1997-03-31 Peter B. Lewis’s Letters to PGR Shareholders
Refer To：《PGR-Form 10-K - Annual report-1996》。
In 1996, Progressive continued on its path to leadership in automobile insurance. We expanded from 37 to 43 the number of states where we hope to convince every auto owner and operator to investigate and buy Progressive's unique package of low cost auto insurance and extraordinary customer service. We make it easy for consumers to do business with Progressive by distributing our products through many different channels.
1996年，Progressive在成为汽车保险业领导者的道路上继续前行。我们将业务覆盖范围从原先的37个州扩大到43个州，希望在这些地区让每一位车主都能了解并购买Progressive在低成本汽车保险与卓越客户服务方面的独特组合。我们通过多种渠道分销产品，方便消费者与Progressive进行交易。
I am proud and happy to report that we believe that our private passenger auto premium growth in 1996 made Progressive the 6th largest United States auto insurance company. We grew in 1996 by increasing our share of the approximately $22 billion nonstandard auto insurance market and by continuing to grow in the approximately $85 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.
我很自豪地告诉大家，我们相信在1996年私人乘用车保费的增长使Progressive成为美国第六大汽车保险公司。我们在1996年的成长，既来自于我们在规模约220亿美元的非标准汽车保险市场中所占份额的扩大，也来自于在约850亿美元的标准及优选汽车保险市场中的持续增长。我们投入大量精力与资金在人才和流程方面，以减少车祸给人们带来的创伤与经济损失。我们的业绩体现了这些投资的成本，而这些投入正是为了使我们在所有汽车保险业务中更具竞争力。
In 1996, Progressive's organization adapted to the company's larger size and gained the flexibility and responsiveness required to sustain superior performance in the face of increasingly intense competition and increasingly rapid technological change. We are confident that we can continue to grow profitably by continuing to lower our costs and rates and continuing to improve customer service and the speed with which we deliver it. The rate, extent and success of all the change required to accomplish this has earned Progressive unexpected recognition as a leader among the many organizations which are re-engineering themselves.
在1996年，Progressive的组织架构随公司规模的扩大而不断调整，并获得了在竞争日益激烈、技术日益变化的环境下保持卓越表现所需的灵活度与快速反应能力。我们坚信，通过持续降低成本与费率并不断提高客户服务水平及其响应速度，能够继续实现盈利性增长。为达成这一目标所需的改变在速度、广度以及成效方面，都使Progressive在众多进行流程重塑的企业中收获了意想不到的认可和领导地位。
Progressive's strong focus on customers leads to steady growth in market share which, in turn, permits us to reduce the costs of doing business and become even more competitive. Our people's superb response to the challenge of creating and managing growth reaffirms both how committed and how talented they are. Great people operating with a clear Vision, strong Core Values and creative Strategies will continue to drive Progressive's profitable growth.
Progressive对客户的高度关注带来了市场份额的稳步增长，进而使我们能够降低运营成本并提升竞争力。我们的员工在应对创造与管理增长的挑战方面表现出色，再次印证了他们所具备的奉献精神与杰出才能。拥有清晰愿景、坚定核心价值观和富有创造力的战略的优秀员工将继续推动Progressive的盈利性增长。
Growing the number of policyholders, particularly standard and preferred risks with their higher retention rates, builds intrinsic value because renewals are more profitable than first year business. To encourage writing more standard and preferred risks and to improve customer retention, we adjusted the 1997 "Gainsharing" program (contingent cash incentive compensation for all Progressive people) to credit the estimated increase in value created by adding new customers. The drive to add customers faster will result in more spending to promote our brand and to develop more claim adjusters and customer service representatives. These costs, along with expected losses on first year business, are likely to bring underwriting profit margins more in line with our 4 percent objective.
