PGR's Net Margin Shows Improvement: Can it Retain the Momentum?

The leading auto insurer Progressive Corporation PGR has made significant improvements in its net margin. The net margin showed an improvement of 980 basis points over the last two years, which continued into the first nine months of 2025, wherein it improved by 170 basis points.

PGR’s leading market presence, distribution innovation, underwriting technology and the application of quantitative analytics in pricing and risk selection continue to drive net margin improvement. The company expects both the personal property and core commercial auto products to have near double-digit rate increases through the remainder of 2025.

Progressive relies on technology. It continues to invest in generative AI tools with a vision to improve policy pricing and find new business opportunities. While Snapshot is expected to be the key element in improving the accuracy of personal auto rating, it has adopted machine learning to enable faster time-to-insight and more effective decision-making. Deploying technology has also helped PGR manage costs prudently.

The Personal Auto segment remains a long-term growth driver for Progressive, fueling both premium volume and profitability. The auto insurer’s focus on growing personal auto policies and carefully expanding commercial lines improves premium income, which, in a benign catastrophe environment, amplifies net margin.

A reinsurance program in its personal property business that is designed to reduce overall risk to the extent of coverage purchased also limits loss, in turn aiding margin expansion.

Thus, Progressive’s scale and tech-driven underwriting expertise should help the company sustain margin growth.

What About Progressive’s Peers?

Chubb Limited CB has achieved notable net margin improvement through disciplined underwriting and effective pricing. Strong commercial lines growth, lower catastrophe losses and sustained rate adequacy drove a 440-basis-point margin rise over two years, underscoring how operational efficiency and sound pricing support CB’s consistent profitability.

On the other hand, Berkshire Hathaway BRK.B has seen net margin variability due to underwriting outcomes, investment portfolio swings and the performance of its energy, manufacturing, service and retail units. Berkshire’s long-term margin stability hinges on expanding predictable, high-quality businesses, maintaining pricing discipline and reducing exposure to catastrophe-prone risks for more durable profitability.

PGR’s Price Performance

Shares of PGR have lost 6% year to date, underperforming the industry.

PGR’s Expensive Valuation

PGR trades at a price-to-book value ratio of 3.75, above the industry average of 1.52. But it carries a Value Score of B.

Estimates Movement for PGR

The Zacks Consensus Estimate for PGR’s fourth-quarter 2025 EPS has moved 1.4% south, while that for first-quarter 2026 has witnessed no movement over the past seven days. The same for full-year 2025 and 2026 has moved down 0.5% and 0.1%, respectively, in the same time frame.
 

The consensus estimates for PGR’s 2025 revenues and EPS indicate year-over-year increases. The consensus estimate for 2026 revenues suggests a year-over-year increase, but the same for EPS indicates a decline.

PGR stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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