LETTER TO SHAREHOLDERS  

致股东信

An Auto Insurance Commercial Every Fourteen Seconds! This was an interesting factoid gleaned recently during the course of evaluating advertising agencies. Without validating the claim, directionally it captures one of the most observable macro changes in our industry over the past few years. In 2006, few consumers escaped an auto insurer’s message as just about every conceivable impression space has been used to capture consumers’ interest. Why now? What’s changed?  

每十四秒就有一则汽车保险广告！这是我们在评估广告代理机构过程中最近获得的一则有趣的数据。虽然这一说法未经过验证，但从大方向看，它反映了过去几年中我们行业最明显的宏观变化之一。2006年，几乎没有消费者能逃过汽车保险公司的广告，因为几乎所有可能的媒介空间都被用来吸引消费者的注意。为什么是现在？又发生了什么变化？

Three years ago, I wrote that 2003 would be the second year of underwriting profitability in the auto insurance industry for the past 25. Since then, the industry has gone on to four consecutive years of underwriting profitability. Based on where we start 2007, the odds look good for a “five-peat” (I hope that’s not trademarked!). With favorable underwriting results and a stable outlook, the competition for consumers has increased dramatically. With consumers in demand, price pressure was sure to follow. While simple characterizations about pricing don’t capture individual market and segment level detail, a second notable macro change is that the industrywide earned premium for 2006 may well be lower than 2005, a first in at least 25 years.  

三年前，我曾写道，2003年将成为过去25年中汽车保险行业盈利承保的第二个年份。从那以后，该行业已连续四年实现了承保盈利。根据我们2007年的开局来看，实现“五连冠”的可能性很大（希望这称谓不是商标！）。在良好的承保业绩和稳定的前景下，争夺消费者的竞争大幅加剧。随着消费者需求的上升，价格压力自然随之而来。尽管关于定价的简单描述无法涵盖各个市场和细分层面的细节，但第二个显著的宏观变化是，2006年整个行业的已赚保费可能会低于2005年，这在至少25年内是首次出现。

Under these market conditions 2006 was a good, not great, year for Progressive. Our calendar-year underwriting profit margin remained exceptionally strong at 13.3%, still far outstripping our long-term target of 4%. Combined with investment returns for the year, net income was up 18% over last year to $1.65 billion, or up 21% to $2.10 per share. Our return on shareholders’ equity was 25.3%, consistent with our five-year average. Less exciting was the slow growth in premiums, which on a written and earned basis grew about 1% and 3%, respectively. Our growth in policies, my preferred measure, tells much the same story, with our Personal Lines book increasing 3% and Commercial Auto about 7%. I’ve said many times that our culture thrives on profitable growth, and while understandable given market conditions, these growth numbers and trends do not meet our expectations.  

在这样的市场环境下，2006年对Progressive来说是个不错但并非卓越的一年。我们的年度承保利润率依然异常强劲，达到13.3%，远远超出我们长期设定的4%的目标。加上当年的投资收益，净收入比去年增长了18%至16.5亿美元，或每股增长21至2.10美元。股东权益回报率为25.3%，与我们过去五年的平均水平一致。相比之下，保费增长较为缓慢，投保和已赚保费分别仅增长约1%和3%。而我更看重的保单数量增长也反映了类似的情况：我们的个人业务保单增长了3%，商用汽车业务增长约7%。我多次强调，我们的企业文化依赖于盈利性增长，尽管考虑到市场条件，这样的增长数字和趋势仍未达到我们的预期。

MARKET CONDITIONS  

市场状况

The well-documented reduction in claims frequency over what is now several years is clearly the underlying driver of industrywide favorable results and limited upward pressure on premiums. At this time last year, I reported that our view continued to be that we would slowly return to more normal operating margins by allowing expected increases in severity, and potentially frequency, to absorb the margin in excess of our target rather than immediately price it away. That forecast, at least in the months that followed, proved to be incorrect. Since no significant change in frequency or notable acceleration in severity appeared to emerge, our view of the future and our game plan needed re-evaluation. At the annual investors’ meeting, I announced that our efforts to fully explain and calibrate frequency reductions, while interesting, had been inconclusive. Obvious contributors of decreased frequency include vehicle safety, road design, driver education, more vehicles per household, and gas price fluctuations, but the amalgamation of these factors does not lend itself easily to a reliable forecast. What is more apparent to us now is that these drivers were, in many cases, structural changes and distinguishable from the observable insurance cycle. The prospect for future advances, especially in vehicle safety, suggest that even further reductions in frequency and injury severity are plausible, though difficult to forecast.  

