Earnings call transcript Q1 2023

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Douglas Constantine

Good morning, and thank you for joining us today for Progressive's First Quarter Investor Event. I'm Doug Constantine, Director of Investor Relations, and I will be a moderator for today's event.

The company will not make detailed comments related to its results in addition to those provided in its annual report on Form 10-K, quarterly reports on Form 10-Q and a letter to shareholders, which have been posted to the company website.

Although our quarterly Investor Relations events often include a presentation on a specific portion of our business, we will instead use the 60-minute schedule for today's event for introductory comments by our CEO and a question-and-answer session with members of our leadership team.

The introductory comments by our CEO were previously recorded. of previously XX-minute we for schedule and with the balance use live of answers the team. of for members completion recorded will remarks, the questions Upon leadership our this event

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

is uncertainties December discussions available our the businesses, information our face. supplemented affecting concerning you our we risk found and Additional related for These safe documents of the can ended risks on to will report investors.progressive.com. the year at factors of by for XX-K where XX, in the Form quarter report and section of Investor Relations those annual be challenges as XXXX, statements discussions other via first find website our the XX-Q harbor forward-looking statements XXXX,

I'm kick us To begin some will Griffith, with Tricia? pleased Tricia CEO, today, comments. introductory off who our introduce to

Susan Griffith

for thank morning, joining you us today. and Good

the events. through. post One vein I'm end, confident to and been of since years the perhaps XXXX, the uncertainty business unexpected is onset our lessons In poetic unforeseen to of that the the pummeled business. that will In Since the March that us pandemic, the have by pandemic in have future. of see enduring continue is we X manage resilience our through the our world

combined ratio. calendar on to our XX goal quarter, year of not first a we're track the Through achieve

about here where goals, Given our we're this going. our how extensive many stated meeting questions and of has got we history prompted

My which are I'll answers challenges we more understanding is urgency addressing that with lieu hope as of clear as traditional some acting. As analysts. how that we by asked opening a questions such, the will you well a instead investment the of gain provide statement, have been are to in the

The and your The you have scrutiny increased XX reacting to always our same new will first above combined to are are ratio. to we our question we answer is in ratio, the decrease verification margin of being address to speed a we of expense decisiveness. way year underwriting with these rates. to tighten business have largest target that is, how The manage calendar and that I'll X levers our and order. react

our deliver Our both largest we expect reduce spend, calendar is our expense controllable variable consider are we resuming ratio. that expense we confident can to spend. reduce and we we advertising costs, slow are could action year which and Once growth to will profitability, taking help target these our

invested won't While of may our benefit media this the to as spend from actions growth places bringing standards limiting reduce we've industry-leading details our in will non-rate options, plan the provide believe business. Using target we'll can't bill science we currently tell have and growth I in which we segments in you we how are and underwriting acquisition that to greatest write forward, same of reducing such tighter that the margins. believe the side, going the pricing the affect to side segments business continue we on or our and we at will verification the

the across ensure We margin. rate aggressive XXXX prior plan lines where of and in to pricing earning took our Auto country-wide is target Finally, to we on we rate X still basis, increases are of through the balance some an all points and aggregate In X, Personal our largest moving lever deliver rate year to profit take slowest of quarter we're rates. increases. in needed

first in to of are we what growth? will quarter in and is, this was do foremost, of proud actions the meet keep the XXXX given all-time we question, that. First and high our for company, to the that target next will very The take profit an growth mind

hard in market of still a quoting consumers are we with Secondly, their lots very insurance.

We also continue to see shopping. ambient

While still will there policy demand to products. slowed robust our be our growth anticipate for by continue actions, be we may

of course, also competitors a Of growth be. what in will our the actions play role

So I specific won't predictions. on speculate growth

policies However, you are rest target on focused that can we assured meet our margins. we or growing will believe that exceed

believe answer us rate behind were said in one. Lastly, rate what in Do we line questions started is increase we've the that increases. not changed? you, way, which that said The you you months many reserving fairly biggest and is was data received with were seeing like your come another increases We this were reserves that caused to anticipating, basic. you what Or with over adequate? confident last now react the few

Personal based and time reserves In react change are strengthening short-tailed and trends. reserve happened our coverages, said, estimates largely about That fixing new and feel relatively vehicle over quickly, we the on In these recognize trends today. we our reserve coverages. Lines, levels being in evolving to can good

the change. law took for prebill we be the effects lawsuits periods. on In full House estimated by of we of triggered would changes the of to including believe increases the estimate our capture March, the believe in effect of The for As reserve the March we lawsuits Bill needed effect Florida the accident legislation, loss we represented we what XXX. best reserve the of costs flood

Going to insurance takes forward, legislation manage consumers. positive of Florida steps for help the cost believe the auto we

information will it to and However, as react and we continue the is assess situation develops. evolving, to

adequately we today monitoring are to reserved. In in again, severity believe trends are Commercial and we frequency and we adequately Lines, reserved ensure remain

a reserve on as they appropriate. Of we them If can to with react comes trends course, assumption will do, any caveat change. adequacy that

sold how you recent is goods of your never to years in miss full We address past? until question I'll reserving reserving And premiums can that, in The adequacy? are individually. did of after follow-up the given predicting reserve business how our the current trends these confident the The you questions insurance is, adequacy know cost future. be collected.

assumptions. with an of on data, extremely knowledge estimates based ultimate are, and our historical extensive high usually As costs degree advanced predict by We and to our accuracy. such, of about analytics loss business use customers reserves our exposures nature,

hard, Predicting saw the trends fixing Personal trends severity We previously in coverages. higher-than-expected during however, claims future developed Auto, that in primarily predict we and vehicle in fully didn't closed the is quarter.

