The Progressive Corporation (PGR) 4 Nov 202020 Q3 Earnings call transcript

Company Profile

Participants

Doug Constantine	Director of Investor Relations
Tricia Griffith	Chief Executive Officer
John Sauerland	Vice President & Chief Financial Officer
Mike Zaremski	Credit Suisse
Elyse Greenspan	Wells Fargo
Jimmy Bhullar	JPMorgan
Greg Peters	Raymond James
Michael Phillips	Morgan Stanley
Gary Ransom	Dowling & Partners
Yaron Kinar	Goldman Sachs
David Motemaden	Evercore ISI
Meyer Shields	KBW
Brian Meredith	UBS
Josh Shanker	Bank of America
Suneet Kamath	Citi Research

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to The Progressive Corporation’s Third Quarter Investor Event. The company will not make detailed comments related to quarterly results in addition to those provided in its quarterly report on Form 10-Q and the letter to shareholders, which have been posted to the company's website, and we’ll use this event to respond to questions. Acting as moderator for the event will be Progressive's Director of Investor Relations, Doug Constantine. At this time, I’ll turn the event over to Mr. Constantine.

Doug Constantine

good and James, you, morning. Thank

scheduled investor Although, leadership dial-in at CEO presentation instead and instructions typically for team. minutes a dial-in a telephone question-and-answer members can events a our use comments specific of investors.progressive.com/events. our XX will Questions quarterly by on we portion includes business, only participants. found event asked with relations The of by today's be for session may the introductory our be

event this based to in cause discussions include expectations forward-looking are during are always, As and many differ could statements These may those discussed uncertainties today's on and results statements. from actual events that current event. management's materially risks subject to and

our second Report our factors Safe where the Additional related XX-K and affecting third Form and you XXXX of business, Annual other discussions on information risks will available concerning those Form first, on risk our quarterly and to and quarter's report uncertainties discussions XX-Q, forward-looking statements statements find in Harbor is that directly COVID-XX includes risks our face, face. Form first further the of challenges risks for XX-Q from indirectly quarter factors particular, third quarter these on report our of risk arising specific uncertainties In XX-Q. that quarterly including and pandemic the we in and and the discussions we are note referenced

line, Tricia Griffith, CEO, our will to going call introductory from first our comments. some conference Before Tricia? the question make

Tricia Griffith

mind, Progressive. elections close I'd questions. was It your before everyone's extremely open that get words everyone. and few I know yet a we morning, good I on an including and Doug, the with decided not at Thanks, election. thought those are to

we're the other. the regardless most shareholders we our all importantly each I our united live think commitment for caring end, communities, our that I'm for core shareholders, customers, of values, support. that golden to specifically our know we the proud our and very important in in our it's rule, candidate that

pillars, people as our come incredible a to focused I feel for and we on a more year why strongly Unity really last on an thought than This IT Monday been one competitive I on As advantage manager They're This know, in I'd are the a and did we company no and that marketplace. us. share get challenging forward and who significant strategic note are move our our you has video He together. know exemplifies win marks ever. the share last times, out we that and he four rely said, month culture so through to I our literal went Tricia, and words that as October, on which a to received different us political united yard I'm culture Group we Scott, regarding that I speak next team said that and for there week. to sign we from national Tuesday and this echoed pile and communication I your end deeply so am you note Then many a team, election have year so in which in truly, of these and I others week things and thankful the by leaders for much it's His for be his many are appreciative for at grateful. progressive. the sent is means to I season. another are of he

a another or what of beyond golden the an over call in rule. will as DRG strong political to neighbors company Progressive regardless truly but it's The our or applies remain and we for who delayed their not we’re of to that we this regardless reflect night say committed not the Progressive and the we these to may to even cetera. week's calm love results. there'll even stressed, marks being The vote yard. to care our donated values. in Progress, we've today who people. talked election. direct to we do spirit the focused, started with this core to and feel meaningful. say really the cars people as team that Due you late with extension tomorrow exemplify veterans. differences. right in what and our in end shooting the distancing of culture. And deserving Eighth away giveaway know, neighborhood past eight morning, but the after race, other the program Keys regardless neighbor where video reporting committed our another restrictions diversity with with where and back and starts love though business social at to for be ensure your Annual et XXX up loving give about hoped operations Also, of still Conveying is words you right to are years. sustain people respect, is this our to our not culture up neighbors of and sign work we is and of and this sign easy And it's middle the our a differences, the our other convictions, our group and example successful our prevail neighborhood, friendship small, to great next My really business That's that that be support All-in-all, that -- over very giving the on bond participants requirements, Please you will outcome, love, quarter and of vehicles events our also own grow for communities strive Being the continues of Here's collegiality we've can same I placed here through who with in each it common your rooted hope can that work

have letter, to you. Thank James acutely been That's we in strong that remain QX question with our And aware with take unfold. As that always We're our tumultuous as that pleased we're I are will times events nimble the first stated suits. extremely and results. these my really also

Operator

is Suisse. ahead, Go please, Zaremski Instructions] the your from [Operator of Credit question Our line open. first line comes from Mike

Mike Zaremski

kind question, Hey, thanks. lot kind subrogation. of the higher -- more. to guess, morning. automobile -- by about -- there's during know more seem is I'd out a distortions just of COVID, some Good trying been for in the some severity noise out to called and love called about longer some there be to quarter, staying I you learn Q and I trends. you've of to in kind learn They -- of I'm first the

bit might kind of is can new if little be of bodily So this whether normal, lower understand kind or pip underlying we the in and the the especially sides? trend a injury

Tricia Griffith

difficult Thanks me QX let me go through to and with Mike. they some haven't a reported little compare it’s insight let They're couple. Yes, bit PCI QX, yet. a not as because give volatile but you as

