The Mayfield Village auto insurer is writing down $325 million dollars in investments for the month of August. Most of that loss is from investments in Fannie Mae and Freddie Mac.
The latest twist in the nation's subprime loan crisis happened Sunday when the federal government took over Fannie and Freddie. The mortgage giants own or guarantee $5 trillion in US home loans. The takeover pretty much wiped out the value of Fannie's and Freddie's stocks. Patrick Brennan is senior manager of investor relations for Progressive Corporation.
Patrick Brennan: These losses certainly hurt but they don't affect our ability to operate day to day, to pay claims or any of those things.
Because of the hit to its securities portfolio, Progressive Corp reported a $135 million net loss for August 2008. Compare that to the same time last year when the company saw a $77 million dollar profit. The company warns there could be an additional $171 million more in writedowns this month. Mhari Saito, 90.3.