the progressive corporation 2006 annual report
financial review
The Progressive Corporation and Subsidiaries
Ten Year Summary — Financial Highlights
(unaudited)
(millions-except ratios, per share amounts and number of people employed)
| 2006-2002 ·2001-1997 | 2001 | 2000 | 1999 | 1998 | 1997 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
Insurance Companies Selected Financial Information and Operating Statistics – Statutory Basis |
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| Net premiums written | $ | 7,260.1 | $ | 6,196.1 | $ | 6,124.7 | $ | 5,299.7 | $ | 4,665.1 |
| Growth | 17% | 1% | 16% | 14% | 36% | |||||
| Policyholders’ surplus | $ | 2,647.7 | $ | 2,177.0 | $ | 2,258.9 | $ | 2,029.9 | $ | 1,722.9 |
| Net premiums written to policyholders’ surplus ratio | 2.7 | 2.8 | 2.7 | 2.6 | 2.7 | |||||
| Loss and loss adjustment expense ratio | 73.6 | 83.2 | 75.0 | 68.5 | 71.1 | |||||
| Underwriting expense ratio | 21.1 | 21.0 | 22.1 | 22.4 | 20.7 | |||||
| Statutory combined ratio | 94.7 | 104.2 | 97.1 | 90.9 | 91.8 | |||||
Selected Consolidated Financial Information – GAAP Basis |
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| Total assets | $ | 11,122.4 | $ | 10,051.6 | $ | 9,704.7 | $ | 8,463.1 | $ | 7,559.6 |
| Total shareholders’ equity | 3,250.7 | 2,869.8 | 2,752.8 | 2,557.1 | 2,135.9 | |||||
| Common Shares outstanding | 881.2 | 882.2 | 877.1 | 870.5 | 867.2 | |||||
| Common Share price: | ||||||||||
| High | $ | 12.65 | $ | 9.25 | $ | 14.52 | $ | 14.33 | $ | 10.07 |
| Low | 6.84 | 3.75 | 5.71 | 7.83 | 5.13 | |||||
| Close (at December 31) | 12.44 | 8.64 | 6.09 | 14.11 | 9.99 | |||||
| Market capitalization | $ | 10,958.6 | $ | 7,616.8 | $ | 5,345.4 | $ | 12,279.7 | $ | 8,667.0 |
| Book value per Common Share | 3.69 | 3.25 | 3.14 | 2.94 | 2.46 | |||||
| Return on average common shareholders’ equity | 13.5% | 1.7% | 10.9% | 19.3% | 20.9% | |||||
| Debt outstanding | $ | 1,095.7 | $ | 748.8 | $ | 1,048.6 | $ | 776.6 | $ | 775.9 |
| Ratios: | ||||||||||
| Debt to total capital | 25.2% | 20.7% | 27.6% | 23.3% | 26.6% | |||||
| Price to earnings | 27.2 | 164.5 | 18.5 | 27.7 | 22.6 | |||||
| Price to book | 3.4 | 2.7 | 1.9 | 4.8 | 4.1 | |||||
| Earnings to fixed charges | 10.7x | 1.3x | 5.7x | 10.2x | 9.2x | |||||
| Net premiums earned | $ | 7,161.8 | $ | 6,348.4 | $ | 5,683.6 | $ | 4,948.0 | $ | 4,189.5 |
| Total revenues | 7,488.2 | 6,771.0 | 6,124.2 | 5,292.4 | 4,608.2 | |||||
| Underwriting margins:1 | ||||||||||
| Personal Lines | 4.5% | (5.2)% | 1.2% | 7.9% | 6.3% | |||||
| Commercial Auto | 8.3% | 3.3% | 8.4% | 17.6% | 10.9% | |||||
| Other indemnity2 | 7.0% | 13.6% | 10.8% | 8.6% | 7.9% | |||||
| Total underwriting operations | 4.8% | (4.4)% | 1.7% | 8.4% | 6.6% | |||||
| Net income | $ | 411.4 | $ | 46.1 | $ | 295.2 | $ | 456.7 | $ | 400.0 |
| Per share (diluted basis) | .46 | .05 | .33 | .51 | .44 | |||||
| Dividends per share | .0233 | .0225 | .0218 | .0208 | .0200 | |||||
| Number of people employed | 20,442 | 19,490 | 18,753 | 15,735 | 14,126 |
All share and per share amounts were adjusted for the May 18, 2006, 4-for-1 stock split and the April 22, 2002, 3-for-1 stock split.
1) Underwriting margins are calculated as pretax underwriting profit (loss), as defined in Note 9 – Segment Information, as a percent of net premiums earned.
2) In 2003, we ceased writing business for our lender’s collateral protection program. As a result, underwriting margin is not meaningful (NM) for our other indemnity businesses due to the insignificant amount of premiums earned by such businesses after that date.