-- it's you when PD of happened of think opposite of sort what in inbound QX So, in the of terms subrogation.

which payments, a inbounds volume an supplement lower period coming are of applied of volume. a is period from increase to sub current Our in

So, that points sub, a we inbound incurred. bit remove if higher, you little report higher. about four It's X.X%, PD

points. X.X right So, around

this On less So, sub collision, a it's if longer And when than was in. And QX that's XX.X. higher, bit course, goes a that at driving little no were X.X clearly money you in is negative but remove sub percentage, trends. we bit, of again that the up mix little the outbound QX. receive we

that was the you're and when frequency very And numerator all different. about changes So it's denominator really quarter-to-quarter. having

talked BI, to about similar QX. You is our incurred severity

facts And two we aging, some accounts which have two points. loss of shift. to point one about relates loss believe we to then that for -- have another So, we points

there took XXXX compared to facts So, what did loss, we're of quarter two of look of we XXXX less a less of two loss. morning end we commute, seeing, was this And at congestion rear facts are then quarter and likely we because think is we that accidents. what that of

kind a always I'm a bender, accidents, are severe. fender are that more of wouldn't damage severity think intersection an perspective. which from more cause or much There injury perspective So,

believe account X%. around mix facts So our is and estimates to inflation X% take into of loss, shift, aging the we the

issues. while we the believe bit reporting on are based So a those we it's little two XX.X%, lower

mix – account about with severity for because So different PIP shifts. state in mix so And difficult of those there's higher space the severity changes. points two the many so

that aside severity. York to most we from think New the So of X% X% around PIP are states

trends. It's volatile. as different loss insight our not of some the COVID and that different into it's just you with situation severity traveled miles still hopefully will give So because patterns. and vehicle But

Mike Zaremski

during bump new the there's think know move whether very – like high-level That's lastly, been a I it's is to if And the helpful. we get COVID. Yes. to an PIP. question I'll It temporary segment the acceleration feels been of more of whether – kind this just only I'm a is question. auto. normal I of direct-to-consumer or guess, of Okay. there's trying I kind broadly

better to is kind is there about trying that of guys something to you there's of you you of guys helping feel we and us Just letter you? of understand technologies that's just bit understand marketing taper feel or kind could Anything a Tricia are that your great using help kind third-party one-off you growth. kind little get off continue better? guys from will think to do I

whether is to in double-digit Just of a trying growth direct-to-consumers the sense get sustainable?

Tricia Griffith

but we market, in side that believe for we're on our we are to side Yes. direct the I marketing reciting auto the that. the auto side mean passenger when agents private

do So we weren't now our bit able them start to to applications branches, lot or little things actually some their a home saw obviously as them it able open. go increase happened, but work when to agents orders down. seeing the from of And stay-at-home their we're of a were open

rates has that side. on happens is side I on that could a while What increased of what volatile the infection. direct-to-consumer depending really for with say will the be So commercial

likely more commercial it complexity. on products more those majority always our ventures are the channel people really and will side. in the depends commercial to over trend our are from happening that the been the But for-hire It's agents. has new product we time I in the seeing complicated been on where Progressive. would directly say So with have as buying That our coming it's comfortable transportation, direct-to-consumer strongest business direct felt a they're

starting it we've truckers ventures comfortable say the they're in could side it's business. what's It example, invested to new going I would be with and will that could more happening is what's it what younger we're say direct. for with direct continue. the So pandemic, hard glad be of if But happening

to continue have that for just to need. on want We when where feel be depending we how customers and everyone buy available to for like and want broad coverage

Mike Zaremski

you. Thank

John Sauerland

dynamic very Mike, there's And we point normal obviously, normal questions. we and direct playing new right add just now. It's thinking use the a in to I aren't the new well. might environment you severity a the both any but we're think out

the Q direct in the for as quarter. a XX% noted up space, in So you the advertising is

quarter, effect to because of about up well. that that Q advertising as our So come we when conversion you credits those the and know of opportunities some where spending And lower or now. to up efficiently see business. quarter prospects of That the in as in spend their you is us the call is off approach X% rebates seeing for of to in we are we are bring competitors the a what COVID had side more noted and but some have equation in was prospects should pricing

up We all in quarter. from competitiveness think more is even X% Conversion we So equal, a else a for the we're good may pretty be standpoint getting competitive. place.

even else effective. So our all being advertising more especially again equal,

Mike Zaremski

you. Thank

Operator

Our the Wells with Greenspan from ahead Fargo. next Elyse question of please. line comes Go

line is open. Your

Elyse Greenspan

just Good out then was question that in the driven down thank first the first morning. went Hi, the pointed in you you. second did half quarter, but Q, of up half. guys in miles third the back My

was think any think color that or COVID you apply I Or lockdowns it other not within if might third have I'm cases the to that? that anything you was get wondering some driven we So in pickup color -- in partial dynamics just quarter? sure what if could would states? on certain

Tricia Griffith

XX%-ish ranges. what done we We from that roles have in they that's retired. home. country. XX% to the in home We the the digging narrowing. state. fell to And understand people We still me at given rush mileage. versus can into features data it. had now kind of they're their and is where think We're believe on fell It’s really during so that the traveled what when really starting although how look jobs have different a is than features have, be these in do younger longer obviously variety do still see really are around We people they're a reflected we from think to people how period jobs congestion miles the And vehicle older might a their to We a can be understand just VMC, that to UBI dig that something And time We're small a less of we congestion. call their less types are very the changes hour more Elyse. miles right XX much to of that they working our we're of is dines you the are the need you might work-from-home demographics more and through of about. trough and from state-to-state. work happened. Robinsons higher we they try would in morning, Good morning the that or driving and from XX% job at vehicle where across that there's Yeah. be pretty in and with line traveled can't in that than and XX% wrights There's or this spends look drop think gap looking fact for

we're that So closely. watching

in lot states think what I the several a what do. rates depends specific infection happens with weeks on next and

we're the in seeing is side through those group our side using again what that both do where not continue trends commercial hall those states closely Snapshot change. we'll areas to watching the we and very those So data and frequency understand and on smart product

the So because forth. on back drivers of goods and the truck more road moving are

the we a congestion And the more. commercial side. the see road bit decreased, we So little on on that different even though has they're know

a of and keep usage-based gives we'll many you always our in and watching of that our as So across that bit a changing lot of we hopefully thankful color. necessary. and that have little It's data insurance react products we're

