Progressive 2011 Annual Report Download

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Draw your car facing right.

Table of contents

  • Page 1
    Draw your car facing right.

  • Page 2
    ... right. 1). THE REQUEST On December 13, 2011, Progressive invited customers, shareholders, employees, friends, and family to perform this simple task. 3 Financial Highlights 5 Vision and Values 9 Letter to Shareholders 19 Objectives, Policies, and Operations Summary 27 Consolidated Financial...

  • Page 3
    ... level of claims service available at service centers located in major metropolitan areas throughout the United States. Progressive companies offer consumers choices in how to shop for, buy, and manage their auto insurance policies. Progressive offers its products, including personal and commercial...

  • Page 4
    ...Book value per share Consolidated shareholders' equity Market capitalization î'eturn on average shareholders' equity Net income Comprehensive income Policies in force (thousands) Personal Lines Agency-auto Direct- auto Special lines Total Personal Lines Growth over prior year Commercial Auto Growth...

  • Page 5
    to so can to 1959 (Jrgen, age 33) 4

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    ... 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. Progressive's Core Values serve as the foundation for our corporate culture...

  • Page 7
    3). THE JOURNEY Rumpy (Jakob, age 29) 7 Lepro Balt (Extrater, age 93)

  • Page 8
    To reï¬,ect personalization, digital artist Aaron Koblin developed a simple drawing tool where drivers have submitted over 100,000 interpretations of cars. The imaginations and experiences of people from all walks of life produced a variety of vehicles. Sedans, race cars, roller skates, moon rovers,...

  • Page 9
    a for a Hotrodings (Madseb, age 26) 8 VolvoFlo (Flo, age 31)

  • Page 10
    Letter to Shareholders It's not always apparent when meaningful business history is being made and in auto insurance that's not very often, but in 2011, Progressive's introduction of Snapshot just might qualify. ® "I'm a good driver why don't I get credit for that?" "What does my age or ...

  • Page 11
    ... considerably better than our targets.We look forward to an economy where new sales of these vehicles return to prior levels. Our special lines offer ings, along with our continued growth in our Progressive Home Advantage® program, continued to drive our important multi-product household measures...

  • Page 12
    ...and Commercial Auto finished out the year with close to 6% written premium growth, mostly driven by doubledigit growth in the 3rd and 4th quarters. This growth reï¬,ects our implementation of needed pricing increases, often before our competitors, returning unit growth through new applications, and...

  • Page 13
    ...product design is much more than just price segmentation and for us involves the consumer and agent presentation and, increasingly so, their ability to interact with the product by selecting and packaging combinations of coverage that best meet their needs. I doubt any year in Progressive's history...

  • Page 14
    ...just one initiative to build on the concept of product design and presentation is our prototype application that allows a consumer to use the camera in their device to send a photo of a driver's license and similarly their current insurance card with vehicle identification number, and in return get...

  • Page 15
    ... enhancing both our Agent and Direct distribution options?"-our very clear and consistently stated objective. getting this right was highlighted in 2011 as "Flo" was voted America's #1 advertising icon (as named by Entertainment Weekly). I'm sure her over 3.3 million Facebook fans had something...

  • Page 16
    ...' #1 choice for Auto Insurance." Our people, culture, and aspirations are what continue to make us special. Nothing we have achieved has been without the efforts of so many, and I thank the people of Progressive, our agents and brokers, customers, and shareholders for their support in making this...

  • Page 17
    GO!GO!Racer! (Greg, age 24) Starcar (Craig, age 31) to 18

  • Page 18
    ...customer service. Progressive is a growthoriented 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 19
    ... rates are presented on a one-year lag basis for the industry. ACHIEVEMENTS We are convinced that the best way to maximize shareholder value is to achieve these financial objectives and policies consistently. A shareholder who purchased 100 shares of Progressive for $1,800 in our first public...

  • Page 20
    ... Gogh Van (Jason, age 38) OPERATIONS SUMMARY Personal Lines Our focus on growing our policyholder base is now consistently resulting in more customers and more revenues. In 2011, Personal Lines added more than 580,000 policies (5%) and achieved $13.6 billion of net premiums written, a 5% increase...

