34 slides from Progressive Corporation (the)'s earnings presentation, Feb 27, 2024
Slide 1: Investor Relations Q4 2023
INVESTOR RELATIONS Q4 2023 Investor Relations Destination Era and Progressive Advantage Agency I N V EISNTVOER S TROE R L ARTEILOANTSI O QN4S Q 4 2 0 2 3 1
Slide 2: Information relevant to this presentation
Information relevant to this presentation Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 Investors are cautioned that certain statements in this presentation not based upon historical fact are forward-looking statements as defined in the Private Securities Litigatio
Slide 3: Information relevant to this presentation
Information relevant to this presentation Regulation FD disclosure outlets Progressive disseminates information to the public about Progressive, its products, services and other matters through various outlets in order to achieve broad, non-exclusionary distribution of information to the public. The
Slide 4: Lori Niederst
Lori Niederst Customer Relationship Management President INVESTOR RELATIONS Q4 2023 4
Slide 5: Progressive's four cornerstones
Progressive’s four cornerstones Core Values —Who we are Purpose —Why we’re here Integrity, Golden Rule, Objectives, We exist to help people move forward and Excellence, Profit live fully Vision —Where we’re headed Strategy —How we’ll get there Become consumers’, agents’, and business People & Broad
Slide 6: Premium mix and estimated market share of Robinsons
INVESTOR RELATIONS Q4 2023 PREMIUM MIX AND ESTIMATED MARKET SHARE OF ROBINSONS* 100% 3.0% SAMS Inconsistently insured 7.1% 8.7% 10.1% 11.1% 11.4% 12.6% 12.9% 90% ESTIMATED ROBINSONS MKT SHR 2.5% Consistently insured, 80% DIANES possibly a renter 70% 2.0% PGR DWP MIX 60% Homeowners who do not 50% 1.5
Slide 7: Progressive Advantage Agency (PAA)
INVESTOR RELATIONS Q4 2023 Progressive Advantage Agency (PAA) EST. 2006 EST. 2018 EST. 2022 BUSINESSQUOTE AUTOQUOTE ® EXPLORER® EXPLORER® (HQX) (BQX) (AQX) 7
Slide 8: Almost 1 in 5 U.S. households trust Progressive for at least one protection product
INVESTOR RELATIONS Q4 2023 Almost 1 in 5 U.S. ESTIMATED HOUSEHOLD PENETRATION* households trust 20% Progressive for at least one protection +80.6% 18% product 16% 14% 12% 10% 8% 6% 4% 2% 0% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 * Personal Lines and Property segments. Excludes Commercial
Slide 9: Potential for a Win–Win–Win Dynamic
INVESTOR RELATIONS Q4 2023 Our customers The Progressive Meeting their insurance needs with Advantage Agency broad coverage from reputable carriers Potential for a Our network of carriers Win–Win–Win Providing a growth opportunity through Dynamic access to Progressive customers and experiences Progr
Slide 10: Section agenda
INVESTOR RELATIONS Q4 2023 Section agenda 01 / PAA overview 02 / Benefits of Destination Era and the PAA Kathryn Sean Lemieux Freeman Business Leader Business Leader CRM Sales Experience Direct Progressive Agency Experience Team 10
Slide 11: PAA overview
INVESTOR RELATIONS Q4 2023 PAA overview 11
Slide 12: Progressive is the destination for all of Sam and Ashley's insurance needs
INVESTOR RELATIONS Q4 2023 Progressive is the destination for all 2009 Sam Welcome to Progressive Auto of Sam and Ashley’s insurance needs 2011 Sam A Harley rider Auto +Motorcycle 2016 Sam & Ashley Marriage Auto, Motorcycle Auto, Motorcycle 2018 Sam & Ashley A new apartment +Renters Auto, Motorcycle
Slide 13: Comparison rates and digital tools make insurance easy
INVESTOR RELATIONS Q4 2023 PAA WRITTEN PREMIUM AND AGENTS Personal and Commercial Lines Comparison rates and digital tools make insurance easy. +200% DIRECT WRITTEN PREMIUM The Progressive brand and customer choice create consumer confidence. 2017 2018 2019 2020 2021 2022 2023 Direct Written Premium
Slide 14: We launched our Destination Era strategy with competitor property and commercial lines products
INVESTOR RELATIONS Q4 2023 We launched our Destination Era strategy with competitor property and commercial lines products and continue to build on this success 2006 2012 2017 2022 - 2023 Launched Homesite- Multiproduct Quoting Launched our customer- Online quote and buy now PAA branded Home and lau
Slide 15: BusinessQuote Explorer
INVESTOR RELATIONS Q4 2023 ® BUSINESSQUOTE EXPLORER® 15
Slide 16: Our PAA network of carriers
INVESTOR RELATIONS Q4 2023 Our PAA network of carriers PROPERTY PORTFOLIO CARRIER PAA Appointment 2006 2022 2010 2019 2015 2014 2011 2012 2019 2021 2021 2012 2023 PRODUCTS Home/Condo ● ● ● ● ● ● ● ● ● ● Renters ● ● ● ● ● Other ● ● ● ● ● COMMERCIAL PORTFOLIO CARRIER PAA Appointment 2014 2016 2020 201
Slide 17: Agency cross-sell efforts extend relationships as customer needs change
INVESTOR RELATIONS Q4 2023 Agency cross-sell efforts extend relationships as customer needs change DIRECT BUNDLES CREATED BY GRADUATIONS 1.6x 1.6 All Other Carriers PGR Home 1.4x 1.4 1.2x 1.2 1.0x 1 0.8x 0.8 0.6x 0.6 0.4x 0.4 0.2x 0.2 0.0x 0 2019 2020 2021 2022 2023 Source: Internal data 17
Slide 18: Comparing auto rates has been part of Progressive for more than 20 years