Elyse Greenspan

is That's helpful. Snapshot. And then on question my second

right, we give a I your kind kind was guys I COVID to driving a you savings within them? the on where for Snapshot of to take-up rates us hoping today. then could that this during devices And could sit less of with So agency are you is noticed the that update and the have potentially potentially use want side an greater rate both some folks guess take-up lead device potentially slowdown, direct to

Tricia Griffith

Yes.

a direct rate always the side. had pretty So take immediately, we've good high on

shutdown, we saw immediately, uptick that an So leveled had that. off. when And the of in we sort

and take On the agency we side go where we haven't had historically a saw great of up, rate, a continues. it's that

their need of last competitive, months, to and So clients. and the that, COVID in understand thousands I virtually, of -- and think, mutual been I to and talk be been been they've probably and get agents to agents is couple course, they Snapshot able talked great that things talking I've selling to in they to the I've our clients, literally of out about one of

increased COVID. and level has increased it's of much before but out, more has that maybe that kind than so And continued to

Smart commercial biggest was the XX%. climbed monthly the and September side, enrollment Haul On rate ever about to take the

want commercial So do seeing anything? John, that add side. we're definitely to the on you

John Sauerland

Yeah.

So that's that the was higher, go transportation definitely rates especially that segment for-hire noting take seeing earlier. in Tricia

on rate is, the to And you that of well excited as new ventures. see especially delivery trucks, call very what take think sort trucking. So we're of interstate as can we

out on premiums own high. So their a of And truckers truck lot are going pretty are insurance days. these

insights we open priced, the rate one. that even that feel Smart we especially the might the that And from segment really And when take overall. is that very great there is premium. day So to have have Haul well higher they're very lower than it's offers that we

more mention used whereby is drives. Test you do now. -- we thing, this other encouraging. test Road I there have Snapshot lot, the rate that So call a can something we marketed we would are we mobile devices on generally in via Snapshot the And take And what well, haven't is is to market called

at and discount we a Road you you renewal behavior, driving drive quote. your you we in at fully we participating a give developed Test. for with if Today for the Snapshot, while, your deploy discount So give get then initial that

get that You up front.

the be So ready again, marketed will do we're we early but rates there think we we're to by have take very excited it, consumers a interested.

Elyse Greenspan

you And proceed will you available thank That's traditional where Road be Snapshot states follow-up, Test, to helpful. Road will Test in have all the product?

John Sauerland

Yeah.

available today. it's So marketed just haven't it. We

Elyse Greenspan

color. for the That's Thank Okay. you helpful.

Operator

Go Our Jimmy with please. next Bhullar, of JPMorgan. question comes line from the ahead,

Your is open. line

Jimmy Bhullar

like more Hi. more recover Good either be to trying just for it are to and a and and environment outlook auto few seem years? last business trying margin, companies morning. sort discussed the of gain pricing does proactive share I the just question you your in they've on that the more lost had the conditions personal competitive because and or over share the

Tricia Griffith

We've Yes. great. I compared X.X September. really added last mean, million we feel policies to

we were like So we quickly. reacted well feel positioned coming then the very And pandemic. into we

started depending want product happens, channel, to channel and board And continue what the we stimulus, on do growth that. to profitability. state there's we do want what travel has across that really and look -- et for have at we were feel been retention, auto they'll with to helped out because So credits to We obviously, vehicle were us months that customers. there immediately that and those could to able miles well balance and some product, share by our it play down. we've if enjoyed We XX% knew state, gave And by best we to moratoriums to by as we so cetera. that then customers change, because say, two gaining that surgically

in competitive take conversions we're bites down If rate now what call, will or less we is, lot other we from and intel down we get and decreases. companies taking going we're terms rates we slightly. of of doing apple our a small what of the So agents, see

and down the X when might rate for states, there some our that X%. people XX about say XX% quarter competitive through keeps decreases, and is We X% And April watch in of I quickly, XX two about April are this really September. in that about talked So net decrease X.X% have been did we and to really written percentage shopping. and states have which taking about will so it rate maybe We when through taken states maybe we're react December, us form XX country-wide of we then, about able premiums.

So, very did. to we're had do that in And be we credits letter most. again, like good or when position, why surgically our really our is need we industry the they to on product. is I customers feel I I'm the reaction both COVID being been able to rate, pleased like we everybody But make whether took they we depending everyone's a the to sure competitive. and This competitive John and a said, able that react our us off discount, ways, competitive. positioned for like well, feel we're are very do way going what to and and results the with started which we've trying

Jimmy Bhullar

the your balancing where and there you're to mid-XXs focus a more down think, you've think slow push would of And to Like, margins in you've instead? this growth? growth for where and either level a loss past be continuing on ratio talked or the level it I growth on sort taking is when up combined comfortable about the you profitability, ratio and about

Tricia Griffith

Yes.

fast went So least at of grow in as XXXX, profit. since that we to $X.XX we've underwriting can make we in the objective had the company and same as public

to core profit. That always have is of five we one balance we values and so, that. And try said, them

be if growing, first. don't we'll believe then profit start profitable So we can we comes

want deal. We to give margin. here's So, the away don't

grow our ratio, we combined objective as that at surgical XX, it grow believe that margin level, a is less very so. we still but XX we'll than can, as fast or across such the overall it do for that the we understand we such, if If and we'll grow again, keep look that different job So company is portfolio. our at we can that as and do at a the don't, you

continue market profitability So, share we to yes, to achieve sure while grow, going we're that goal. gain try our to aggressively making all

Jimmy Bhullar

you. Thank

Tricia Griffith

you. Thank

Operator

James. line question the next please. comes of Peters Our from with ahead Greg Go Raymond

Your line is open.

