The Progressive Corporation, a holding company that has insurance and non-insurance subsidiaries and one mutual insurance company affiliate (collectively, the “Company”), does not have any revenue producing operations of its own. Its insurance subsidiaries and affiliate provide personal automobile insurance and other specialty property-casualty insurance and related services throughout the United States. The Company’s Personal Lines segment writes insurance for private passenger automobiles and recreation vehicles through both the independent agency channel and the direct channel. The Company ranks third in the U.S. personal auto insurance market, based on 2003 and estimated 2004 net premiums written, with an estimated 7.4% market share in 2004.
Progressive Corporation 是一家控股公司，旗下拥有保险和非保险子公司以及一家互助保险公司附属机构（统称为“公司”），自身并不从事任何营收业务。其保险子公司及附属机构在美国各地提供个人汽车保险及其他专业财产与意外保险服务。公司的个人保险业务部门通过独立代理渠道和直接渠道销售私家车和休闲车保险。根据 2003 年及估计的 2004 年净保费收入，公司在美国个人汽车保险市场排名第三，预计 2004 年的市场份额为 7.4%。
Although there are approximately 300 insurance companies/groups with annual premiums greater than $5 million competing in the estimated $158 billion U.S. personal auto market, the top 15 insurance groups account for approximately 72% of the premiums written. In the aggregate, these top 15 groups outperformed the industry in both growth and profitability, supporting the Company’s belief that the market will continue to consolidate. The Company is the number one writer of private passenger auto insurance through independent agencies and the number three writer in the direct channel, based on net premiums written in the U.S. The Company also competes in the U.S. commercial auto insurance market where it is the third largest carrier, based on direct premiums written, with about 6% market share. The Company’s Commercial Auto segment writes insurance for automobiles and trucks (e.g., pick-up or panel trucks) owned by small businesses primarily through the independent agency channel.
尽管约有 300 家年保费超过 500 万美元的保险公司或集团在估值为 1580 亿美元的美国个人汽车保险市场中竞争，但排名前 15 的保险集团就占据了大约 72% 的保费总额。这些前 15 家保险集团在增长和盈利方面整体优于行业平均，印证了公司对市场将持续整合的判断。在美国，公司是通过独立代理销售的私家车保险第一大承保人，也是直接渠道第三大承保人（按净保费计算）。公司还参与美国商业汽车保险市场，是该市场第三大保险公司（按直接保费计），市场份额约为 6%。公司的商业车险业务主要通过独立代理渠道，为小型企业拥有的汽车和卡车（如皮卡车或厢式货车）提供保险。
The holding company receives cash through borrowings, equity sales, subsidiary dividends and other transactions, and may use the proceeds to contribute to the capital of its insurance subsidiaries in order to support premium growth, pay interest on or retire its outstanding indebtedness, pay dividends and repurchase its Common Shares and for other business purposes. In 2004, the Company received $1.6 billion of dividends from its subsidiaries, net of capital contributions, and used a portion of these dividends to fund the tender offer discussed below. At year-end 2004, the Company had $1.2 billion of readily marketable securities in a non-insurance subsidiary that can be used to satisfy the holding company’s obligations.
控股公司通过借款、出售股权、子公司分红及其他交易获得现金，并可能将这些收益用于向保险子公司注资以支持保费增长、支付利息或偿还未偿债务、支付股息、回购普通股或用于其他商业目的。2004 年，公司从子公司获得净额为 16 亿美元的分红（已扣除资本注入），并将部分资金用于下文所述的要约收购。截至 2004 年底，公司在一家非保险子公司持有价值 12 亿美元的易变现证券，可用于履行控股公司的义务。
During 2004, the Company repurchased 16,919,674 of its Common Shares at a purchase price of $88 per share for a total cost of $1.5 billion pursuant to a “Dutch auction” tender offer. Outside of the tender offer, the Company repurchased 1,695,222 additional Common Shares during the year at a total cost of $139.5 million, with an average cost of $82.31 per share. The Company did not issue any debt or equity securities during 2004, but repaid $200 million of notes at maturity in January 2004 and $6 million of “other debt” in December 2004.
