Progressive 2010 Annual Report Download

Download and view the complete annual report

Please find the complete 2010 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 35

  • 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

2010 Annual Report
The Progressive Corporation

Table of contents

  • Page 1
    The Progressive Corporation 2010 Annual Report

  • Page 2
    .... Progressive is committed to becoming consumers' #1 choice for auto insurance by providing competitive rates and innovative products and services that meet drivers' needs throughout their lifetimes, including superior online and in-person customer service, and best-in-class, 24-hour claims service...

  • Page 3
    ... outstanding (millions) Book value per share Consolidated shareholders' equity Market capitalization Return on average shareholders' equity Policies in force (thousands) Personal Lines Agency-Auto Direct-Auto Special Lines Total Personal Lines Growth over prior year Commercial Auto Growth over prior...

  • Page 4
    ... picture of Progressive by stating what we try to achieve (Vision), how we interact with customers (customer Value Proposition), and what guides our behavior (core Values) permits all people associated with us to understand what we expect of ourselves and each other and how we conduct our business...

  • Page 5
    ...auto accidents and other mishaps, and by building a recognized, trusted, admired, business-generating brand. We seek to maximize shareholder value and to provide a positive environment that attracts quality people who develop and achieve ambitious growth plans. core VaLUeS Progressive's Core Values...

  • Page 6
    6 distinction. that which sets someone or something apart from the others.

  • Page 7
    ... to which we aspire in the industry. Surveys being what they are inform, if not calibrate, but we were delighted by one such survey in 2010 that indexed Progressive higher than all others as-the company most positively changing how auto insurance is done. 8

  • Page 8
    ...industry regaining profitability through rate increases, leading to significant industrywide growth in written premium. Progressive posted growth rates more often than not in the strong double digits zone for this half. As well documented frequency declines emerged and industry rate levels proved to...

  • Page 9
    ... points higher on an accident-year basis-a strong performance given significant new business. The momentum building in the second half of 2009 in our Agency auto production carried into 2010 and we saw attractive growth in new applications and policies in force for the entire year. Similar to Direct...

  • Page 10
    ... of the PIP coverage is still a work in progress; and a fourth just missed. Several others, while profitable, did not meet their planned targets. I offer this perspective to reinforce the point that we manage the business at the local level with talented product managers focused on the issues and...

  • Page 11
    ... by price + coverage our intensity and progress. Industry surveys would support our feelings, but most importantly customer policy life expectancy continues to lengthen and our 2010 actions, including our improved get the insurance you designed and need loyalty programs and commitment to rate...

  • Page 12
    ... focus on the thousands of details in product design, customer service, claims delivery, and every other aspect of our business. Progressive today is a different company and, in the broadest of terms, the asset value of the company, represented by numbers of customers and future months and years of...

  • Page 13
    ... the "Messenger," will help tell the Progressive story from a different point of view while incorporating meaningful points of branding with our established campaign. Developed and tested in late 2010, we have high hopes this identifiable character will provide added weight to our "Flo" of customers...

  • Page 14
    ...available through participating agents and for online consumers. It's hard not to be excited by the potential for this concept and our redesign. Our 2011 plans call for increasing the number of states in which we offer the product, further improving the customer experience, and active marketing. 16

  • Page 15
    diStinctiVe PricinG. Pay based on how you drive with Snapshot. SM visit progressive.com or an authorized independent agent oPerationaL SkiLLS Marketing, product design, and distribution, perhaps for some are the more visible elements of Progressive, but our success is directly dependent on our ...

  • Page 16
    ... share paid in February 2011 for 2010 performance. We remain very confident that the variable dividend is an appropriate part of our capital management arsenal, and now have several years that have tested its formulation. With minor changes to reflect a constraint that comprehensive income exceed...

  • Page 17
    ... business to two critical components to make a point -"We don't have many charMy close each year thus is appropriately the most constant part of this letter for it is the most public forum I have to thank the people of Progressive, our agents and brokers, customers and shareholders for their support...

  • Page 18
    ... ambitious, yet realistic. Progressive monitors its financial policies continuously and strives to meet these targets annually. experience always clarifies objectives and illuminates better policies. We constantly evolve as we monitor the execution of our policies and progress toward achieving our...

  • Page 19
    ...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...

