Progressive's Policy Growth Steady: Will it Fuel Premium Acceleration?

Progressive Corporation’s PGR policies-in-force (“PIF”) is an important growth indicator, reflecting the total number of active insurance policies across its various business segments.  PIF has been exhibiting steady growth over the years, particularly in personal auto and commercial lines.

Increasing PIF signals PGR’s solid retention ratio as well as new policy writings, driven by leading market presence, distribution innovation and underwriting technology, and the application of quantitative analytics in pricing and risk selection. PGR expects both the personal property and core commercial auto products to have near double-digit rate increases through the remainder of 2025.

Policies in force increased 18% at the Personal Lines segment in the first quarter, driving 20% higher net premiums written.  The growth was largely concentrated in personal auto products and was primarily fueled by a rise in new application volume. Higher advertising spends, enhanced partnerships with independent agents and the targeted use of the agent compensation program should continue to drive volumes higher.  Policies in force were up 6% in Commercial Lines in the first quarter of 2025, driving 5% growth in net premiums written. 

Retaining the momentum, Progressive reported a 17% increase in its April PIF. In the Personal Lines segment, PIF increased 17% to 35.5 million, while at Commercial Lines, the same improved 6% to 1.1 million.

Continued growth in PIF helps attain a competitive edge, benefiting premium volumes, which is the primary contributor to an insurer’s top line.   These, along with prudent underwriting and technological advancement, will help PGR sustain profitability.

What About PGR’s Competitors?

Policies in force of The Allstate Corporation ALL and The Travelers Companies Inc. TRV, two other auto insurers, have been increasing, driving premiums.

During the first quarter of 2025, Allstate’s PIF was 37.7 million, driven mainly by an increase in homeowners' PIF. Solid brand presence, prudent pricing and improved distribution through both direct and agency channels, enforcing strong retention, should drive Allstate going forward. 

Travelers’ solid retention rates, favorable pricing, an uptick in new business and positive renewal premium trends should continue to drive premiums. Continued execution of strategic growth initiatives, combined with stable market environments, is expected to support the expansion of TRV’s auto, homeowners, and commercial insurance segments.

PGR’s Price Performance

Shares of PGR have gained 17.4% year to date, outperforming the industry.

PGR’s Expensive Valuation

PGR trades at a price-to-book value ratio of 5.71, above the industry average of 1.58. But it carries a Value Score of B.

Estimates for PGR Witness Northward Movement

The Zacks Consensus Estimate for PGR’s first-quarter and second-quarter 2025 EPS has moved up 11.4% and 2%, respectively, over the past 30 days. The same for full-year 2025 and 2026 has increased 2.5% and 1%, respectively.

The consensus estimates for PGR’s 2025 and 2026 revenues and EPS indicate year-over-year increases. 
 

PGR stock currently carries a Zacks Rank #2 (Buy). 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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