2008-02-27 Glenn M. Renwick’s Letters to PGR Shareholders
Refer To：《PGR-Form 10-K - Annual report-2007》。
LETTER TO SHAREHOLDERS
致股东信
2007, by Progressive growth standards, was slower going than any of us would like.
按照Progressive的增长标准，2007年的发展速度比我们任何人希望的都要缓慢。
While growth is appropriately the headline story for the year, it is important to reiterate our commitment to profitable growth as the only growth we find acceptable. This is a commitment which almost certainly will take on more relevance in 2008 as margins more closely approximate our 96 combined ratio goal than at any time in the past several years. Profitability for 2007 exceeded our goal, with a combined ratio of 92.6 contributing to net income just short of $1.2 billion.
尽管增长无疑是今年的头条新闻，但我们必须重申，我们只认可盈利性增长。鉴于利润率在2008年将更接近我们96%的综合比率目标，这一承诺几乎可以肯定会变得更加重要。2007年的盈利能力超出了我们的目标，综合比率为92.6，净收入接近12亿美元。
In comparison with prior years, profitability and premium growth are both down and they directly reflect the pricing strategy we enacted in mid-2006 when we began reducing prices to grow policies in force as fast as possible. Our transition from wide margins to current conditions did not produce the aggregate revenue growth we had hoped for.
与往年相比，盈利能力和保费增长均有所下降，这直接反映了我们在2006年中期实施的定价策略——为了尽快增加在保保单数量而降低价格。我们从高利润率转变为当前状况，并未实现我们所期望的总体收入增长。
We are confident that, long-term, we are best served providing product for our customers at our target profitability levels and, consistent with our culture, attempting to grow our customer base as fast as possible.
我们坚信，从长远来看，我们最好的服务方式是以目标盈利水平为客户提供产品，并依照我们的文化，尽可能迅速地扩大客户基础。
Growth
增长
Using the measure of growth we care about most—number of policies in force — we ended the year with more customers than any prior year in each major product line (Personal Auto, Special Lines and Commercial Auto). On the other hand, more traditional measures of growth—written and earned premium—fell short of 2006 by 3% and 2%, respectively, with rate decreases not fully offset by the increase in policies. We estimate that for 2007, written premiums in the private passenger auto industry will remain relatively flat.
以我们最关心的增长指标——在保单数量——衡量，我们在每个主要产品线（个人汽车、特殊险种和商用汽车）上均创下了比以往更多的客户。然而，传统增长指标——投保保费和已赚保费——分别比2006年低3%和2%，而保费下降未能完全被保单数量的增长所抵消。我们估计2007年，私人乘用车行业的投保保费将保持相对平稳。
Personal auto’s policy growth of 2% for the year reflects a decline in our agency-produced business of 1% and a gain of 7% in our directly acquired customers. Our preference would be for healthy growth in all business areas. However, customers acquired directly through the Internet remain our fastest personal auto growth segment; we believe this reflects, in part, changing consumers’ preferences.
个人汽车业务的保单增长率为2%，这反映出我们代理渠道业务下降了1%，而直接获取客户增长了7%。我们希望所有业务领域都能实现健康增长。然而，通过互联网直接获取的客户仍然是我们个人汽车增长最快的部分；我们认为这部分反映了消费者偏好的变化。
In light of our rate changes, the Agency business results were a disappointment for the year.
鉴于我们的费率调整，代理业务的业绩今年令人失望。
缺少彻底舍弃代理的底气和勇气，底气是过去所有经历的结果。
The reality is that the standard of pricing sophistication among our most important competitors has improved, as has the technology used to present rates and make the sale. More often, our Agency rates are being presented to consumers alongside competitors’.
事实上，我们最主要竞争对手在定价精细化方面的标准已有所提高，展示费率和促成销售的技术也有所改进。我们的代理费率往往与竞争对手的费率同时展示给消费者。
This means that it is imperative that we redouble our efforts to lead in the application of rating and segmentation skills, while maintaining our low-cost position for non-claims expenses and excellent claims resolution quality.
这意味着我们必须加倍努力，领先应用定价和细分技能，同时保持低理赔外费用和出色的理赔处理质量。
Our Direct business had more favorable outcomes from our rate reductions. The percentage of shoppers who became customers after seeking a quote increased, as did the expected tenure of current customers. As we better understand this channel and the consumers who favor it, our activities fall into two primary areas of opportunity:
我们的直销业务从降费率中获得了更有利的成果。寻求报价后转化为客户的比例增加，现有客户的预期留存时间也延长。随着我们对这一渠道及其青睐者的了解加深，我们的活动主要集中在两个机会领域：
One is to maximize the likelihood of having the customer buy. We can do this by providing a clear presentation of the options available, without overwhelming them, and better meeting their needs for related products, such as homeowners insurance, even if they are not “manufactured” by Progressive.
