This Insurance Stock Is Basically a Money-Printing Machine

Core Insights - Progressive is a dominant player in the insurance industry, delivering exceptional returns for long-term investors, with an investment of $1,000 in 1990 growing to $4.69 million today [2] Group 1: Business Model and Strategy - Progressive has adopted a disciplined underwriting approach since 1965, focusing on consistently underwriting profitable policies rather than merely breaking even [3] - The company utilizes technology, such as telematics, to personalize insurance rates based on driver behavior, enhancing its competitive edge [4] Group 2: Financial Performance - Progressive aims for a profit of approximately $4 for every $100 in premiums written, with a target combined ratio of 96% or better, achieving an average combined ratio of 92% over the past 23 years [5] - The company generated $16.5 billion in free cash flow over the past 12 months, highlighting its strong cash-generating capabilities [5] Group 3: Competitive Advantages - Progressive's consistent profitability across market cycles is attributed to disciplined underwriting, precise pricing, and operational efficiency, reinforcing its durable competitive moat [7] - The company's adaptability and ongoing adjustments in strategy make it a smart investment choice for those looking to build lasting wealth [8]