Core Insights - The Progressive Corporation reported a significant increase in net premiums written and earned for November 2025, with net premiums written at $6,193 million, up 11% from $5,563 million in November 2024, and net premiums earned at $6,894 million, up 14% from $6,040 million [1] - Despite the growth in premiums, net income decreased by 5% to $958 million from $1,006 million in the previous year, and earnings per share available to common shareholders also fell by 5% to $1.63 from $1.71 [1] - The company experienced a substantial decline in total pretax net realized gains on securities, which dropped 82% to $32 million from $175 million [1] - The combined ratio increased to 87.1 from 85.6, indicating a slight deterioration in underwriting performance [1] Premiums and Policies - The total number of policies in force increased by 11% year-over-year, reaching 38,414 thousand compared to 34,739 thousand in November 2024 [1] - In personal lines, the agency auto policies rose by 10% to 10,713 thousand, while direct auto policies increased by 14% to 15,856 thousand [1] - Special lines and property policies also saw growth, with special lines up 7% to 6,992 thousand and property policies up 4% to 3,657 thousand [1] - Commercial lines experienced a 5% increase, with policies in force reaching 1,196 thousand [1]

Core Points - The Progressive Corporation declared an annual common share dividend of $13.50 per share and a quarterly common share dividend of $0.10 per share [1][2] - Both dividends are payable on January 8, 2026, to shareholders of record as of January 2, 2026 [2] - The annual dividend for 2025 was determined based on the company's capital position and expected future capital needs, with the Board expected to continue declaring quarterly dividends for 2026 [2] Company Overview - Progressive Insurance simplifies the process of understanding, buying, and using various insurance products, including car and home insurance [4] - The company is the second largest personal auto insurer in the United States and a leading provider of commercial auto, motorcycle, and boat insurance, as well as one of the top 15 homeowners insurance carriers [5] - Founded in 1937, Progressive offers innovative shopping tools and services aimed at saving customers time and money [5]

>> WELCOME BACK TO SQUAWK BOX. GOT SOME NEWS FROM THE INSURANCE INDUSTRY. CONTESSA BREWER JOINS US AT THE TABLE THIS MORNING WITH MORE.WHAT'S GOING ON. >> MORNING GUYS. WELL WE CAN EXCLUSIVELY REPORT THIS MORNING USAA IS SET TO RETURN $3.7% BILLION TO ITS POLICYHOLDERS, 14.2% MILLION OF THEM MOSTLY SERVICE MEMBERS, VETERANS AND THEIR FAMILIES.USAA IS AN ASSOCIATION, AND SO ITS CUSTOMERS ARE ALSO ITS SHAREHOLDERS. THIS IS THE LARGEST PAYBACK IN THE COMPANY'S 103 YEAR HISTORY, AND THAT'S IN SPITE OF THE CONSI ...

Core Viewpoint - The Progressive Corporation (PGR) is considered a buy due to its ability to sustain an above-industry-average Return on Equity (ROE) in the long term [1]. Company Performance - Progressive has successfully maintained a lower combined ratio than the industry average, indicating effective cost management and operational efficiency [1].

Core Insights - Progressive Corporation (PGR) has significantly improved its net margin, with a 980 basis point increase over the last two years and a further 170 basis point rise in the first nine months of 2025 [1][9]. Group 1: Margin Improvement Drivers - PGR's market presence, distribution innovation, underwriting technology, and quantitative analytics in pricing and risk selection are key factors driving net margin improvement [2]. - The company anticipates near double-digit rate increases for both personal property and core commercial auto products through the remainder of 2025 [2]. - The Personal Auto segment is a long-term growth driver, enhancing premium volume and profitability, while prudent reinsurance strategies help limit losses and support margin expansion [4][9]. Group 2: Technological Investments - PGR continues to invest in generative AI tools aimed at improving policy pricing and identifying new business opportunities [3]. - The Snapshot program is expected to enhance the accuracy of personal auto rating, while machine learning is utilized for faster insights and better decision-making [3]. Group 3: Competitive Landscape - Chubb Limited (CB) has achieved a 440 basis point margin rise through disciplined underwriting and effective pricing, highlighting the importance of operational efficiency [6]. - Berkshire Hathaway (BRK.B) has experienced net margin variability due to various factors, emphasizing the need for predictable, high-quality business expansion and pricing discipline [7]. Group 4: Stock Performance and Valuation - PGR shares have underperformed the industry, losing 6% year to date [8]. - The company trades at a price-to-book value ratio of 3.75, significantly above the industry average of 1.52, but holds a Value Score of B [10]. Group 5: Earnings Estimates - The Zacks Consensus Estimate for PGR's fourth-quarter 2025 EPS has decreased by 1.4%, while estimates for the first quarter of 2026 remain unchanged [11]. - Revenue and EPS estimates for 2025 indicate year-over-year increases, but the EPS estimate for 2026 suggests a decline [13].