一方面是最大化促使客户购买的可能性。我们可以通过清晰展示可供选择的方案（不过分信息轰炸），并更好地满足他们对相关产品（例如房主保险，即便这些产品不是由Progressive设计）的需求来实现这一目标。
The second is to increase the overall number of shoppers seeking a Progressive quote. Our brand development efforts, while producing many encouraging signs in 2007, have not yet put Progressive consistently at the top-of-mind levels for consumers that we believe will be necessary to meet our growth aspirations.
另一方面是增加寻求Progressive报价的消费者总数。尽管我们的品牌开发工作在2007年显示出许多令人鼓舞的迹象，但尚未使Progressive在消费者心中始终占据必要的领先地位，而这正是我们实现增长目标所必需的。
Policy growth in Special Lines and Commercial Auto was 8% and 7%, respectively. While we would take more growth in a heartbeat, each of these lines has products with market-leading share positions, making growth just that much harder to come by. It is also abundantly clear that these two successful parts of our business face increasingly intense competition. This forces us to challenge ourselves continuously to ensure our leadership in product design and exceptional service delivery.
特殊险种和商用汽车业务的保单增长分别为8%和7%。尽管我们非常希望获得更多增长，但这两条业务线的产品均占据市场领先地位，因此增长变得更加艰难。同时，很明显，这两个成功领域面临着日益激烈的竞争，这迫使我们不断自我挑战，以确保在产品设计和卓越服务交付方面的领先地位.
I believe that Progressive, and many of our competitors, have now almost fully adjusted pricing to reflect the favorable accident frequency of the past several years and rates and losses now appear to be coming more in balance.
我相信，Progressive以及许多竞争对手如今几乎已完全调整了价格，以反映过去几年中有利的事故发生频率，现在费率与赔付之间看起来更加平衡。
We have openly communicated that we expect to see a higher likelihood of increasing rates to match inflation in our claims costs, primarily driven by bodily injury severities. This is in contrast to what has been a period of about a year and a half of widespread reductions in insurance rates. If this holds true, we will be operating in what I would call more normal conditions.
我们公开表示，预计费率上涨的可能性会提高，以使其与索赔成本中的通胀相匹配，主要是由于人身伤害严重程度所驱动。这与过去约一年半内保险费率普遍下降的情况形成鲜明对比。如果这种情况持续，我们将进入我所称的更正常的市场环境。
Under these conditions, the challenge is to price accurately and react quickly to market trends, something that has traditionally been a strength for us. We enter this market with the added benefit of the investments we’ve made in Claims over the past several years that are now producing high-quality claims resolutions, better customer experiences and impressive productivity advances.
在这种情况下，挑战在于准确定价并迅速应对市场趋势，这历来是我们的强项。凭借过去几年在理赔方面的投资成果——现已带来高质量的理赔解决、更好的客户体验和显著的生产力提升——我们以额外优势进入这一市场。
Competitive Dynamics
竞争态势
Few would challenge that the competitive dynamics of our industry are changing. As a result, the skills we require of ourselves and the experiences our customers expect of us are evolving, in many cases, rapidly.
几乎无人会质疑我们行业的竞争态势正在改变。因此，我们所要求具备的技能以及客户对我们的体验在许多情况下都在迅速演变。
The challenges we face each day force us to think about “What’s the next move?” It is this constant questioning—how do we do things better tomorrow than we did today—that makes Progressive, Progressive. The art in this year’s annual report represents 25 artists’ responses to the same challenge.
我们每天面临的挑战迫使我们思考“下一步该怎么办？”正是这种不断的质疑——如何让明天比今天做得更好——造就了Progressive的独特风格。本年度年报中的艺术作品展示了25位艺术家对这一挑战的回应。
没有终极的答案。
2007 was a year with notable and important progress on many fronts. I’ll highlight four areas of competitive focus for Progressive that reflect part of our response to the changing dynamics.
2007年在多个领域取得了显著且重要的进展。我将重点介绍Progressive在应对变化态势中所聚焦的四个竞争重点领域。
1. Continued focus on customer satisfaction and loyalty
1. 持续关注客户满意度与忠诚度
In this letter last year, I reported on the companywide deployment of a “Net Promoter® Score” (NPS), which can provide substantial insight about those customers who identify themselves as promoters, detractors, or simply indifferent based on their willingness to refer us to others.
