Progressive--Auto Insurer for All People  

Progressive——为所有人提供汽车保险

In 1994, we made great strides toward repositioning Progressive to offer automobile insurance to all U.S. licensed operators through independent insurance agents and other distribution methods. This customer-driven approach is increasing our rate of growth and market share, which, in turn, lets us reduce the costs of doing business and become still more competitive.  

1994年，我们大步迈进，将Progressive重新定位为通过独立保险代理及其他分销渠道，为所有持有美国驾驶执照的驾驶员提供汽车保险。这种以客户为中心的方法正在提升我们的增长速度和市场份额，从而使我们能够降低运营成本并变得更具竞争力。

We are building intrinsic value in the form of a growing customer base, and a broad array of products and services delivered when and how customers most want them. Progressive's people are responding superbly to the challenge of managing explosive growth, reaffirming how good they are, as well as the strength of Progressive's Vision, Values and Strategy.  

我们正在以不断扩大的客户群和在客户最需要的时刻以他们希望的方式提供的多样化产品与服务来构建内在价值。Progressive的员工在应对爆发性增长的挑战时表现出色，再次证明了他们的优秀以及Progressive愿景、价值观和战略的力量。

We grew in 1994 by increasing our share of the approximately $20 billion nonstandard auto insurance market and by beginning to grow in the approximately $80 billion standard and preferred auto insurance market. We work hard and invest heavily in people and processes to reduce the human trauma and economic costs of auto accidents. Our results include the cost of these investments designed to make us more competitive for all auto insurance.  

1994年，我们通过提高在约200亿美元非标准汽车保险市场中的份额，并开始在约800亿美元的标准及优选汽车保险市场中实现增长，从而取得了发展。我们努力工作，并在人员和流程方面进行大量投资，以减少交通事故所带来的人员创伤和经济成本。我们的业绩中包含了这些旨在提升我们在所有汽车保险领域竞争力的投资成本。

Progressive shareholders are best served by executing meaningful, long-term strategies. Success requires translating premium growth into commensurate earnings growth, so our stock price reflects the intrinsic value we are now creating.  

实施具有深远意义的长期战略，最能为Progressive股东带来利益。成功需要将保费增长转化为相应的盈利增长，使我们的股票价格能够反映出我们目前创造的内在价值。

From its beginnings, Progressive's most important competitive advantage has been having superior people, measured by their intelligence, work ethic, ambition, creativity and demonstrated performance. Many companies pay lip service to this idea. At Progressive, it is a way of life. Our people's teamwork and esprit has never been higher. Our performance-based Gainsharing compensation lets them enjoy the benefits of competitive and productivity improvements so long as they continue to meet or exceed the Company's ambitious objectives.  

自创立以来，Progressive最重要的竞争优势在于拥有卓越的人才，他们以智力、工作热情、抱负、创造力及实际表现为衡量标准。许多公司只是口头上赞同这一理念，而在Progressive，这已成为一种生活方式。我们的团队合作和精神始终处于巅峰状态。只要员工继续达到或超越公司雄心勃勃的目标，我们基于绩效的分红激励制度便使他们享受到竞争力和生产率提升带来的收益。

Progressive's evolution accelerated greatly six years ago, when Proposition 103 in California forced us to understand consumer discontent with auto insurance at the same time that Allstate's success in nonstandard auto insurance forced us to respond to consumer demand for lower prices and improved service.  

六年前，随着加州103号提案迫使我们认识到消费者对汽车保险的不满，以及Allstate在非标准汽车保险领域的成功促使我们响应消费者对更低价格和更优服务的需求，Progressive的发展大大加速。

These events led us to redefine Progressive as a consumer-focused auto insurer offering all auto owners and operators vastly better service at lower cost. We must continue to spend less to run our enterprise, even as we work hard and creatively to enhance our customers' and agents' experience of doing business with Progressive.  

这些事件促使我们重新定义Progressive，使其成为一家以消费者为中心的汽车保险公司，向所有车主和驾驶员提供成本更低、服务显著更优的汽车保险。即使我们努力并富有创意地提升客户和代理人与Progressive合作的体验，我们仍必须持续降低运营成本。

Future growth will come from adding to the number of states where we seek to insure all auto risks, from working with the independent agents dedicated to regaining market share and from integrating other buying options into a consumer-focused, brand experience in ways that attract customers and support the forward-looking agents who will succeed in the 21st century.  

