Financial Objectives & Policies Scorecard

Financial Results

Target

2011

2010

2009

5 Years1

10 Years1

Underwriting margin Progressive 4% 7.0% 7.6% 8.4% 7.2% 9.6%
  Industry2 na (.4)% (.8)% 1.4% 1.2%
Net premiums written growth Progressive (a) 5% 3% 3% 1% 8%
  Industry2 na 1% (1)% 0% 3%
Policies in force growth Personal auto (a) 5% 8% 5% 4% 8%
  Special lines (a) 5% 5% 3% 6% 11%
  Commercial Auto (a) 0% 0% (5)% 0% 9%
Companywide premiums-to-surplus ratio (b) 2.9 2.9 2.8 na na
Investment Allocation: Group I (c) 21% 22% 20% na na
  Group II (c) 79% 78% 80% na na
Debt-to-total capital ratio <30% 29.6% 24.5% 27.5% na na
Return on average shareholders' equity Net income (d) 16.5% 17.1% 21.4% 15.2% 20.3%
  Comprehensive income (d) 15.0% 22.3% 35.5% 16.2% 21.8%
 
(a)   Grow as fast as possible, constrained only by our profitability objective and our ability to provide high-quality customer service.
(b)   Determined separately for each insurance subsidiary.
(c)   Allocate portfolio between two groups:
Group I - Target 0% to 25% (common equities; nonredeemable preferred stocks; redeemable preferred stocks, except for 50% of investment-grade redeemable preferred stocks with cumulative dividends; and all other non-investment-grade fixed-maturity securities)
Group II - Target 75% to 100% (short-term securities and all other fixed-maturity securities)
Note: External data is not available to enable us to report 2009 under our current allocation strategy. For 2009, Group I included common equities, all preferred stocks, and below investment-grade fixed-maturity securities, while Group II included short-term securities and all other fixed-maturity securities.
(d)   Progressive does not have a predetermined target for return on average shareholders’ equity.
na   not applicable
1   Represents results over the respective time period; growth represents average annual compounded rate of increase (decrease).
2   Represents private passenger auto insurance market data as reported by A.M. Best Company, Inc. The industry underwriting margin excludes the effect of policyholder dividends. Final comparable industry data for 2011 will not be available until our third quarter report. The 5- and 10-year growth rates are presented on a one-year lag basis for the industry.

Source: Progressive's 2011 Annual Report
Last updated: February 28, 2012

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