Summary
Progressive Corporation (PGR) filed its 2013 10-K on February 25, 2014, detailing its robust property-casualty insurance operations, primarily focused on personal and commercial auto insurance. The company reported net premiums written of $17.3 billion for 2013, a slight increase from the prior year, indicating continued market presence. A key performance indicator, the combined ratio, stood at 93.5, suggesting efficient operations with claims and expenses managed effectively relative to premiums earned. Progressive's business is strategically organized into Personal Lines (90% of premiums) and Commercial Lines, utilizing both agency and direct distribution channels. The company emphasizes innovation, particularly with its usage-based insurance program, Snapshot®, which generated over $2 billion in annual premiums from customers in 2013. Significant investments in technology and data analytics are highlighted as core to their competitive strategy, enabling accurate risk segmentation and pricing. The report also addresses the competitive landscape, regulatory environment, and financial strategies, including a variable dividend policy tied to performance.
Financial Highlights
36 data points| Revenue | $18.17B |
| Interest Expense | $118.20M |
| Net Income | $1.17B |
| EPS (Basic) | $1.95 |
| EPS (Diluted) | $1.93 |
| Shares Outstanding (Basic) | 599.10M |
| Shares Outstanding (Diluted) | 603.60M |
Key Highlights
- 1Net premiums written reached $17.3 billion in 2013, up from $16.4 billion in 2012, demonstrating stable revenue growth.
- 2The combined ratio improved to 93.5 in 2013 from 95.6 in 2012, indicating enhanced underwriting efficiency.
- 3Personal Lines accounted for approximately 90% of net premiums written, with the Snapshot® usage-based insurance program surpassing $2 billion in annual premiums.
- 4The company ranked fourth in U.S. private passenger auto market share in 2012 and believed it held this position in 2013.
- 5Commercial Lines ranked second in the commercial auto insurance market for 2012 and was believed to retain this position in 2013.
- 6Progressive emphasizes technology and data analytics for risk segmentation, pricing, and competitive advantage.
- 7The company maintained strong statutory surplus ($6.0 billion at year-end 2013) and risk-based capital ratios well above minimum requirements.