过去几年来，索赔频率显著下降这一事实已广为人知，这显然是推动整个行业业绩向好及限制保费上行压力的根本原因。去年这个时候，我曾报告我们认为，通过允许预期的损失严重程度（以及可能的频率）增加来消化超出目标的利润率，而不是立即通过提价消除，这样我们将会逐步恢复到较为正常的经营利润率。然而，至少在随后的几个月中，这一预测被证明是不正确的。由于并未出现频率的显著变化或严重程度的明显加速，我们对未来的看法和战略计划都需要重新评估。在年度投资者会议上，我宣布我们为充分解释和校准索赔频率下降所做的努力虽颇具趣味，但结论并不明确。造成索赔频率下降的明显因素包括车辆安全、道路设计、驾驶员教育、每户家庭车辆增多以及油价波动，但这些因素的综合作用难以形成一个可靠的预测。现在对我们来说更明显的是，这些因素在许多情况下属于结构性变化，与可观察到的保险周期有所区分。未来在车辆安全方面的进一步进展，表明索赔频率和伤害严重程度有可能进一步下降，尽管这一预测仍然充满难度。

We also assessed that failing to respond to stepped-up advertising efforts and the increased potential for our customers to search for lower prices in the marketplace when we could profitably meet or beat competitive offers, was no longer the correct strategy. While rates for a majority of consumers were relatively stable, marketing messaging was at an all-time high. Unlike other industries, our marketing efforts are unlikely to create increased overall demand, rather the expected outcome is more about moving around the available pool of consumers. Conscious that not all price reductions result in good trade-offs, we challenged ourselves to assess our market pricing relative to our goal of a 96 combined ratio and to make trade-offs that were acceptable and smart. Accordingly, we placed increased emphasis on competitive pricing for our current customers to ensure their likelihood of staying with us.  

我们还认为，如果我们对不断加强的广告攻势以及当我们能够以盈利方式满足或击败竞争对手报价时，客户在市场上寻找更低价格的潜力不作出反应，这已不再是一种正确的战略。虽然大多数消费者的费率相对稳定，但市场宣传却达到了前所未有的高位。与其他行业不同，我们的营销努力不太可能创造出总体需求的增加，而预期结果更多在于重新分配现有消费者资源。考虑到并非所有降价都会带来良好的权衡，我们挑战自己，评估我们的市场定价是否符合96综合比率这一目标，并作出既合理又聪明的权衡。因此，我们对现有客户采取了更具竞争力的定价策略，以确保他们留在我们这里的可能性。

This reassessment of frequency and severity trends in our business means we will “play-it-as-we-see-it” and, more importantly, we are prepared to react quickly when we see a change. Our personal auto policy periods are short, providing greater flexibility to price correctly. Our controls and analytic review of profitability by sub-segments of our book are robust. We believe our ability to recognize trends is better than our ability to predict them, and our product management, technology and operational groups are all capable of reacting quickly. We are at our best when the market conditions require nimbleness. Each of our product lines has acted on the reassessed game plan and a review is provided in the Operations Summary section provided later in this report.  

对我们业务中索赔频率和严重程度趋势的重新评估意味着我们将“按现状行事”，更重要的是，我们已做好在看到变化时迅速反应的准备。我们的个人汽车保单周期较短，这为准确定价提供了更大的灵活性。我们对各子业务板块盈利能力的控制和分析审核也非常稳健。我们相信识别趋势的能力优于预测趋势的能力，同时我们的产品管理、技术和运营团队均具备快速响应的能力。当市场条件要求敏捷反应时，我们才能发挥最佳表现。我们的每一条产品线都已根据重新评估的计划采取了行动，相关回顾将在本报告后面的“运营摘要”部分中提供。

STRATEGIES AND EMPHASIS  

战略与重点

Long before 2006 started, we recognized that growth, and the attendant issues in managing growth, would not be the primary focus for the year but rather we would give maximum effort to key initiatives we believed would shape the company for the future and, in some cases, provide a distinct competitive advantage. We concentrated on claims, developing a marketing culture and focusing on long-term customer satisfaction that will lead to increased retention.  

