The Progressive Corporation (PGR) 28 Feb 232022 Q4 Earnings call transcript

Good morning, and thank you for joining us today for Progressive’s Fourth Quarter Investor Event. I am Doug Constantine, Director of Investor Relations, and I will be moderator for today’s event.

The Company will not make detailed comments related to its results in addition to those provided in its annual report on Form 10-K, quarterly reports on Form 10-Q and the letter to shareholders, which have been posted to the Company’s website.

This quarter includes a presentation on a specific portion of our business, followed by a question-and-answer session with members of our leadership team. The introductory comments by our CE and the presentation were previously recorded.

the previously XX we event as minutes questions answers the balance use for other of our and the in management of scheduled with members completion of recorded as team. will remarks, the live recorded our Upon remarks featured well leaders for this

actual management’s to event and are and subject materially many risks As this forward-looking discussed event. These expectations may always, during discussions results statements current statements. that events could from those cause uncertainties include differ in are and based on today’s to

concerning Additional of XXXX, discussions in for discussions where on be risks we the information These website annual our businesses, XX-K safe find will via harbor found at the those statements available related section the other risk investors.progressive.com. and uncertainties Form documents XX, you face. of our of can to factors is year affecting December ended Investor and the Relations forward-looking our challenges report statements

pleased CEO, comments. begin Tricia? to introductory To introduce some who I’m Tricia will us with our today, off kick Griffith,

morning, joining us thank for Good today. you and

of tumultuous among largest XX history was played our hurricane years in and of Progressive’s high toughest the effects in years. The the role a all environment. the pandemic, XXXX a continued inflation and together in Throughout calendar our premiums goal delivered force. growing year while in these of XX people policies challenges, once Progressive came written both a and unity again beating combined ratio

the is people that Progressive of pride in of all The I feel indescribable.

deliver best-in-class have met head expect. stakeholders We results our continued challenges and the all on to

is We be, forward our updated who and our move culture, our embedded here, why challenges meet is which to people built we our four we revised these purpose. we values, which newly help is to are cornerstones, ability fully. to our core live which are purpose exist is are, which Our on in

to better purpose We and guide to unify quo history purpose modified and modify challenging accelerate equity. progress legacy values of core our our organization. on our the the builds the Our of status and

owners, updated headed, now serve. expanded our a the holistic we business more will get pillars to And we vision. our there, adapt it ensure so to environment the our cornerstones which include strategy. reflect better company are We’ve all we which to how the Where to of provides We two the evolution and privileged we of of are is customers these our vision our operate view four to is culture in. ever-changing

will the While we Progressive, always Progressive. our that continue maintain things business will to make progress, to seek

pillar not segmentation. and expense Competitive we’ll In discuss today’s the pricing the the cornerstone competitive but best rate on also we’ll driven strategy by most call, of prices prices. discipline and accurate accuracy, once the specifically, again means focus just offering rate, industry-leading

for are us. said personal the continued pace at believe quarter, behind slower a than the we raise to few the fourth last rate likely have late we major quarters, early XXXX. As increases XXXX auto and auto we personal In but in rates

is regulators, to majority future While on trends. approved are nearing intent increase of with and adequacy, believe commensurate some filings rate be states we loss continue are waiting to by respective their the our still to rates states

relative conversion. Based their strong so, profitability retention quote own improving on know resulted that public rate our in And as and raising they seen competitors have filings, rates to concerns. we’ve are we our growth has address high improve, done which competitiveness

take, our should improvement which actually those us now seen sustain some post-COVID competitors rate help We’ve surpass trends.

acquisition history, XXXX. application expense our with also finished quarter ratio to result, the in running auto As PIFs auto in XXXX growing personal a contributed than our a which volume X% for we best while fourth personal XXXX new lower

market. we’ll and will on enter media look to as and we XXXX, evaluating media to hard capitalize efficiently our use budget, continuously this We’re continue we

opportunistic our acquisition reflects and of at direct higher it of current time. rate stance, is indicative states in the in this levels The expense most we ratio have confidence January

anything, years if taught course, three have the unpredictable. last the us that it’s future is Of

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highlight significant invited Progressive two roles this we’ve in who’ve products UBI on development. UBI our To leaders our call, played

our the five And he years, auto auto for business our Jim led UBI UBI. will discuss to has usage-based Jim we have team. leader personal made insurance. personal advances XX-year veteran. a in Haas, is personal First last speak for auto the Jim be Progressive will

Cory is will be a Jim Cory Following veteran. Progressive XX-year Fischer.

Cory For been for a agency accepted business our role Cory Lines of lead as distribution nine new month, group. last leader our And has to Commercial R&D. years,

advantage led UBI, advances in technology. his R&D the rollout successful be Lines, this Commercial tenure highlighting giving Commercial in our Lines have once products. During Progressive will Cory during Cory the made important UBI of auto all both of again first-mover in commercial we

joining thank hand now this will Jim it to morning. you Again, Jim? for I Haas. us over

Tricia. you, Thank

Haas, we’ve long built Progressive’s about starting I’d improve how telematics with history tell that how on mentioned, lead to Tricia Jim you we’ve Tricia my efforts. in Personal Today, that our is name and I As to Lines like discussed continued core how the value-added can now outside to be discuss to discussion data to improve on some moving finally, then bringing sources bring wrapping rating accuracy of soon. during up program, And from quote. we in services business with the Snapshot market new we’ll Telematics

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Thanks, Jim.

