The loss of 20 cents a share compares to a profit of $76.9 million, or 11 cents a share, a year earlier, the Mayfield Village, Ohio-based company said today in a statement. Excluding the investment loss of $327.7 million, the company earned about 11 cents a share.
Progressive joins insurers including Hartford Financial Services Group Inc. and First American Corp. in disclosing losses on the two home lenders. Progressive said $278.3 million of the write-down for the month was related to holdings of preferred and common stock in the mortgage companies, and said it expected further write-downs in September.
"This is a market unlike anything anyone has seen in our lifetimes,'' said David Havens, a credit analyst with UBS AG in Stamford, Connecticut. "Progressive had, as far as we know, the highest proportion of Fannie and Freddie preferreds of any large insurance company.''
Insurers are releasing information about investments in the lenders after the U.S. Treasury stepped to prevent their collapse, wiping out most of the value of the shares. First American, the No. 1 U.S. title insurer, said it will write down the value of $37.9 million in holdings of Fannie Mae and Freddie Mac preferred securities, reducing third-quarter earnings.