While place for speculate in adequately and on have I people these I'm I that decisively reserved. you confident we why short-tail won't trends ensure adjust and change, reserves quickly coverages. we we're the reacted processes in to can our tell to these

to aware long-term and X acutely Hopefully, of answers myself, team these to ratio, little first supports results always explanations will goals. believe direction the quarter address of that and of of headed, which XXXX, the For no we reserves questions development year-end averaged ending most combined be the on doubt my our year the set the reserve some our adequately. confident the Rest all the we're to assured people and X.XX in I that one we years to strive unfavorable prior than achieve continue more points first quarter. I I the about can sought-after at is continue Progressive. everything a do statement

us, now I joining for again will questions. you your take Thank and

Douglas Constantine

team We available the Instructions]. previously members our portion questions. live have answer event. today's of now management concludes This of recorded [Operator to

our take first question. now will We

Operator

line from comes Mike question BMO. the with first Zaremski of Our

Michael Zaremski

Thanks for helpful remarks. prepared the

feel on legislation? said you As is the you situation the You evolving. -- said a But also the follow-up legislation to you can said is the you elaborate that Florida comments, positive.

payback claims? sometimes a ultimately, and Florida April be the to of there Do for that could taken kind like to been past, it influx in less teeth now of you in charges were has So there due the claims feel legislation. has the

Susan Griffith

Mike, Good thanks. question,

So plaintiff we effects bar, of with will think the they the and try that of the positive today legislation we're In very meantime, challenge very the we consumers don't the not to would as it's those. long-term written be familiar for know Florida.

fact we So look we what consider we more estimable the that And bill were March a to between that strengthened time the and look filed. and for signed is possible we did being the every are was talked time took the time about cost legislative lawsuits lawsuits And likely reserve it he that's that that our the we governor probable. and going it. in at, at occur the why

not there the lawsuits, all-time which lawsuits XXX%, up Florida, XXXX. May March, in of in nearly overall high Florida, were is XXX,XXX civil fact, filed in In ours,

lawsuits. significant So

we good. to be this short prepare So are long those going to will term, term, obviously get through

of to couple good XXX. Bill out things a that comparatives. modify of So pure the House from came laws changed Comparative

years. There's for The years get us There's a time takes fees. a important So but those gather way because most a actually limitations if harbor to which than negotiate good. make is more XX%, bad you're to X to you really importantly, repealing don't into greater when you bit demand safe really the information there's from start we to probably attorney than one is collect. statute claim actually if some little to faith, think it are that, and X to

short this challenged. the we know term, will and In we though, be don't evolve, it could if --

feel And importantly information. the so law the good we good really react for we it's will we very think as Florida. overall, and just consumers have But about accordingly changes, more we of more

Michael Zaremski

ultimately, to maybe new be some corrective customers. you want than rates still touched levels remarks, needing mouth. made appear feel CAGR. on like market will don't this trying what follow-up, in record to average, in words excellent. That's I It has take which the you but it. you that your helpful. on share prepared your of Progressive's be juxtapose my be about is actions. Lines shopping comments -- we're to like of I put been meaningful a growth, your kind the Got And and final sounds that are Progressive most lower to comments pivoting know Would I'm with your Personal seeing applications more there's to

you industry So good level absolute lot as the growth. rate, of is about long of feel still a taking the as

Susan Griffith

that rate competitors and you I the we more time on mean us. at think bit going in I any compared little us even is likelihood happen. to to subsiding see more our even growth data. And Yes. of have a advertising, take so than We seen our reduce --

do market to shopping, are. has our with they So people really the and hard

So our feel we still bullish do on growth.

the you couple tremendous those. little about. incredible bit in all-time me that I key were because of didn't of me which Let a But a give history of stats interesting stats about you apps, really company. we feel the couple new talked I the other give about let talk a

We billion, which quarter, X point in force this $X.X policies share. we market premium like of approximately $X.X So grew million. is grew

think you span, carrier. more that's XX-month XX you If $X than at the top like And if that, a about size look of even billion. a we've grown

extraordinary think, are we tidbits couple that those about. I So interesting good a an feel

going at both growth. growth look you're to when look growth, at premium unit you Also, and

that sometimes when know subsides you So just premium growth there's relationship. advertising, there's inverse a reduce increase maybe know. unit the advertising, when But we really bit, don't little We also growth. you

goal to going So as margin, our take to to And some that margins you'll our more we also see you're get see widen. ultimately, premium is our growth. rate profit target