Greg Peters

morning. Good

be will question first around the So retention.

your Ohio-based discloses company know, you As went if insurtech just this retention that been curious rates, color last disclose give public you It's They rates. relative year, Allstate their year? company. could us And how has was retention there another an retention to their some groups. I'm also about

Tricia Griffith

Holy service reward to you in, retention acquire Yes, us money the you you retention. to us and -- the so customers, great want we for want the really Grail, is make they with they sure spend give come

for retention at look life policy we call So, what we expectancy.

XX XX% to agency, of On months, indirect. trailing X% up the it's up X%,

those getting the -- benefit the numbers, but would Now, unemployment, moratoriums leniencies with people would and conservative, caveat billing jobs what we're so the be happens etcetera. and and we is we say are that on a may of depending say they and

bit more three month is lower PLE a indirect. in little X% a commercial trailing side, annual three of about is a because is at policies; X% bit line on XX up X%. in up, we are And agency up Our look those the course, basis Trailing and volatile. X% little

very of best a keep to but customer if and And that, right very close their coverage work customers them, the to policy we're to there's group keep to to direct auto make to lines do their management know going that we'll CRM, relationship commercial and lot on also auto, now. need our both we our pleased our work changes order volatility with the with they So, on side available. customers in our

moratorium in COVID. we lenient the know because that we scene is of that based would stayed very the part are So, that I a on on positive. also But we PLE the queue say state numbers of

Greg Peters

it. Got

that your I'm get to them are your expense The possibly expense curious laser-focused second within to you have low initiatives company bring your number ratio, ratios of the them the to and closer is competitors down ratios lower. around keep on And reducing your level. a ongoing about expense question to their

Tricia Griffith

we're of our Yeah, It's we expense digital of that that the customers And proud investing results. like sure talk in we're our course, all making time. about balance, ratios need. pretty things a

one pandemic working we photos and do went we I the But think can of good was of obviously, really know learned the and based into is that videos silver you on of the were prior on to fact that all we homes from to the our linings that write that the the exacerbated estimates pandemic. we kind it work.

So, ratio, we such continue quality or to to biggest car and an be some Sauerland’s of RPA what is intervention. the understand example expense Because good, can work And experiment want expense we they and working side John a on, can a is vehicles ratio have is in you look human see low your of that adjustment without what understand, organization, type loss Group loss continue such that we is that of estimate. part as process. and not out. at a need to not things accuracy because is our CRM indemnity pay we if customers how get don't

and a lot Directors it that's for changes the last had, achieve. around redoing Board we're what a And things because this of a obviously of five had company, we a lot we're the so topic And going actually there's, been year plan year. of actually try we a to what completed of we year, we we're have

but look less are that customers? we competitive constantly prices that balance this can John our affect to we And together. advertising, on work And competitive not we than good. How important. digital, said, do try investments really that know is absolutely like with more goals of we with that internal we have and a industry, We

on big or to John you a the ratio of color? the expense that decline So side. side whether any it's holder part is you're want string overall first it add

John Sauerland

some Yes. level better to Certain but cost cost than structure our have many are of there structures competitors progressive. who competitors are aspiring

get So competitive in continuing we've years. for been structure to more focused terms cost of on

Tricia we in As two buckets. it of noted, think

expenses expense ratio commission ratio. that's the to was order the advertising, to acquisition, It non-acquisition we of put think pay So was acquisition long to the agent on In up I growth to we're we for quarter because in advertising in customers earlier, have as well expense for good just we We have side, a continue acquiring up XX%. year-to-date. going XX% think time. so competitive agents we're call grow what we commission, as there. mentioned Similarly and

portion it price think So the three Tricia on noted, we lower. in set of expense reducing auto commercialize as well to matters around only as trying for further big the that home we go five four years, where focus in noted, taken is our costs as we what and marketplace good. growth is We consideration as points part is the ratio you competitiveness on of insurance expense our infrastructure ratio of And is think expenses – non-acquisition drive very non-acquisition and not on but Tricia are especially. out close if think expense we've our back ratio, or a site we set I that the maybe thing as that in the to

Greg Peters

Thank for answer. the you

Operator

Morgan Go Stanley. ahead question of from Phillips comes the please. Our line Michael next from

Your open. line is

Michael Phillips

morning. good Hey,

that I that offer connected rich thoughts to on complete the have view insurance your access car So and to from to fleet at company fleet aggressive use about you starting their proprietary Elon that's all his really being guess hiring with companies Tesla is data own just – heard we've on talk only captive like actuaries for insurance well fleets? real-time and competition do data how to maybe from

Tricia Griffith

parties understanding – positive to investing from Express data we OEs mean I in have it how have that from really and we whether quote. perspective, – I functionality third been do call a think where we talent Yes. feel it data to be gather We we we're at.

trends. important. is now. we'll who that and be answer over owns better think time that our the answer is talent the will this Does to working point yes, is that to that or lot data We with working mean something understand believe that I get some but how we're of question your a the on that data So understand quotes understand to I – at way question? on answer the we've been partners have to

