Mayfield Village, Ohio-based vehicle insurer Progressive Corp. reported a 27 percent increase in net premiums earned in July 2003 from July 2002.
Net premiums jumped from $872 million to $1.1 billion, while net income jumped 70 percent over July 2002, from $83.4 million to $141.9 million. Per share earnings increased by 68 percent, from 38 cents per share to 64 cents.
The company also reported a 3.7 point drop in combined ratio, from 89.6 percent to 85.9 percent.
In July 2003, the company received notice from the Internal Revenue Service that the Joint Committee of Taxation of Congress had completed its review of a Federal income tax settlement agreed to by the Internal Revenue Service, primarily attributable to the amount of loss reserves deductible for tax purposes.
As a result, the company will receive an income tax refund of approximately $58 million, which the company had previously recorded as a deferred tax asset (i.e. no impact on results of operations). In addition, the company will receive interest, which is currently estimated at $30.4 million, or 9 cents per share, and is reflected as “Other income.”
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