早在2006年开始之前，我们就认识到，增长及其伴随的管理问题不会成为当年的主要焦点，而我们将全力推动那些我们认为能够塑造公司未来、在某些情况下提供独特竞争优势的关键举措。我们专注于理赔、打造营销文化，并着力于提升长期客户满意度，从而实现客户留存率的提高。

Claims   Our emphasis on quality claims handling and superior customer experiences continues to meet our expectations, and I never tire of reporting that year-after-year our assessments on both measures exceed prior highs. Going forward, our emphasis  

理赔   我们对优质理赔处理和卓越客户体验的重视持续达到了预期，我也总是不厌其烦地报告，年复一年，我们在这两项指标上的表现都超越了以往的高点。展望未来，我们的重点

will be to ensure quality and service levels are maintained in balance with a cost structure that contributes to, and strengthens, our market competitiveness.  

将是确保质量和服务水平与成本结构保持平衡，从而促进并增强我们的市场竞争力。

Our biggest strategic contribution to facilitating this balance took a huge step forward in 2006 with the opening of 29 new concierge claims centers. We now operate 53 such claims centers nationally in 41 metropolitan markets. Long-term followers of Progressive  

我们为实现这一平衡所做的最大战略贡献在2006年取得了重大进展——新开设了29个礼宾式理赔中心。目前，我们在全国41个大都市市场运营着53个此类理赔中心。长期关注Progressive的人士

know that this initiative has gone from concept, to market test, to a 20 operation burn-in period to, now, full-scale deployment. Each phase tested our thesis that this concept is capable of creating a really meaningful and valued change in the consumer experience, while reducing the frictional costs associated with claims handling, all while leveraging our scale to economic and competitive advantage. I could not be more pleased that we have now reached a market penetration where we can declare and advertise that this is our primary approach to damage assessment and facilitation of repair in a growing number of markets. We will incorporate this distinctive offering as part of our ongoing advertising and brand communication.  

知道这一举措已经从概念、市场测试、20个运营试运行阶段发展到如今的全面部署。每个阶段都验证了我们的论点：这一概念能够在提升消费者体验方面带来真正意义和价值的变化，同时降低理赔处理相关的摩擦成本，并利用我们的规模优势获得经济和竞争优势。我对我们目前达到的市场渗透率感到无比满意，我们现在可以宣称并宣传，这已成为我们在越来越多市场中进行损失评估和协助修理的主要方法。我们将把这一独特产品作为持续广告和品牌传播的一部分加以推广。

Marketing Culture   I have said that as a business we are good at three things that really matter: allocating costs between consumers in ways that best match their expected costs; managing the claims and administrative costs that must ultimately be allocated; and providing superior consumer experiences. In 2006, we added the need to become equally good at marketing as we are in other skill areas to the “things-that-really-matter” list. We have good reason to be pleased with how the Progressive brand has developed in the last decade or so, but as with all things that show opportunity for improvement, we took stock of the relevance of our message and actions in today’s marketplace. In doing so, we saw opportunities to advance in many areas ranging from market intelligence gathering, to consumer feedback, to consistency of brand communication, to retailing of product features, to a more effective use of our skills and talents. In the latter part of 2006, we dedicated resources to take a pragmatic look at all marketing and brand activities, and to confirm or amend as necessary the foundation of our brand and consumer promise. A few highlights are important to share.  

营销文化   我曾表示，作为一家公司，我们擅长三件真正重要的事情：以最符合消费者预期成本的方式在消费者之间分摊成本；管理最终必须分摊的理赔和行政成本；以及提供卓越的消费者体验。2006年，我们在“真正重要的事情”清单中增加了与其他技能领域同样擅长营销的需求。对于Progressive品牌在过去十多年中的发展，我们有充分的理由感到满意，但正如所有显示改进机会的事物一样，我们对自己在当今市场中信息传递和行动的相关性进行了盘点。在此过程中，我们看到了在许多领域的进步机会，从市场情报收集、消费者反馈、品牌传播的一致性，到产品特性的零售化，再到更有效地利用我们的技能和才华。2006年下半年，我们投入资源对所有营销和品牌活动进行务实审视，并根据需要确认或修正我们品牌和消费者承诺的基础。这里有几个重要的亮点需要分享。

