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Progressive Corp PGR

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Progressive Continues to Battle Headwinds in Fourth Quarter

Brett Horn, CFA Senior Equity Analyst

Analyst Note

| Brett Horn, CFA |

Progressive continued to battle headwinds in the fourth quarter, as the personal auto space appears to be exiting the pandemic in much worse condition than it entered. Still, the narrow-moat company produced a 19% ROE for the year, with this year’s ROE coming in back in line with Progressive’s historical average, after a few years of outsized returns. But this was largely driven by $1.5 billion in realized investment gains, as underwriting profitability saw a significant decline through the year. We will maintain our $79 fair value estimate.

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Company Profile

Business Description

Progressive underwrites private and commercial auto insurance and specialty lines; it has over 20 million personal auto policies in force and is the fourth- largest auto insurer in the United States. Progressive markets its policies through independent insurance agencies in the U.S. and Canada and directly via the Internet and telephone. Its premiums are split roughly equally between the agent and the direct channel. The company also offers commercial auto policies and entered homeowners insurance through an acquisition in 2015.

Contact
6300 Wilson Mills Road
Mayfield Village, OH, 44143
T +1 440 461-5000
Sector Financial Services
Industry Insurance - Property & Casualty
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 43,326

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