PGR
Progressive
Insurance / BV
★ Quality 71/100Price today
$218.95
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What this business is made of
The business
A machine that collects today and pays tomorrow, measuring risk better than anyone.
Progressive insures cars and, increasingly, homes in the United States. It makes money two ways: underwriting with discipline (collecting more in premiums than it pays in claims and expenses) and investing the float—the cash from premiums it hasn't yet paid out in claims. With net earned premiums of $81.7B and a loss ratio (claims / premiums) near 66%, underwriting is the main engine.
Its edge is data: decades measuring each driver's risk with telematics (devices that record how you drive) let it price more precisely than rivals. Replicating that takes time, scale, and the discipline not to chase cheap growth.
Revenue history
From $47.7B to $87.7B in 4 years — nearly 1.8x its size. Selling more and more is the base of everything else.
Where each $100 of sales goes
Revenue $87.7B · FY2025
Of every $100 in sales, $87 goes to costs and operations; $13 is left as net profit (13% margin).
Catalysts and risks
ROE of 37%, exceptional for an insurer; most celebrate half that.
Revenue nearly doubled in four years: from $47.7B (2021) to $87.7B (2025).
Loss ratio ~66% leaves ample room over the profitability threshold (combined ratio below 100% = profitable underwriting).
Natural catastrophes and inflation shocks in repairs that spike claims without warning.
The rate cycle: when everyone cuts prices to win customers, margins evaporate.
Reserves miscalculated today can turn into losses tomorrow; the damage arrives late.
Charlie's note
“Paying 1.37x book value for a business that returns 37% on that capital is neither generous nor reckless. For underwriting quality like this, you'll rarely see the multiple drop to one.”
Analysis · June 2026
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