Progressive Corp., the No. 3 U.S. auto insurer, said it will not pay investors an annual dividend in 2008 because it is barred from doing so unless it meets financial targets.
Progressive said because it expects to have a 2008 after-tax comprehensive loss it will be precluded from paying a dividend. Under a variable dividend policy, the company cannot pay a dividend if after-tax comprehensive income is lower than after-tax underwriting income.
As of Nov. 30, Progressive’s after-tax comprehensive loss totaled $860.8 million over the first 11 months of the year, the Mayfield Village, Ohio-based insurer said.
Progressive said in 2009 it will follow the same policy for determining any dividend payment.
(Reporting by Lilla Zuill, editing by Gerald E. McCormick)