6. The Progressive Corporation (NYSE:PGR)
Number of Hedge Fund Holders: 95
The Progressive Corporation (NYSE:PGR) provides private and commercial auto insurance, as well as specialty lines; it has about 20 million personal auto policies in force and is one of the major auto insurers in the United States. The company markets its plans directly over the phone and online, as well as via independent insurance companies in the US and Canada. Its premiums are divided almost evenly between the agent and direct channels. The firm also sells commercial auto plans and expanded into homeowners insurance through an acquisition in 2015.
One of the most successful franchises in the insurance sector and the Best Financial Stocks, The Progressive Corporation (NYSE:PGR) has continuously produced returns that lead the industry. However, due to the recent ups and downs in the auto insurance market, the company has experienced quite a bit of volatility.
The Progressive Corporation (NYSE:PGR) produced impressive results in the third quarter, with GAAP EPS of $3.97, $0.08 more than expected, and revenue of $19.46 billion, a 27% year-over-year growth. Since it paid out less in claims and expenses than it made in premiums, the company’s combined ratio of 89% showed profitability. Strong demand and more media spending drove Progressive to add a record 1.6 million new policies. Record-high direct channel applications and enhanced customer conversions led to strong growth in both direct and agency channels, setting up the business for long-term increases in market share.
The price objective for The Progressive Corporation (NYSE:PGR) was boosted by Wells Fargo from $299 to $302, and the firm maintained its Overweight rating on the shares. According to the firm, Progressive is well-positioned to grow and continue to gain market share as long as interest rates stay steady and margins are at all-time highs.
Andreas Halvorsen’s Viking Global was the largest stakeholder in the company among the funds in Insider Monkey’s database. It owns 3.49 million shares worth $884.58 million as of Q3.
Bretton Fund stated the following regarding The Progressive Corporation (NYSE:PGR) in its Q3 2024 investor letter:
“We think The Progressive Corporation (NYSE:PGR) is the most sophisticated auto insurer in the business. It leverages its vast amount of driver data and is usually one of the first in the industry to recognize important shifts in things like driver behavior and collision costs. Progressive was one of the first to raise rates aggressively in 2021 to offset the higher costs from the more frequent car crashes and higher repair costs post-Covid. By raising prices before its competitors did, Progressive lost customers and wasn’t able to grow as fast as it usually does. The rest of the industry has since caught up and increased rates. Progressive’s rates are now comparatively attractive once again, and that’s led to highly profitable growth. Through September 30, its premiums are up 20% over last year, which is great for a low-growth industry like auto insurance. Progressive added 1.5% to the fund this quarter.”