What happened
On the success of a rival, veteran insurance company Allstate(NYSE: ALL) capped off the trading week with a nice share-price surge. Its stock closed the day almost 6% higher following the publication of encouraging and solid monthly results from Progressive(NYSE: PGR).
So what
Investors plowed money into Allstate after learning about how well Progressive did in September.
For the month, the latter insurer's net premiums written climbed by a sturdy 22% year over year to reach just under $4.9 billion. Net premiums earned more or less tracked with this growth, advancing by 20% to more than $4.6 billion.
The company's combined ratio -- a key metric in the insurance business comparing claims paid out to policyholders and earned premiums -- fell sharply to just below 90 from the year-ago level of 116. A lower ratio is considered more favorable, as is one under 100.
Progressive notably progressed in terms of policy count. All told, its total policies in force rose by 10%. Auto policies were particularly successful during the month.
More encouragingly, Progressive flipped dramatically to a net profit during the period. Its September bottom line was $369 million in the black, providing quite a contrast to the over $684 billion the company lost in the same month of 2022.
Now what
Allstate isn't Progressive, of course, but as an insurer with a roughly similar business profile, it swims in the same waters. The latter company's significant recent improvements bode well for insurers across the board, as they indicate clear demand for the types of policies they offer.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Progressive. The Motley Fool has a disclosure policy.