John Sauerland

point I year, as aggressive would one vacuum, growth, add don't dollars, competitive the I'd live marketplace But was even in say, the advertising adversely of in will all that obviously. actions for Mike, growth. bit a as saw less our certainly with we is, affect a our sure. higher equal, we on actions, last And rates disarray we else saw

as to environment react aggressively be in experiencing obviously, then remain if as our well, this we competitors they it growth are be and adversely our will do seen won't So currently affected. what that

Operator

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

Elyse Greenspan

with the over rates In you first in looking of you your rates get to comments, to year. mentioned guys raising take My I on XX-Q the additional magnitude rates, some here. are color the remainder the aggressive of and question, from being wanted additional

aggressive us that give specifically, you magnitude in like So more of a increases Can say low you Auto, rates, single the expecting take? single when the high sense to within the of in rate digits? Personal digits, is now you're just

Susan Griffith

believe would but decades what Sure. need to take much period, profit to to over come just a target we as when our get with I execute do that. going we're on Progressive, we've I try to this inflationary margin. ability shown, assume up we over as not number. our to rate that that I didn't give

great rate We have pricing group, a a group. revision great

we So that. do know we can

say our of Now or What of can it's could course, the which point more decrease there's would product, And at have what all state, channel to et specific caveats increase very approval, weather, in with up rates. this that happen cetera. I is private of desire again, passenger dynamic neighborhood time, and this in quite a we'll really around ahead trend stay take We to XX and catch all time. the this year in think auto. more caveats points of the regulatory

XX%. that's could digits. to watching don't single plan We're low that Right things as of So But know. today. X% unfold. as our now, We again, be

Elyse Greenspan

Okay. of price just business Is of of then percentage, still your concerned to that a rate? talking be think the X% you're way looking kind versus perhaps book you could right, down be needed, would sense looking portion in portion break And said, where still in? you us versus but portion which rate us, give Auto, and these need Personal that really I'm you needs you for maybe you the the portion where of a aggressive the level perhaps there just to XX% about to grow to grow the might

Susan Griffith

with limited perspective, want regulatory grow auto to as always we sometimes Yes. are can, fast as approvals. From we we but the an

we think more where of much we've going about to we've because which those those on haven't as Coast, states. some talked some are rate for increases places we've obviously, So the as got been waiting need needed, in rate before, there

country-wide less year. we like into neighborhood XX% are suffice on to details, feel Some but to this a think say, average, it it. we're the want we in don't We additional go really about where of ahead

Operator

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

Brian Meredith

here for A of them couple Tricia. you,

The quarter? first of your the today and discussion penalty about growing as the rapidly. business you're remember on new this back impact business Auto to in one, Tricia, that XXXX penalty What's Personal of new I results or pretty all

Susan Griffith

that quarter, you're especially to the those our up, costs. since so expense going Well, was side direct feel I front-load think on we this in media

-- on policyholders. quarter in last I the had spend think penalty I you did see business sort were future call. So media still But in at new an first investment higher said this of future our pedal in the I having that year. -- ratio, in we look a and this as our and first expense we for our

So yes, expenses were higher.

Brian Meredith

business loss side typically loss just actually, ratio. I new because ratio was higher thinking a on more carries

Susan Griffith

Yes, business lot a carry penalty yes, losses, last of the quarter, including new was higher as of business. weather that record it things to But compared a does X et yes, level we a part the well, there years new have ratio. with loss there in cetera. as well happened anytime first That is

Brian Meredith

in combined you're are now kind the my adjust I right come XX. having I ratio, Auto reserving for And guess if the in question Okay. brakes , is, my expecting is happen the second XX to XX first that then a question, you're reserving here actions curious, taken ex you're like forward? I'm the I'm just assuming of quarter, below to actions of a not why you those I those that going kind Personal up which given it at tap ex still

Susan Griffith

Brian, of and commitment that calendar cohort lifetime balance, it's Yes, our year commitment. our

reduce it. to brakes. reduce going And growth. media to just our about thinking slow on grow. always are normally, definitely when to we're say say putting but balance our want to not it intentions we're that trying I the still so we're have And wanted I that we anticipated we media, the We're could future, always would spend,

just mentioned, very of too, We're Now with a what's depends John still seeing on see a -- We're still lot market. a lot happening of we it ambient hard seeing shopping. competitors.

we as get things, year can, easily regulatory that, very are we intentions calendar to again cetera, our to on depending weather, to spend ramp if grow. media to as and our up literally, XX can soon So our get we et

calendar it's that accident really year, of year So balance commitments.