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point he Haas’ a a the of customers retention who versus surcharge Jim work. are slide where think segmentation I showed getting of is great case discount a at So in

be going equal, in more are our than who frequency favorable help else getting that frequency out, getting folks the that drive folks are play marketplace, And drivers competitors. lower frequency. the higher will as the are obviously our discount are to continues who So the surcharge, the all a and a to

about efforts note as tight. profitability. We’ve underwriting have we we’ve though talked restrictions rates we were place put Additionally, in we underwriting considerably our I will challenged as retained we’ve shared. fairly by raised that

the which in generally we’ve to pushing are able are at able off been same this rates able and competitive speaking raise customers to point environment to the a frequency underwriting restrictions, manage So, that maintain higher where very the to time. we

that in perspective both from underpriced. continuing against rate good segments pretty guard but we think I So, to are a might place, also be the level

the automaker regarding an in word the represent industry. believe And follow-up investors a new the the I have automakers you some used of made you I could of and about early new That’s felt it. you Got leg commentary the believe I excited a about are are of And But competitiveness automakers. stages. the appreciate My kind lot that partnering not partnership. leg, within helpful. or of we that and know the them it’s is you with

why well? it -- can to curious a threat of partnerships if to maybe you automakers more pay on you’re is if light bit for as Progressive shed and data, this having isn’t So a competitive the only the Thanks. having

that. Sure, the whether with with competition Jim Mike. more talk across think a or bit Yes. insure-techs let Haas board, about it’s great. But is OEs little we the I’ll

feel benefits consumers. also partnerships really have most we talked importantly it’s about, the and like when it Jim We like important

color So Jim, to you any to want do that? add

hardware is putting to to They you Sure. pay for return on for those the This to way money. all the them We a costs way that are get Mike, obviously a that. monetize data them right. the automakers, are is that. in goes eventually some car for

Some OEMs we’ve as to want to seen, an insurance, might are not. get going some

out data of is And to get different that them us. this way so for from a value-add

ISI. Our you next comes floor. have Motemaden question David with Evercore from David, the

match guys years, difficult the six Tricia, us of PIF to morning. market in XXXX. Good the couple PIF since be growth XX% Thanks. of type in Hi. in you growth you believe August in saw hard would of years told I thought you the auto that, last start next the the

and are get they peers you just on front, some reported losses with the and are seeing, the some could marketplace how have challenges on Just the rates you way of to on over years? next Just feel -- how six your growth still what type just we the the you do you that on wondering see are new seeing five the if given that your could of an we that think update feeling apps? thoughts just your in you of that wondering

last on, will there’s I years driving be because prepared we three going we seen of things about severity to car haven’t to things great we never will behavior, before. anticipate believe than five sit. really you Thanks, going what inflation, tell reacting said, what for, in or frequency, can’t predict that ago. I David. pandemic. months I that that and lot environmental -- more I to over feel a we’re position went be there’s is frankly whether I’ve we’ve a trends That growth felt We the a through learned bullish lot I PIF four as it’s the prices, used

we to rate. we So, take said, were start going to

what’s there’s earn I obviously that XXXX late to but think, we’re we changing. book. feel good, time do foreshadowed start and kind ever-evolving ‘XX. took watching of an We into into to the some happening It been always

on passenger calendar points So about that X.X last as we for year. still in We to in this of X color, private know, in, we earn just And January. took year. the XX.X auto have side, you points points took some

the that said, rate to rate future John continue added we we to to at trends, to on the and and need look and -- But Sauerland the So, future that need and now trends match -- such we now risk. this shopping out because first out a question of is there, have that our a because there’s in prospects --we’re what good rates. position now Mike been -- have there competitors raising and lot lot a of from the

different we’re out and up front it. exceeding of a But they’re because us. in position, So, in we sometimes got just catching just

ambient So, lot with we of there’s of efficient segmentation. Jim what what happens shopping, really is and other both well for superior Cory have lot And as us. talked which believe about, shopping, as a we variables, a

can. to as as many for long going many and onto customers we’re we grab obviously can as as So, keep customers as we

in the of our our of of prices, in competitive in market works flywheel favor selection et decades adverse that lasts, cetera. and timeframe things segmentation, segmentation like this because many course hard this brand, our However, many, and investing