Core Viewpoint - Investor Steve Eisman believes Progressive Corp. is undervalued and represents a significant value investing opportunity at current levels [2][4]. Company Overview - Progressive Corp. is based in Ohio and has been owned by Eisman for several years [2]. - The company operates with a business model similar to Walmart and T-Mobile, allowing it to operate efficiently and offer cheaper products and services [2]. Market Position - Eisman notes that Progressive is capable of gradually increasing market share despite competitive pressures [3]. - The stock is currently trading at approximately 13.5 times the 2026 consensus earnings estimate, which Eisman considers inexpensive [4]. Financial Performance - Progressive reported $20.849 billion in revenue and earnings of $4.06 per share for the third quarter, missing consensus estimates [4]. - Following the earnings report, most analysts lowered their price targets, with the average consensus now at $263.07, indicating a potential upside of 15.93% from current levels [5]. Stock Performance - The stock has declined 5.71% year-to-date and trades at under 13 times earnings and 1.57 times sales [6]. - The relative strength index (RSI) is at 55.1, suggesting a neutral-to-bullish outlook [6]. - Shares of Progressive closed at $226.91, with a slight increase of 0.40% on the last trading day [7].

Core Viewpoint - Progressive (PGR) shares have declined approximately 22% since the initial coverage in March, attributed to high valuation despite strong fundamentals, suggesting a wait for a better entry point [1] Company Analysis - The company is recognized for its strong fundamentals, yet the current valuation is considered high, leading to a cautious investment stance [1] Investment Philosophy - The investment philosophy emphasizes acquiring high-quality stocks and businesses led by disciplined capital allocators that generate exceptional returns on capital and can compound invested capital over extended periods [1]

Core Insights - The Progressive Corporation reported significant growth in key financial metrics for October 2025, including a 6% increase in net premiums written and an 11% increase in net premiums earned compared to October 2024 [1] - Net income surged by 107% year-over-year, reaching $846 million, with earnings per share also increasing by 107% to $1.44 [1] - The company achieved a combined ratio of 89.7, a 4.4 percentage point improvement from the previous year, indicating enhanced operational efficiency [1] Financial Performance - Net premiums written: $7,002 million in 2025 vs. $6,578 million in 2024, a 6% increase [1] - Net premiums earned: $7,078 million in 2025 vs. $6,387 million in 2024, an 11% increase [1] - Net income: $846 million in 2025 vs. $408 million in 2024, a 107% increase [1] - Earnings per share: $1.44 in 2025 vs. $0.69 in 2024, a 107% increase [1] - Total pretax net realized gains on securities: $57 million in 2025 vs. a loss of $88 million in 2024, a 165% improvement [1] - Combined ratio: 89.7 in 2025 vs. 94.1 in 2024, a 4.4 percentage point improvement [1] Policy Growth - Total policies in force: 38,379 thousand in 2025 vs. 34,364 thousand in 2024, a 12% increase [1] - Personal lines policies: 37,178 thousand in 2025 vs. 33,223 thousand in 2024, a 12% increase [1] - Agency auto policies: 10,720 thousand in 2025 vs. 9,581 thousand in 2024, a 12% increase [1] - Direct auto policies: 15,802 thousand in 2025 vs. 13,653 thousand in 2024, a 16% increase [1] - Special lines policies: 6,996 thousand in 2025 vs. 6,504 thousand in 2024, an 8% increase [1] - Property policies: 3,660 thousand in 2025 vs. 3,485 thousand in 2024, a 5% increase [1] - Commercial lines policies: 1,201 thousand in 2025 vs. 1,141 thousand in 2024, a 5% increase [1]

Core Viewpoint - Property and casualty insurance is identified as a business with an inherently superior business model, provided there is sufficient capital and expertise to operate effectively [1]. Group 1: Company Insights - The focus is on identifying reasonably priced companies with steady long-term growth prospects [1]. - There is an emphasis on uncovering small- and mid-cap companies that have the potential for exponential growth through careful fundamental analysis [1]. Group 2: Investment Philosophy - The belief is that highly educated individuals can significantly outperform the market if they possess the right temperament and are willing to learn basic accounting and financial principles [1].

Core Insights - The profitability of Progressive Corporation (PGR) is significantly influenced by its management of underwriting expenses, which include policy acquisition costs and other underwriting-related expenses [1][5]. Underwriting Expenses - Policy acquisition costs account for over 50% of underwriting expenses, directly contributing to top-line growth by increasing the number of active insurance policies [2]. - Underwriting expenses have represented one-fifth of total expenses over the past three years, fluctuating between 17-20% of total revenues during the same period [3]. - Effective management of underwriting expenses leads to an improved combined ratio, which is a key measure of underwriting profitability [3]. Cost Management Strategies - Progressive employs data-driven underwriting and automation to manage underwriting expenses, enhancing cost control and competitive positioning in the market [4][9]. - Although underwriting expenses have increased in the last two years due to higher business volumes, they remain a crucial driver of profitability and long-term intrinsic value growth for PGR [5][9]. Peer Comparison - Similar to Progressive, Berkshire Hathaway (BRK.B) and Allstate Corporation (ALL) also rely on effective management of underwriting expenses to sustain profitability and long-term value creation [6][7]. Stock Performance - PGR shares have declined by 6% year-to-date, underperforming the industry average [8]. Valuation Metrics - PGR has a price-to-book value ratio of 3.73, which is above the industry average of 1.5, but it holds a Value Score of B [10]. Earnings Estimates - The Zacks Consensus Estimate for PGR's fourth-quarter 2025 EPS has increased by 4.5%, while estimates for the first-quarter 2026 have decreased by 0.9% over the past 30 days [11]. - The consensus estimates indicate year-over-year revenue increases for 2025 and 2026, but a decline in EPS for 2026 [12]. Current Ranking - PGR currently holds a Zacks Rank 3 (Hold) [13].