Operator

Credit of line the from Kligerman comes question with Suisse. Andrew next Our

Andrew Kligerman

overall you cited Tricia, XX%. about severity up

to pieces. trying I'm unpack the So

most part sequentially it category of noticed Index I that? around Manheim you first You X.X% the And severe. a the Could second specify cited repair in is, the number quarter. the up being the

a So big that are as the forward? was year used move. about prices car How you thinking moves

Susan Griffith

a There's question. into that fixing good really the a cars. severity Yes, lot goes of

things. so couple of And a

We have industry, an really struggled I -- and capacity. shop think with as

get just in time, rates. have of cars on and up, Parts ability So X%, of under bit them throughput a cetera. to the little prices rental, length et to labor get which could, out, effect our course, are

a are unemployment X.X% those rate up techs X%. and the of Same how the thing and mechanical kind shops. think between body hiring of So in But with there's rates problem everywhere. repair

some that's So contributions.

cost abated And haven't the those the prices, then really parts of really, either.

with working Claims our we're well. to body that up those working shop open cars So weather what course, really is do our exacerbates of of in out. as partners President and to and get capacity And

bit. years So went a the last again, we down Manheim little it still up haven't pops the extraordinary. several seen and -- high is the But over

these good of about the to. is are kind that's trends part we're reacting short the Again, this tailed. So

react to then to And taken have. we to trends future. can So can in need for quickly, rates now, enough what the we we we which watch have really we them continue determine

Andrew Kligerman

Commercial. mentioned years. given actions, Personal. on a actions you've really you for there touched And of Is kind I the there may see. But particularly I the been last think And non-rate for have the actions? practice leverage much have of part of couple it non-rate non-rate in

Susan Griffith

I bringing Commercial sure Yes. on play yes, with on to we're those especially lot business, side. to I And on say what new et target into on would of put into leverage, that new reach profit quickly the make cetera. there's pretty working the able won't But all our restrictions Yes. margins. of we're go we're business a

Operator

question Bhullar comes the from JPMorgan. next Jimmy line of with Our

Jamminder Bhullar

had Or about is on or question the back throughout specific it can doing advertising. how And I advertising? regions? are on you And country? pulling talk first, you're a quantify So if much you in it

Susan Griffith

our where digital. will whether the at mass share Yes. or goes and budget look we group, media back and our we're it's pull we pull advertising, But We accordingly. like on actually incredible I pulling and will budget will back, exactly -- share just and we an say most where won't don't media media have they back inefficient they to media when book,

we something can happening margins. down So up what's depending or on dial that's our profit that with

but we to, share We need if won't right, -- we get et we can cetera. local easily turn if So that. off more can't

the of we've approach the we as our kind that's We're and past. to So nimble media. shown in take flexible really

Jamminder Bhullar

lot -- pricing are was prices? period, -- conducive talk companies as you about Okay. environment adjusting on the And how then for is environment pushback that the do is delays the and the a before? XXXX regulatory still the Because now regulators from Is prices? think price increases and I it pushback in was in Or than you for regulators. price can the the better raising regulatory of raising environment -- process expect of there from

Susan Griffith

the seeing really these and trends think these industry of watching do continue. Progressive trends it's regulators definitely It's not I the most are see alone. and inflationary

departments have in it and for coverage prices. data what, we for and so we're what people continue data, to coast to to you with. because the in X on a you take the rates. share some industry But challenges want is competitive that have states we majority, as show always always understand available if challenges. to to said, I And That's and we our Like know need challenge the what the the state. affordable want for we run, and insurance for have our they every and have working need we we makes going prospective with of show There's each great, be the what long

really important. is availability know that. We So

that, regulators And so could but there's a couple challenging. get always states to to that continue with of the we're work be going to

Operator

comes question next Scott Our line with Sachs. Goldman the Alex of from

Alexander Scott

And trend. you favorable I over last how just they've on and I is for to frequency think trends. contributed one loss First months the just reasonably all run XX they've had

there I saw you that evolving play and wanted sort any to how out you have any what view and of was if in XQ, So see will if just there update?

Susan Griffith

QX frequency flat. Yes. I in was mean relatively

many quarter. haven't it. to things of really still trends quite a pre-COVID. we come out little in into, one try macroeconomic back seen frequency go kind there's It's noise We flesh react to that always it because to necessarily of And just to so solidly there's hard bit

we react lot and of from miles vehicle UBI continue watch traveled data But a So we data, from goes. watch Obviously, so lot driven, and how frequency that. of that watch we'll lot for there's a inputs and miles have don't control. to we that to, we a that's our something

Alexander Scott

Understood.