So, sure PIF growing can to be, is take can follow our as our while growth do everything can to combined at goal making going longstanding of we I customers. we can’t to going XX we possibly foreshadow as what ratio our we fast and our of care are

the like it terms Is been or great. there, that? -- just just that I’m hear that’s from sort on Okay, a think interesting that or segmentation that profitability frequency up that how out. rolled helpful. interested states? profitability, maybe you we to just more as of following from impact about And sounds monitoring That’s underwriting what XX it maybe in and should the something that perspective growth roll where we where that states on get continuous it might very in can change you anything had greater on development And an has out you’ve see step of --

have what that and cost obviously provide mean, in down over years. bit the think the Jim I of the those what is more especially little services is Yes. going a from expensive, claims think, I we’re excitement to -- a perspective, about about the continuous But some examples. costs but about we’re excited gone I talked

XXXX enhance and we’ll to continue with at since competitors. that will we the amount, ever What ability know our to so we our sure to UBI our evolve monitor update with you means like continue UBI segment exact I’m to offerings. don’t we continue we’re have So, we’ll we’ll where our that often but products. we out believe And from on yet,

Our next Alex question comes of from Scott Goldman Sachs.

-- had How periods? maybe I looking is all how business forth. environment of and at coming was just penalty does of just during in new question application First look the the new growth kind prior sort growth this potential on -- from business the on so

Yes.

it, a penalty. perspective new I’m in done did high growth, we I’ve is are the something been And thinking to because times you wrong. maybe that as where about thinking business You something about that you have my talk penalties we from often lot because know, about

penalty our it. slashing. was Sunday, an was knee. a for took did son it. He emotional. He Lacrosse. He As He knew youngest got watching I a example, play He

that We’re controllable. things the we a pay amount is different all the little because and we bit that do

you As when pulled we we make witnessed on our some and things reached other back did sure XX. media to

direct the specifically increase on there. investment you’ll acquisition for and investment front our ratio side future. costs expense our we an January So, load so an are for because It’s -- you from in owners, we my perspective, saw our in really what investment our our paying, It’s the customers.

the something ratio. the in business do that to caveats lines, And of we have of again, XX business? manage ceiling how aggregate, it’s combined our we excited an all So, we’re terms with

that So we should past the it’s need forward should to know hard compare we this to. But where to need pull we back really and and have we’ll go. been to volatile the a environment we from levers has throttle

I exact the tell you tell amount. can’t right now. we’re are in pretty position And will So, Progressive. we excited you the we’re about again, that

time. to going really never cocky about excited talk follow and it it always all data maniacally brings. and long we’re be about we’re But we market, and the to the going hard lasts, we however So, really we paranoid be what believe this are

more sort to to of do provides, the it allowing you of Or your telematics? of more broadly directionally of things be you are about doing? you’re that but if to I is to doing the quantify Second of the it question just telematics. to things I as to expanded it of competitors little guess, sort diminishing telematics that some about Or even to scale of competitors probably want to just could pricing pricing that as through pricing appreciate a others advantage that. the some When don’t more are but it I the talk talk or like this has same high I kind us on maybe the because over maybe and has more like it begin some broadly, applicable maintained the you degree? front advantage think not industry doing you just just have could not advantage level these you’re gives these that that adopting things, same some

takes But lot high learn to and businesses. driving that. about in and Yes. then it and history get can it Cory a continuously on I’ll on level behavior for perspective to weigh one, talk of their Jim

So, I ago. on primer to been. three nearly it, decades ahead why of where of sort headstart, out which think history We were have did a you of a is the we we’ve have obviously,

think rate are though, risk. Jim made I sure A I couple that that one we think pricing points the -- to it’s to important make is, and

happy So else when they although go that’s selection. adverse a do when if customers get again, and never somewhere surcharge, they are they

N a also So not can there what is the, X, but from competitive multiple pieces happen equals just of perspective.

be segmentations as is to John about to have in able So, acumen to UBI our piece. talked our an understand truly that rate underwriting other with well as risk what the to also important

if don’t add of, it’s line money I which side you Cory, anything? my commercial know on perspective save I the So the commercial if a can think on I’m important I more drive from probably insurance, line? good or is a a and the driver big I truck, want to in Jim cost

Personal Lines side, more yes, years there say. let’s is certainly ago, in was there XX activity UBI than

want of We as into more as of pricing to to move aggressively, that program doing. anybody continuing we get can, as is else what price forward, that just are we many regardless advantage more and people can. take price accurately our We as

Yes. Thanks, Alex.

think for that, are largest auto lot we I than And also data auto, anyone are insurer truck. commercial commercial more number and So in a we one we with else. have the

leadership a segmentation. feel like we have, we position so, in And

extends position marketplace. telematics leadership relative think the that I to

believe that telematics. we some between in amount So, telematics. we have, are the size, through our we think companies are there of increasing are investing data But I the lead

add. just I’ll

weren’t pricing the telematics, in early history So, curve. auto, full to of over evolution the the personal on, we

receiving consumer be we and and be curve. at we So, Because full that we to people didn’t we discounts. a were adoption, understood should people lot some seeking should are receiving price bigger the of surcharges, that forefront

we almost pricing very curve data I to we have close now or that the to with are today. completely think

