Progressive Retaining Helene, Milton Property Losses Net; Auto Over $0.7B

Progressive disclosed property and vehicle insurance loss estimates for Hurricanes Helene and Milton in conjunction with the carrier’s report of third-quarter earnings yesterday, indicating it won’t cede property losses from either storm to reinsurers.

Only losses from Hurricane Helene hit third-quarter earnings, which more than doubled to $2.3 billion, compared to $1.1 billion of net income for third-quarter 2023.

Even though Helene added $563 million of catastrophe losses, adding 3.0 loss ratio points to overall underwriting ratios for the quarter, Progressive recorded a combined ratio of 89.0 across all of its businesses, down from 92.4 for last year’s third-quarter.

Progressive broke down the Helene losses between auto and property lines, reporting incurred vehicle losses of $401 million, including boats and recreational vehicles, in the month of September. Progressive’s property business incurred $162 million of losses, and $23 million of allocated loss adjustment expenses. No amounts were ceded to Progressive’s occurrence excess of loss reinsurance program because the property loss and ALAE total did not exceed its $200 million retention threshold.

The same is true for Milton, which is a fourth-quarter event and did not impact the third-quarter results. While Progressive did not disclose an estimate of its Milton property losses, the carrier said it doesn’t expect Milton property loss and ALAE totals to breach the $200 million retention threshold.

As for vehicle business (including special products), as of Monday, Oct. 14, 2024, Progressive estimated that incurred losses from Milton will be approximately $325 million.

Together, the two hurricanes have added $726 million in incurred losses to auto loss totals for the year.

Noting that Milton is a more recent event, Progressive’s earnings announcement noted that the company based its estimates of losses from the storm on very early claims reporting information, along with its experience with severity and reporting patterns from many past storms. The company also relied on several assumptions, including mix of claims, which may ultimately differ from expectations, Progressive said, noting that it is continuing to evaluate the impact of this catastrophe as more information develops and that estimates could change materially as information develops and claims are reported.

Late last year, Progressive nonrenewed 100,000 Florida residential insurance policies, which were assumed by Tampa-based Loggerhead Reciprocal Interinsurance Exchange.

Additional financial information for the third quarter included in yesterday’s announcement included net written premiums, which jumped 25 percent to $19.5 billion.