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1. Company Snapshot

1.a. Company Description

The Progressive Corporation, an insurance holding company, provides personal and commercial auto, personal residential and commercial property, general liability, and other specialty property-casualty insurance products and related services in the United States.It operates in three segments: Personal Lines, Commercial Lines, and Property.The Personal Lines segment writes insurance for personal autos and recreational vehicles (RV).


This segment's products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, watercrafts, snowmobiles, and related products.The Commercial Lines segment provides auto-related primary liability and physical damage insurance, and business-related general liability and property insurance for autos, vans, pick-up trucks, and dump trucks used by small businesses; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses, and long-haul operators; dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, and coal-type businesses; and tow trucks and wreckers used in towing services and gas/service station businesses; as well as non-fleet and airport taxis, and black-car services.The Property segment writes residential property insurance for homeowners, other property owners, and renters, as well as offers personal umbrella insurance, and primary and excess flood insurance.


The company also offers policy issuance and claims adjusting services; and acts as an agent to homeowner general liability, workers' compensation insurance, and other products.In addition, it provides reinsurance services.The company sells its products through independent insurance agencies, as well as directly on Internet through mobile devices, and over the phone.


The Progressive Corporation was founded in 1937 and is headquartered in Mayfield, Ohio.

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1.b. Last Insights on PGR

The Progressive Corporation's recent performance was negatively impacted by its Q3 earnings miss, with earnings per share of $4.05, falling short of the Zacks Consensus Estimate by 20.3%. A $950 million one-time Florida policyholder credit, driven by statutory profit caps, contributed to the miss. This development has raised concerns that the company's underwriting margins have peaked and may face pressure from increased competition. Additionally, premium inflation is decelerating, and normalized margins are likely to decline modestly.

1.c. Company Highlights

2. Progressive's Q3 Earnings: A Closer Look

Progressive's financial performance in Q3 2025 was strong, with a combined ratio of 89.5, premium growth of 10%, and policies in force (PIF) growth of 12% year-over-year, resulting in 4.2 million more policyholders or almost 7 million more vehicles in force. However, the company recognized a $950 million estimate for policyholder credit expense for Personal Auto customers in Florida. The earnings per share (EPS) came in at $4.05, missing estimates of $4.99. Revenue growth is anticipated to be 8.1% next year.

Publication Date: Nov -05

📋 Highlights
  • Strong Combined Ratio:: Achieved a 89.5 combined ratio, reflecting solid underwriting performance in Q3 2025.
  • Florida Policyholder Credit Expense:: Recognized $950 million estimate for Florida auto due to House Bill 837, impacting 2025 results.
  • Policy Growth:: PIF growth of 12% YoY, equivalent to 4.2 million more policyholders or 7 million more vehicles.
  • Advertising Efficiency:: Monitored monthly with a focus on cost per sale, leveraging auction-based flexibility for scale.
  • Capital Allocation:: $1.2 billion share buybacks YTD under 10b5-1 plan; potential dividend discussion with Board in December.

Underwriting Performance

The company's underwriting performance was impacted by the $950 million estimate for policyholder credit expense in Florida, driven by the modified comparative negligent system and one-way attorney fees implemented by House Bill 837. The average loss cost or pure premiums for Florida injury claims are down between 10% and 20%, and the percentage of Florida personal injury protection or PIP claims, for which they receive lawsuits, is down around 60%. This suggests that the company's underwriting in Florida is showing signs of improvement.

Growth Strategy

Progressive is well-positioned to grow, with a framework for new business readiness growth, which includes assessing adequate rate levels, segmentation, cost sharing, interstate diversification, regulation, and market conditions. They are looking to grow in 33 states, with 20 in their growth states and 13 in volatile states. The company's strong brand, broad coverage options, and great culture are key to their success.

Valuation

With a Price-to-Book Ratio (P/B) of 27.49, the market is pricing in a high level of confidence in Progressive's future performance. The Combined Ratio of 89.5 suggests that the company is currently underwriting profitably. The Dividend Yield is not a major consideration at this point, as the company is still growing rapidly and has a lot of capital to invest in the business. However, the company is discussing a potential dividend with its Board of Directors, which could be a positive development for shareholders.

Margins and Tariffs

Progressive hasn't seen a significant impact from tariffs on their margins yet, and they're looking at low single-digit effects. They have the margins to absorb that, but it could change. The company's average written premium is affected by their rate decreases, and the Florida situation is a factor in their premium per policy. However, they're competitive and will continue to adjust their segments to remain competitive.