However, to continue we to elements the us as Jim science, additional continue continue to pack. can leading data advance pull sharing, that have the was can

is game segmentation our So, never ending.

we a aggregate continue in us slides, an means, at Lines Commercial gap in loss to to competition. have come And have to which similar the still options can to trying benefit with find We was. significant We Cory market keep can comments competitors are is their use to and ratio always stage Lines, a earlier with where the mentioned Commercial we that as further data prepared additional Lines advance, between to offering. the that as Personal for with and pricing play telematics us

think I So, a are standpoint. telematics from a great we place in

all at end not the of journey. are We at the

and to going pricing to to comes our advantage, to it continue competitive are telematics. We when and continue evolve advance

I’ll He our add it about is have. and role, about people and When talking strategic his and in to nuance, one their when really so pillars. you times. last his Commercial a learnings role thing just is prior team. because This One telematics thinking in colleagues I of mentioned Cory referred a his important. very he’s Lines, Jim they specific think our is really to subtle culture. this couple and that And common our think he’s and

Our culture whether I and because to prior within forth, it’s amount of back role it’s Lori shared years leadership the us to the really is role to for ago, many she when go in know CHRO, ranks we it’s business. when movers I but jobs, understanding and first learnings prior the her rotational the and important think company. key, she people talent Niederst many from think really really her That to is sides many of -- because think of in our different was she depth

and especially and the is something the our leaders is and our measure, it’s of the ideas way successes So although to and hard and it’s like opportunities subtle in telematics. important, really way culture work sharing

Andrew next Suisse. Our question Credit with from Kligerman comes

data the to helpful about question, bit. understand the I’d population Personal plus And XX%, incredibly that. you Lines the is can elaborate -- that robust, Progressive’s about Really thinking segmentation, I I insured utilizes don’t fact see prior just talked that Hey. of competitors to the all XX% Mobile a Thanks a on data But maybe but and Telematics. analytics use. like Cambridge history it and answer that lot. know,

in you’re fast given What fashion? it this So makes that so all my using hard question not a is replicate platform? a very replicatable to similar

way. that Yes. models the the data using in Jim about same data mean I’ll talk same platform same let using Similar doesn’t the all or or more. the we’re

into it’s get So this. one, to expensive

last lot. we’ve three years, invested these Over a

outputting it’s same is platform, sudden you early we’re and the understand of your just rural, In not other the to all different. same So, anything? you want Jim, data turn do on, it’s add Cambridge different all and data the But thing. exact with on, variables. but urban a sharing can’t your segmentation

Sure.

right. gets our data the with You’re in mechanism Mobile great embedded them. collection We’ve partner. provide the is relationship They Cambridge app. had that a

most them do you’re we so, right, data the in And from And use get them. people that industry.

lot I We what’s own make that different data. how learned that most think, the is we the want about we our over of to own out we’ve the algorithm. to, a way use and years data

you in states. Most And not think the UBI can industry, actually most in I like true. filed are that. everybody That’s -- see entire mentioned for confidentially the algorithms

competitors. of So, those are the not all with shared

we other companies’ So, see ours. can’t can’t see algorithms, they

we that. think we we’ve developed -- can there, So, can advantage we maintain an and

we of source us We calibrate think also some of data, some another offer pick, we gives which customers which helps device have OBD an well. as of our which that

Very and severity, the And you stuff that pretty minutes to how loss on accident I’m if solve wondering helpful. product, some fact that’s us of LAE loss under response the ratios? you’ve the for you your got to site. gain insight that where XX numbers? affects amazing, with share share impact your Anything some could any could into there on

Yes.

just that’s new. too think I

and to make time probably we’re customers We’ll just greatest into always ago dipping want that in. since We’ve really months. have years there Again, been sure our on need. we’re probably XX that that interested this. something more XX in it’s to We’re their XX for of

the that they years. our That’s the that more to and start to important. But -- on again, it. accident, data have help able we could use share biggest claim them to relate probably the give going get way them retention, be terms were is and customers few want when impact much the great lot a there thing that in they And to in can And into we’ll a if help pretty to to the we position mind. the soon too et of our peace So, do of benefits of cetera. that get need before from back

tell you of just Got business you real it. the in percent a overall book adoption, And that increased XX% percent usage the us you quickly, UBI. mentioned Could have? of

bit agency Jim, work bit then channel higher direct. more little lower new if in we And it’s the perspective, in in. correct me I’m is we direct. offer wrong, in about the the which independent the lower? over obviously, to it the in agency A with channel, From what little We channel. share agents. in Okay. direct externally, coming A XX,XXX and XX% everyone

Some a perfect increase making that feel as board it’s pressures offering. all for more makes hit Not and And across maybe but do other business safely comfortable believe an you’re seen you it, drive driving if new often since which sense. we’ve less inflationary fix the you XXXX, that consumers.

that. just I’d add

channel, direct the that very offers the in in is space in channel agency agency It robust. demand than the substantially rate higher channel. the take commercial So is through also the the