INVESTOR RELATIONS Q4 2023 Comparing auto rates has been part of Progressive for more than 20 years 1994 2000s 2013 2022 First auto carrier to offer Comparison rating experience Bundled comparison Introduced the free rate comparison (CRE)-based ads became a staple rates for both home AutoQuote servi
Slide 19: Piloting a multicarrier auto experience since Q3 2022
INVESTOR RELATIONS Q4 2023 Bringing our CRE, HQX, and consumer insights together, we’ve been piloting a multicarrier auto experience since Q3 2022 Logos used with permission. 19
Slide 20: The PAA concept works when we address three key areas
INVESTOR RELATIONS Q4 2023 The PAA concept works when we address three key areas 1 Leverage brand Simplify the value 2 proposition Clarify the ongoing 3 value Source: Conceptual image 20
Slide 21: Benefits of Destination Era and the PAA
INVESTOR RELATIONS Q4 2023 Benefits of Destination Era and the PAA 21
Slide 22: Potential for a Win–Win–Win Dynamic
INVESTOR RELATIONS Q4 2023 Our customers The Progressive Meeting their insurance needs with Advantage Agency broad coverage from reputable carriers Potential for a Win–Win–Win Dynamic 22
Slide 23: Potential for a Win–Win–Win Dynamic
INVESTOR RELATIONS Q4 2023 Our customers The Progressive Meeting their insurance needs with Advantage Agency broad coverage from reputable carriers Potential for a Our network of carriers Win–Win–Win Providing a growth opportunity through Dynamic access to Progressive customers and experiences 23
Slide 24: Potential for a Win–Win–Win Dynamic
INVESTOR RELATIONS Q4 2023 Our customers The Progressive Meeting their insurance needs with Advantage Agency broad coverage from reputable carriers Potential for a Our network of carriers Win–Win–Win Providing a growth opportunity through Dynamic access to Progressive customers and experiences Progr
Slide 25: Multiproduct households: expansion and penetration of markets
EST. 2022 INDUSTRY PERSONAL AUTO & PROPERTY PREMIUMS INVESTOR RELATIONS Q4 2023 Expansion and penetration of markets $200B PROGRESSIVE MULTIPRODUCT METRIC: 2+ PRODUCT HOUSEHOLDS (HHs) $93B 87% 5.3 PTS FIVE-YEAR CHANGE IN GROWTH HH MIX MULTIPRODUCT HOUSEHOLDS IN HH MIX OF PGR HOUSEHOLDS WITH 2+ PRODU
Slide 26: Increased consideration driven by choice
INVESTOR RELATIONS Q4 2023 KEY DRIVERS OF CUSTOMER CONSIDERATION, QUOTING, AND PURCHASING Increased consideration driven by choice Confidence that I’m Makes the entire getting great coverage, insurance process easier service, and rates Foundational to Win-Win-Win Dynamic Growing the total pie allows
Slide 27: Sales and conversion lift driven by breadth of offering
INVESTOR RELATIONS Q4 2023 Sales and conversion lift driven by breadth of offering Multicarrier models SUCCESSFUL HQX RATE OFFERS BY HQX CONVERSION RELATIVITY BY increase likelihood of NUMBER OF AVAILABLE CARRIERS NUMBER OF RATES PROVIDED returning a competitive rate that meets consumers’ needs. Num
Slide 28: Retention value of choice
INVESTOR RELATIONS Q4 2023 Retention value of choice PAA CUSTOMER RETENTION 9+ Our goal is to meet customer needs MONTHS throughout their lifetime. If their current policy is no longer a match, Our portfolio of products to meet we can offer alternatives and maintain the customer needs is extending t
Slide 29: Retention value of additional protection
INVESTOR RELATIONS Q4 2023 Every product benefits from the sale of additional protection within the household, regardless of whether the additional protection is a Progressive Retention value of additional protection or network carrier policy. POLICY LIFE EXPECTANCY BY NUMBER OF PRODUCTS IN HOUSEHOL
Slide 30: Media virtuous cycle
INVESTOR RELATIONS Q4 2023 With access to a multicarrier model Media virtuous cycle We can offer consumers more options that meet their needs MULTICARRIER MODEL Leading to increased sales yield per visitor MORE CONSUMER OPTIONS to progressive.com Allowing us to increase marketing spend while achievi
Slide 31: Value of distributed products: revenue source and risk mitigation
INVESTOR RELATIONS Q4 2023 Value of distributed products: revenue source and risk mitigation The PAA produces significant commission revenue • Predictable source of revenue • Minimal exposure to Loss/CAT risks such as weather and natural disasters Complementary to underwriting risks/revenues Meeting
Slide 32: Our success is evident in the Income Statement
DIRECT PERSONAL AUTO 5-YEAR NET PREMIUM EARNED CAGR INVESTOR RELATIONS Q4 2023 SAMS 12.5% Our success is evident in DIANES 12.7% the Income Statement WRIGHTS 14.9% ROBINSONS 19.9% Net Premiums Earned of Progressive- manufactured products. This figure is impacted by: SERVICE REVENUE LINE ON INCOME ST
Slide 33: The Progressive Advantage Agency contributing to our Destination Era agenda
INVESTOR RELATIONS Q4 2023 The Progressive Advantage Agency 2009 Sam Welcome to Progressive Auto contributing to our Destination Era agenda 2011 Sam A Harley rider Auto +Motorcycle Sam and Ashley in the future may … 2016 Sam & Ashley Marriage Auto, Motorcycle • Start a small business and need a Comm
Slide 34: Thank you
Thank you INVESTOR RELATIONS Q4