增加保单持有人数量，尤其是那些拥有较高留存率的标准及优选风险客户，将提升内在价值，因为续保业务比第一年的业务更为盈利。为了鼓励增加标准及优选风险的承保量并提高客户留存率，我们对1997年的“Gainsharing”计划（针对所有Progressive员工的附加现金激励薪酬机制）进行了调整，将增加新客户所带来的价值增量纳入考核体系。加快吸引客户的速度会导致我们在品牌推广以及培养更多理赔专员和客户服务代表上投入更多费用。此外，第一年业务出现的预期损失也会使承保利润率更接近我们4%的目标。
Like all shareholders, we want premium growth to translate into current earnings growth and a higher stock price. However, we manage by executing meaningful, long-term strategies that build value which we expect to be reflected in the stock price over five-year periods. Therefore, as an investment, Progressive stock may be most attractive to investors interested in long-term appreciation.
与所有股东一样，我们希望保费增长能够转化为当期收益增长和更高的股价。然而，我们是通过执行具有实际意义的长期战略来管理公司，这些战略能够创造价值，并有望在五年周期内反映到股价之中。因此，作为一项投资，对于关注长期增值的投资者而言，Progressive的股票或许最具吸引力。
To facilitate growth and the execution of our strategies, we reorganized in 1996 to be less hierarchical, to have managers doing both staff and line work, and to become closer to customers by expanding the number of local business units. We eliminated the Chief Operating Officer role and created a "Policy Team" made up of the eleven people who make Progressive's final management-level decisions--five Process Leaders respectively responsible for Product, Independent Agent Marketing, Direct Marketing, Ownership (customer service) and Claims, as well as the Chief Financial, Human Resources, Legal, Information and International Officers, and me.
为促进增长并执行我们的战略，我们在1996年进行了组织重组，减少层级结构，让管理者既能担任员工角色又能担任业务角色，并通过扩大本地业务单元规模来进一步贴近客户。我们取消了首席运营官一职，并成立了一个名为“政策团队”（Policy Team）的组织，由11名成员组成，他们共同决定Progressive最终的管理决策——其中包括5位分别负责产品、独立代理人营销、直接营销、客户所有权（客户服务）及理赔的流程负责人，以及首席财务、人力资源、法律、信息与国际事务主管，以及我本人。
Policy Team member's Gainsharing compensation is targeted between 100 percent and 135 percent of base salary and is based largely on corporate results, with Process Leaders incented to achieve world class profit/growth producing breakthroughs. My role on the team is to ensure that all issues are identified, articulated and addressed; to decide in the rare instances where there is sufficient disagreement to warrant my doing so; and to oversee the objective setting and performance evaluation processes. In 1996, Policy Team members initiated the practice of evaluating each other and being evaluated by their direct reports.
政策团队成员的Gainsharing奖励目标设定在基本薪酬的100%至135%之间，主要依据公司整体绩效而定，其中各流程负责人受到激励要在利润与增长方面实现世界级的突破。我在团队中的职责是确保所有问题都能被提出、阐明并得到解决；并在极少数存在重大分歧的情况下负责做出最终裁决；同时还负责监督目标设定与绩效评估流程。1996年，政策团队成员开始相互评估，并接受直接下属的评估。
We organized process teams made up of people from both staff and line functions to support the business units serving ever more localized sets of customers. The teams concentrate on improving the processes fast enough to sustain Progressive meeting its own high standards for customer service, profit and growth.
我们组建了由后勤职能和业务职能人员共同组成的流程团队，以支持那些服务于日益本地化客户群的业务单元。各团队的核心任务是快速改进流程，使Progressive能够持续满足其在客户服务、利润和增长方面所设定的高标准。
Most business unit general managers report to Process Leaders. General managers are responsible for reducing claim costs, improving agent service and relationships, direct marketing and deciding price levels for their territory. Gainsharing for general managers is targeted at 50 percent to 100 percent of base salary, depending on business size and process involvement, and is earned based on the profitability and growth of their business. We subdivide continuously as growth produces enough customers to warrant more local focus, which almost always drives costs down and improves customer service. Early in 1997, we had 38 business units, compared to 16 at the end of 1995.