Haul, is average program larger have is of especially benefit So, trucks that enrolling higher the substantial. which we’re costs, generally with about, this in talking insurance like a Smart

said select business way predictive an agents as consumers to that channel and well. that in So, this option likely are in as or Cory more as and owners case is highly

Elyse from comes Wells Greenspan question next with Fargo. Our

mean, My realize that days, environment trend it’s You rate a first about would loss initial some question, but think very driven right? we expectations trend. volatile loss be said I Tricia, these what your XXXX? future by to I when of for your are that comments, goes

we macroeconomic such done monitor in you sort just And trends, that of little in a be we X.X will our XX react in all that I tell and lot points. give mentioned I a it. is taking data, can we at you will embedded to insight years of data, of volatile watch What a look quickly bit internal We bunch closely several that these the last everything that that’s we’ve been It’s why able years. we UBI continue That’s I is to of January to a wanted trends. them. know

enviable position start the or position were react that XXXX those react to profitably able we’re a trends, severity the and the we be see because in experience feel able when started in -- late good quickly we’re now, why see So, sitting we to we in and to to in to And we’ll we to why trends position trends those quickly. like see those grow. we’re that’s

gave that’s of I you And most some just customers. where right new then the percentage. on for the And opted was this UBI side, I into thought know business of

renewal the customer to Progressive you lower at want you current at just choose Snapshot opt you’re your in your length during If can if rate? or and use of policy, try to to product, a

group it’s that that. had But that they a if except had we to offering. small makes each want actually we able when customers, actually we XXXX. new And did. trends normally to But sure change And provide make I yes, maybe not think it or our sure I’m It to sent we did, started when to we business. a but to in, Yes. out XXXX, that be was material sense driver. exactly for current

COVID Snapshot an made to customers saw on Yes. us our took materially save that driving many up That and down existing was we not when offer. through to and offer

available. open up They it’s haven’t Customers us taken So it. it just do can on and significantly.

one. one quick And more then

mentioned So is continuously new you the monitoring. guys product

So or the has they opt a state uses that period? Snapshot can that you’re in monitoring that monitored Snapshot anyone be active with product, continuously into to different

program, So only continuous. into -- the when is they it is there opt

at pick to forever. to can’t force get them Obviously, continue don’t that. monitor to You we

we’d program’s but we’ve available data. are The program giving around that the sort biggest grow way when accommodates discounts continue is certainly they -- data, and do, we encourage monitoring of So, and the to design that that people to stop if continuously. us them designed got be that

our Please next standby question. for

Tracy, Benguigui from question floor. Tracy with next Our Barclays. the you comes have

some, to selection? did rate? some fine you’ve though Even exceeding mean, it’s like you I’m Thank your approached states, your away ad with rates. feel you. lower since be cheaper in are than growing I adequacy most you you quickly wondering, getting you rate you more competitors get like, given feel you spend, could quite Do even mention of with risk are with guys

to want we want trends. competitive to future be Well, we price and to loss

that So, I January. increase we give change, data and severity continue see will and or to we that’s should trends point look did in at that rates, why we frequency

to will aperture our haven’t stay of that we up we like So important from on grow. our at top of things in and opened continue we terms said, not And trends will John perspective. looking are underwriting

So more each it using have accurately pricing -- and that to match possible for perspective. quickly as about from now we all is to risk. to data the as rate leverage still me, But

the to that also filing raise your key was amongst Could it. achieve in that? your tenants are Got you touch multiproduct What yesterday? initiative upon mentioned to customers retention

that customers and with want know stable consumers our We rates. most I insurance think

volatile able what not even in small we if XXXX have, of we to apple, had And to have kind like possible, call, to in so to to of bites this trends. environment to the of increase we rates want be ahead stay

many We also very offerings. have

of we Agency stable more we we work our unaffiliated do to bundles, and in to partners seek destination of the have So, of will it whether Progressive really and those we Advantage a home, continue be carrier And have company. for with have to Robinsons, we sort Wrights more long-term that. is

coverage. our where, how whether pillar of shop being our when to of broad in so buy, so we and or not, and it’s that want terms of paper our think And on customers

it other when say necessarily where Personal going home, So, side, we’re go. on Lines the sell doesn’t we people’s company to

also our we product a side, use Lines business, for GL, Commercial as the as comp, et cetera. well others small On workers’

different and more the following able stay. Agency -- to with about have is we’ve really trust, to we Advantage the longer that insurance, lot it from the life we’re even insurance to with customer Progressive that insurance ranging customers the more the partners the earned it’s a the of So, them, jewelry travel offer work more and they where their

grail. continues retention So, to be the holy

stable of the seeing We’re about two parts quarters We’ll that improvement. really are retention on having having but and unfold, positive rates report as great service. to know continue do we

focusing you’re focus segment more a there is that And Great. will direct? a versus on? more be Agency,

bit different across control. focus a the We No. in They’re terms of little board.