Michael Phillips

I access was their offer of landscape was that know really I and guess, there their we what I to insurance how view have that to to from trying So companies the even get like own looking towards I offer at. just your from more but aggressively insurance. fleet that competitive speaks was are trying data

Tricia Griffith

Got great competition. Yes if answered that. wasn't I Yes, I it. sure it's

a they for We have had in – long, long time. have data shot

very tell we're really these the cost. I about talked help feel with the today, on floor excited we those transportation be will the with that so able and real question That the understand now I in time. able drivers now to side our trust to cetera, that is you drivers traveled, And important. higher help trust, to et to comfortable. interest Robinson with think about And those miles discounts give that commercial very able when fact especially, cohort, The we're doing what retention. are and That loss the best to could delivery sell watch line I'm be Elisa that vehicle I feature answered will with

evolving. stop great, because the to it never allows is So competition us

plug could it we do you then years wireless. you a had dongle So and had ago in only to and the

we talked Now road device. John test. mobile about our the have

Proview. Snapshot have We

it So really continue forces on data in and invest to good our XX plus a to us collecting million way policyholders. data

in better. great we're competition only a makes like really feel position and us we So

Michael Phillips

you how score then the and runway looking left think on up about Telematics specifically at UBI you what's guess, in lifeline talked have is, alluded the or I and does credit auto? think two lot we as couple a years? rating I of pricing Okay, dries a it guess Are Varel? variable thing I personal Or now. to a thanks. part Do here decades? long of we that

Tricia Griffith

You challenges know brought what? you there's up, about been will -- glad That's -- because I the been a that And I on that know because I'm there pandemic -- of lot. issues. regulatory we've thinking be

the points. what's answer I lot kind would really longer So be world. on make me couple it's pricing Michael But of in on of you to than for this and think then a a important Basically risk based happening want. probably

projects. used questions specifically, it And first affect race. been and in we've usage does foremost, race pricing So never is on the of getting credit insurance

Basically And fulfill key, for we that's when analytics it's insurance the the for accuracy, American it that lot rates. people have want business In base it risk. in fact about same different and to We've are make races, progressive advanced to If that dream that's for about to few a their a all opportunities that race there's driving, to consumers insurers price available also And specific want achieve and reflects get small really and cost. the we legislative to lined. same exact risk same it's leverage me, risk and sure same people to they us illegal. me we desire. credits, regulation I happen rate like And the we have technology person enables owners virtuous and and the data talked the past insurance A clear it's just a their allows be cycle. profile. that and risks -- it's economic and supports the

to not then so which back years, success If been broader segmentation and availability you've to accuracy. job the but goes create last to in financial able for several got and creation. consumer for to affordability, just company a that We've at for leads growth leads rating accuracy many our and jobs innovation rating the least shareholders and and

in – to solvency, closely the the that role options past, variety industry been that and of consumers. had to that very competitive we've provide a we've proud and regulator's the for of. ensure healthy cycle the facilitate in markets So ensure it’s wide us work we've talked compliance And virtuous about with

prices excessive unfairly key inadequate, at before that or ensuring discriminatory. focus elements to insurance that for not I've So are is on mentioned

strong And through competitive in are advocates the distribution. and healthy, affordable. the volunteer for transfer be continue to products that risk able insurance facilitate drive taking industry, So economic delivering want insurance we're available for that broad to U.S. to both and growth we

of the contract industry ,we risk-based for and continued So support the sanctity believe for to us we we --in pricing. want preserve the

for Now a other those recognize open burden. mandatory with and segments. very on and certain can industry will massive outcome for solutions negative significant leaders we to likely We're that disruption collaborating market all be said, individuals some protection that have versus unnecessary that creating regulatories insurance other do regulators financial a individuals for and

variable So that's credit we've one many. of sort of on, pricing my which support why risk-based feel is continued to

how decisions just think about where challenges time we and affect affordability of at I we're history and have about we the make that think the think in to that we for future consumers.

Ohio protection go countrywide. course of who in that. the route We we're do Progressive. as have to I'm know And So be couldn't get able able XXXX. then out nonstandard insurance segments. And to affordable our to people allowing insurer you eventually many very if Cleveland they're to proud back rust started access of across you in

have segmentation of and model available with believe access priced to inviting greater affordable confuse shouldn't data providing unprecedented challenges a provide competitively during our affordability pandemic critical that this innovation insurance and many long to We of We and use all. technology in widely protection. for the standing and role, solvent face I

issues they've have couldn't from not the decades for equality of solve And the opportunity the them been think need I surface. problem brought the get now we root and the year that insurance and the for to think industry ultimately but and all I just looming arisen stem to during ongoing. pandemic, together social events injustice really regarding this

$XX that, should will stimulus it and distribute surgically and minimum this us list that. country over term wage employees time form really hope hour. need could I over And those wave infections. that I'll our the to more that next able Progressive through believe a some $XX to very and all perspective raise we shut focus get already active that to but And my on from So elections per my hour most. of proud an of we're up, the time funding. as on need make note we is decided additional this we're to I need of it be this short go to after

safely communication. the schools online effective reopen can and deliver So

get ahead. can't You

which broadband ability coverage. have online don't you to the learn If requires to infrastructure investments like access

insurance everyone play I is that so to role solutions an risk-based on, I've achieve So country that changes. message we a desire. facing focusing here lot as are and a that, but is obviously to about company able make really they opportunity and the go could economic a to we'll on the And substantive great as in on a continue thinking Michael. opportunities rational been

So I'm glad up. you it brought

race I them. variable. hold is related not think and a firm powerful not It we'll it believe on to credit is it's race do related. We continue that is

Michael Phillips

much. you it. very Thank Okay. Appreciate

Operator

line with the ahead Go please. Gary & Ransom Dowling question next from Our comes of Partners.