未来的增长将来源于扩大我们寻求承保所有汽车风险的州数量，与致力于重新夺回市场份额的独立代理合作，以及将其他购买方式融入以消费者为中心的品牌体验中，从而吸引客户并支持那些将在21世纪取得成功的前瞻性代理。

When we were a nonstandard auto insurer experimenting with commercial insurance, Progressive was compared to other specialty propertycasualty insurers dealing in secondary markets. The new Progressive seeks to write all auto risks, and to be continuously less involved in nonauto commercial insurance. We are now the 7th largest U.S. private passenger auto insurer with 2.2 percent market share, surpassed only by State Farm Mutual, Allstate, Farmers Group, USAA, Nationwide and GEICO, which, along with Safeco, are the companies to which we compare ourselves.  

当我们还是一家专注于非标准汽车保险且在商业保险领域进行试验的保险公司时，Progressive常与其他在次级市场经营的专业财产与意外保险公司相比较。全新的Progressive旨在承保所有汽车风险，并且逐步减少在非汽车商业保险领域的参与。如今，我们已成为美国第七大私人乘用车保险公司，市场份额为2.2%，仅次于State Farm Mutual、Allstate、Farmers Group、USAA、Nationwide和GEICO（以及Safeco），这些公司是我们用来对比的对象。

An opportunity to see and solve problems from a wider variety of perspectives.  

这为我们提供了从更广泛角度观察和解决问题的机会。

Results  

结果

Operating income, which excludes realized gains on security sales and one-time items, is the best measure of how well we perform in our operations. Operating income increased to $212.7 million, or $2.76 per share, compared to $197.3 million, or $2.61 per share, in 1993. Operating income excludes the $71.0 million elimination of the supplemental reserve and realized gains of $23.8 million in 1994 and $107.9 million of realized gains, primarily from the sale of equity securities, in 1993. Net income increased 3 percent to $274.3 million, or $3.59 per share, in 1994, compared to $267.3 million, or $3.58 per share, in 1993. Return on shareholders' equity was 27.4 percent, compared to 36.0 percent in 1993.  

经营收入（不包括证券销售的已实现收益及一次性项目）是衡量我们运营表现的最佳指标。经营收入从1993年的1.973亿美元（每股2.61美元）上升至1994年的2.127亿美元（每股2.76美元）。经营收入不包括1994年因取消补充准备金而节省的7100万美元以及1994年所实现的2380万美元收益和1993年主要来自股票销售的1.079亿美元已实现收益。净收入从1993年的2.673亿美元（每股3.58美元）增长3%至1994年的2.743亿美元（每股3.59美元）。股东权益回报率则从1993年的36.0%降至1994年的27.4%。

We have historically established case and IBNR reserves by product, with the objective of being accurate to within +/-2 percent. Pricing has been based only on case and IBNR reserves, which have historically been redundant. To give ourselves an even higher level of comfort about loss reserve adequacy, we had set our aggregate reserves near the upper end of the reasonable range of total reserve estimates. We called the difference between total reserves and the sum of our case and IBNR reserves a "supplemental reserve." In 1994, we eliminated the $71.0 million supplemental reserve because it made our estimates of total reserves excessively conservative and was out of step with industry practices. The effects of the elimination were a one-time 1994 earnings increase of $.62 per share, a 3.2 percentage point improvement in the underwriting profit margin and a $46.2 million addition to capital.  

我们历来按产品设立实际与未报备损失（IBNR）准备金，目标是在±2%的范围内达到准确性。定价一直仅基于实际及IBNR准备金，而这些准备金历来具有冗余性。为了进一步增强对损失准备金充足性的信心，我们将总准备金定在合理估计范围的上限附近。我们将总准备金与实际及IBNR准备金之和的差额称为“补充准备金”。1994年，我们取消了价值7100万美元的补充准备金，因为这使得我们的总准备金估计过于保守，也不符合行业惯例。取消补充准备金的效果表现为1994年的一次性每股收益增加0.62美元、承保利润率提高3.2个百分点，以及资本增加了4620万美元。

Net premiums written increased 35 percent to $2,457.2 million, compared to $1,819.2 million in 1993. We achieved an 8.3 percent underwriting profit (11.5 percent including the elimination of the supplemental reserve), compared to 10.7 percent in 1993. We reduced underwriting expenses by 3.0 percentage points, after a reduction of 3.5 percentage points in 1993.  

已承保净保费从1993年的18.192亿美元增长35%至24.572亿美元。我们实现了8.3%的承保利润率（若计入取消补充准备金则为11.5%），而1993年为10.7%。在1993年降低了承保费用率3.5个百分点之后，1994年我们又进一步降低了承保费用率3.0个百分点。

 

Progressive's Diversified Businesses  

Progressive的多元化业务

Diversified divisions provide combinations of service and indemnity to businesses. In 1994, Diversified divisions' net premiums written and underwriting profits were $115 million and 21 percent, respectively, compared to $118 million and 14 percent in 1993. The Diversified divisions produced service revenue and pretax profits of $41.9 million and $10.0 million, respectively, in 1994, compared to $43.7 million and $6.8 million in 1993.  