在去年的这封信中，我曾报告过公司范围内推出的“净推荐值”（NPS），该指标能深入洞察那些根据是否愿意推荐我们而自我归类为推荐者、贬低者或中立者的客户。
Introducing such a measure has given us a sharper read on how our customers perceive us. A referral, or willingness to refer, speaks volumes about an individual’s attitude toward us. How we treat our customers is completely within our control, which drives what they think, feel and say about our service.
引入这一指标使我们更清楚地了解客户对我们的看法。客户是否愿意推荐我们，能充分反映他们对我们的态度。我们如何对待客户完全掌握在自己手中，这直接影响了客户对我们服务的看法、感受和评价。
A particularly pleasing 2007 result is the measurable progress we made in advancing our Net Promoter Score. Overall scores from customers in most of our product lines increased in 2007, with big gains in our auto offerings sold through agents and direct.
2007年一个令人满意的成果是我们的净推荐值显著提升。大多数产品线的客户总体评分在2007年都有所上升，尤其是通过代理和直销渠道销售的汽车产品取得了大幅提升。
Our claims service, including our concierge level of service, continues to be one of the most valued customer experiences we offer and has high measured satisfaction.
我们的理赔服务，包括高端礼宾服务，一直是我们提供的最受客户青睐的体验之一，并获得了高度满意的评价。
In addition to macro measures, more targeted views of NPS have become an excellent diagnostic tool for many aspects of the customer experience and I’m thrilled with how enthusiastically this measure has been embraced throughout the company and the value it helps drive.
除了总体指标之外，更细分的NPS视角已成为诊断客户体验多个方面的优秀工具，我对全公司如此热情采纳这一指标以及其所带来的价值感到非常欣喜。
Our culture is willingly expanding to embrace the subtleties of really great customer experiences. This began several years ago with the highly differentiated and, we think, superior concierge level of claims service. More recently, we are focusing on more effective and consistent customer communication, with a voice that accurately reflects who we are and how we think our customers would best understand what we have to say.
我们的企业文化正在积极拓展，以包容真正卓越客户体验的细微之处。这一切始于几年前，我们推出了极具差异化且我们认为优于竞争对手的高端礼宾理赔服务。最近，我们正致力于更有效、更一致的客户沟通，力求用一种准确反映我们身份以及客户如何最好理解我们所表达内容的方式来传递信息。
The ultimate reward for our efforts is measured by customer actions. The consistently increasing gains in customer tenure we have experienced throughout the year in both our Agency and Direct businesses, and across product lines, is our best and most meaningful outcome. So far, I like what I see and believe our actions and customer behavior changes are related, even if our math is less precise on exactly how.
我们努力的最终回报体现在客户的行为上。我们在代理和直销业务以及各产品线中所体验到的客户留存时间持续增长，是最宝贵且最有意义的成果。迄今为止，我对所见颇为满意，并相信我们的举措与客户行为的变化密切相关，尽管我们尚未精确量化其关系。
Perhaps confirming that we are heading in the right direction, the J.D. Power National Auto Insurance Study reported this year that we had climbed in their rankings of customer service. In fact, over the past five years, we made the largest gain in customer satisfaction in our industry grouping. Full disclosure requires me to acknowledge we started at a low point, and are now more in the middle of the pack. While we can’t change history, acceptance of that reported perception and corresponding action will shape our future.
也许是对我们正走在正确道路上的佐证，J.D. Power全国汽车保险研究今年报告称我们在客户服务排名上有所上升。事实上，在过去五年中，我们在行业内获得了最大的客户满意度提升。需要坦白的是，我们起点较低，如今仅处于中游水平。虽然历史无法改变，但接受这一反馈及相应的改进措施将塑造我们的未来。
2. The explosive influence of brand building and advertising
2. 品牌建设与广告的爆发性影响
Perhaps influenced by the last five years of industry underwriting profit on the heels of many years of underwriting losses, one of the most visible signs of the changing competitive dynamic is the focus among industry leaders on brand development and consumer communication.
或许受过去五年在经历多年承保亏损后取得的行业承保利润的影响，行业领军者最明显的一个变化迹象就是对品牌发展和消费者沟通的重视。
In 2007, we made several significant “foundation” decisions regarding our brand and advertising efforts. We completed our announced move to a single Progressive brand and consolidated our two brand groups into a centralized marketing group. We also re-established our Immediate Response Vehicle as our icon and made necessary, and extensive, progress on our visual identity. These efforts will allow for greater consistency in future branding efforts than we have had in recent years and each will be further developed and built upon in 2008.