Your line is open.

Gary Ransom

up. customers all Yes, good and mentioned and creative the your morning. in Tricia letter wondered ways were quotes customers success direct you we of and the attracting is customer. how just you're are into in What in a success in getting or environment the COVID those getting and going new key successfully funnel term? over at I of in looking the And that's saw of also longer this customers either the seeing actual spend up what treating elements ad today

Tricia Griffith

we targeted product do more as I look our ultimate able to is with our expand to creatives. be acquire at below importantly, to cost. line, Gary able But success our at/or acquisition we're and so think Well customer

savings. years about talked protection it example but superstore, savings, buy inside And home. message of Dr. had So for Rick have first savings, called for And have that on a is, we and talk network now this for is your you whole the An parents call. a your we've I had that the Parentamorphosis campaign seeing become savings, don't know is we're and few characters entire work. when about your as settled which obviously you it we flow if years you've character also or not, we seen

guys of We've the relate couple and campaigns think good that line a of results We're a sports chains of regular is with Cleveland lot which I that the live seeing to quarterback well. that play that due watching done to we the people XX-yard what Browns television. can that. are to now do to everyone's wishes, able really until we the market back during go

So we prospects creative we when works, look do in new to call convert when lead and months. look we and on the it at the from And us us the that it at all then when we haven't last does doesn't, what what get six and it campaign. that understand look we in get creative. more things move at deeper doesn't, And double -- cost. we shopped those down When they

shop. really we're continue where we that about happening, whole what everything during the it meantime of department, And moving because nervous know I'm doing in miss everyone kind that had forward. and that some creative to to is So they we of really a didn't we competitive thinking initially consumer shut softer, wanted did make marketing on be out a because call sure lot we're really we We and COVID, call, flow was it, shortlist, was Progressive environment creative cetera. to because and stories opportunities our to that squad, on her down. really go so a this proud available, campaign were was did is when of we et step. We of Zoom even got we a And just now nice new. sort But

Gary Ransom

agents? the also, on But Usually just that there rates up well? that it lowest you conversion into things on to -- is Are more price where as Maybe or than comparative are are means there there more there? your the extending were incentives they coming -- seeing that I there. channels Is agency agents’ think going the as into your is other well. raters

Tricia Griffith

platinum if agents done incentives that. the commission a Yes. we've depending loss They're home have those may we changed want Robinsons, them the agency things. we're have things have if to do do agent to We to occasionally other our giving you're auto selling them auto, of UBI get that more XX-month And bundled we commission. and over structures We, to on agency see in agents be, policies years, platinum allowed preferred, some side, so based It on like lot incentives. more. on based the and ratio something

we So in the past. do didn't always those

agents. I agency relationship I've talk to with changed has said agents very to way. beginning, of a the lot in been a Our our able at really positive Like

our had XX obviously do platinum I them. with year. couldn't Usually top something We ago this long not we agents. Just

believe have long-term So and different a the while type is give that about the commission value the you we we bifurcated of based commission same overall we'll keep our of which level rate, incoming we'll customer, on customer.

complaints, obviously, So, last probably lot, say from claims organization, stellar. matters because lot. the a lot, not coming happy I a commission is a would matters have cost so claims our so organization always and with thing to to the And any are matters deal brand agents

is yes, Clearly, based of we it. we that So there's one we on in cost goes into different customer of incentives namely from the have that do we -- get commissions have and lot preferred. our type a benefit But, them. brand. They

John Sauerland

I to on say Tricia's of ease just Gary last point elaborate use.

important. So, use of price perspective. competitiveness is extremely as almost Ease is in important my

to on deal noted front a but So, as end with not the end claim sure, hassles well. Tricia back for having as with

drive we've heavily agents to in invested easier. and make to technology in our help quoting business that So, household Progressive quoting now will definitely as the And well.

Tricia Griffith

full portfolio finished we month last or month quoting. this think of I Yes, rollout

is agent extraordinary. the So, feedback

got Just make it you to Gary. easy. Thanks

Gary Ransom

you. Thank

Operator

with line Our next is question open. please, comes from Goldman Sachs. Kinar your Go ahead Yaron

Yaron Kinar

of kind the With Any relate of to the line any to maybe ad the channels reach and of actually new media customers? spend of innovative ease get beyond and out you're want regards on market? morning. to creative ways then exploring the Internet get this I use social our questions. consumers and to continue Hi, quotes in to ways traditional are good there that to last ways

Tricia Griffith

I I and we marketing that's streaming. how When Yes. media the media. We're sort on to of market usually go speak portion about one of mass

advertise We Internet. affiliates on on of we and the So, network, Hulu. most social advertise channels, on

we and -- search. we So generic have

we want to down. don't sure everything too to message you make do bog you of our our get get the right we to can there a -- much times to message variety you not number to ways little So because too and we we of not have

a many there's -- on there's we that even in And the media. specific the yes, have So, for channel. creative that sometimes usually on we're looking besides characters that platform mass ways. that also And don't digital have it's demographic will different

down. great to or is how much play change have so streaming, we'll things So, yes, And to we watch ways. of of understand so we as a with it's to working if remove it that. pretty a part data or the double people we part quickly variety And continue access watch can TV

Yaron Kinar

And there? you kind greater that any of metrics spend or terms share improving in on Is channels? can in of you media take-up are non-mass are your those increasing there the

Tricia Griffith

and say different them We're many add people think to channels. wanted have for yes. because have on? to I need access spend John John you do so be don't through to to something increasing the those cord those cut channels the we to any sure in watch TV to want

John Sauerland

spend nontraditional growth into new we in the testing and in media media has for now Yes, years traditional we're outpaced constantly where can.