Perhaps the most significant finding is the powerful association consumers and agents have with the Progressive name. Our 2004 introduction of our Agency Business brand, Drive® Insurance from Progressive had, for some, de-emphasized Progressive and created unintended separation from our claims service. In response, in February 2007, we announced that we repositioned the Progressive name in the name of all products we sell, allowing agents to more effectively leverage the power of the Progressive name as our single brand name. Progressive Drive Insurance is the name of the private passenger auto product sold through independent agents. This preserves the agent-specific product identity for our private passenger auto product that we desire, while increasing the emphasis on the Progressive name. Progressive Direct is the name used for the private passenger auto product sold directly by the company online and by phone. Progressive Commercial, Progressive Motorcycle, Progressive RV, Progressive Boat, etc. are the names of our non-private passenger auto products sold by agents and directly. A change of this nature was not something we expected so soon after market introduction of the Drive name, but with an increasing focus on our concierge claims service and other aspects of the Progressive brand, we wanted all customers to associate with the Progressive name and have our agents offer to their customers one more strong reason to buy Progressive.  

也许最重要的发现是，消费者和代理人对“Progressive”这一名称拥有极强的联想。我们在2004年推出的代理业务品牌——Progressive旗下的Drive®保险，对于某些人来说，淡化了Progressive的品牌形象，并无意中使其与我们的理赔服务产生了分离。对此，为了回应这一情况，我们在2007年2月宣布，在我们销售的所有产品名称中重新定位Progressive这一名称，使代理人能够更有效地利用Progressive这一单一品牌的影响力。Progressive Drive Insurance是通过独立代理人销售的私人乘用车产品的名称。这既保留了我们所期望的、针对私人乘用车产品的代理人专属产品身份，同时也强化了对Progressive名称的强调。Progressive Direct则是公司在线和电话直销的私人乘用车产品名称。Progressive Commercial、Progressive Motorcycle、Progressive RV、Progressive Boat等则是由代理人和直销渠道销售的非私人乘用车产品的名称。如此性质的变更并非我们在Drive名称推向市场后不久就预料到的，但随着我们对礼宾式理赔服务及Progressive品牌其他方面日益重视，我们希望所有客户都能联想到Progressive，并让我们的代理人为他们的客户提供更多购买Progressive的有力理由。

The images in this report are those of real customers, reinforcing that a marketing culture for us starts with respect for the customer and an increased appreciation of the relevance of our product and what works and what doesn’t.  

本报告中的图像均为真实客户的照片，这进一步证明了我们的营销文化始于对客户的尊重，以及对产品相关性及其有效性与否的不断加深的认识。

It’s about you. And it’s about time.SM is our new advertising tag line, but it’s much more than that; it’s a positioning we will challenge ourselves to live up to.  

这关乎你，也关乎时机。SM是我们的新广告标语，但远不止于此；这是我们将不断自我挑战以兑现的定位。

Our work around reaffirming and challenging our brand promise to consumers includes ensuring that all our internal pricing and customer experience actions are consistent with the brand. Predictably, we have opportunities to improve. Pleasantly, we confirmed that we offer distinctive benefits that are truly valued by consumers, and greater opportunity to ensure we present our full story. With the assistance of new advertising and creative resources, we expect to advance quickly on closing identified gaps.  

我们在重申和挑战对消费者的品牌承诺方面所做的工作，包括确保所有内部定价及客户体验举措与品牌保持一致。可以预见，我们仍有改进的空间。令人欣慰的是，我们确认了自己提供的独特优势确实得到了消费者的重视，同时也有更多机会确保我们能完整地讲述我们的故事。在新广告和创意资源的协助下，我们预计将迅速弥合已识别的差距。

Retention   I have reported on retention activities and their importance for some time, and we have had some successes at improving internal processes and eliminating what last year I called “friendly fire.” That said, we have yet to make substantial progress in moving our retention measures and now realize additional root cause issues exist.  