大多数业务单元的总经理向流程负责人汇报工作。总经理的职责包括降低理赔成本、提升代理人服务和关系、开展直接营销，以及为其管辖区域确定费率水平。根据业务规模和流程参与度，总经理的Gainsharing目标设定为基本薪资的50%至100%，其获得的实际奖励取决于业务的盈利能力和增长情况。我们随着业务增长不断进行细分，当拥有足够多的客户时，就会进一步本地化，从而几乎总能降低成本并提升客户服务。1997年初，我们拥有38个业务单元，而在1995年底这一数字为16个。
Progressive's unique approach to management continues to evolve along with its business strategy. Our management philosophy includes the following:
Progressive独特的管理方法会随着业务战略的演进而不断发展。我们的管理理念包括以下几点：
Total Quality Management dovetails with our Excellence Core Value--doing better than we did before--and empowers Progressive people to change how they function if the change measurably improves customer service or reduces costs, and if it does not disrupt others in the work chain. Because measurement is essential to TQM, we have dramatically improved our ability to measure performance and to control quality. Teamwork is the way we work. We continue to improve the ways in which we motivate, manage, evaluate and reward teams.
全面质量管理（TQM）与我们“比以往做得更好”的卓越核心价值观高度契合，赋予Progressive员工在不干扰工作链上其他人的前提下，根据可量化的结果来改变工作方式，只要该改变可以显著提升客户服务或降低成本。由于衡量对于TQM至关重要，我们大幅提升了衡量绩效和控制质量的能力。团队协作是我们的工作方式，我们也在不断改进团队激励、管理、评估和回报的机制。
Steady Cost Reduction has been, and continues to be, critical to our strategy. Underwriting expenses were 21.6 percent of premiums in 1996, compared to 23.0 percent in 1995 and 35.0 percent in 1990.
持续降低成本在过去和现在都对我们的战略至关重要。1996年的承保费用占保费的21.6%，而1995年为23.0%，1990年则为35.0%。
Process Management by top managers eliminates much staff/line friction, fosters cooperation among business units and departments, and requires balancing delicate trade-offs between local autonomy and collective effectiveness.
高层管理者的流程管理减少了大量后勤/业务间的摩擦，促进了业务单元和部门之间的合作，也需要在本地自主权和整体效能之间进行微妙的权衡。
Thorough Testing of new ideas has replaced our former propensity to seize perceived opportunities and grow them as fast as possible.
我们以前倾向于抓住看似存在的机会并尽快加以扩张，如今则用对新想法的深入测试来取代这种做法。
有洞察力的转变。
Performance-based Compensation pays our people very well for exceptional performance, makes contingent pay significant to everyone and fosters the achievement of our demanding objectives. In 1996, 10.8 percent of total compensation resulted from our Gainsharing program.
基于绩效的薪酬使表现出色的员工获得丰厚回报，并让每个人都能切实感受到弹性薪酬的重要性，从而激励我们去实现高目标。1996年，我们的Gainsharing计划在整体薪酬中占比达10.8%。
Results
业绩
In 1996, net premiums written increased 18 percent to $3,441.7 million, compared to $2,912.8 million in 1995. Progressive has posted an annual underwriting profit in 24 out of the last 30 years and bettered our 4 percent underwriting goal with an 8.5 percent margin in 1996. We reduced underwriting expenses by 1.4 percentage points in 1996, following a 1.7 point reduction in 1995.
1996年，净承保保费增长18%，达到34.417亿美元，而1995年为29.128亿美元。在过去30年里，Progressive有24年实现了全年承保盈利，并在1996年以8.5%的利润率超越了我们4%的承保目标。继1995年将承保费用率下降1.7个百分点后，我们在1996年又降低了1.4个百分点。
Operating income, which excludes net realized gains on security sales and one-time items, is the best measure of how well we manage our insurance operations. Operating income increased to $309.1 million, or $4.08 per share, compared to $220.1 million, or $2.84 per share, in 1996. Operating income excludes $7.1 million of net realized gains in 1996, compared to $46.7 million in 1995. Net income was $313.7 million, or $4.11 per share, this year, compared to $250.5 million, or $3.24 per share, in 1995. Return on shareholders' equity was 20.5 percent, compared to 19.6 percent in 1995.