  • Page 21
    ... quotes, sales, bill payments, and policy changes are being transmitted via mobile devices and we expect this trend to continue. We remain committed to meeting customers' needs where, when, and how they wish to interact with us. Commercial Auto Progressive's Commercial Auto business had During 2011...

  • Page 22
    ...half of 2011. This helped to reaffirm our market leading position as America's number one insurer of trucks. We built on our emerging direct Commercial Auto business, setting new records for new business applications and policies in force.We completed the rollout of customer Internet quoting in the...

  • Page 23
    81per hour (approximate collection rate) 65 days 5). THE RESULTS (collection period) 228,402 (unique visitors) 24

  • Page 24
    126,786 (total drawings submitted) (longest time spent drawing) 30 25 Data from December 13, 2011- February 16, 2012 + minutes 177 (countries represented) 10 seconds (shortest time spent drawing)

  • Page 25
    GAZ 51 (Bevbor, age 42) Farmer Moe (Michelle, age 19) is the when 26

  • Page 26
    ...404 of The SarbanesOxley Act of 2002 and applicable SEC regulations, along with the related report of PricewaterhouseCoopers LLP, is presented in the 2011 Annual î'eport to Shareholders, which is attached as an Appendix to Progressive's 2012 Proxy Statement. Glenn M. î'enwick, President and Chief...

  • Page 27
    ... compensation Total equivalent shares - Diluted Basic: Net income per share Diluted: Net income per share See Notes to the complete Consolidated Financial Statements included in Progressive's 2011 Annual Report to Shareholders, which is attached as an Appendix to Progressive's 2012 Proxy Statement...

  • Page 28
    ...Progressive's 2011 Annual Report to Shareholders, for further discussion. See Notes to the complete Consolidated Financial Statements included in Progressive's 2011 Annual Report to Shareholders, which is attached as an Appendix to Progressive's 2012 Proxy Statement. 29 The Progressive Corporation...

  • Page 29
    ... of Changes in Shareholders' Equity (millions- except per share amounts) For the years ended December 31, COMMON SHARES, $1.00 PAR VALUE 2011 2010 2009 Balance, Beginning of year Stock options exercised Treasury shares purchased Net restricted stock awards issued (forfeited) Balance, End of...

  • Page 30
    ...to shareholders Acquisition of treasury shares Net cash used in financing activities Effect of exchange rate changes on cash Increase (decrease) in cash Cash, Beginning of year Cash, End of year See Notes to the complete Consolidated Financial Statements included in Progressive's 2011 Annual Report...

  • Page 31
    ...of storms, hurricanes, snowfalls, hail, and winter conditions); changes in driving patterns and loss trends; acts of war and terrorist activities; our ability to maintain the Stock Price Quarter High Low Close Rate of Return Dividends Declared per Share 2011 1 2 3 4 2010 $ $ 21.24 22.08 21.66...

  • Page 32
    ... from which it has been derived. Cleveland, Ohio February 28, 2012 COMMON SHARES AND DIVIDENDS The Progressive Corporation's common shares are traded on the New York Stock Exchange (symbol PGî'). Progressive currently has an annual variable dividend policy. We expect the Board to declare...

  • Page 33
    ... Agent and Registrar Registered Shareholders: If you have questions or changes to your account and your Progressive shares are registered in your name, write to: American Stock Transfer & Trust Company, Attn: Operations Center, 6201 15th Avenue, Brooklyn, NY 11219; phone: 1-866-709-7695; email: info...

  • Page 34
    ... Report a Claim For Customer Service: If you bought your policy through an independent agent or broker If you bought your policy directly through Progressive online or by phone If you have a complaint or concern regarding any claim handling or other claims-related issue2 1 2 Commercial autos/trucks...

  • Page 35
    ... verified recycled sources. Acid-Free, recycled and recyclable papers were employed throughout this publication. Artwork: ©2012 Aaron Koblin Design: Nesnadny + Schwartz, Cleveland + New York + Toronto Printing: AGS Custom Graphics ©2012 The Progressive Corporation Page 28 : Zoocar (Zoo, age 42...

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