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Progressive Corp PGR

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Morningstar’s Analysis

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Catastrophes and Normalization Lead to Tough Quarter for Progressive

Brett Horn, CFA Senior Equity Analyst

Analyst Note

| Brett Horn, CFA |

Catastrophe losses and a dissipating pandemic tailwind led to a difficult quarter for Progressive. We estimate the annualized ROE for the quarter was only 3%, although the trailing 12-month level of 23% is still quite good for the narrow-moat franchise. Overall, we believe that recent results support our view that the company’s results would normalize as the pandemic wound down, and that pricing pressure could push industry results into a relatively weak spot. We will maintain our $79 per share 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.

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