at as can is customers in sure same company want thing but across segment great a they aggregate. they’re our service. behalf brand every a with great shop making the consumers and of to So, consumer, on that’s to are. mutual if extend the goal PLEs stable that individually And an rates with decide our looking and it agent the have But

we’re to Tracy, was saying, offerings Tricia broaden to our continuing As the consumers.

historical us about much you was Tricia our a we customer. So, households households households longer call of the stay talked and lot than insured inconsistently core those Sam, multi-product single-product who implying than as with longer customer

spectrum end the So, the spectrum. the actually does towards the longer end to is continue our shift of which Robinson more retaining of book

had also setback raise That as noted, to rates have, aggressively. Tricia coming seen We back. we’ve a is as

PLEs trend positively of to trailing Our fully XX trailing is X And the the trailing certainly at starting indicator but leading metric. X the not least the turned, is are the yet trailing on XX.

competitive we So, segmentation space. focusing customers. auto make we we are for that personal as those new find in definitely out Increasingly, multi-product products roll on more can the us households more preferred

we rating that environment, been shift And had more think take a lot as to Our grow we book to before way. continues you’ll of continue see I stable to as rate. get they to a our PLEs have

comes America. question Josh from Bank next Shanker our And of at

please as have insight? fourth some year inflected for maybe well? quarter in happening like give full something fourth quarter but versus apps XXXX, in conversion quote quarter. into ‘XX what’s give policy new on and conversion application you You Can some indication the the you it fourth numbers and seems Could the and new policy XXXX

shopping started. on had happened new to were opening to don’t good shopping. We we basis, began Yes. what good for convert. lot a prospects there’s started, of we coverage position, year-over-year quarterly And publish We were in hard a we want able the market and a was in the and that slides rates great had. but at we did it show Basically, apps

staffing churn. good a that kind We position that’s of when and turn. it’s in yes, see side. a So, we really were the perspective side sales the the market things claims really we of on to hard when saw started for But sort from

John, to anything? want add you

third fourth you do through year the Sure. Josh, we quarter. date numbers provide the to and quarter

we to charts actual assume come just equal presentation you an of you weighting, showed the you a if number, also in So, those. can but

what close looking exactly number darn see is, can’t by but you charts. pretty So, come you the those at

in in a is up story a short the were fourth quarter, obviously new lot. the So, were conversion Prospects apps up and as was the consequence fourth up considerably considerably quarter.

the for that’s can and your how side. changed? bit you question Protective, commercial Since about large And a little acquiring fleet offering talk

Can question, you repeat please? the

part The changed sorry. large fleet how I’m since your has of as business was, acquiring question Protective?

something fleet. Thanks. still mean, we’re was a to was from small additive going were Not substantially. I and really growing really it what lot and Yes. that we well, learning our integration’s the

be will So, to commercial times now that. continue. I’ve about Miller, excited and side who’s from continue the And acquisition He we running met a Protective Mike is running couple with line the came of Protective. and

So play. have he’ll on really last plan We’ve focusing been in be within large. the at company to the so Progressive year, growth excited his integrating in

KBW. Shields question coming with next from is Meyer Our

related slide I on think. Two a questions, XX% Great. is XX participation discount. This with

I I naively into underpinned marginal utility. get a that And then The hoping I I’m then you and has what discount, guessed and of us profitability? the surcharge, would’ve participation first the incremental question equal, I less decision a is bad get second that if was information to probably is the discount. how talk driver I bigger factor through raise does could all a guess retention

I’ll about Yes. that. let talk Jim

John think larger the was what I saying. discount is

the curve. the -- to to full curve pricing We’re

we good so those in driving so great them. behaviors And know to that we’re and of -- drivers the are going not customers have course, is election adverse are surcharges. on add And the the

want you anything, Do Jim?

part them. in and creates to Raised to discount, asking encourage for we’re more And participation a wanted that. case, to we customers we’re participation Sure. discount Yes. larger continue that the the going incentive in as do

As the surcharge how is ultimately participation for term, first term. a on the discount relate the for would you it if only got renewal

you So when it’s removed, the get renewal. to

on which the they’re a them would now And getting terms, so, the subsequent a which in first removed a bad accurately goal. surcharge discount and larger term, off driver get us the priced is is getting more larger

can So, and participate, just the the as participation discount we to terms. subsequent encourage on price we then accurately as is to people there

getting where for of is seems rating Second thinking more there It the California, I’m benefits this but limited. of like states? into regions risky a the monitoring of flexibility UBI question, rating enormous. there are be are other Is incorporated chance algorithms economic may

lot of up we lot. to It’s the populous department many of get state. a continue to in margins. talked most We’d decades that rates We in want a reach XXX, about work proposition make be We the in we sure our that meantime, many, love need But California. target California. kind that the with That’s history from things profit a will the we to to that ago. the came to grow

from your comes with question Paul, Newsome Sandler. next question. Piper ahead Our Paul with go

how use react enough work to if Thanks the can change. having that’s telematics products I formulas changes the for I if you if to rate prices was bit possible, don’t the changes actually talk little call. actually through telematics the sounds It morning. like to of the telematics effectively know Good to could hoping file about change changing product know a without without continuous a the about environmental you environment for faster the filing? allowing particularly telematics, effectively are you but

question, let Good I’ll Paul. Jim take that.