  • Page 20
    ... included in Progressive's 2010 Annual Report to Shareholders, which is attached as an Appendix to Progressive's 2011 Proxy Statement. achieVeMentS We are convinced that the best way to maximize shareholder value is to achieve these financial objectives and policies consistently. A shareholder who...

  • Page 21
    ... between the filed and actual price changes is explained by shifts in the mix of business across customer segments and geography. We continue to adapt our products and services to meet our customers' personal insurance needs throughout their lives. The Progressive Home Advantage® program, where we...

  • Page 22
    ... increased our focus on the mobile space and we are confident we will be reporting much more on this in the future. We upgraded our mobile Web site for policy services and added the ability to quote auto insurance in 13 states during 2010. We also elevated apps for iPhones and Android devices...

  • Page 23
    ... applications and policies in force increase 7% and 2% for the year. We are confident Florida is now positioned to meet profit targets in 2011, though rebuilding the policy base will be a longer-term proposition. We cannot predict when the commercial auto market will begin to expand and to meet our...

  • Page 24
    ... the consolidated Financial Statements, as well as Management's discussion and analysis of Financial condition and results of operations and Supplemental information, which are included in Progressive's 2010 annual report to Shareholders, which is attached as an appendix to Progressive's 2011 Proxy...

  • Page 25
    ... is presented in the 2010 Annual Report to Shareholders, which is attached as an Appendix to Progressive's 2011 Proxy Statement. ceo and cFo certiFicationS Glenn M. Renwick, President and Chief Executive Officer of The Progressive Corporation, and Brian C. Domeck, Vice President and Chief Financial...

  • Page 26
    ... earnings per share was antidilutive due to the net loss for the year. See Notes to the complete Consolidated Financial Statements included in Progressive's 2010 Annual Report to Shareholders, which is attached as an Appendix to Progressive's 2011 Proxy Statement. THE PROGRESSIVE CORPORATION AND...

  • Page 27
    ... in Progressive's 2010 Annual Report to Shareholders, for further discussion. See Notes to the complete Consolidated Financial Statements included in Progressive's 2010 Annual Report to Shareholders, which is attached as an Appendix to Progressive's 2011 Proxy Statement. THE PROGRESSIVE CORPORATION...

  • Page 28
    ... Voting Preference Shares authorized; no such shares have been issued. See Notes to the complete Consolidated Financial Statements included in Progressive's 2010 Annual Report to Shareholders, which is attached as an Appendix to Progressive's 2011 Proxy Statement. THE PROGRESSIVE CORPORATION AND...

  • Page 29
    ... 1 1 .1 0 (98.3) (179.4) (239.6) 0 (2.9) 5.8 2.9 $ $ See Notes to the complete Consolidated Financial Statements included in Progressive's 2010 Annual Report to Shareholders, which is attached as an Appendix to Progressive's 2011 Proxy Statement. THE PROGRESSIVE CORPORATION AND SUBSIDIARIES 35

  • Page 30
    ... to the consolidated financial statements from which it has been derived. Cleveland, Ohio March 1, 2011 COmmOn sHares and dIVIdends The Progressive Corporation's common shares (symbol PGR) are traded on the New York Stock Exchange. Progressive currently has an annual variable dividend policy. We...

  • Page 31
    ...in our releases and publications, and in our periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including...

  • Page 32
    ... releases, access progressive.com/investors. For financial-related information or to request copies of Progressive's publicly filed documents free of charge, write to: The Progressive Corporation, Investor Relations, 6300 Wilson Mills Road, Box W33, Mayfield Village, Ohio 44143, e-mail: investor_...

  • Page 33
    ...4641 e-mail: [email protected] Claims reporting via the Web site is currently only available for personal auto policies. Any policyholder, claimant, or other interested party who has any complaint or concern regarding any claim handling or other claims-related issue may report such claim...

  • Page 34
    ...) 22 Brick Face 25 Untitled (Hard Rain) 28 Empty Pockets 30 Catch Air 36 Harvest 40 Untitled (Dream Houses) Artwork Design Printing ©2011 Robin Rhodt Nesnadny + Schwartz, Cleveland + New York + Toronto AGS Custom Graphics ©2011 The Progressive Corporation This publication was printed at an...

  • Page 35
    6300 W ils on Mills R eld V illag oad, May fi e, Ohio 4 414 3 440.46 1.5000 p r o g re s si ve.c om ®