经营收入（不含证券销售的已实现净收益及一次性项目）是衡量我们保险业务管理成效的最佳指标。经营收入从1996年的2.201亿美元（合每股2.84美元）增长至3.091亿美元（合每股4.08美元）。经营收入不包括1996年的710万美元已实现净收益，而1995年该数字为4,670万美元。本年度净利润为3.137亿美元（合每股4.11美元），而1995年为2.505亿美元（合每股3.24美元）。股东权益回报率为20.5%，而1995年为19.6%。
Progressive's Core Business 23
Progressive的核心业务 23
Ninety-eight percent of Progressive's net premiums written is insurance for private passenger automobiles, recreational vehicles and small fleets of commercial vehicles, which we categorize as "core." Core business net premiums written grew 19 percent to $3,367.2 million, compared to $2,824.2 million in 1995. The underwriting profit margin was 8.1 percent, compared to 5.2 percent in 1995.
有98%的Progressive净承保保费来自私家车、休闲车辆以及小型商用车车队保险，我们将其归为“核心”业务。核心业务的净承保保费从1995年的28.242亿美元增长19%，达到33.672亿美元。承保利润率为8.1%，而1995年为5.2%。
Three years ago, we consolidated our new, unique and superior customer services into a Progressive brand by expanding service in a number of states and testing ways to project the brand to potential customers. We focused managers on empowering people and constantly improving the delivery of around-the-clock, immediate response, information-rich service, designed to delight customers.
三年前，我们通过在多个州扩展服务并探索将品牌传递给潜在客户的方式，将新颖、独特且优质的客户服务整合成“Progressive”品牌。我们让管理者注重赋能员工，并持续改进提供全天候、即时响应且信息充足的服务，以期让客户获得满意体验。
We use a combination of television commercials, direct mail and other media to urge consumers to test Progressive's smart new way to shop for auto insurance by calling 1 800 AUTO PRO(R) (1-800-288-6776). In an average 15-minute call, consumers can receive a quote for their particular risk profile from Progressive and comparison rates from up to three other leading auto insurers, including State Farm and Allstate. Our representative also explains the following service improvements, which when considered together, are unique to Progressive:
我们结合电视广告、直邮及其他媒体的方式，鼓励消费者通过拨打1 800 AUTO PRO(R)（1-800-288-6776）来体验Progressive的一种全新、智能的汽车保险购买方式。消费者平均只需花15分钟，就能获得Progressive针对其特定风险状况的报价，以及最多三家主要汽车保险公司（包括State Farm和Allstate）的费率对比。我们的客服代表还会向消费者介绍以下几项服务改进，这些改进结合在一起，构成了Progressive独一无二的优势：
差异化，后一任Glenn M. Renwick也搞了不少结合数字化的项目，现任CEO理赔出身，产品上的创新还没有看到。
Assistance after an accident, or other loss, is Progressive's most important service, so we implore our customers to call 1-800-274-4499 immediately after any incident. Twenty four hours a day, 7 days a week, a Progressive person answers the phone, takes the information, authorizes emergency measures and almost always can have a Progressive claim representative face-to-face with the customer or claimant within a few hours.
事故或其他损失发生后所获得的帮助，是Progressive最重要的服务，因此我们恳请客户在任何事故发生后立即拨打1-800-274-4499。我们全年无休、全天候接听电话，获取信息并授权紧急措施，几乎总能在数小时内安排Progressive理赔代表与客户或索赔方见面。
Universal acceptance because consumers abhor being rejected or cancelled. Progressive rarely rejects and never cancels honest customers who pay their premiums in the 43 states where our complete program is operative.
普遍接受，因为消费者非常厌恶被拒保或退保。在我们完整项目已开展的43个州里，只要客户诚实且按时缴纳保费，Progressive几乎不会拒绝承保，也不会退保。
Competitive rates for risks from ultra-preferred to nonstandard in the states with the complete program. As experience makes us comfortable with pricing standard and preferred risks, we concentrate more on this market which accounted for between 10 and 15 percent of 1996 premium volume and is expected to become an increasing percentage of total premium volume.