2004 年，公司通过“荷兰式拍卖”要约回购 16,919,674 股普通股，每股回购价格为 88 美元，总成本为 15 亿美元。在要约之外，公司全年又回购了 1,695,222 股普通股，总成本为 1.395 亿美元，平均每股回购成本为 82.31 美元。公司在 2004 年未发行任何债务或股权证券，但于当年 1 月偿还了 2 亿美元的到期票据，并于 12 月偿还了 600 万美元的“其他债务”。
On a consolidated basis, the Company generated positive operating cash flows of $2.7 billion in 2004, portions of which were used during the year to repurchase Common Shares and to construct two new call centers and an office building, as well as lease additional space to support the Company’s growing operations. The Company opened one additional claims service center during the year, bringing the total number of such centers to 20. These centers, which are designed to provide end-to-end resolution for auto physical damage losses, are expected to improve efficiency and customer convenience, increase accuracy, reduce rework, improve repair cycle time and provide greater brand distinction.
从合并角度来看，公司在 2004 年实现了 27 亿美元的正向经营现金流，部分现金用于回购普通股、建设两个新的呼叫中心和一座办公楼，以及租赁额外办公空间以支持公司不断增长的业务。公司当年还新增一家理赔服务中心，使此类中心总数达到 20 家。这些中心旨在为汽车物损理赔提供端到端的解决方案，预计将提升效率与客户便利性、提高理赔准确性、减少返工、缩短维修周期，并增强品牌辨识度。
The Company’s goal is to grow as fast as possible, constrained only by its objective to produce an aggregate calendar year 4% underwriting profit and its ability to provide high-quality customer service. During the year, in light of market conditions and its own favorable underwriting profitability, the Company favored maintaining relatively robust margins without significantly impairing growth. Nevertheless, the Company remains committed to its stated profit and growth objectives over rolling five-year periods.
公司的目标是在确保全年核保利润率达到 4% 和持续提供高质量客户服务的前提下，实现尽可能快速的增长。鉴于市场状况和公司自身良好的核保盈利能力，公司在当年倾向于维持相对稳健的利润率，而不显著牺牲增长。尽管如此，公司仍致力于在滚动的五年周期中实现其既定的利润和增长目标。
The U.S. private passenger auto insurance market produced its second consecutive year of underwriting profitability as auto accident frequency rates continued to decline. Consequently, there was little rate pressure on consumers, leading to a natural reduction in consumer shopping. While these market conditions and profitability levels are unusual and perhaps transitional, they offered opportunities for the Company to improve its understanding and calibration of market responses to varying rate stimuli.
由于汽车事故发生率持续下降，美国私家车保险市场已连续第二年实现核保盈利。因此，消费者面临的保费上涨压力不大，导致消费者主动比价投保的意愿自然下降。尽管这种市场环境和盈利水平并不寻常，甚至可能只是过渡性的，但这也为公司提供了机会，以更好地理解并校准市场对不同费率调整的反应。
The Company had a 12% increase in net premiums written, an 85.1 combined ratio and net income of $1.65 billion in 2004. Policies in force grew 11%. The Company continued to reap the benefits of the profitable growth phase of this insurance cycle and further benefited from the lowest level of automobile accident frequency experienced by the industry in recent history. Rate stability, along with the Company’s advancements in product design, brand and technology initiatives, also contributed to 2004 results. The Company performed 124 auto rate and program revisions, which were designed to maintain rate adequacy and reflect the Company’s most accurate estimate of prospective loss costs based on available information.
2004 年，公司净承保保费增长 12%，综合赔付率为 85.1，净利润达 16.5 亿美元。有效保单数量增长 11%。公司继续受益于当前保险周期的盈利增长阶段，同时行业历史上最低的汽车事故发生率也进一步助力。费率稳定，再加上公司在产品设计、品牌和技术方面的推进，共同推动了 2004 年的业绩表现。公司全年进行了 124 项车险费率和产品方案修订，旨在维持费率充足性，并根据可用信息反映公司对未来赔付成本的最准确估计。
In 2004, the Company achieved underwriting profitability in all of the 49 Personal Lines markets in which it writes business, with only Florida not meeting or exceeding its 4% underwriting profit objective due to hurricane-related losses. In Commercial Auto, two states, out of the 45 markets in which it conducts business, were unprofitable (these states represented less than 1% of the Commercial Auto premiums written).
