The Progressive Corporation (NYSE:PGR) Q4 2022 Earnings Call Transcript

John Sauerland: I’d just add that. So in the direct channel, the take rate is substantially higher than in the agency channel. It also offers that in the commercial space the demand through the agency channel is very robust. So, we’re talking about, especially with Smart Haul, which is generally larger trucks that have higher average insurance costs, the benefit of enrolling in a program like this is substantial. So, agents and consumers or business owners in this case are way more likely to select that as an option and as Cory said is highly predictive in that channel as well.

Operator: Our next question comes from Elyse Greenspan with Wells Fargo.

Elyse Greenspan: My first question, Tricia, goes to some of your initial comments, right? You said that future rate would be driven by loss trend. I mean, I realize that it’s a very volatile environment these days, but what are your expectations for loss trend when we think about 2023?

Tricia Griffith: We will just continue to watch it. That’s why I wanted to give you a little bit of insight in January taking 1.5 points. What we know is that we closely monitor a lot of these trends. And I mentioned a bunch of them. It’s been such a volatile several years that we look at our internal data, UBI data, macroeconomic trends, all I can tell you is that we will be able to react quickly and that’s sort of embedded in everything that we’ve done in the last 85 years. So, when we start to see those or see those trends and experience those trends, we’ll react quickly. And that’s why we feel like we’re in a good position because we were able to react quickly to the severity trends that we started to see in late 2021 and why we’re sitting in the position — the enviable position we’re in now, to be able to profitably grow.

Elyse Greenspan: And then on the UBI side, I thought most of this was opted into right for new business customers. And I know that’s where you just gave some of the percentage. If you’re at current Progressive customer at renewal or just during the length of your policy, can you opt in and choose to use a Snapshot product, if you want to try to lower your rate?

Tricia Griffith: Yes. And we actually did. It was in, I think 2021, maybe or 2022. I’m not sure exactly when we did, but we actually sent out material to our current customers, when trends started to change to make sure that they had that offering. And we had a small group except that. But yes, we want to be able to provide that if it makes sense for each driver. But it’s normally a new business.

John Sauerland: Yes. That was when we saw COVID driving down materially and made an offer to our existing customers to save through Snapshot and not many took us up on that offer. So it’s open and available. Customers can do it. They just haven’t taken us up on it significantly.

Elyse Greenspan: And then one more quick one. So you guys mentioned the new product is continuously monitoring. So the state that you’re active in with that Snapshot product, anyone that uses Snapshot has to be continuously monitored or can they opt into a different monitoring period?