在开展完整项目的州里，我们为从“超优选”到“非标准”的各类风险提供具有竞争力的费率。随着我们在标准及优选风险定价方面愈发熟练，我们会在这一市场投入更多，该市场在1996年约占保费总额的10%至15%，并有望在今后占总保费的比例不断上升。
Many different ways to buy, which consumers prefer, so we offer choices--including over 30,000 independent insurance agencies (our most important method of distribution), joint marketing relationships with national accounts and Progressive's 1 800 AUTO PRO(R) telephone service. Now that our personal auto product line includes standard and preferred auto, agents have found more and better ways to match the product they offer with the needs of the consumer, spurring our growth and helping the independent agent channel regain lost market share.
消费者更倾向于有多种购买方式，因此我们提供了许多选择——包括3万多家独立保险代理人（我们最重要的销售渠道）、与全国性客户的联合营销关系，以及Progressive的1 800 AUTO PRO(R)电话服务。现在我们的个人车险产品线覆盖标准及优选汽车保险，代理人也能找到更多、更好的方式将所售产品与消费者需求相匹配，推动我们业务增长，并帮助独立代理人渠道夺回流失的市场份额。
24 hours a day, 7 days a week service. Consumers want to do business when it's convenient for them, so we operate 24 hours a day, 7 days a week to provide new insurance quotes, handle endorsements and questions concerning current policies, and, most importantly, respond to accidents and other incidents. Our customers depend upon our service, which is supported by a real-time disaster management approach that continuously monitors performance of internal systems, threatening weather patterns and other natural events. This approach allows us to regularly reconfigure our network and place disaster response teams in motion as soon as we hear of an event.
每周7天、每天24小时的服务。消费者希望在他们方便的时间办理业务，因此我们全年无休、全天候运营，为客户提供新的保险报价、处理保单批改以及现有保单的疑问，更重要的是应对各种事故或其他突发事件。我们的服务依赖于实时灾难管理方式进行支撑，通过持续监控内部系统性能、恶劣天气模式及其他自然事件来实现。一旦我们得知需特殊应对的事件，就能迅速重新配置网络并派遣灾难应对团队。
Progressive's Diversified Businesses
Progressive的多元化业务
The United Financial Casualty Company, Professional Liability Group and Motor Carrier business units provide combinations of service and indemnity to businesses. Their primary products are collateral protection coverage for automobile lenders and loan tracking for financial institutions, directors and officers liability and fidelity coverage for American Bankers Association member community banks, and underwriting and claim servicing for state involuntary residual market commercial and personal auto programs and other commercial enterprises. Each unit is the largest provider of its specialty in the country, though the market size for each declined in 1996.
United Financial Casualty Company、Professional Liability Group及Motor Carrier等业务部门为企业提供服务与赔付组合。它们的主要产品包括为汽车贷款机构及金融机构提供抵押品保护和贷款跟踪服务、为美国银行家协会成员社区银行提供董事及高管责任险和忠诚保险、以及为州强制性剩余市场商用与个人车险项目及其他商用企业提供承保与理赔服务。尽管这些业务在1996年的市场规模均有所缩小，但每个业务单元仍是该领域在全美范围内的最大供应商。
The Diversified businesses produced revenues and pretax profits of $117.7 million and $24.3 million, respectively, in 1996, compared to $130.2 million and $29.9 million in 1995. In 1996, Progressive acquired 50.1 percent of an automobile inspection service company for $3.0 million.
多元化业务在1996年的营收和税前利润分别为1.177亿美元和2,430万美元，而1995年分别为1.302亿美元和2,990万美元。1996年，Progressive以300万美元收购了一家汽车检查服务公司50.1%的股权。
Investments and Capital Management 25
投资与资本管理 25
Progressive employs a conservative approach to investment and capital management intended to ensure that there is sufficient capital to support all the insurance premium that can be profitably written. Benchmarks for measuring the performance of our investment professionals discourage the assumption of large amounts of interest rate risk. The quality of our portfolio remained exceptional. Fixed-income investments averaged about 89 percent of our portfolio with 63 percent invested in treasuries and other AAA securities. The duration of the fixed-income portfolio was 3.2 years at year-end.
