Progressive Seeing Improvements In The Business, Growth Opportunities Remain

The pandemic barely slowed down Progressive's (NYSE:PGR) upward share price momentum, and this P&C insurer continues to deliver on some of the virtues of its business model, including analytics-driving pricing, lower-cost distribution, and opportunities to leverage growth in markets outside of its core personal auto business. While second quarter results weren't flawless, there were certainly some positives and the business should accelerate from here.

There are still challenges in the P&C business, including increasing loss severity in both auto and home lines, and Progressive's loss ratios are higher than pre-pandemic trends, though still broadly within targets. The real issue here is valuation - Progressive seldom looks cheap, and that makes sense given superior returns on equity and growth potential, but it's hard for me to call the shares a bargain today.

 

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Progressive Seeing Improvements In The Business, Growth Opportunities Remain