Progressive Won't Pay 2008 Dividend On Likely Loss

   DOW JONES NEWSWIRES 
 

Progressive Corp. (PGR) said it won't pay a dividend this year as the auto insurer said its net loss would prevent the company from meeting the company's standard for making a payout.

The company pays a dividend only if its net income is more than underwriting income, but noted its after-tax comprehensive loss through November was $860.8 million.

Progressive had a $684.2 million net loss in the third quarter on $1.03 billion in write-downs on preferred stock of 45 companies, including Bank of America Corp. (BAC), Merrill Lynch & Co. (MER), Fannie Mae (FNM) and Wachovia Corp. (WB), all companies that were slammed by the credit crisis and by losses on their risky investments.

Analysts have said personal-and-casualty insurers are a safer group than life insurers in the current market, since they have less of their equity invested in commercial mortgage-backed securities, but still don't see the sector rallying anytime soon.

Progressive's shares were recently down 2.6% at $14.91. It shares have outperformed the broader market this year, losing 22% of their value, compared with 40% for the S&P 500 Index.

-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089; [e-mail]

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