Progressive在投资与资本管理方面采取稳健策略，旨在确保我们拥有足够的资本来支持所有能够盈利的保费承保。我们为投资专业人员设立的绩效基准并不鼓励承担大量利率风险。我们的投资组合质量依旧表现卓越。固定收益类投资约占我们投资组合的89%，其中63%投资于国债与其他AAA级证券。截至年末，固定收益投资组合的久期为3.2年。
Our 1996 objective was to increase Progressive's exposure to the equity markets closer to the 15 percent target established in early 1996 while avoiding excessive market volatility which could reduce surplus and thus curtail growth. On December 31, 1996, common stocks comprised 12.1 percent of the portfolio, up from 8.2 percent at the prior year-end. This percentage will increase as investment opportunities are identified. Progressive generally pursues a "value" rather than a "growth" style of equity investing. From this perspective, the domestic stock markets look over-valued relative to some foreign markets. We rely on Sanford C. Bernstein & Co., a value-oriented firm, to manage our small global equity portfolio.
我们的1996年目标是将Progressive在股票市场的敞口提升至更接近1996年初制定的15%目标，同时避免过度的市场波动导致盈余减少，从而抑制增长。1996年12月31日，普通股占投资组合的12.1%，而上年同期为8.2%。随着我们发现新的投资机会，这一比例将继续增加。Progressive在股票投资上通常采用“价值型”而非“成长型”策略。从这一角度看，相较于部分海外市场，美国国内股市估值显得偏高。我们委托一家秉持价值导向的公司Sanford C. Bernstein & Co.来管理我们规模较小的全球股票投资组合。
The 1996 taxable equivalent total return for the portfolio was 7.8 percent, compared to 12.4 percent last year. The average maturity of our fixed-income portfolio ranged between 3.1 years and 3.9 years throughout the year. The short average maturity of Progressive's bond portfolio reflects the 1.7 year average life of our insurance liabilities.
1996年，投资组合的税后等效总回报率为7.8%，而去年为12.4%。全年期间，我们固定收益组合的平均到期期限在3.1年至3.9年之间波动。Progressive债券组合的平均到期日较短，主要反映了我们保险责任约1.7年的平均负债周期。
The total portfolio increased to $4,450.6 million at December 31, 1996, from $3,768.0 million at December 31, 1995. Investment income (interest, dividends and realized gains and losses) was $232.9 million before taxes and $180.2 million after taxes, compared to $245.8 million before taxes and $186.6 million after taxes in 1995. On December 31, 1996, our portfolio had $114.1 million in unrealized capital gains, compared to $78.7 million at the end of 1995, resulting from increased stock prices as the S&P 500 index rose from 615.9 to 740.7 during the year.
截至1996年12月31日，投资组合总额从1995年12月31日的37.68亿美元增至44.506亿美元。投资收益（包括利息、股息以及已实现收益和损失）税前为2.329亿美元，税后为1.802亿美元，而1995年分别为2.458亿美元和1.866亿美元。到1996年12月31日，我们的投资组合中含有1.141亿美元的未实现资本利得，而1995年年底为7,870万美元，这主要得益于标普500指数在年内从615.9上涨至740.7，带来股价上涨。
Our ratio of net premiums written to statutory surplus was 2.7 to 1 on December 31, 1996. The Company has sufficient funds to support anticipated growth in the operating companies. Progressive's debt to total capital ratio was 32 percent at year-end 1996, compared to 31 percent last year and a range of 24 percent to 61 percent over the past 20 years. During 1996, we issued $100 million of 7.30% 10-year Notes and redeemed our 93/8% Serial Preferred Shares, Series A, at a price of $25 per share, plus accrued and unpaid dividends through May 31, 1996, the redemption date, for a total cost of $82.1 million. In addition, we repurchased 1.0 million Common Shares at an average cost of $41.73 per share.