2007年，我们在品牌和广告工作上做出了几项重要的“基础性”决策。我们完成了向单一Progressive品牌的转变，并将两个品牌集团整合为一个集中的营销团队。我们还重新确立了“即时响应车辆”作为我们的标志，并在视觉识别系统上取得了必要且广泛的进展。这些努力将使未来的品牌建设比近年来更加统一，并将在2008年进一步发展和完善。
During the year, we strengthened our marketing team and got more in sync with our ad agency. We have challenged our teams to produce campaigns that have thematic continuity, make real breakthroughs in generating interest and have a strong call to action. Early work on new campaigns and ideas looks encouraging for building our momentum on this front.
在这一年中，我们强化了营销团队，并与广告代理机构建立了更紧密的协同关系。我们挑战团队推出主题连贯、能够真正引起关注并具备强烈号召力的广告活动。新广告和创意项目的初步成果显示，这将有助于我们在这一领域积聚更大的动力。
Our introduction in the latter part of the year of Pet Injury Coverage — recognizing that for many customers, pets are often a valued passenger in the vehicle — is another first from Progressive. For the target group, this was a fresh and appealing message and reaction was surprisingly positive. This type of activity can be very beneficial to our awareness efforts and is something we expect to continue.
我们在年末推出的宠物伤害保险——认识到对许多客户而言，宠物常常是车辆中珍贵的“乘客”——是Progressive的另一项创新。对于目标群体来说，这是一个新颖且富有吸引力的信息，并获得了令人惊喜的积极反应。这类活动对提升品牌知名度非常有利，并且我们预计将会持续开展。
In January of 2008, we announced a naming rights and sponsorship deal with the Cleveland Indians Major League Baseball team. Progressive Field is the new name for the ballpark and Progressive is the exclusive auto insurer of the team. This relationship reallocates about 1% of our annual media spend and is intended to generate greater exposure for Progressive reaching an estimated 120 million baseball fans each year.
2008年1月，我们宣布与克利夫兰印第安人职业棒球队签订冠名权及赞助协议。新球场被命名为Progressive Field，而Progressive成为该队的独家汽车保险提供商。此合作将重新分配大约1%的年度媒体支出，旨在使Progressive获得更多曝光，每年触及约1.2亿棒球迷。
3. The increasing role of technology
3. 技术作用日益增强
We are observing the reach of the Internet well beyond the initial quote and sale to now facilitating more post-sale transactions.
我们发现互联网的作用已远超最初的报价和销售，正推动更多售后交易。
Both our Agency and Direct offerings are using e-signature and e-fulfillment as an efficient means to complete the sales transaction. We have put considerable effort into making this effective and valued.
我们的代理和直销产品均采用电子签名和电子履约作为完成销售交易的高效方式。我们为使这一方式既有效又受欢迎投入了大量精力。
Beyond the sale, customers are increasingly using online service to make changes in their policy, check policy status and make payments. We are actively working toward increasing the number of customers who accept paperless as their preferred means of interacting with us. A trend of decreasing calls per policy and increasing clicks per policy is very acceptable, allowing our representatives and agents to focus on more complex customer needs.
售后方面，客户越来越多地使用在线服务来更改保单、查询保单状态和进行支付。我们正在积极努力，使更多客户选择无纸化作为与我们互动的首选方式。每份保单电话咨询减少、在线点击增加的趋势非常令人满意，这使我们的代表和代理能够集中精力处理更复杂的客户需求。
Recognizing the role the Internet plays in every aspect of the insurance transaction for consumers and the essential interface it provides between us and our agents is a critical priority. Leadership in this area is our objective and, while not a specific measure, we were happy to be recognized as “Best Insurance Web Site” by the Web Marketing Association and for receiving the #1 rank in auto insurance Web sites from Keynote Competitive Research, a position we’ve maintained in 11 out of 12 ranking periods since 2000.
认识到互联网在消费者整个保险交易中所扮演的角色以及它在我们与代理之间所提供的重要接口，这是我们的关键优先事项。我们目标在这一领域保持领先，尽管没有具体指标，但我们很高兴被网络营销协会评为“最佳保险网站”，并连续11个周期中（自2000年以来12个评比周期中）获得Keynote竞争研究颁发的汽车保险网站第一名。
As I write this letter, we have our first customers using new technology that supplies us with vehicle activity data wirelessly and routinely, supporting our unique usage-based insurance offering. We have been experimenting with vehicle-provided data for some time and using that new and relevant data to provide customers with rates that best reflect their actual driving behaviors. The challenge of changing consumers’ comfort level with this form of insurance rating is not something we underestimate, but we believe the concept of more customized rating can become an interesting and powerful part of who we are, building on our long-time association with innovation in the industry. The new technology better matches the concept and makes for a very interesting outlook beginning in 2008.