客户留存   我一直在报告客户留存活动及其重要性，我们在改善内部流程和消除去年我所称的“内耗”方面已取得了一些成功。但话虽如此，我们在推动客户留存措施方面尚未取得实质性进展，现在也认识到还存在其他根本性问题。

To quantify how we are doing on customer focus and retention efforts, we rolled out a companywide deployment of a “Net Promoter Score” in 2006. Underlying this concept is our belief that the strength of response to a single question, “How likely is it that you would recommend insurance from Progressive to a friend or colleague?,” can provide substantial amounts of information about those consumers who identify themselves as promoters, detractors or simply indifferent. A referral, or willingness to refer, speaks volumes about an individual’s attitude toward the company. When further sliced and diced to every possible consumer grouping, and correlated with the multitude of customer experiences we provide, this knowledge trumps the array of inconsistent and often annoying consumer surveys that preceded it. Moreover, it has created a companywide customer measure that has quickly taken on the importance of other key cultural imperatives. We no longer debate the academic pros and cons of internal and external survey data. Rather, we are committed to maximizing the benefits from this singular approach. From what we have seen so far, this is more than an interesting cosmetic measure; this is something that contributes to a marketing culture.  

为了量化我们在客户关注和留存方面的工作，我们于2006年在全公司范围内部署了“净推荐值”系统。该概念的基础是我们相信，对“您有多大可能将Progressive保险推荐给朋友或同事？”这一单一问题的反应强度，可以提供大量关于那些自我归类为推荐者、贬低者或中立者的消费者信息。一次推荐或推荐意愿足以说明一个人对公司的态度。当这些数据被细分到各种消费者群体，并与我们提供的大量客户体验相结合时，这种知识远胜于此前那些零散且常令人恼火的消费者调查。此外，这一系统已经建立起了全公司的客户衡量标准，并迅速获得了其他关键企业文化指标的重要性。我们不再辩论内部与外部调查数据的学术优劣，而是致力于最大化这一单一方法所带来的好处。就目前所见，这不仅仅是一个有趣的表面措施，而是真正有助于构建营销文化的举措。

It is not an unfair characterization to suggest that Progressive’s culture and business practices, in part, reflect our beginnings and history as an acquirer of new customers with relatively short tenure. Transforming our focus to build on that acquisition culture and more effectively blend it with the necessary changes to retain customers for more of their insurable lives is proving to be more than just a subtle change. By our best estimates, Progressive has acquired more new customers per year than any auto insurer in recent years. Marketing to our existing customers, done well by many of our competitors, is an area of exponential internal attention, which in combination with our acquisition skill, provides for very exciting growth potential.  

认为Progressive的企业文化和经营实践在一定程度上反映了我们作为短期客户获取者的起源和历史，这种描述并不为过。将我们的重点从单纯的客户获取转变为在此基础上更有效地融合必要的变革，以便在客户的保险生命周期中实现更长久的留存，这不仅仅是一种细微的改变。据我们最佳估计，Progressive每年获取的新客户数量超过了近年任何一家汽车保险公司。针对现有客户的营销——这是许多竞争对手都做得很好的领域——正受到内部极大的关注，加上我们在客户获取方面的能力，展现出非常令人兴奋的增长潜力。

We believe we get many benefits by being a pure-play in auto insurance and have no plans to deviate from that course, but we are also aware of consumer needs for other products and the retention differences that come as a result of having multiple relationships with the same customer. During the year, we introduced a Progressive-underwritten Personal Umbrella product in our Agency Business and entered into a joint marketing relationship with Homesite Insurance Group for Agency and Direct business customers interested in a homeowners policy. The economic contribution of these ventures to date is far too small for comment, but both represent additional efforts to strengthen our ability to meet long-term customer needs.  

我们相信，作为一家专注于汽车保险的公司，我们可以获得许多优势，并且没有偏离这一方向的计划，但我们也意识到消费者对其他产品的需求，以及因与同一客户建立多重关系而带来的留存差异。在这一年中，我们在代理业务中推出了Progressive承保的个人综合险产品，并与Homesite保险集团就对代理及直销客户提供房主保险建立了联合营销关系。到目前为止，这些业务的经济贡献还微不足道，但它们都代表着我们为增强满足长期客户需求能力而采取的额外努力。

Our Gainshare measure, highlighted last year as our way to calibrate the business gain made in any calendar year, for 2007 will reflect our internal emphasis on retention and the customer. The general construct remains the same, but two important tuning changes have been made. Growth, and our stated goal to profitably grow as fast as possible, will be calibrated for Gainshare in terms of number of policies rather than in just dollar terms—a simple change intended to reinforce the importance of every customer interaction. We will also begin to disaggregate new and renewal policy populations and focus on the growth of each, with a weighting between the two reflective of the importance of the cultural shift toward increased retention of current customers. The loss of a current customer replaced with a new customer, while a numerical offset, is not a brand or economic offset we are happy with.  