pick like time. driving something telematics that on rating or monitoring changes is that, of dramatically, the renewal a like customer The because right. over up would and continuously you’re they’re Paul, pandemic the

In terms of to the last have you effect year. continuous -- of that, we roll to started just just out

towards elevated months, six just we it a were renewal that the changes, of For back year. until the the first it did not lot the half states the like looks it before, it’s of

just the days then book. of up bigger will their renewal, a -- early on need be to of bigger And up you share grow build coming that right time to But still so. now, So that. over first they’re in-force a it’s

all So would on do would little rate the Plus, means. aren’t the need like traditional it a get that. people will mechanism to UBI, who a for really through while effective we that’s we before in be that

the as go Can change something for and just of the means the we that algorithm see you can you you both that into quickly change change something that the talk can algorithm type? if about effectively a continuous filing well? Is some non-continuous, or an how environmental

that’s the algorithm sort how file of be We confidentially of states the done. filing. typically and Typically, that that’s would

are was wonderful These Great. Thank much. very That questions. you my Thank calls. you.

Raymond with Our next Gregory comes Peters from James. question

telematics an answered. of talk you of media to spend. you XXXX? your have XXXX media through Most been Tricia, budget. I perspective comments us about guys talked know Can my versus budget one annual go about questions in on your your advertising you for

Yes.

where our budget, our a efficiency at assess targeted -- of but We spend. I it we cost, do and then absolutely we’re So, we ongoing, of cost the the mean, the per look on based business then and sale kind acquisition getting from.

ambient course, I bit is which, shopping, of really little about So talked efficient. a

butting We’re do continuously. we efficient that And now. we spend our if or more it’s year in back will pull progresses, of the we’re is to believe a as against we continually need those happen conversations little XX position that are bit But, more we we assess believe what ceiling. what to will if do up

pay -- we of upfront. for to sort we things Some discounts get advanced

of to, -- back should year. on lot the to So But side flexibility, in those of like saw especially spend. those you we have the we digital are a need bolt kind last

in believe up have growing we it on years, best interest And go profitably what the the or the can Company. a we over of depending is fluid. So, budget, down it’s

Does is budget mean sure answer ‘XX not I’m that the higher ‘XX? for what means. it versus that

mean higher. be could changed. in I things it point time, this At

year. was it last higher So,

If it you be didn’t flexibility. being the have we year last January, would said higher this up it would than end asked to me because before, make some had but that I

flexibility. we So, of for what we happen with think budget a lot can

of adds there. A couple

it’s I it would as So dynamic -- and opportunistic. characterize

we’re the you economics acquisition So, to direct the towards see product January, as priced especially targeted feel for we’re priced, our ratio, and extent to we spend cost said, we our into adequately our lifetime can lot look at that was eye it as up. on you a But, expense going Tricia more advertising. policies. expense if an on example, with Again, an our ratio those

ratio hit clearly, to up, advertising more indicator last driven drop a were XX January, the we saw year, spending latter was that part we’re advertising through back great right saw ensure large the expense to now. costs. which year combined degree on for which So, working that lower that is hard we In of pop ratio you you our by a as

Okay. was on question My reinsurance. second

and Can is last perspective market’s had. the about reinsurance last you’ve an of talk change how you your Obviously, part your year? story hard might reinsurance on year Now, this that year. important it us to versus

absolutely. Yes,

here [ph] our reinsurance organization. Brandon runs who have We

in. I’ll him So, weigh have

on question be our particularly core we we the we to we’ll think retain the that adapted for carry We with I X/X, placement mean, conservative -- to fairly to is the to we I forward Thanks our June how cat to want program. reinsurance. look at which tend how really of placement, property part losses. in how

offer We’ll be I willing we tailor in that. we that far purchase. flexible as to decide is market continue what as think we’ll what to to can how have to the

Does to deductible that higher mean lower have a or you’re a going deductible?

exactly of that. where going early not over we’re programs little of the have year on this a but land a Certainly, say seen pressure, last to years. lot reinsurance It’s just bottom couple end of the to

options if will be creative We be our retention. looking at manage need to other

from Citi. Our next question with comes Michael Ward

telematics, on OEM have did the I a and data question vehicles. specifically

seems road like on vehicles to U.S. any limited you if in the curious newer existing the more of the -- data have just might capabilities the It Just it on be that U.S., vehicle least of with the cellular in population might small which the currently given -- vehicles I just might at fairly turnover. the connections, get data be a be chunk sense

all. you can if wondering on at just elaborate that So,

have firm really different Yes, over years the investing as the we’re we’re vehicles to on depends OEM. upon cellular depending you’re the connection The correct. last in about places They’re with referring been OEMs several talking that. in

been had on it. working number years, have some for -- of are there a still Some are