多元化部门为企业提供服务与赔偿的组合。在1994年，多元化部门的净已承保保费和承保利润分别为1.15亿美元和21%，而1993年分别为1.18亿美元和14%。1994年，多元化部门分别贡献了4190万美元的服务收入和1000万美元的税前利润，而1993年分别为4370万美元和680万美元。

Investments and Capital Management  

投资与资本管理

The balance of revenue and profit comes from interest, dividends and capital gains produced by Progressive's assets. Progressive's investment and capital management are managed by our subsidiary, Progressive Partners, Inc., based in Rye, New York.  

收入和利润的剩余部分来自于Progressive资产产生的利息、股息和资本利得。Progressive的投资与资本管理由我们的子公司Progressive Partners, Inc.负责，该公司总部位于纽约赖市。

Progressive Partners employs conservative investment and capital management philosophies, intended to preserve our focus on underwriting and to ensure that we have enough capital to support all the insurance premium we can write profitably. We believe that insurance companies create shareholder value by taking risks to improve their offering to consumers, not by generating cash to be invested aggressively. During 1994, we were neither harmed nor distracted by the speculative investment strategies that impaired many enterprises.  

Progressive Partners采用保守的投资和资本管理理念，旨在保持我们对承保业务的专注，并确保有足够的资本支持所有盈利性承保的保费。我们认为，保险公司通过承担风险以改善对消费者的服务来创造股东价值，而不是通过激进地投资产生现金。1994年，我们没有受到许多企业因投机性投资策略而受损或分心的影响。

The Company's investment portfolio increased to $3,180.0 million at December 31, 1994, from $2,786.4 million at December 31, 1993. For 1994, total investment income (interest, dividends and realized capital gains) was $182.3 million before taxes and $146.7 million after taxes, compared to $242.4 million before taxes and $177.2 million after taxes in 1993. In 1994, we realized $23.8 million in capital gains, compared to $107.9 million in 1993. The large difference was principally attributable to the $74.3 million gain recorded on the sale of our investment in MBNA in 1993. On December 31, 1994, our portfolio had $41.1 million in unrealized losses, compared to $70.2 million in unrealized gains in 1993. This decrease was due largely to the adverse impact on our fixed-income portfolio of rapidly rising interest rates throughout 1994.  Progressive seeks incremental returns through active management of its assets and measures performance on a total return basis. In 1994, the taxable equivalent total return was 3.7 percent. This was 4.3 percentage points, or $134 million, better than the benchmark against which we measure performance. The most important factors accounting for this improvement were maintaining relatively short average bond maturities and investing heavily in intermediate municipal bonds that outperformed other fixed income categories. The quality of the portfolio remained exceptional with high-grade fixed-income instruments averaging about 92 percent of invested assets throughout the year.  

截至1994年12月31日，本公司的投资组合规模从1993年12月31日的27.864亿美元增至31.80亿美元。1994年，总投资收益（包括利息、股息和已实现资本利得）税前为1.823亿美元，税后为1.467亿美元，而1993年分别为2.424亿美元和1.772亿美元。1994年，我们实现的资本利得为2380万美元，而1993年为1.079亿美元。这一巨大差异主要归因于1993年出售我们在MBNA的投资所记录的7430万美元利润。1994年12月31日，我们的投资组合呈现出4110万美元的未实现亏损，相比之下，1993年的未实现盈利为7020万美元。这种下降主要是由于整个1994年中快速上升的利率对我们的固定收益投资组合产生了不利影响。Progressive通过积极管理其资产以寻求渐进性回报，并以总回报率为基准衡量业绩。1994年，应税等效总回报率为3.7%，比我们用来衡量业绩的基准高出4.3个百分点，或1.34亿美元。促成这一改善的最重要因素是保持相对较短的平均债券期限，以及大量投资于中期市政债券，这些债券表现优于其他固定收益类别。整个年度中，高评级固定收益工具平均占投资资产的约92%，使得投资组合质量保持卓越。

In January 1994, near the lows in interest rates for the year, we issued $200 million of 6.60 percent, 10-year notes. We expect this transaction, and the $327 million of debt and equity financing completed in 1993, will preclude the need to raise additional capital for the foreseeable future.  