我们的收益共享指标在去年已被强调为衡量任何一个日历年度业务收益的方式，对于2007年，这一指标将反映我们内部对客户留存的重视。总体结构保持不变，但做了两处重要的调整：一是增长以及我们所宣称的以盈利方式尽快增长的目标，将以保单数量而不仅仅是金额来校准收益共享——这一简单变更旨在强化每一次客户互动的重要性；二是我们将开始将新保单和续保保单群体分离开来，并分别关注它们的增长，其权重将反映向提高现有客户留存转变的文化变革的重要性。用新客户替代现有客户，虽然在数字上可以抵消，但这并不能弥补品牌或经济上的损失，这是我们所不满意的。

In about the last 20-some years, Progressive has doubled in size five times—each doubling more challenging than the last. During 2006, we blueprinted the plan for our next doubling incorporating many of the issues touched on above. While we are cognizant of our size, market conditions and the strength of competition, we are confident a Progressive of twice our current size can be a very real outcome with quality execution on our challenges.  

在过去大约20多年中，Progressive的规模曾翻了一番五次——每一次翻番都比上一次更具挑战性。2006年，我们制定了下一次规模翻番的蓝图，其中融入了上述许多问题。虽然我们清楚地认识到自身规模、市场状况以及竞争的激烈程度，但我们相信，只要高质量地执行我们的战略挑战，一个规模是当前两倍的Progressive完全有可能实现。

INVESTMENT AND CAPITAL MANAGEMENT  

投资与资本管理

Our investment portfolio made a greater contribution to our results this year with a total return of 7.4%, up considerably from the 4.0% produced in 2005. Investment income was up a healthy 21% for the year. Our common stock portfolio generated a return of 16.3%, largely tracking the general market. We continued to maintain a high-quality, relatively short-duration fixed-income portfolio. As the market price for risk declined during the year, we further reduced our exposure, ending the year with a weighted average credit quality of AA+, up from AA at the end of 2005. Fixed-income returns were strong on an absolute basis at 5.9% and very strong for the level of risk assumed.  

我们的投资组合今年对业绩的贡献更大，总回报率为7.4%，远高于2005年的4.0%。当年投资收益健康增长了21%。我们的普通股投资组合回报率为16.3%，大体与整体市场保持一致。我们继续保持高质量、相对短期限的固定收益组合。随着当年市场对风险定价的下降，我们进一步降低了风险敞口，年末加权平均信用评级达到AA+，较2005年底的AA有所提升。固定收益回报率在绝对值上为5.9%，在承担的风险水平上也非常出色。

Early in the year, shareholders approved an authorization to increase the number of shares outstanding and the Board of Directors subsequently approved a 4:1 stock split, which was effective in May. Based on our long-standing and continuing position on capital management—to repurchase shares when our capital balances, view of the future and the stock’s price make it attractive—we repurchased 39.1 million shares during the year, or a little over 6% of the outstanding balance at the start of the year. The average repurchase price was just under $25, on a split-adjusted basis.  

年初，股东批准增加流通股数量的授权，随后董事会批准了4:1的股票拆分，并于5月生效。基于我们长期以来对资本管理的立场——当我们的资本余额、对未来的预期以及股票价格具有吸引力时进行回购——我们在当年回购了3910万股，约占年初流通股总数的6%以上。经拆分调整后的平均回购价格略低于25美元。

We ended the year in a very strong capital position, with no constraints on any business opportunities, and a debt-to-total capital ratio below 15%. Our capital strategy preference is to maximize operating leverage (i.e., ratio of net premiums written to statutory surplus), while maintaining relatively low financial leverage, and we continue to expend considerable effort to assess capital needs under a variety of operating and external contingencies. We believe we have opportunities to extend our operating leverage and will continue to manage our capital to that objective.  