-- the for it’s it to over. So, turn take does fleet a and while

years. almost every an OEMs OEM Toyota, They’ve expect very few this focused we it’s base. a of recent relationships And larger the -- moving are ones. which model most But we the on is more GM got and two direction. in with and installed other So, of got we’ve as mentioned,

population So time. we grow will this over expect that

could maybe the take-up route? involved discuss It then there’s versus between And more mobile in great phone the hurdles of initially. using you app take-up app, that data and kind that’s just seems mobile why OEM the maybe like wasn’t

so of trending? about curious those X And see you sort how

up, Adoption the both with program in been whole overall we’re the of adoption and mobile has and happy OEM.

that So we’re depending different just on both offer they to share with options data. consumers We want happy of how those programs. to

can so just we the been biggest to have increasing. get and trying both And footprint we’re

Okay.

to just elaborate on maybe So that.

customers. you the I great or mentioned take-up adoption existing think wasn’t guys that the for

rates -- it than I’m so, it, And might up? shopping raising new part for customers is curious competitors is currently what just why be great or the -- of the just

people bunch one the with up in asking Yes. things to we groceries risk. from going Everything about were I I business when struggling assess that rate for were of finances. of new because current to the XXXX customers, talked When to et a data their was doing would kind that just it’s we you’re say knew cetera. the of

So most didn’t a just and it. we sort campaign marketing people do of did

I then think health like don’t make you with it’s something It’s to it. get sort and of you insurance sort or just you you -- want life of insurance whether anything, necessarily decision that stick do again.

we the business do an So, need new when it’s for just easier we’re information all to a rate. acquiring accurate

Our Ryan next from Autonomous. comes question Tunis with

I couple had the just UBI stuff. a on

kind are. of their customers want the the they insurance curious in I’m wouldn’t rates detection. to could and there’d have -- their would impact claims that frequency crash smaller one, where So, of on with dollar the a to lot potentially kind the of company, first just that about tell because some maybe just thinking they be if think that got collision I keep

So crash more you got knowing in is the that actually in that there they lead to claims getting possibility you that potentially door? any the

Yes. algorithm to more it’s works, In really pick this Thank way not the you, crash severe case, trying fender particular benders. the for Ryan. It’s accidents. It’s a up question. good looking detection

not handle somebody These fully repair These gotten out larger to have we either choose So, reported these dollar just are are of where aren’t might small would it pocket. either to way. or claims, claims. claims expect that

think We it. of we’ve claims think don’t we anyway. So, these gotten

Got the of telematics. thinking And some it. I about then guess just

are the the I that traditional is kind like when the question for what about really find continuous, you So discounts later, kind And months six a you you’re find drivers variables at rating one was to a XX%, shakiest insurance the look that gave yourself if had big like be tend giving -- you giving curious of like you’re telematics for you’re you know, of That’s how to code, can variables ZIP discounts customers, part. predictive that not give FICO, the to surcharge, I you’re conclusions reasons the discount, the just have in was been when like about also the getting I a are you used discount? space, any which main indicators? after big then finding don’t you whatever, a giving first giving what draw having that surcharge really of to surcharge

So, on informs, of the of question to traditional in and of terms part point -- is the that whole your it what that. all the first incremental what of variables are how UBI

let score. they inaccurate, seen to could ZIP we UBI, just that we these we’re it. person within that the credit that in But not about UBI live different have have that if customer further, traditional So, information gives otherwise that new variables other would code without have person the fixed this tend the same. variables or is the segment than this you looks us

So, segmentation. improving that’s it’s the the point,

participation surcharge, In which is terms the for a the signing give just of is we discount up. discount,

that when they theoretically, how the data as surcharge, if of our from will model, driving why on it so, kind from hard we things like terms surcharge, discount And gotten a model, like because the people that. other. one someone then much drive simply drive, get website, variables of in you share uses you braking, could and to the it’s move But move continuous we’ve

is driving. the of into typically drive of hard get who -- drive brakes. some folks to they’re a tend So surcharge and are figure that. a more Those aggressively have This sign how variables more that

XX% conclusion, I -- anything you it a tend But or get terms just bit Got say so be following in get kind be of -- those tend And largely what standard? preferred you it. who about more in the up, hear be those who to little on discount much about is I or less just incremental. bit usually little tend XX% to more to can mixed guess of it’s a more

of us UBI I incremental think of the showing to all is kind it’s that.

be don’t the we intentionally, get We -- to give if customers likely want place. discount, we a to way. that want look it the -- first just more it the the we’d knew them So preferred to discount in were bigger

bigger surcharge. try UBI discount. this an we to even This preferred So, maybe customer out of kind deserves other use sort to preferred a deserves customer

-- really So, it’s what we it’s segmenting beyond already have.

We’ve exhausted time. scheduled our

the And I you hand so for over that will concludes call to Stacy, back our closing scripts. event.

investor of quarter available fourth section Corporation’s a Information for of replay the will Progressive be year. next the the Investor event. Progressive’s event website concludes on That about the Relations

disconnect. now may You