Progressive 2006 Annual Report Download - page 17

Download and view the complete annual report

Please find page 17 of the 2006 Progressive annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 37

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37

contact support
OBJECTIVES
Profitability Progressive’s most important goal is for our insurance
subsidiaries to produce an aggregate calendar-year underwriting
profit of at least 4%. Our business is a composite of many product
offerings defined in part by product type, distribution channel, geog-
raphy, customer tenure and underwriting grouping. Each of these
products has targeted operating parameters based on level of
maturity, underlying cost structures, customer mix and policy life
expectancy. Our aggregate goal is the balanced blend of these
individual performance targets in any calendar year.
Growth
Our goal is to grow as fast as possible, constrained only by our
profitability objective and our ability to provide high-quality customer
service. Progressive is a growth-oriented company and management
incentives are tied to profitable growth.
We report Personal Lines and Commercial Auto results separately.
We further break down our Personal Lines’ results by channel
(Agency and Direct) to give shareholders a clearer picture of the busi-
ness dynamics of each distribution method and their respective rates
of growth. Aggregate expense ratios and aggregate growth rates
disguise the true nature and performance of each business.