Progressive Corporation

Methodology

Progressive's auto insurance earnings can fluctuate with accident frequency, severity trends, and catastrophe losses, though disciplined underwriting provides more stability than peers. Telematics advantages and direct distribution create competitive moats. The calculation works reasonably well when normalizing for underwriting cycles and focusing on sustainable combined ratios.

Methodology

Progressive typically trades at premium PEG ratios reflecting superior underwriting discipline, technology advantages from Snapshot telematics, and consistent market share gains. While expensive versus traditional insurers, operational excellence justifies valuations. Compare to GEICO's implied value and Progressive's historical range while considering telematics adoption and pricing sophistication.

Methodology

Progressive offers a modest dividend with management emphasizing underwriting discipline and growth investments over aggressive payouts. The small dividend adds minimal value compared to capital appreciation from market share gains. For Progressive, underwriting profitability and policy growth matter far more than current yield in driving shareholder returns.