Property and casualty (P&C) insurer Progressive (PGR +0.32%) continued to knock it out of the park in the first quarter. So, then, why has it underperformed other insurance stocks? For instance, while Progressive shares are down over 23% in the last 12 months, Allstate shares are up nearly 12%.
While revenue and earnings growth has continued, it has slowed in recent quarters. There are also lingering concerns that a softening insurance market with increased competition, relaxed underwriting standards, and lower premiums, will eventually affect quarterly results.
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Diving deep into Progressive’s Q1 2026 results
For the first quarter, Progressive reported total revenue of $22.2 billion and net income of $2.8 billion, or around $4.81 per share. Underwriting margins came in at 13.6% . The company’s combined ratio, which represents the percentage of premiums spent on claims and underwriting expenses, was 86.4. For comparison, most P&C insurers have combined ratios exceeding 90.
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Progressive managed to deliver strong margins while continuing to grow its total number of policies in force. Over the past year, policies in force increased 9%, from 36.3 million to 39.6 million.
Yet while Progressive’s underwriting margins and growth remained industry-leading, the market had a mixed at best reaction to the latest figures. Metrics like net income and total policies in force fell slightly short of forecasts.
Premium and policyholder growth also slowed down in the quarter. Progressive reported a 6% year-over-year increase in premiums written, and an 8% increased in earned premiums. During the full year 2025, these figures were at 12% and 10%, respectively.
Shares remain pricey, despite continued uncertainty
Progressive is about a month away from releasing quarterly results again, but as the company also issues monthly financial reports, investors aren’t completely in the dark. On May 20, Progressive released its April 2026 financial report.
In April, Progressive once again reported solid net written and earned premium growth, with these metrics rising 6% and 7%, respectively, year-over-year. Net income also increased by 10% compared to the prior year’s month. However, a large increase in realized investment gains skewed results; while Progressive’s profitability increased by double digits, the company’s combined ratio for the month came in at 90.2, meaning underwriting margins were only 9.8%, a big decline from reported margins during Q1 2026.
As Progressive did not provide any commentary alongside these figures, the root cause of this margin drop is unclear. We do know, based on commentary from CEO Tricia Griffith in the Q1 earnings call, that Progressive appears focused on capitalizing on a softening, more competitive insurance market to “continue on our growth trajectory.”
With Griffith’s comments suggesting a preference for growth over margins, it makes sense sell-side earnings forecasts remain downbeat, calling for earnings of $16.40 and $16.19 per share in 2026 and 2027, respectively. Compare that to 2025, when Progressive reported earnings of $18.25 per share . As uncertainty persists, you may want to stick to the sidelines. Progressive, trading for 12 times forward earnings, continues to trade at a premium to peers like Allstate, which trades for around 9 times earnings. That’s not to say it will become one of the most undervalued stocks, but a further de-rating could be in store.
