Progressive’s quarterly profit jumps on robust auto insurance demand

(Reuters) - Insurer Progressive reported a 10% jump in first-quarter profit on Wednesday, helped by resilient demand for its auto insurance policies.

Shares of the Mayfield Village, Ohio-based company rose 1.8% to $281 before the bell.

Rising wages and low unemployment in the reported quarter helped sustain customer spending on auto insurance, one of Progressive’s mainstay revenue streams.

Its net premiums written jumped 17% to $22.21 billion in the quarter.

The insurer’s combined ratio was 86%, compared with 86.1% in the year-ago period. A ratio below 100% means it earned more in premiums than it paid out in claims.

Progressive provides insurance for personal as well as commercial autos and trucks, motorcycles, boats, recreational vehicles and homes.

The company’s net income rose to $2.57 billion, or $4.37 per share, in the quarter ended March 31, from $2.33 billion, or $3.94 per share, a year earlier.

Progressive had 35.1 million personal insurance policies in force, 18% higher than a year earlier. Commercial lines policies were 6% higher than last year.

Insurers face potential disruptions from tariffs, which could inflate the cost of auto parts and building materials as well as drive up repair costs.

Analysts, however, expect the tariff impact to the auto insurance industry to be manageable through pricing adjustments.

The impact of tariffs on the auto insurance industry could also allow Progressive to further extend its market share gains, analysts say.Progressive shares have gained nearly 15% so far this year, compared with an 8.3% fall in the benchmark S&P 500 index as of last close.

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