Okay. wanted bodily And just ask follow-up, I as to a severity. on injury

It rate a driven, of terms update, severity decisions like front. the if learned spend of more I wasn't bodily in any in growth have this. damage injury or you wanted sure that to through that there just property you're you make on anything to XQ so and If sounds but component and the more making ad forth

Susan Griffith

Yes. relatively be Bodily injury several has last the started quarters. over to stable

tissue, rep, with increases severity Some had , of our attorney what do of soft and some we saw QX is tissue. to we losses, in closing the non-lit call large which soft

can to Florida -- states, our could course, too. state, of many of able we rep go of get one more on how we're depending on deeply But little I'll And stable. stabilized well. for that obviously, based watch is pretty discern well -- change ultimately and bit Florida as think levels big House And course, a are So a that as to I because that change being trends fairly XXX. that. those biggest Bill losses And been attorney it's so are could

Operator

the Sandler. comes of from line question next with Our Paul Piper Newsome

Jon Newsome

not has of well? it's of commentary of all bit little process being part follow-up. shopping. stabilizes issues. sort like fixing on distracted faster And of a pieces the things to surprised as reserve kind issue that and I Or a equation well? Is that it an sort seems little hear driving and of driving actually A of was the the the with

Susan Griffith

to to at And the we from our a usage-based a And we snapshot our data variables. from different because of Well, look so of variables. different discern relatedness driving on kind lot understand its have obviously, solely it's to many hard there's own distracted that. insurance

to relate So it if you think how about hard and could break. distracted driving

driving we only. it's So so look not don't at distracted --

how the we we're is So What the travel, accidents what though, -- data where is can see. many exactly we react of just mile call seeing on we terms more frequency, before we accidents, in the to, vehicle were talking congestion.

what's at that distracted on So happening we react driving. really I would say further have understand wouldn't specifically and all But to that. to any look commentary I of

Jon Newsome

looked you quite the hasn't talk a little then it bit trends And but in all big the passenger maybe like was that It the that separately, the picture been about can business. affecting Commercial auto, necessarily private past. same

issues So case these severity from the that's is notable Commercial the that trend and the reserve X where between all businesses comments are perspective? or about as of difference business well? where there kind is a a happening in the is the Or

Susan Griffith

Yes.

similar So seeing And our And well. core very late mostly more a Commercial look from the of trucking the is to Lines, little bit we're especially auto our they're very you as expensive at segment, are those and the fix perspective when -- seeing our in reserving, in reserving, reps. trends. reports

Our but trends. similar case just perspective, strengthening from are pretty rep the reserves

Operator

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

David Motemaden

trend? to -- to correct you roughly that's points take, I'm that of pace points on but need Tricia, mentioned you took year, what's just with think that already I is Could on in XX just wrong versus talk about X how that had much that. up this keep a me if rate needed you catch of you the just to addition

Susan Griffith

up, perspectively, point eventually, us Yes. believe specifically. will at this that us will ahead we we It of we both get trend that, also et to seeing cetera, and was because actually at where those. won't look come X. margin are we're the what point that what's rate took stay to catched to hopefully, but to profit with I at our target get of talking It rate in rates about quarter we go additional the exactly into

David Motemaden

that that not there far And about grow when on how think adequacy about I existing good interpret it. the prices right to feel sounds despite you the that still it lower then pretty on growth off Got the and you you rate to Am intending your -- ad guys are spend. existing dynamic? still about just feel so like and you're out good

Susan Griffith

Yes, I good growth. feel do about

about new that's you where really question your the margin. bringing business a to you're target that data make reaches that more can be asked someone and And scrutiny, more underwriting gather sure confident profit you on

with we sure profitable. growth, for the feel we new some of sure with scrutiny do that So caveats do to that future make is the just comfortable the making extra business

add? Pat, anything do to you have

Patrick Callahan

a just little other on color commentary growth. QX's Yes,

incredible And of half in the agency had improvements. channel, we was business it's X/X. conversion growth new So from the like more

So you that media the continue our will with street, are pretty of good to good when some how rates strong about higher competitive prices have grow shopping, continuing pretty talk pullback, to competitive and the with on that's we even about indication a levels ambient business. feel

Susan Griffith

volatile and day and I one advertising X always talked incredibly pull other expenses, been about you When Yes. happened years. an on this this What learn something. always the meetings, time such of we've back this love to, in has you my is or every a like situation

So well efficiency, try these et advertising and cetera. about we as to of our to times advantage learn take something

just So as we continue another to do that well, comment. as

John Sauerland

David, versus on catch-up forward on your looking. question

comments, we always forward-looking. future our trend into that that And Tricia's of mentioned, as points, indications. terms little selects. and a fixing pricing our the we for additional introductory in severities clearly off and are mentioned was cars as Our We've into dialing were obviously is year. dialed And we seen she into coming data

also There a was discussion around Manheim.

need those stayed than aggressive selects and that's pricing, back, car that Manheim, it conclusion has while to all into had has. arrived trend in It around a up obviously future has where back. we've it rate. pricing for goes been we if That general, when on We've our aggressively we look are higher recently, doing indications. projections come at to we the anticipated than get you -- more down Our dialed more our

Operator

Tracy next with question the Our Barclays. Benguigui of from line comes

Tracy Benguigui

a higher physical physical driver severity of how your this damage trend Since can XX% key lowering XX% loss damage and last auto quarter behind the versus in was quarter, year? adverse to view reconcile development comfortable auto got you you

