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Progressive Corp. posted full-year 2022 net income of $721.5 million, down about 78 percent from net income of $3.35 billion the prior year, due to losses in its investment portfolio.

However, Chief Executive Officer Tricia Griffith in a letter to shareholders said the insurance business had solid growth in 2022, with personal, commercial and property net premiums written seeing growth of 9 percent, 17 percent and 8 percent, respectively.

“We made trade-offs during the second half of the year and prioritized profit over growth, with a focus on expense management, primarily our media budget, and continued rate level management,” Griffith wrote. She said Progressive acted quicker than competitors, enacting rate increases starting in 2021 and, as a result, the Personal Lines business finished 2022 with a combined ratio of 96.

The CEO said Progressive watched as the market caught up to rate actions it took earlier and, she said, “As our competitiveness improved, our Personal Lines business ended 2022 with growth in both premiums and policies in force.”

Commercial lines finished with a 2022 combined ratio of 91.1 but property “fell well short of expectations,” Griffith said, with a combined ratio of 110.5, of which 26 points was attributed to catastrophe losses. Third-quarter’s Hurricane Ian accounted for about 30 percent of Progressive’s total property-catastrophe losses. For 2022, Progressive incurred about $560 million in losses in personal lines and $15 million in commercial lines.

Griffith said that in 2022 the insurer focused on growing in states with less catastrophe exposure, limiting growth for coastal and hail-prone properties.

“In addition, we increased rates an average of about 19 percent across property’s product portfolio in 2022, with larger increases in Florida and in hail-prone states such as Colorado and Oklahoma. We will continue to adjust rates to work toward our profitability goals in our property business,” Griffith said.

Total net realized loss on securities totaled nearly $2 billion for 2022. Griffith said the company thought its investments were conservative but “it was difficult to escape the volatility seen across both the fixed-income and equity markets.”

“We believe there is the potential for continued market volatility in the first half of 2023 and believe our current posture will have us in position to find strong investments if valuations continue to improve,” she said.