This is our first report on auto insurance major, Progressive Corp. The company had a disappointing quarter and failed to meet Wall Street expectations in terms of revenues as well as earnings. The management claims that the quarter’s company-wide combined ratio, excluding catastrophe losses, improved by 1.9 points which showed their efforts to combat the impacts of inflation. Hurricane Ian was the biggest single event in this quarter. This quarter, the company increased personal auto rates in 20 states at an average of around 5% each day for an overall countrywide premium impact of +2%. Consumer quoting and shopping has increased by over 20% in both direct and agency channels. The combination of continued advancement of the science of media buying and planning and lower competitor spending led to an incredible rise in efficiency in media expenditure and has also helped propel this quarter’s growth. Continued improvement in conversion coupled with auto quote growth led to an auto innovative application growth of 20% this quarter. PIF property growth in this quarter slowed as it progressed in this multiyear goal. We initiate coverage on the stock of Progressive with a ‘Hold’ rating.
Our Report Structure:
⦁ Company Overview
⦁ Investment Thesis
⦁ Key Drivers
⦁ Historical Quarterly Statement Analysis – Income Statement & Cash Flows
⦁ Historical Quarterly Balance Sheet Analysis
⦁ Historical Annual Financial Statement Analysis
⦁ Analysis Of Key Financial Ratios
⦁ Financial Forecasts For 3 Years
⦁ Forecasting The Capital Structure & Net Debt
⦁ Discounted Cash Flow Valuation
⦁ Trading Multiples
⦁ Key Risks
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