3. NewsRoom

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Potentially 12%-15% Consistent Income: Monthly Options Series (December 2025)

Nov -30

Source: seekingalpha.com

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Baltimore Washington Financial Advisors Inc. Boosts Stock Holdings in The Progressive Corporation $PGR

Nov -27

Source: defenseworld.net

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5 Women-Run Companies Reshaping Portfolios With Consistent Growth

Nov -26

Source: zacks.com

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Progressive: Dominance At A Discount

Nov -26

Source: seekingalpha.com

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Advisors Asset Management Inc. Acquires 2,691 Shares of The Progressive Corporation $PGR

Nov -26

Source: defenseworld.net

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PGR's Net Margin Shows Improvement: Can it Retain the Momentum?

Nov -24

Source: zacks.com

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AXQ Capital LP Buys Shares of 1,993 The Progressive Corporation $PGR

Nov -23

Source: defenseworld.net

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Bank Julius Baer & Co. Ltd Zurich Sells 97,416 Shares of The Progressive Corporation $PGR

Nov -23

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.17%)

6. Segments

Personal Lines Incl. Property

Expected Growth: 8.3%

Progressive Corporation's personal insurance lines, including property, will drive growth, driven by increasing demand for bundled policies, improved digital channels, and a strong brand reputation.

Commercial Lines

Expected Growth: 8.5%

Progressive's commercial lines growth is expected to be driven by a shift towards online channels, expansion into new markets, and increased adoption of telematics-based insurance products, which will lead to improved underwriting margins and enhanced customer experience.

Other

Expected Growth: 4.1%

The Progressive Corporation's miscellaneous business segment is driven by increasing demand for specialized insurance products, growth in emerging markets, and advancements in digital technologies, which are expected to contribute to the segment's growth.

Unallocated Investment Income

Expected Growth: 4.5%

Progressive Corporation's unallocated investment income growth is driven by its disciplined investment approach, a growing investment portfolio, and a strong macroeconomic environment, resulting in a forecast CAGR of 4.5% from 2022 to 2025.

Unallocated Total Net Realized Gains (losses) On Securities

Expected Growth: 4.5%

Progressive's unallocated total net realized gains or losses on securities are driven by favorable trends in investment income, strong capital management, and a diversified investment portfolio, positioning the company for long-term growth.

Service Businesses

Expected Growth: 8.5%

Progressive Corporation's service businesses growth is driven by increasing demand for usage-based insurance, expansion into adjacent markets, and investments in digital capabilities, enhancing customer experience and retention.

7. Detailed Products

Auto Insurance

Provides financial protection against physical damage and bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle.

Home Insurance

Covers damage to a policyholder's home and personal possessions, as well as liability for accidents that may occur on the property.

Renters Insurance

Provides coverage for personal property and liability for renters, as well as additional living expenses if the rental property becomes uninhabitable.

Motorcycle Insurance

Provides financial protection against physical damage and bodily injury resulting from motorcycle accidents, as well as liability coverage.

Boat Insurance

Covers damage to boats, as well as liability for accidents or injuries that may occur on the water.

Recreational Vehicle Insurance

Provides coverage for recreational vehicles, such as RVs, motorhomes, and travel trailers, against physical damage and liability.

Commercial Auto Insurance

Provides coverage for businesses that use vehicles for commercial purposes, including liability and physical damage coverage.

Umbrella Insurance

Provides additional liability coverage beyond the limits of standard insurance policies, protecting assets from lawsuits and financial loss.

8. The Progressive Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Progressive Corporation is medium due to the presence of alternative insurance providers and financial institutions that offer similar products and services.

Bargaining Power Of Customers

The bargaining power of customers for Progressive Corporation is low due to the lack of negotiating power of individual customers and the company's strong brand reputation.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Progressive Corporation is low due to the company's large size and scale, which gives it negotiating power over its suppliers.

Threat Of New Entrants

The threat of new entrants for Progressive Corporation is low due to the high barriers to entry in the insurance industry, including regulatory hurdles and capital requirements.

Intensity Of Rivalry

The intensity of rivalry for Progressive Corporation is high due to the competitive nature of the insurance industry, with many established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.36%
Debt Cost 4.77%
Equity Weight 74.64%
Equity Cost 5.66%
WACC 5.44%
Leverage 33.97%

11. Quality Control: The Progressive Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Yield: 8.0

Momentum: 6.0

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A-Score: 6.4/10

Value: 5.6

Growth: 8.4

Quality: 7.0

Yield: 4.0

Momentum: 4.5

Volatility: 9.0

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A-Score: 5.5/10

Value: 5.7

Growth: 3.4

Quality: 4.9

Yield: 8.0

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Volatility: 9.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

222.89$

Current Price

222.89$

Potential

-0.00%

Expected Cash-Flows