No bad stock

The Progressive Corporation
CEO : Ms. Susan Patricia Griffith

Quarterly earnings growth(YoY,%)

Tricia Griffith says,

Financial Performance in 2022

• Progressive exceeded its goal of achieving a 96 combined ratio for the calendar year 2022, despite the challenges faced due to the pandemic, high inflation, and natural disasters.
• Written premiums and policies in force increased during the year.
• The company continued to raise personal auto rates in Q4 2022, but at a slower pace than in the previous quarters.
• Competitors’ rate increases have improved Progressive’s relative competitiveness, resulting in improved retention, quote growth, and conversion.
• Finished 2022 with the best fourth quarter for personal auto new application volume in the company’s history.
• Progressive is continuously evaluating its media budget and will look to capitalize on the hard market in 2023.

Usage-Based Insurance (UBI)

• Progressive has been a pioneer in UBI, with its first product, Autograph, launched in 1996.
• UBI is the company’s most predictive rating variable, which provides unparalleled rate accuracy to customers.
• Progressive’s UBI program has evolved, with the latest addition being continuous monitoring, which began its rollout in the summer of 2022.
• UBI adoption is at near-historical highs, with billions of miles of data collected, providing an advantage in rate accuracy.
• Two Progressive leaders, Jim Haas and Cory Fischer, will discuss the advances made in personal and commercial lines UBI, respectively.

Tricia Griffith says,

Investment in the future

• The increase in direct side expense ratio in January is an investment in the company’s future.
• The investment is for the benefit of the owners and the customers.

Controlled expenses

• Progressive has control over the expenses and the amount they pay.
• They can pull back or throttle forward depending on the need.

Excitement about the progress

• Progressive is excited about their current position in the market.
• They have the levers to control their expenses and adjust to the market changes.
• They believe the hard market will bring benefits for the company.

Q & A sessions,

Rate Increases and Segmentation

• PGR took 13.5 points in 2021 and still has 3 points to earn in 2022, with 1.5 points taken in January.
• Competitors are catching up and exceeding PGR’s rate increases, but PGR has superior segmentation and is in a good position due to the many prospects shopping around.
• PGR wants to grow as fast as possible at a combined ratio of 96 and retain customers by offering stable rates and broad coverage.

Telematics and Pricing to Risk

• PGR has a headstart in telematics and continuously learning about driving behavior, allowing for better pricing to risk.
• UBI and other segmentations help understand the rate to risk, which is important for both personal and commercial lines.
• Commercial lines are particularly important for pricing to risk, as good drivers in high-cost insurance areas can potentially save money.

Offerings and Retention

• PGR offers many different offerings, including home, life, travel, and jewelry insurance, to follow the customer and offer more options.
• Retaining customers is the holy grail, and two key factors are stable rates and great service.
• Retention has seen positive improvement.