want reach when the buy. We overarching is have consumers philosophy on and a focuses to group new where And ways people. how that entirely to

the forefront we I channels. can on of And speaking new those relatively measure ensuring the are we actually trying success normally think new investing. that channels of definitely So, and

we to very differentiates measure out that think find marketers. to we new I relative other we're us are money its that spending of So, that effectiveness disciplined a ways lot and

Yaron Kinar

that could blocks. the because of as by even an insurtech scoring Progressive legacy in the And one innovative incumbents much form you second question traditional have goes hear the from arguments these how time my push they're is And insurers the which telematics Okay. we successful not dilemma blocks. insurtech, of based and encumbered to innovator's because advantage over legacy an that over then pricing of and like result a face that it ultimately ones

little looks at and in innovative between about and pushing how the legacy balance the it So a Progressive block? dilemma to and ways versus how right to handles hear maybe more innovators price I'd these score the maintaining creative love

Tricia Griffith

cetera cycle talked and a in do a have about I And when that. bit virtuous innovate, I talked you that, when little you about the et segment, you of terms

to say start we're of work innovation. legacy And us to first from okay, that And insurtechs serving hone say make have that said believe be the we here that be year. And think it easy work really but we're them we be that. that's increase DNA to We've so go able try constantly been our use be are of in to the million and technology our don't of I I and perspective, able We're purpose or nice to in would in able That's them, is use going for why are able we to systems. in terms and margins, that to naming continue we won't should in we great in that. is part think, perspective. ease which around. – a of to to I time innovating were I to also don't one ease we change going insurtech a around target without just having And benefit and $X.X cost reason on don't acquisition. a of the we have great lot. intend policies our profit we're important. That's to do the very hone on that into

don't they own that shareholders to availability we're we have going have make can. because test to growth if not. you XXth to we're regardless that know us We say our are We money the or committed the things, – – fast

able everything to leverage do values costs. We're size and we're to make going we're one acquisition to very lower our we have innovative. always can a our to So of profit core

Yaron Kinar

on congrats and Thanks, it. quarter. good Got a

Tricia Griffith

you. Thank

Operator

please. of David with line ahead from Our Go the Motemaden next ISI. comes question Evercore

Your line is open.

David Motemaden

morning. good Hi,

exploring. you And with market? entered view I Exchange way of of DTC Is a sort subchannel an have Data help Veris following or business might this exploring for partnerships of that with Just just expand you're of on any new on customers. car any to vroom.com new acquire hoping maybe like to these I'm the that OEMs as a lines ways was sort you the have or Ford may you something that distribution agreement do or have you unique to online – you I – bit personal wondering of along offer be I just insurance. how could ways the acquire this auto of has the that know that guess that customers? the relationships? sites you

Tricia Griffith

I the little some and works Thanks, we've with over relationships a – functionality right have and that other the a we aggregators. We about liberty talked many in OEs work different not and us we David. many years Express with bit to do give OEs Yes quote talk John? that to worked about that now. I'm have will the

John Sauerland

Yes.

the ago. So GM. over a many can't We worked years with how with years. we've four directly probably OEs ago now, I remember started relationship years

sale. the reflective As you point driving to get offer rates at and data directly know from and vehicles that of quote behavior the of point the are of

with worked also gatherers of have third-party aggregators data that that of or We data.

and it, to a actually apps funnel not challenging. and are it. where that out in is we for experience continue to say come been number That that we with in and as we've the you're won't the we work well. make continue see tracking normally we driving entities are number to space. are bottom to and where it those a your at there test refine that versus us. buy outset economics, funnel going challenges think has It to as phone of how there come is about media, worked So better policy meaning and and on work of When to the new to that And through economics continue people the you're in point talk funnel top the the of get the the continuing funnel we

that manners have the spend success direct point our years a the but OEs of a testing of it soon from data So be will shown numerous into and some we've in portion been anytime media number for considerable now frankly. not to

David Motemaden

Got it.

those rates but still direct channels. other like that conversion your sounds interesting, correct Is it so characterization? And the below are are

John Sauerland

you from about way process whole the conversion And the folks to in get core to think policy, the think only not but you to bought it. even process. as then to That's of a got fair quote and getting interested

think there. about policy. when So talking the got funnel it's we funnel longer efficiency. that's we're percentage what about than we the is talk in just entire the of This bought conversion a Then quote,

David Motemaden

Got it.

That's notwithstanding, credit it's helpful. more then switching And year That the that sense. just a and you gears profitable makes broadly other Okay. for obviously you've guys, been just taken. actions

Just about the of guys And the wondering, think variable as end approach how I you about year? we are how dividend? we guess should that thinking the

Tricia Griffith

Yeah.

that. and strength, year of couple for some Jon John throughout thinking come about. that strong So what We've we we Capital up. that year. Progressive about the which had Board December dividend decides our something thinking them and be committee always beginning meet with one capital dry will that the more Head understanding and the We with the of with is a have Obviously range powder be through payable I in our might Bauer, sessions we'll very and a believe investment the at line Management of meet the next talk anything get we that and will we're

about it because great we've We able left share year. position. a have in months We So feel can with great feel but -- obviously our we to any And amount with been few great our our Again, shareholders. can the we that's and be we feel a feel Board's that an share about past, There's growth about but I don't we still our Anything good. really decision. unknown our capital happen. specific profit. you, really will

John Sauerland

We five handful left people of minutes call the a still and have queue. have in the in approximately

little go a and We the will long. go here handful bit through last

single Investor contact over we at a However, question. have contact to I'll additional the limit it on the you question, group will With James. the website. Relations if information hand to everybody may you back that,

Operator

KBW. the next question with comes of line Go Shields please. ahead, Meyer Our from

Your line is open.