1994年1月，在全年利率处于低位之际，我们发行了2亿美元的6.60%十年期债券。我们预计这一交易以及1993年完成的3.27亿美元的债务和股权融资将在可预见的未来免除我们筹集额外资本的需求。

During 1994, we repurchased 1,080,300 Progressive Common Shares at an average cost of $31.44 per share.  

1994年，我们以每股31.44美元的平均成本回购了1,080,300股Progressive普通股。

1994 Initiatives  

1994举措

Progressive's total concentration on auto insurance means that every initiative is designed to improve customer product, price and service.  

Progressive全力专注于汽车保险，这意味着每一项举措都旨在改善客户产品、价格和服务。

DIVERSITY Our growth plans suggest that most new hires will be either claim or customer service representatives. Our objective is to have the demographics of the people we hire for these positions reflect the demographics of the communities where our offices are located, and ultimately the demographics of our customers.  

多元化 我们的增长计划表明，大多数新员工将是理赔或客户服务代表。我们的目标是让所聘用人员的人口构成反映办公室所在社区的人口结构，并最终与客户的人口构成相符。

TV COMMERCIALS We produced new commercials highlighting Express Quote(SM) service, building on the theme of changing auto insurance consumers' expectations.  

电视广告 我们制作了新的广告，重点宣传Express Quote™服务，以改变消费者对汽车保险的预期为主题。

COMMUNITY ORGANIZATION We began experimenting with moving profit and growth responsibility for high potential communities from state-focused division presidents to community managers to put us closer to customers and to manage hyper-growth better.  

社区组织 我们开始尝试将高潜力社区的利润与增长责任从关注州的事业部总裁转移给社区经理，以便更贴近客户，更好地管理快速增长。

NEW HEADQUARTERS After years of having our Cleveland people in many different buildings along the I-271 corridor east of Cleveland, we completed and moved into 517,800 square feet of new space on our Wilson Mills Road, 42-acre site, where Information Services occupies the building that was our headquarters from 1974 through 1986, improving internal communication and reducing costs.  

新总部 在多年来将克利夫兰的员工分布在克利夫兰以东I-271走廊的多个建筑后，我们在Wilson Mills Road的42英亩场地上完成并搬进了517,800平方英尺的新办公空间，该处的建筑曾自1974年到1986年为我们的总部，由信息服务部门占用，从而改善了内部沟通并降低了成本。

Risks  

风险

Progressive faces tremendous opportunity. We point out risks to help our shareholders understand the Company better, not because our risk level is greater than that of other businesses.  

Progressive 面临巨大的机遇。我们指出风险是为了帮助我们的股东更好地了解公司，而不是因为我们的风险水平高于其他企业。

LEGISLATIVE AND REGULATORY RISK Insurance laws and regulations change continually. In 1994, the political climate may have improved. Consumers, enjoying a respite from inflationary price increases, have moderated their demands for reform. We rely on our division presidents and product managers to help regulators and legislators resolve issues in the way that best serves consumers.  

立法与监管风险：保险法律和法规不断变化。1994年，政治环境可能有所改善。消费者在暂时摆脱通胀引发的价格上涨后，对改革的要求有所缓和。我们依靠各事业部总裁和产品经理协助监管机构及立法者以最符合消费者利益的方式解决问题。

UNPREDICTABLE UNDERWRITING MARGIN AND GROWTH RATE Our strategy is to strive to achieve a four percent underwriting profit margin target in each program. We cannot predict with precision the timing and pace of the decrease in underwriting margins, nor the rate of growth. With margins now closer to four percent, we monitor each program to ensure that rates are adjusted promptly and adequately.  

不可预测的承保利润率和增长率：我们的策略是在每个项目中努力实现4%的承保利润率目标。我们无法精确预测承保利润率下降的时机和速度，也无法精确预测增长率。由于利润率现已接近4%，我们会监控每个项目，确保费率能及时且充分地调整。

UNPREDICTABLE INVESTMENT INCOME The average duration of our $2.9 billion fixed-income portfolio is approximately 2.5 years, meaning investment income is unusually sensitive to short-term interest rates. We continue to maintain a short average maturity to support our operating strategy, but have recently lengthened the portfolio somewhat.  

不可预测的投资收入：我们29亿美元固定收益投资组合的平均存续期约为2.5年，这意味着投资收入对短期利率异常敏感。我们继续保持较短的平均到期日以支持运营策略，但近期略有延长。

PRICING RISK We continue to learn how to price standard and preferred auto insurance, but have not yet conclusively proved our expertise. 

We minimize this risk by controlling volume in these new programs and changing rates immediately when experience dictates.  