Susan Griffith

why much what some of to the we believe claims Well, seeing through I but quarter. with always inbound are versus the severity there's a with our way a you And now there's do in that of noise older working quarter, you're this color collision has of subrogation. can give lot higher higher its

think you claims cetera, we're et through height if of those. the about So at ACV, working

would about sure I the be property your if trend. my damage not point answered I'm or... that severity question So

Tracy Benguigui

Q K, all your loss the you out break the In Yes. or components, trend. your

but like the to it looks just within adverse XX%. damage So at it's seem up noticed made auto down, severity, year, doesn't in was Q, earlier the and the quarter. on reconcile the taken development XX-K, look in I directionally, the I it physical call last with comments XX% was

So you I down damage? your understand why physical auto loss to trend took of just within wanted view

John Sauerland

clarification. Maybe That retrospective view our number. looking a not there. loss is of It's a trend

simply So severity last at numbers. that quarter versus first year's damage quarter, year saying is looked when last this physical similarly, you

it a consecutive is that metric. retrospective So help? Does

Tracy Benguigui

Okay.

right or to And to so you've think it's what year about even would correlated the in year, that be not number last taken just all XX% adverse you for given the development given said? accident

John Sauerland

we're there. providing versus period previous you So the each quarter severity change in

quarter provide normally we year-to-date. the and you the So

versus XX% up now, quarter for And so property right damage. previous we're

the third-party mentioned you damages damage. fixing cars. physical coverage So Property for

Operator

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

Joshua Shanker

ago XX-Q, halt. saw to XXXX ground years 'XX back taking growth you we And rate. call results, announced XQ had after go X were May If when a conference we this to just that the you

do earned almost little And premium to the rates. very that had stop very of you were compared to able skills able XXXX? that growth you you were were approval little before this you you that stop that And the at time what to at immediately. rate? the new aren't the regulatory had even urgency in to able growth or written You to going you the had taken some that What do were the point,

Susan Griffith

ahead We're curve, session. Yes. tried the regulators -- use we my to levers, in answer the the and opening I to going of of At ahead that's point, were competition. similar that why question-and-answer

levers similar did worried cetera, think, used but that, giving et COVID, the I still, we effects that all were regulators of the that back I'm people about the time. which we last us So very very proud with with of

very think it's I that though, we're also now, hard market. a what seeing is

John that So causing are shopping. I which the taking, talked rate about some is think and increases competitors Pat our both still

though been the first even quarter. levers, you we'll of we've I So grow, to like similar stats able some use gave

depending believe And continue that may that, what does. again competition so on we

regulators for it's think what they their started similar in seeing line, this come available just that system. we're we It's through more companies have way constituents know coverage seeing very with I if they data, to trend. an to from -- the put want have the and inflationary bottom that

Joshua Shanker

in then current for that basis on the HB XXX XXX that was mentioned And month was points I of of you basis All less it XXX impact points the quarter. XXX XX-Q, or March? the year right. extrapolate than Can the

Susan Griffith

signed. a what And accurate. we because Yes, that's that you pretty of again, on done was time that what math probable really that. And based probably estimable thought lawsuits we looked something probably of will and continue in the could. those that But not period on -- is before we math But would happen. happened I some be did or bill may haven't again, could the that actually at is looked to we at short yes, things of thought the evolve. may evolve

Operator

question next Yaron with comes Kinar line of from Our Jefferies. the

Yaron Kinar

talk My applications, Wrights, Diane's, line with And roughly tremendous those of at first you question, what seen are weighting even like the added? in can those distribution Sam's, book? we've the about roughly maybe have in Robinsons that were looking -- that the growth customers among among just new is you in-force quarter-to-date,

Susan Griffith

Yes.

in the I can in Pat this. out or on think queue. weigh John we're

we in grew segments. think all I

an to more think we've from bundle. be to continue are likely think Sam's home in shop. going I auto we've to Robinsons -- I increased

of that. always the part there's So I against grew But PLE think segments. we all

Patrick Callahan

that's Wright the and quarter for Yes, an was perspective, And really our across in Robinsons the From fastest in we Diane's right. saw new apps grew. growth all positive segments. app growth and also

a From we PIF slower, also grew they perspective, as the So little positive segments growth just saw a Sam's but during well. quarter. across all grew

So are Sam's, not faster segments in the but... that

John Sauerland

our with nomenclature, unfamiliar those are who bundle us. for homeowners just don't And Wrights with

pulling footprint. property of where grown to as So lot a number especially insurance, geographic to other that markets encouraging And we where as in are property of this actually though well. it's underwritten with are manufacturer portfolio. who the what the to I Home, been we're channel, Progressive we've restricting fastest. of of piece And that's in products we or their still our households, even audience. this our Wrights limited -- product, the have Robinsons back known, perhaps a we think auto have as markets revise that we see well agency with in where growing home-owning And by think, some are homeowners our

in So who habits. think as are out. Robinsons Pat pointed And well growing as Diane's what are their stable we we're insuring in still as of renters

the considerably stable also more the bundle, more and see. to is growing sectors which without So homeowners encouraging growing even in