Meyer Shields

on either hoping of us. us there? Great. could what's through the sort and for John, was volatility I monthly or accommodating commercial expense And thanks that talk been the in lines so much going Tricia ratio

John Sauerland

looking we're should volatility. results, at expect whenever So you

In business, Let about me as ratio. ratio, we start talked well there of the ratio expense expense in non-acquisition our as terms previously. commercialized loss

our growing growth. been commercial future been we're actually intentional and business in that's because plan-ful expense for our have ratio and We investing

program direct heavily easy Explorer of platform in for initiative, insurance get from quotes small invested call a essentially it entire feeling -- great our far. our we and it owners now marketing program, progress business. think BusinessQuote like in get direct business. XX our our And We've the would states business because basically what Specifically, Explorer, is also We we so that very which there. country business effectively commercialize with we're the commercialized our triples makes addressable about which to HomeQuote are like variety there to carriers platform to through

a ratio lines the in bring a it's expense to So been. that we relative we've commentary, look expense competitive have relative That down. a term, commercialized little slightly a to long-term you're month, at business. But commercial structure business meaning we're from very going to plans specifically quarter. encourage ratio, the you competitors, for on cost on our the in longer we where loss to least for said, if back ratio on for elevated near-term, looking But the be basis

Tricia Griffith

around and concept. Horizon BOP fleet. three in planned And to business when what I saw Auto years very would forth opportunities the say We small specifically Meyer and some is TNC set that several we this and mostly commercial was Horizon and ago

that And that into there to investment. money put in And the so, now money seeing we had of we we're it. invest some knew some -- to order have fruition

it down direct commercial small on and product with that over believe we and for things do different but new about we because felt to And spend broad an that addressable market So products, about come will and both bit that the to to with even these bought our in opportunity the solidify. odd for we auto pandemics agency that we Again good was more little feel products. ability more time businesses, as us there have side. feel win coverage going positive very our a with in been we like forward but many

Meyer Shields

so Excellent. much. Thanks

Operator

comes from question with of Meredith line Brian Go next the UBS. please. Our ahead

Your line open. is

Brian Meredith

My it question. Chris X, to per if I minus went XQ business from auto look written for premium personal at your X in average XQ. policy plus

higher seeing may be things impact Just been that or all well? you those having you've any buying the types an are i.e. taking customer as of deductibles, that curious is limits that, habits in on changes rate actions due to lower

Tricia Griffith

I seen change the our mix much would profile. business I a majority haven't say is of premiums. in that of reduction too our in

Brian Meredith

Great. Thank you.

Operator

America. Josh with comes Shanker Bank question the next of line ahead of Go Our from please.

Your line is open.

Josh Shanker

can in are Thank I'm and compare right JV just it can we you when shopping now widely add, that questions, so seasonal and if difference because a people ago. is years prices in the are compared seeking going there auto to maybe But down, decent seeking that insurance for auto buying. people believe of shopping taking home late you might unsatisfied. stimulate the going my shop, an be Progressive's call. and people so just between up, And are know a where ever, policy policy? to there's that to wondering progress people had when three was prices I've tended now it amount behavior, and an if auto

Tricia Griffith

off, the use depends terms what I are so et That's it hate this when is really Yes. be that, the they're Josh, furloughed to did in It or situation prices this still environment, hard, in get ago. look to And of, might the even I unprecedented. -- cetera. with going it think looking down different. three and it's do on for years compare at and waived consumer word, somebody

acquisition that to there we that it's and is they're know. So have our making ability now we to the that sure measure the get there. customer we And that The what message hard out costs that under really I targeted our think have. on in to broad focus have coverage amount

So for to it's me say. really hard

is I they anything? want are Do reason, priced. to we're we've and the think shopping we're tried just, you add to when easy what competitively do available, we're regardless of

John Sauerland

Yes.

behavior don't shopping There agree agree. I So with different metrics Tricia. always they many and around are

we most we're are we concerned that is getting to As spending prospects up. are Tricia we with noted, know efficiently the get as prospects are

the consumers' for being terms in bundles In terms bundle agency line. are direct have quotes increasingly of we behavior faster mono of been the in as positioned perception the we provider as or the And auto growing as certainly, the prospects channel certain. in in our do measure getting that. channel than well on we are for home, both And auto

Josh Shanker

Thank you much very

Operator

line Our Citi from the Kamath next Suneet ahead of Go please. question Research. with comes

Your line is open.

Suneet Kamath

Great. to for sounds Test. a focused but back marketed have circle to technology had haven't like it. Thank on the it Road or you. I It maybe wanted you while,

why rolling Thanks. decision make just just policyholders, as customers, on So that push to as you are planning new curious existing well now? new out the a to customers? or And

Tricia Griffith

put ago. data. there years up, Yes. We something they because had the ago way complications, drive time six the And to want called say it to need or was at in test some were I years five maybe. some

did not of was we probably a we a little bit reasons that So advertising lot. the think that one of

So on-road again, while. it customers. And We to a working test give still the on for we've their of be have worthy working with ability want people own to this we've would our been been coverage Progressive. to and tests, it just make what very

to rolled that is for we've continue for have likely Data we we economics -- yes, have it in -- probably through spread snapshot you ago. year, customer going other so to So this really roll I'd funnel future. coverage. to learn out work as a and customers coverage. the a These we you're are it of out over that broaden say been want the on couple very wouldn't more working months early, do because broadly if as so already. on that Again, we're then for near for you'd it But, a

John Sauerland

That questions. appears final to have been our

for So that back the scripts. call concludes over I'll our James closing the hand to event. you

Operator

next third Progressive That of website available for concludes the section event. be The event investor the about of on quarter will Progressive the replay Information Investor year. Relations a Corporation's

may now disconnect. You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.