我们以非常强劲的资本状况结束了当年，没有任何业务机会上的限制，债务与总资本比率低于15%。我们的资本战略倾向于最大化经营杠杆（即净保费与法定盈余的比率），同时保持相对较低的财务杠杆，并持续投入大量精力评估在各种经营和外部突发情况下的资本需求。我们相信有机会进一步扩大经营杠杆，并将继续按照这一目标管理我们的资本。

As part of our capital planning process, we announced last year that we would introduce a variable annual dividend based on our Gainshare factor. During 2006, we published the year-to-date Gainshare factor in our monthly reporting to provide shareholders some familiarity with the measure and its relative volatility. We closed the year with a factor of 1.18.  

作为资本规划过程的一部分，我们去年宣布将推出基于收益共享系数的可变年度股息。在2006年，我们在每月报告中公布了年初至今的收益共享系数，以便股东熟悉这一指标及其相对波动性。年末，我们的系数定格在1.18。

The Board of Directors has established that the 2007 variable dividend will be based on 20% of after-tax underwriting profit multiplied by the companywide Gainshare factor for 2007 and paid in early February 2008. Based on similar parameters and the 1.18 factor of 2006, if the dividend policy had been in effect for the year, the dividend would have been about $.39 per share. We will continue to publish the year-to-date Gainshare factor and full details of underwriting performance rather than provide any guidance on dividend expectations.  

董事会已确定，2007年的可变股息将基于税后承保利润的20%乘以2007年全公司的收益共享系数，并于2008年2月初支付。按照类似的参数和2006年的1.18系数计算，如果该股息政策在当年生效，股息将约为每股0.39美元。我们将继续公布年初至今的收益共享系数以及承保业绩的全部细节，而不提供任何关于股息预期的指导。

LOOKING FORWARD  

展望未来

Forward-looking statements and earnings guidance are not something anyone would associate with Progressive and we think for good reason. However, this letter to all shareholders serves as a good forum to tell our story as we see it—the results, the opportunities and, most importantly, the organization’s sense of optimism for the future.  

前瞻性声明和盈利指引并非人们通常会与Progressive联系在一起，我们认为这是有充分理由的。然而，这封致所有股东的信为我们讲述自己的故事提供了一个良好的平台——无论是业绩、机遇，还是最重要的，对未来的乐观情绪。

We are continuously motivated by our aspiration of becoming Consumers’ #1 Choice for Auto Insurance throughout their insurable lives. While our growth in 2006 did not match our aspirations, the positive introspection that has resulted at all levels is exactly the attitude that is expected. Our Core Value of Excellence—continuously doing better than we have done before—is both demanding and a challenge that Progressive people love to embrace.  

我们始终受到“成为消费者终生首选汽车保险”的愿景激励。尽管我们2006年的增长未能达到预期，但各个层面产生的积极内省正是我们所期望的态度。我们的核心价值——卓越，即不断超越以往的表现——既苛刻又充满挑战，而Progressive的员工乐于迎接这一挑战。

We tend to celebrate our successes quickly and then move on to our opportunities. As summarized in this report, we have several opportunity areas with tremendous upside potential. We enter 2007 with some exciting changes, an emphasis on capitalizing on claims strategies that have been developed over the past several years, a renewed focus on marketing and brand development, and an increased commitment to achieve meaningful progress toward the cultural shift necessary to make longer tenure for our customers possible and desirable.  

我们通常会迅速庆祝我们的成功，然后转向新的机遇。正如本报告所总结的那样，我们在多个领域拥有巨大的上行潜力。我们以一些令人振奋的变化迎接2007年，着重于利用过去几年发展起来的理赔策略，重新关注营销和品牌建设，并加大力度推动实现能够使客户获得更长保险期所必需的文化转变。

Everything we have achieved is a result of the efforts of the nearly 28,000 Progressive people whom we sincerely thank for our business results and for continuing to make Progressive an environment where people enjoy working hard and are motivated to do their best work as well as an environment others want to join.  

我们所取得的一切成就，都归功于近28,000名Progressive员工的努力，对此我们衷心感谢他们为我们的业务成果所做出的贡献，以及不断将Progressive打造成为一个人们乐于努力工作、激励大家发挥最佳水平、并吸引他人加入的环境。

Equally important is our appreciation for the customers we are privileged to serve, the agents and brokers who choose to represent us and shareholders who support what we are doing.  

同样重要的是，我们对有幸服务的客户、选择代表我们的代理人和经纪人以及支持我们工作的股东，表示衷心的感谢。