2004 年，公司在其开展业务的 49 个个人保险市场中全部实现核保盈利，仅佛罗里达州因飓风相关损失未能达到其 4% 的核保利润目标。在商业车险方面，公司在开展业务的 45 个市场中有两个州未实现盈利（这两个州的保费收入合计不到商业车险总保费的 1%）。
During 2004, the Company experienced $109.1 million of favorable prior period loss and loss adjustment expense reserve development, or 2.5% of prior year’s reserves. This level of reserving accuracy allows the Company to have solid pricing data, which helps ensure rate adequacy. The low loss frequency, coupled with no notable escalating trends in claim costs and continuous improvement in claims settlement quality, helped contribute to the Company’s favorable results for the year (discussed further in the Loss and Loss Adjustment Expense Reserves subsection).
2004 年，公司实现了 1.091 亿美元的以往年度赔付及理赔费用准备金利好发展，占上年度准备金的 2.5%。这种精确的准备金评估水平为公司提供了稳健的定价依据，有助于确保费率合理性。事故发生率低，加之理赔成本无明显上升趋势，以及理赔质量持续改善，共同推动了公司当年的良好业绩（详见“赔付及赔付费用准备金”小节）。
The Company’s investment portfolio produced a fully taxable equivalent (FTE) total return of 5.2% for 2004. Short-term interest rates increased as the Federal Open Market Committee raised the overnight Federal Funds Rate by 1.25% to 2.25% during 2004, while yields on long maturity U.S. Treasury bonds declined. The economy continued to expand at a solid pace, supporting growth in corporate profits, positive stock market returns and lower yield differential for non-U.S. Treasury securities compared to similar maturity U.S. Treasuries. The Company maintained its asset allocation strategy of investing approximately 85% of its total portfolio in fixed-income securities and 15% in common equities. Both asset classes contributed to the overall result, with FTE total returns of 11.6% and 4.2% in the common stock and fixed-income portfolios, respectively, for 2004. Late in the first quarter, the Company shortened the duration of the fixed-income portfolio and ended the year at 2.9 years, compared to 3.3 years at the end of 2003. The weighted average credit rating of the fixed-income portfolio ranged from AA to AA+ during the year. Substantial cash flows from operations and positive investment returns provided modest portfolio growth, even after completion of the Company’s $1.5 billion “Dutch auction” tender offer for its Common Shares in 2004. The Company continues to maintain its fixed-income portfolio strategy of investing in high quality, shorter duration securities in the current investment environment. The Company’s common equity investment strategy remains an index replication approach using the Russell 1000 Index as the benchmark.
公司 2004 年的投资组合实现了 5.2% 的税前等值总回报。随着联邦公开市场委员会在 2004 年将联邦基金隔夜利率上调 1.25% 至 2.25%，短期利率上升，而长期美国国债收益率则下降。经济持续稳健扩张，推动企业利润增长、股市回报积极，且非美债与同期限美债之间的收益率差缩小。公司维持其资产配置策略，将约 85% 的投资组合配置于固定收益证券，15% 配置于普通股。两类资产均为整体回报做出贡献，2004 年普通股和固定收益投资组合的税前等值回报率分别为 11.6% 和 4.2%。第一季度末，公司缩短了固定收益投资组合的久期，截至年末为 2.9 年，相较 2003 年末的 3.3 年有所下降。固定收益投资组合的平均信用评级全年在 AA 至 AA+ 之间。尽管公司在 2004 年完成了 15 亿美元的“荷兰式拍卖”普通股回购，但充足的经营现金流和积极的投资回报仍实现了适度的投资组合增长。在当前投资环境下，公司继续坚持其“高质量、短久期”的固定收益投资策略；而普通股投资策略仍为指数复制法，以 Russell 1000 指数为基准。