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

Tricia Griffith: No. We focus across the board. They’re a little bit different in terms of control. So, an agent can decide if they want to shop it on behalf of the consumer, but they’re looking at the same thing as consumers are. And that’s making sure that our mutual customers have stable rates with a company with a great brand and great service. But our goal is to extend PLEs across every segment individually and in the aggregate.

John Sauerland: As Tricia was saying, Tracy, we’re continuing to broaden the offerings to our consumers. So, you talked about multi-product households as Tricia was implying those households stay with us a lot longer than single-product households and much longer than our historical core customer of Sam, who we call the inconsistently insured customer. So, our book does continue to shift more towards the Robinson end of the spectrum which is actually the longer retaining end of the spectrum. We have, as Tricia also noted, seen a setback as we’ve had to raise rates aggressively. That is coming back. Our PLEs are starting to trend positively at least on the trailing 3 metric. And the trailing 12 is not yet fully turned, but certainly the trailing 3 is the leading indicator of the trailing 12.

So, we are definitely focusing on more multi-product households as we roll out new products in the personal auto space. Increasingly, we find segmentation that can make us more competitive for those preferred customers. Our book continues to shift that way. And as we get to a more stable rating environment, I think you’ll see our PLEs continue to grow as they have been before we had to take a lot of rate.

Operator: And our next question comes from Josh Shanker at Bank of America.

Josh Shanker: Could you please give some insight? You have the policy conversion and new application numbers for the full year 2022, but it seems like something inflected in the fourth quarter. Can you give some indication on what’s happening fourth quarter versus fourth quarter 2021 in quote conversion and new policy apps and maybe into €˜23 as well?

Tricia Griffith: Yes. We don’t publish new apps on a quarterly basis, but we did want to show it for year-over-year in the opening slides we had. Basically, what happened was shopping started, the hard market started. We were in a good position, and there’s a lot of prospects that began shopping. And we had good coverage at great rates and we were able to convert. So, it’s really sort of when we started to see things turn. We were in a good position for that from a staffing perspective on the sales side and the claims side. But yes, that’s really kind of when we saw the hard market churn. John, you want to add anything?

John Sauerland: Sure. Josh, we do provide you year to date numbers through the third quarter and the fourth quarter. So, if you just assume an equal weighting, you can come to a number, but we also in the presentation showed you actual charts of those. So, you can’t see exactly what the number is, but you come pretty darn close by looking at those charts. So, the short story is conversion was up considerably in the fourth quarter. Prospects were up considerably in the fourth quarter, and obviously new apps as a consequence were up a lot.

Josh Shanker: And question for the commercial side. Since acquiring Protective, can you talk a little bit about your large fleet offering and how that’s changed?

John Sauerland: Can you repeat the question, please?

Josh Shanker: I’m sorry. The question was, how has large fleet changed as part of your business since acquiring Protective?