The Progressive Corporation has released an update of its incurred property losses from Hurricane Ian, stating that prior to giving effect to reinsurance, its loss and allocated loss adjustment expenses (ALAE) are estimated to be $1 billion.
According to the firm, this reflects a favourable development of $400 million from its estimated loss and ALAE of $1.4 billion reported as of September 30, 2022.
Back then, it acknowledged that its estimates could change materially as its more than 1,500 deployed claims representatives and independent adjusters continued to take stock of claims and damages.
Progressive states that given that it exceeded its $200 million retention threshold under its reinsurance contracts in September, the change in estimate for the firm’s Property losses and ALAE will not impact its results of operations for December.
This suggests that the firm’s reinsurance recovery will now be $800 million, compared to the previous $1.2 billion that it had been anticipating previously.
The firm notes, “We continue to evaluate and reserve for this catastrophe using our knowledge and experience of reporting patterns from many past storms, in addition to actual claims reported and assumptions specific to this hurricane.
“As further described in our periodic reports filed with the SEC, these estimates will continue to change, favourably or unfavourably, as additional information develops, and additional claims are reported.”
It added that as of December 20, 2022, its estimate for vehicle losses, including boats and recreational vehicles, is essentially unchanged from November 2022.
Meanwhile, according to a recent report from GlobalData, Progressive Corporation has overtaken State Farm to become the largest motor insurer in the US.
The company’s growth was largely attributed to its expanding for-hire transportation business, alongside higher advertising campaigns and its affiliation with a larger number of insurance agencies.