Yaron Kinar

we would coming of not out the the And lingering I'm combined about over of need and year-to-date guess, the It that goes corrective just actions. versions into this is coming seems were ratio already. at is back comments the assume then we're urgency course mainly question when maybe asked think on other confusion question, go like some that say data of some looking seeing, still you several my XX-ish investor the talking reserve my some I I around e-mail And take forward. call call. kind aggressiveness take what I the will of from to next And to of we adjustments that there this sense

maybe will of So to I take that some clarify that to another was confusion. stab you maybe another at give opportunity hoping

Susan Griffith

Yes. It's our calendar goal. really all year about

for to our for there. short-term that everything that as goal will treat we not as had appreciate We're -- we long our well we've very do long we growth at can stated at And growth. XX. long-term calendar we holders, look community investment long-term our XX. will So as fact a year But the our we're

And aggressive so taking why actions. we're that's

that we benefit. great be the here nimbleness, lots levers Progressive is our move. And The quickly part we specifically will can have of

think X growth on business to approval, also know dramatically it's come put there's weather, gave to turn a between next The don't that things advertising if screeching why going has and we're those relationship a trends, and unbelievable, in to stats growth. -- inflationary around beginning. the that's the be apps I we'll at We and we So halt. still But positive. months, new feeling regulatory again, been the able caveats are

So in I to reduce hope on and happen come hey, degree my what to past. competition. letter, always advertising that the queue halt. when and do just I can my growth we What well things, going screeching those a To to comments wanted the is dependent didn't has say all say, very is this is very including

Operator

comes next Our question line of the Citi. from with Michael Ward

Michael Ward

in expectancies I noticed trended positively policy quarter. the life

raising help now could Just think you're into we hoping metric? goes us what how And trending of a again lot about added have and that you that should that understand new prices customers?

Susan Griffith

customer, to is traded our think Again, positive down X. our of see on still likelihood It's indicative and on usually for of is are what's happening. just stay. PLE the customers We happen. our a Well, it could XX. on the that what we That's a time increases. trailing rate trailing may likely The X depending trailing more length change

to affect our have any activity. to trailing that the negatively. We'll continue rate trend of is to is recent watch pretty actions if X So that see more --

Michael Ward

portfolio. know color investment the on strategy new I the CMBS. there's hoping I in on in just could some was disclosure then And provide queue. you the

could I'm single mentioned why especially in you thus the sales far? the wondering CMBS, favor properties, of curious specifically you sort comment office. on you Q that Just guys if

Susan Griffith

starting did weigh Jon curve I'll from of where the this chart we're and ahead from year let Jon? on headed I'll But was But walk I'll the terms CMBS to -- him he will our of we added in. risk Jon Bauer that I in in And year. reduce say a in that ago. Q the for say Absolutely. here. have over through why CMBS

Jonathan Bauer

much the question, so for Thanks Michael. Yes.

take just possible. So saw we we overall and didn't then the early first step as About going came it that our we to at hit macro we looked to match macro XXXX, looked views try a and portfolio when into environment, which forward. portfolio, at the specifically the I'll quarter back, as XXXX,

So point. that several actions at we that to take look

ended interest rate rate interest was side, We on all, the and duration. X environment. of we of January that sort the first Xs around on high given thought So our too then

the So that down and then October to move we by X. back that throughout to to million allowed to look year $XXX the shift again about up

cut likely be therefore, look past and to thought, pretty we given we half right reduce we were side, to equity likely the see what are in volatility overall, the more what in the On equity actions have to our equities than were that much now. to exposure seen

probably mortgage-backed would mortgage-backed and said, in the of think And and since hold residential the is non-sort and a taking as performed true most same any And we securities. recession, across months fixed treasury residential has areas to our the where we we housing And been XX say, thought. has that CLOs watch risk we income uncomfortable. that market and within many further portfolio then, mortgage-backed the X that hit witnessed, we if would securities, it you looked sort then of credit to our securities. commercial of better we was identified cash I be many than that wanted

portfolio, that we market our think shrunk we though than housing as even thought. portion is we a better of So the

terms default year. last to smaller prospectively represented we are portfolio we think it's which to allowing recession last position if I would could corporate that though to be get out the were year-on-year, and in said, the going of see, In the the represents year And looks of securities. it those quarter our to CMBS the looked And as a X% portfolio right In at now. a securities. of takes And you reduce to forward, XXXX, hit rate first securities at us even about XX% commercial in we as hit. that, the over here looked recession, adding of than portfolio the we less that can with severe of end to feel then say with that and it's portfolio just runoff the mortgage-backed opposed not very CLOs, like happen, determined there, still but what the versus comfortable

the we that to felt encompasses wanted like we what So give disclosure.

