Progressive said third quarter profits more than doubled year-over-year as the insurer reported record policy growth.
Progressive added more than 1.6 million total active policies, a 14% year-over-year jump and the most it’s ever added in a quarter. Net income more than doubled, jumping to $2.33 billion. That amounted to $3.97 earnings per share. The insurance company’s stock closed up roughly 3% after the results. 
The quarterly earnings reflect a yearlong trend of Progressive luring auto insurance customers from its peers with competitive rates. The company’s ability to keep rates low along with increased spending on advertising propelled Progressive past Geico to become the second largest auto insurer in the U.S. last year.
“Progressive is growing so fast because they have raised prices less than everybody else, and their value proposition is better for the consumer,” Bank of America analyst Josh Shanker said.
Progressive reported 33.8 million total active policies as of Sept. 30, up from 29.6 million in 2023. The company raked in $18.3 billion in revenue in the third quarter, up nearly a quarter year-over-year.
The insurer has fared exceptionally well in the auto sector.
“To date, the level of ambient shopping in personal auto remains very high, and we have capitalized on that,” Progressive CEO Tricia Griffifth told analysts Tuesday. “The third quarter was one of our strongest in our history.”
Auto insurance premiums have been on the rise for the past three years, pressuring consumer wallets. Prices have yet to ease up. Though the inflation has slowed a bit from 2023, the cost of motor vehicle insurance rose 16% year-over-year in September.
Progressive has raised rates significantly over the past three years in line with the trend, but has managed to hold a pricing edge over its competitors thanks to an investment in data analytics.
“Now people are shopping for auto insurance with a fervor not seen in, perhaps, any time in history, because they’re angry and their pocketbooks are feeling it,” Shanker said.
The company has also spent $2.8 billion on advertising so far this year, 400% more than it spent this time last year.
Progressive has been able to grow policies at a key moment in the insurance industry, where more frequent and severe storms have led the company and its competitors to pull back from some disaster-prone states.
When insurance companies assess and price risk, they consider both the frequency and severity of loss, according to KPMG insurance lead Scott Shapiro. Calculating that risk can be difficult to pinpoint when considering catastrophic storms.
“So many variables in weather prediction makes for tricky business,” Shapiro said.
Hurricanes Helene and Milton battered the Southeastern U.S. in the third quarter, accounting for $740 million in loss across Progressive’s auto and home insurance businesses.
The company is looking to continue nonrenewals of policies in riskier states like Florida in response to the loss.
“We continue to have a really robust derisking program,” she said. “We obviously want to bundle more but that bundle has to be profitable.”
While Progressive has excelled in pricing auto policies, it’s less fluent in the world of homeowners insurance which it sees as an opportunity for growth through bundling home and auto policies.
In growth-oriented states – or states less prone to catastrophic weather – Progressive’s number of active homeowners policies grew 19% year-over-year in the third quarter. In states with more volatile weather, its number of policies dropped 9%, in line with the company’s goal of “de-risking” from these areas.