The Progressive Corporation

This profile examines the third largest private passenger auto insurer in the United States with a focus on its rivalry with Berkshire Hathaway's GEICO subsidiary.

Introduction

Progressive is the third largest private passenger automobile insurer in the United States. The company also has a major specialty operation and is the number one insurer of motorcycles and one of the largest insurers of recreational vehicles and boats. Since 2015, Progressive has also offered homeowners and renters insurance. The company offers insurance directly to customers over the internet as well as through a nationwide network of over 40,000 agents.

Over the past decade, Progressive has increased its market share in private passenger auto insurance from 7.9% to 13.7% while posting underwriting profits every year. In 2021, underwriting operations posted a combined ratio of 95.3% with revenue of $44.4 billion and pre-tax profits of $2.1 billion. As of September 30, 2022, insurance operations provided management with $29.3 billion of policyholder float which funded the majority of the company’s $52.3 billion investment portfolio.

Progressive has faced challenging conditions in 2022. Although underwriting operations have remained solidly profitable, rising interest rates have resulted in unrealized losses in the company’s large fixed-income portfolio while the smaller equity portfolio has been severely impacted by the stock market decline. This report examines Progressive’s history, competitive position, and future prospects.

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