The Progressive Corporation: SWOT Analysis & Company Profile

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					The Progressive Corporation

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The Progressive Corporation: SWOT
Analysis & Company Profile


Reference code: BRFS069CP10-Q4

Published: Oct 2010




Business Review
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The Progressive Corporation - SWOT Profile                                          Page 1
The Progressive Corporation

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The Progressive Corporation - Company Overview

The Progressive Corporation (Progressive Corporation) is the US based insurance holding company, which is engaged in
providing personal and commercial automobile insurance, and other specialty property-casualty insurance products and
related services. As of December 31, 2009, the company owned 53 subsidiaries and had one mutual insurance company
affiliate. It operates through Personal Lines, Commercial Auto, Other Indemnity Businesses and Service Businesses. The
company writes insurance for private passenger automobiles and recreational and other vehicles. It also provides
insurance for private passenger automobiles and recreational and other vehicles. Progressive Corporation’s professional
liability insurance is offered to community banks, principally directors and officer’s liability insurance. The company is
headquartered in Mayfield Village, Ohio, the US.


Financial Performance

The company reported revenues of (U.S. Dollars) USD 14,563.60 million during the fiscal year ended December 2009. Its
revenues recorded a declining compound annual rate of 0.42%, during the period, 2007-2009, and year-on-year (Y-o-Y)
growth of 13.42% over the fiscal year 2008. During the fiscal year 2009, its operating margin was 10.690% as against an
negative operating margin of 1.731% during the fiscal year 2008. Moreover, during the fiscal year 2009, the company’s
net profit margin was 7.261% as against a negative net profit margin of 0.545% during the fiscal year 2008.




The Progressive Corporation - Key Facts

The Progressive Corporation, Key Facts

                                  6300 Wilson Mills Road, Mayfield
                                  Village, Ohio (OH), 44143,         Ticker Symbol, Stock       PGR (New York Stock
Corporate Address:                                                                              Exchange)
                                                                     Exchange
                                  United States


Telephone                         + 1 440 4615000                    No. of Employees           24,661



Fax                               + 1 440 4467436                    Financial Year End         December



URL                               www.progressive.com                Revenue (in USD Million)   14,563.60



Industry                          Financial Services



Locations                         United States

Source: Annual Report, Company Website, Primary and Secondary Research




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The Progressive Corporation - SWOT Profile                                                                            Page 2
The Progressive Corporation

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The Progressive Corporation - Business Description

The Progressive Corporation (Progressive Corporation), through its subsidiaries is engaged in providing personal and
commercial automobile insurance, and other specialty property-casualty insurance products and related services in the
US. The company operates 53 subsidiaries and one mutual insurance company affiliate. As of June 2010, the company
had 24,661 employees.

Progressive Corporation’s operations are organized under four business segments namely, Personal Lines, Commercial
Auto, Other Indemnity Businesses and Service Businesses.

Under Personal Lines business segment, the company provides insurance for personal autos and recreational vehicles
and other vehicles. It provides more than one program in a single state, with each program targeted to a specific
distribution channel, market or customer group. The segment includes the Agency and Direct businesses.

The Agency business of the company comprises of business written by its network of over 30,000 independent insurance
agencies, including brokerage in New York and California, and strategic alliance business relationships with other
insurance companies, financial institutions, and national agencies. During the year 2009, the Agency business contributed
59% towards the segment’s total net premiums. The Direct business of the company is undertaken directly by the
company through online and over the phone. During the year 2009, the Direct business contributed 41% towards the
segment’s total net premiums. The company’s personal line products comprised of insurance for motorcycles, recreational
vehicles, mobile homes, watercraft, snowmobiles and similar items. These products are principally offered through certain
independent agents in 30 states and through telephone to its direct business customers. For the year ended December
31, 2009, the segment generated 89% of the company’s total net premiums written.

Through Commercial Auto business segment, the company writes liability and physical damage insurance for automobiles
and trucks owned by small businesses in the specialty truck and business auto markets. It offers a range of products,
which includes tow trucks, dump trucks, logging trucks, local cartage and other short-haul commercial vehicles. The
segments products and services are distributed through both the independent agency and direct channels. It operates in
the specialty truck and business auto markets. The specialty truck commercial auto market accounts for more than half of
the total commercial auto premiums. The company insures approximately 40% of the vehicles in this segment principally
comprised of dump trucks, logging trucks; tow trucks, local cartage, and other short-haul commercial vehicles. It also
insures in the business auto market, including autos, vans, and pick-up trucks used by artisans, such as contractors,
landscapers, and plumbers, and a variety of other small businesses. For the year ended December 31, 2009, the
segment generated 11% of the company’s total net premiums written.

Progressive Corporation’s other indemnity businesses are principally engaged in writing professional liability insurance for
principally directors, officers liability insurance, and community banks as well as managing its run-off businesses. The
company reinsures the majority of the risk on these coverages with a small mutual reinsurer controlled by its bank
customers and various other reinsurance entities. In fiscal 2009, the segment represented less than 1% of the company’s
total net premiums written.

The company through its Service businesses is engaged in offering insurance-related services, principally processing
CAIP business. As a service provider, Progressive Corporation collects fee revenue which is earned on a pro rata basis
over the term of the related policies. It also includes alliance with three select homeowner insurance companies. . In
fiscal 2009, the segment represented less than 1% of the company’s total net premiums written.




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The Progressive Corporation - SWOT Profile                                                                         Page 3
The Progressive Corporation

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The Progressive Corporation - Major Products and Services

The Progressive Corporation is a holding company, engaged in providing personal and commercial automobile insurance,
and other specialty property casualty insurance and related solutions. The company's products include the following:

The Progressive Corporation, Major Products and Services
Products:

Personal Lines:

Boat insurance

Personal watercraft insurance

Homeowners insurance

Motorcycle insurance

RV insurance

Segway insurance

Commercial Lines:

Commercial Auto insurance

Other indemnity business:

Professional liability insurance to community banks

Directors and officer’s liability insurance
Source: Annual Report, Company Website, Primary and Secondary Research




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The Progressive Corporation - SWOT Profile                                                                  Page 4
The Progressive Corporation

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The Progressive Corporation - History

The Progressive Corporation, History

    Year                Event type                                                    Description


                                                The company entered into a 364 day secured liquidity credit pact with National City
   2009      Contracts/Agreements
                                                Bank for USD 125 million.


   2009      Others                             Progressive Corporation began selling personal auto insurance in Australia.


                                                The company entered in to naming rights and sponsorship deal with the Cleveland
   2008      Contracts/Agreements
                                                Indians Major League Baseball team.


                                                The company expanded its concierge level of claims service, focusing special needs of
   2006      Others
                                                drivers whose vehicles are unrepairable as the result of an accident.


   2003      New Products/Services              The company launched its concierge level of claims service, first in the industry.


                                                The company changed its claims focus offering a better experience for every party
   2000      Others
                                                involved in a claim, including the customer and the body shop.


                                                The company introduced Immediate Response® Vehicle (IRV), a specially marked and
   1994      New Products/Services              outfitted vehicle with trained claims professionals suppo
				
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