1996年12月31日，我们的净承保保费与法定盈余的比率为2.7:1。公司拥有足够的资金来支持运营子公司的预期增长。Progressive的“债务占总资本比率”在1996年底为32%，而去年为31%，在过去20年中这一比率曾在24%至61%之间波动。1996年，我们发行了1亿美元、票面利率7.30%、期限10年的公司债，并以每股25美元（加计截至1996年5月31日赎回日应计但未付的股息）赎回了我们票面利率9 3/8%的A系列连续优先股，总成本为8,210万美元。此外，我们还回购了100万股普通股，平均成本为每股41.73美元。
Progressive supports risk-based capital monitoring by regulators and endorses the trend toward more demanding standards than those currently in use. This effort to improve the early detection of financial weakness before it leads to insolvency should benefit Progressive over time by reducing state insolvency fund assessments. The risk-based capital calculation reflects favorably on companies like Progressive with historically high profitability, short-tailed liabilities, and conservative reserves and investments.
Progressive支持监管部门的风险资本监测，并认可比现行标准更严格的趋势。通过在财务薄弱导致破产之前提高早期预警机制，这一举措将使Progressive随着时间的推移而受益，主要体现在降低各州破产基金的摊派费用上。风险资本测算对于像Progressive这样拥有高盈利能力、短尾责任以及保守准备金与投资的公司而言，反映出积极正面的效果。
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。我们指出这些风险，是为了帮助股东更好地了解公司，而非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. There were no significant reforms during the year. We rely on our general managers to help regulators and legislators resolve issues in the way that best serves consumers.
立法与监管风险。保险相关法律与法规在不断变化。年内并未出现重大改革。我们依靠各业务总经理协助监管机构和立法机构，以能够最好地服务消费者的方式来解决各种问题。
Unpredictable Underwriting Margin and Growth Rate. Our strategy is to strive to achieve a 4 percent underwriting profit margin over the entire retention period of an insured. We cannot predict with precision the timing and pace of changes in underwriting margins, in retention nor in the rate of growth. We monitor each program to ensure that rates are adjusted promptly and adequately to obtain 4 percent margins over the entire retention period of a policyholder.
不可预测的承保利润率与增长率。我们的战略目标是在被保险人整个保单留存期内实现4%的承保利润率。我们无法准确预测承保利润率、保单留存率和业务增长率在何时及如何发生变化。我们会密切监控每个项目，确保及时且充分地调整费率，以便在保单持有人整个留存期内实现4%的目标利润率。
Pricing Risk. We continue to learn how to price standard and preferred auto insurance, and to experiment with new ways to price certain segments. We minimize the risk implicit in new pricing methodology by controlling volume in new programs and changing rates immediately when experience dictates.
定价风险。我们不断学习如何为标准及优选车险定价，并尝试为部分细分市场采用新的定价方式。我们通过在新项目中控制投保量，并在经验表明有需要时立即调整费率，从而尽可能降低新定价方法所隐含的风险。
Homeowners Insurance. This type of insurance has the potential to expose Progressive to catastrophes. Thus, there will be risk if our auto insurance market share objectives require us to offer it. Our current absence of plans to write homeowners is also risky because many consumers prefer to buy all their insurance from one company. In 1997, we will assess the demand for homeowners and will develop a plan to satisfy our customers' needs.
房主保险。这类保险可能会让Progressive面临巨灾风险。因此，如果我们的汽车保险市场份额目标需要我们提供这类保险，就会产生相应的风险。而我们目前并未计划经营房主险，这同样具有风险，因为许多消费者更倾向于从同一家公司购买所有保险。1997年，我们将评估对房主险的需求，并制定相应方案以满足客户需求。
Advertised Brand. Consumer advertising and brand awareness require higher performance standards. We continually consider consumers' demands and appreciate their ability to make wise choices. In response, we are always looking for new and innovative ways to improve service at a lower cost.