X side, office major of that portfolio. the drivers On

The first office. thing is trophy

footprint, so, quality to best would So our the office, have would as these least companies but X was the is look significant not be last years it's if the strong to incredibly -- it past second buildings. maturity tenant. part at or their that look demand, built the XX were portfolio are an X that want offices in shrink in years trophy we different And view then investment-grade to of especially to

the portfolio a conduit that And lot the core lot a and single we pick asset that type different individual so look to have the a of you would type with thing, opposed single we as makes of quality asset buildings on a that underwrite than of of allows where up buildings are are side. us it lesser they portfolio, to think

no with mentioned, the that, portfolio. delinquencies have we in So and disclosure, we as the

without type don't of please We $XXX give environment, we you I a of million over know expect year even if the have portfolio, me answers more specifics. maturities all and be the about I in any this that could know refinanced let if CMBS your problem. next in overall them, but question, to

Michael Ward

helpful. recent was what shedded just trim California, Seattle? on tremendously you that recently, you No, did Maybe quarters, Yes.

Jonathan Bauer

Yes.

any I maturities. that risk So take talk building particular, CMBS we could we the would that their real for is constantly taking is was doing in coming commercial back more here, rollover vacant of lot February, paid getting be where tenant since we're our and thing year, saying, it not looking For a portfolio, March I we the this are first or security last it than there think the into in the this for to I Again, one? just across going are have that. estate. and broadly to us, would would in -- we say What opportunity

in the to there rid get into So money that quality, buildings Is lease get where building to don't it the are put order get owners the that of going to think one. up, any rid the to one. of we

the And and then so left have was really longer trophy X us with across that the tenancy, or years real past estate that portfolio ones maturity. what strong broadly

us delinquencies the the we tenancy. more with maturities. the quality So on geography necessarily, the what's I think By in where I'm what's geography. wouldn't months confident of XX that's the And I feel building, left quality portfolio with next focus what of no of the

Operator

with next of comes question Tunis line Research. Our Autonomous from Ryan the

Ryan Tunis

Yes.

here. couple Just a

I question, points the first rate. the XX on of guess So

So on go then, this taking rate when I were a increases. taking ago, since think back we stopped outsized I guys where call, you guys guess was increases. like it rate you done year said you never

actually almost not aggregate, the that whether comments over about then, about it like that you that a gotten just thinking much seem you're taken your seeing. I'm since saying on quarters, yes, much points But correctly. that the really X like that trailing the I need in XX you've think thinking you've so think like the this when X fact I points versus we're like guess just or next in about I doesn't X extra of step-up quarters what and

Susan Griffith

the mean change to what be which data We to achieve profit want we prefer saw rates obviously, we then in dramatically. to apple, I the target small is, quarter, of margins. our to do ahead we we to bites but did the first prefer take Yes.

for around auto need, the that the this our passenger rate we what private is we'll need of neighborhood so rates on point at future of side. And believe XX sort

So thinking I think you're about it.

largest the but behind Okay. time. rate the is really I thought has this us, volatile in were mean quarter said a we been what we that increases

now. And right we're reacting what seeing so just to we're

John Sauerland

just over... I that add Right. would

Susan Griffith

John add a to wanted comment.

John Sauerland

the just data and going expeditiously action we changes. very have see analyzing we served, been very say, as taking was I well to time, over

play And find we in are be certainly the back. month. action as back. loss do things at better we extent taking we pull Tricia can mentioned, terms surprised off data always down. to can trend can but pull think looking that, have we But would things continually, changed are even we we expeditiously. We every the expecting, as if always way single take I don't of So if out we rates

Ryan Tunis

or going there a And some on adverse not it. of couple whether got selection just then Got questions on. like I've might be

-- loss it's you the book? that business you could just new where the book? disproportionately you Or seeing trend, say the across comment the in you on on? If you're put of Is it are about like broadly issues kind would the that talking toward

Susan Griffith

specifically with where have et I I segmentation. is that. believe for that We cetera. companies think we mean with comes No. selection into And our our have those industry-leading have variables, UBI, we we adverse place believe that

seeing underlying There's we about just we're pretty the talked a loss that of. So good trends about some ahead we We that bit cost. to good that need that. we feel actually get feel little

So rate not segmentation on do the us. is be accurately in and we selection right our to like course, you rate aggressive And but getting time right you of that and goal, at the have to the happen, should street. adverse do, if

Patrick Callahan

Yes. is The business only that would mentioned, add of we competitors and put quality we're quarter mix business -- as always the closely ensure by share I thing clean to thing We prior as watch business. paranoid. John to I would the on business, first We're we add and the insurance seeing getting market homeowner long we is closely, fourth we on are during look to only periods, mix our about that quality feel in the us, watch the multi-car. and being We're shed seeing they the of good contrary, we quarter. constantly transfer that's very

with selection. to intend seeing any and what grow contrary that we exactly So with, we're pretty business it's the happy we're to adverse

Douglas Constantine

concludes scheduled the you I scripts. over will hand our event exhausted forum. time and We've our to closing that call for back the so

Operator

event Information Relations website Corporation's on a Investor the for Event. the will Investor concludes the That Quarter be Progressive's available year. replay First about Progressive of of the section next

disconnect. may now You

The Progressive Corporation (PGR) 3 May 232023 Q1 Earnings call transcript