $330 million. About 75% is attributable to personal auto products, mainly related to property damage, collision and extended coverages. Reserve obsolescence, inflation factors and expert changes also contributed.

Commercial cars accounted for about 20% of the adverse development, mainly due to reported claims from previous accident periods. The rest of the development came from his real estate company.

The insurer is expected to hold a conference call regarding Q4 2022 results on February 28. February financial results will be announced on March 15.