Download PDF

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.

Show Full description

1.b. Last Insights on PGR

The Progressive Corporation faced negative drivers, including a Q3 earnings miss, with EPS of $4.05, missing the Zacks Consensus Estimate by 20.3%. A $950 million one-time Florida policyholder credit, driven by statutory profit caps, amplified concerns that underwriting margins have peaked. Additionally, premium inflation is decelerating, and normalized margins are likely to decline modestly. Institutional investors, such as Calamos Advisors LLC and Chicago Capital LLC, decreased their stakes in the company.

1.c. Company Highlights

2. Progressive's Strong 2025 Results Driven by Growth and Profitability

Progressive reported a comprehensive income of almost $13 billion and a comprehensive return on equity of 40% in 2025, driven by $9 billion in net premiums written and 3.7 million additional policies in force. The company's actual EPS came out at $4.67, beating estimates of $4.44. The private passenger auto market share grew to around 18.5%. With a combined ratio of 96, the company is adjusting rates accordingly and shifting its mix to maintain profitability.

Publication Date: Mar -04

📋 Highlights
  • 40% Return on Equity: Progressive achieved a comprehensive return on equity of 40% in 2025, driven by strong income generation and capital efficiency.
  • $9 Billion Net Premiums Written: The company reported $9 billion in net premiums written, alongside 3.7 million additional policies in force.
  • 18.5% Auto Market Share: Progressive’s private passenger auto market share grew to 18.5%, reflecting its competitive position in the industry.
  • $13.50 Variable Dividend: The holding company declared a $13.50 per-share annual variable dividend, retaining $5 billion in capital post-payment for growth strategies.
  • 3.5:1 Operating Leverage: Regulatory approval increased operating leverage to 3.5:1 premiums to surplus, potentially boosting return on equity through lower capital needs.

Financial Performance and Capital Management

The company's financial performance is underpinned by its efficient capital model and strong risk-adjusted portfolio returns. Progressive operates with a variable dividend policy and a liquid, conservative investment portfolio, providing flexibility in capital allocation and investment risk. The company received regulatory approval to increase its operating leverage to a maximum of 3.5:1 premiums to surplus, which could incrementally raise Progressive's return on equity due to lower capital needs.

Investment Portfolio and Risk Management

Progressive's $100 billion investment portfolio is managed with a focus on supporting the operating business and achieving strong risk-adjusted returns. The portfolio is split between actively managed fixed income and a passive equities strategy. The company's investment goals are twofold: ensuring sufficient capital for growth and achieving strong returns. With a P/B Ratio of 27.48, the market is pricing in a premium for the company's strong financial position and growth prospects.

Growth Prospects and Industry Trends

The company is optimistic about the potential of artificial intelligence (AI) to improve efficiencies in claims and underwriting. Progressive has a history of innovation, including usage-based insurance and predictive AI models using unstructured data. The company expects personal and commercial vehicle insurance in the United States to grow robustly for decades, driven by its competitive advantages, robust data assets, and leading analytics.

Valuation and Dividend Yield

With a Dividend Yield of 6.52%, Progressive offers an attractive return for income investors. The company's ROE of 40.02% is significantly higher than its ROIC of 9.3%, indicating a strong ability to generate returns for shareholders. The P/E Ratio of 12.35 suggests that the stock is reasonably valued, considering the company's growth prospects and financial performance.

3. NewsRoom

Card image cap

Progressive Had a Remarkable Run. Now Comes the Hard Part.

Mar -28

Source: fool.com

Card image cap

DAVENPORT & Co LLC Increases Position in The Progressive Corporation $PGR

Mar -28

Source: defenseworld.net

Card image cap

The Progressive Corporation (NYSE:PGR) Receives Average Recommendation of “Hold” from Analysts

Mar -28

Source: defenseworld.net

Card image cap

Progressive (PGR) Sees a More Significant Dip Than Broader Market: Some Facts to Know

Mar -27

Source: zacks.com

Card image cap

AM Best Assigns Issue Credit Ratings to The Progressive Corporation's Senior Unsecured Notes

Mar -27

Source: businesswire.com

Card image cap

Czech National Bank Has $35.21 Million Stake in The Progressive Corporation $PGR

Mar -26

Source: defenseworld.net

Card image cap

Avanza Fonder AB Has $11.35 Million Stock Position in The Progressive Corporation $PGR

Mar -24

Source: defenseworld.net

Card image cap

BDF Gestion Invests $3.42 Million in The Progressive Corporation $PGR

Mar -24

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

Stock-Card
Cincinnati Financial

A-Score: 6.8/10

Value: 6.2

Growth: 6.4

Quality: 7.8

Yield: 4.0

Momentum: 7.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
PNC Financial Services Group

A-Score: 6.5/10

Value: 5.7

Growth: 6.0

Quality: 6.7

Yield: 7.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

View Full Report
Stock-Card
M&T Bank

A-Score: 6.2/10

Value: 6.5

Growth: 5.6

Quality: 6.8

Yield: 6.0

Momentum: 3.5

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Progressive

A-Score: 6.1/10

Value: 6.0

Growth: 8.6

Quality: 7.3

Yield: 3.0

Momentum: 2.5

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Prudential Financial

A-Score: 6.0/10

Value: 7.0

Growth: 3.4

Quality: 5.3

Yield: 8.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

View Full Report
Stock-Card
Truist

A-Score: 5.7/10

Value: 4.7

Growth: 2.8

Quality: 5.7

Yield: 8.0

Momentum: 5.0

Volatility: 8.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

198.84$

Current Price

198.84$

Potential

-0.00%

Expected Cash-Flows