品牌宣传。面向消费者的广告和品牌认知度的提升需要更高的绩效标准。我们不断考虑消费者的需求，并认可他们做出明智选择的能力。针对这一点，我们始终在寻找新颖且富有创新力的方式来以更低成本提升服务品质。
Competitor Response. Other insurers are reacting 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 offerings. In addition, our people, with their knowledge of our operations along with their skills and talents, are being sought by companies with whom we compete.
竞争对手的反应。其他保险公司已对Progressive试图改变消费者购买汽车保险体验的举措做出反应，但我们无法预测其应对方式及时间会对我们的增长与盈利能力产生怎样的影响。我们会持续关注竞争对手，并将他们在产品和服务上的改进及时纳入我们的消费者方案中。此外，了解我们运营方式且具备专业技能与才能的员工，也正成为与我们竞争的公司所青睐的对象。
The Future
未来
Looking forward prompts me to reminisce. When I leave the office for the last time in a business year, I think about my Dad, Joe Lewis, Progressive's founder and driving force for 18 years, and about the challenges implicit in producing one more record year. As a very young man, I helped Dad with the year-end hand compilation of policy-by-policy results that was Progressive's annual operating summary then. The end of 1996 was especially poignant for me because Progressive is about to celebrate its 60th anniversary and because I was recovering from surgery to correct a circulation problem in my leg, which I am delighted to report has healed well.
展望未来总会让我回想往事。每当我在一个财年的最后一天离开办公室时，我都会想起我的父亲乔·刘易斯——Progressive的创始人，也是其前18年的主要推动力，以及再创佳绩所蕴含的挑战。当我还很年轻时，我曾帮助父亲逐份手动汇编保单业绩报告，那就是当时Progressive的年度经营概览。对我而言，1996年年底尤其令人感慨，因为Progressive即将迎来60周年纪念，而且我当时正在术后康复阶段——手术是为了解决腿部血液循环问题，让我欣慰的是它现在恢复得很好。
I start my 33rd year as CEO proud of producing record earnings and volume in most years and still undaunted by the challenge implicit in Progressive's and my own high standards. I am excited by the new problems and opportunities that come faster and are more perplexing than ever. Along with all Progressive people, in 1997 I will focus on and be measured by improving claim handling quality and efficiency; building the Progressive brand; new process implementation; and responding to community-specific opportunities.
我即将迎来担任CEO的第33个年头，为大多数年份都能创下营收与规模的新纪录而自豪，同时对于Progressive以及我自身所设立的高标准所带来的挑战依然无所畏惧。我对那些出现得更快、也更为复杂的新问题和新机遇感到兴奋。与所有Progressive员工一道，在1997年我将致力于并且也将以此来衡量我的表现：提升理赔处理的质量与效率、打造Progressive品牌、实施新的流程并抓住针对各社区的商业机遇。
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 and commitment. Success so far encourages us to expand at a pace that tests our ability to provide the service we aspire to deliver.
Progressive正引领着美国在处理汽车事故伤害和财产损失方面的一场变革。我们致力于为车祸受害者减轻创伤、降低成本，改善消费者对汽车保险的观感，并因我们的领导力与投入而得到回报。迄今的成功鼓舞我们继续以能检验我们服务能力的步伐加速扩张。
We begin 1997 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.
我们以往年相同的姿态开始1997年——热情洋溢，同时对目标与战略中所蕴含的挑战心怀敬畏；因过去的挫折而保持谦逊，但也为积极应对这些挫折感到自豪，并坚信我们优秀的员工能继续取得卓越成果。
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.
要实现我们的愿景，还需要付出更多努力。对Progressive而言，就好像我们永远都处于创业的初期，因此我们对未来比以往任何时候都更满怀憧憬。
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 1996. 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 1996 and the promise you bring to our future.
我们对能为广大客户服务深表感激。感谢各位的惠顾，尤其要感谢在1996年选择Progressive的三万多名独立保险代理人。同时，我们也对股东们始终如一的信任深表感激。对于成就Progressive这家优秀企业的所有员工，感谢你们在1996年的付出以及你们为我们未来所带来的希望。
Joy Love and Peace
/s/ Peter Lewis
Peter B. Lewis
Chairman, President and Chief Executive Officer
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