定价风险：我们仍在学习如何为标准和优选汽车保险定价，但尚未最终证明我们的专业能力。我们通过控制这些新项目的业务量，并在经验指示时立即调整费率来将风险降至最低。

HOMEOWNERS INSURANCE This type of insurance would be risky if our auto insurance market share objectives require we offer it. The current situation of having no plans to write homeowners may also present a risk because many consumers prefer to buy all their insurance from one company. In 1995, we will assess demand for homeowners and develop a plan to satisfy our customers' needs.  

房主保险：如果我们的汽车保险市场份额目标要求我们提供此类保险，则可能具有风险。目前没有计划承保房主保险也可能带来风险，因为许多消费者倾向于从单一公司购买所有保险。1995年，我们将评估市场对房主保险的需求，并制定满足客户需求的方案。

GROWTH ITSELF Our 30 percent growth and excellent return on equity over the past two years are because our customers value Progressive's service. Our $638 million growth in 1994 was more than our total net premiums written in 1985. Although we have experience managing hyper-growth, we have never hired and trained so many people so fast. We measure quality in all operations and will slow growth if quality slips.  

增长本身：过去两年我们实现了30%的增长和优异的股本回报率，这正是因为客户看重 Progressive 的服务。1994年，我们实现了6.38亿美元的增长，超过了1985年我们的净已承保保费总额。虽然我们在管理高速增长方面经验丰富，但从未如此迅速地雇佣和培训大量人员。如果质量下降，我们将放缓增长速度。

ADVERTISED BRAND Consumer advertising and brand awareness require higher performance standards. In 1994, we increased our appreciation of the ability of consumers to make wise choices, which in turn increased our urgency to respond to their demand for improved service at lower cost.  

宣传品牌：消费者广告与品牌认知要求更高的绩效标准。1994年，我们更加重视消费者作出明智选择的能力，这反过来加快了我们响应他们对以更低成本提供更优服务需求的迫切性。

COMPETITOR RESPONSE Other insurers will react to Progressive's attempt to change consumers' auto insurance experience, but we cannot predict when and how their response will affect our growth and profitability. We monitor competitors and will promptly incorporate their product and service improvements in our consumer offering.  

竞争对手反应：其他保险公司将会对 Progressive 改变消费者汽车保险体验的努力作出反应，但我们无法预测他们的反应何时以及如何影响我们的增长与盈利能力。我们会监控竞争对手，并会及时将他们在产品和服务上的改进纳入我们的消费者方案中。

The Future  

未来

Progressive is leading a wave of change in the United States' system for dealing with auto accident injuries and property damage. We are reducing auto accident victims' trauma and costs, improving how consumers feel about auto insurance and being rewarded for our leadership. 

Success so far encourages us to expand at a pace that tests our ability to provide the service we aspire to deliver.  

Progressive 正在引领美国应对交通事故伤害和财产损失体系的一场变革。我们正在减少交通事故受害者的创伤和费用，改善消费者对汽车保险的感受，并因我们的领导力而获得认可。迄今为止的成功鼓励我们以检验我们提供理想服务能力的速度不断扩展。

We begin 1995 as we began all other years--excited, respectful of the challenge implicit in our objectives and strategy, humbled by our failures, proud of having responded to them and confident that our excellent people will continue to achieve superior results.  

我们像往年一样开启1995年——充满激情，敬畏目标和战略中蕴含的挑战，对失败保持谦逊，为应对失败感到自豪，并坚信我们优秀的员工将继续取得卓越成果。

Much will be required to realize our vision. At Progressive, it is always as if we are just beginning our business and so we look at a future that is brighter than ever.  

实现我们的愿景需要付出诸多努力。在 Progressive，我们始终仿佛刚刚起步，因此我们展望的未来比以往任何时候都更加光明。

We deeply appreciate the customers we are privileged to serve. Thank you for your business, and thanks especially to the more than 30,000 independent insurance agents who chose to do business with Progressive in 1994. We are particularly grateful for our shareholders' continued confidence. To the men and women who make Progressive a great company, thanks for all your contributions in 1994 and the promise you bring to our future.  

我们深深感谢那些有幸获得我们服务的客户。感谢您的惠顾，特别感谢1994年选择与 Progressive 合作的超过30,000名独立保险代理。我们尤其感激股东持续的信任。向那些使 Progressive 成为一家杰出公司的男女员工致谢，感谢你们在1994年的所有贡献以及为我们未来带来的希望。

/s/ Joy Love and Peace      

Peter Lewis 

 

Peter B. Lewis, Chairman, President  and Chief Executive Officer