在撰写此信时，我们已有首批客户采用新技术，该技术可无线、定期地向我们提供车辆活动数据，从而支持我们独特的基于使用情况的保险产品。我们已经试验利用车辆提供的数据，并借此为客户提供更能反映其实际驾驶行为的费率。尽管我们并不低估改变消费者对这种保险定价模式舒适度的挑战，但我们相信更为个性化的定价理念能成为我们的一大亮点，延续我们在行业创新中的长期传统。这项新技术更好地契合了这一理念，为2008年的前景增添了诸多看点。
这些做法真正体现作用是在20年后。
4. The importance of low cost and speed to market
4. 低成本和快速上市的重要性
Falling average premium per policy during the course of 2007 deleveraged some of the gains we had made in our non-claims expense ratio and we ended the year with a 21.1 expense ratio. Although it is up from the prior year’s 20.2, it is still notably one of the better ratios in the industry.
2007年期间，每份保单的平均保费下降削弱了我们在非理赔费用比率方面取得的一些进步，年末我们的费用比率为21.1。尽管较上一年的20.2有所上升，但仍然是业内表现较好的比率之一。
While this is only a part of the total cost and value proposition we offer consumers, we view low cost as a necessary condition to being extremely competitive. To that end, in 2007, we reviewed our structure and made organizational changes designed to increase our ability to execute on key strategies, eliminate redundancies, lower our non-claims expense ratio and foster growth through more competitive pricing and improved customer retention.
虽然这只是我们向消费者提供的总成本和价值主张的一部分，但我们认为低成本是保持极高竞争力的必要条件。为此，在2007年，我们审查了自身结构，并做出了组织调整，旨在提高执行关键策略的能力，消除冗余，降低非理赔费用比率，并通过更具竞争力的定价和改善客户留存来促进增长。
Our technology efforts are a critical part of everything we do and we are appropriately proud of them. In late 2007, and continuing in 2008, additional effort is focused on getting the maximum value for the organization by ensuring greater speed to market of our most important initiatives. Based on what we see, we are confident there are more gains to be made.
我们的技术努力是我们一切工作的关键部分，我们对此感到自豪。2007年末，并延续至2008年，我们将进一步努力，通过确保最重要举措的更快上市速度，为公司争取最大价值。根据我们的观察，我们有信心还能取得更多进步。
Our collective focus on every area of cost management, combined with our retention initiatives, gives me confidence that, over time, we can expect levels of non-claims expense better than we have achieved to date.
我们在成本管理各个领域的共同努力，加上客户留存计划，让我确信，随着时间推移，我们的非理赔费用水平将超越迄今为止的表现。
Capital Management and Investing
资本管理与投资
2007 was an active year in restructuring our capital position. Consistent with 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 to do so — we continued to repurchase shares in the first half of the year.
2007年是我们调整资本结构的重要一年。按照我们长期以来在资本管理方面的立场——当我们的资本余额、对未来的展望和股票价格具备吸引力时回购股份——我们在上半年继续回购股票。
After a number of years of strong profitability, however, we had accumulated capital in excess of our immediate business needs and believed a more comprehensive review of capitalization was warranted.
然而，在经历了多年的强劲盈利后，我们积累的资本已超过当前业务需求，因此认为有必要对资本结构进行更全面的审查。
In June, we announced a recapitalization plan, the key elements of which were: a return of capital to shareholders via a one-time extraordinary cash dividend of $2 per share; the issuance of $1 billion of hybrid debt securities; and, a reconfirmation of our intention to repurchase our shares in the open market and through a 10b5-1 plan, which extended the availability of our buying window. We were very happy with the execution of this plan, which resulted in the return of approximately $3 billion to shareholders in 2007 through dividend and repurchase activity.
6月，我们宣布了一项资本重组计划，其关键要素包括：通过一次性特别现金股息每股2美元向股东返还资本；发行10亿美元的混合债务证券；以及重申我们在公开市场及通过10b5-1计划回购股票的意图，从而延长了我们的回购窗口。我们对这一计划的执行非常满意，2007年通过分红和回购活动向股东返还了约30亿美元。
危机前缩减了大量资本，估计大部分还是回购，可以预判的行为。
We enter 2008 in a strong, well-balanced capital position, with reduced shareholder equity and an increased level of long-term debt. Our debt-to-total capital ratio of 30.6% was slightly over our published policy of maintaining debt-to-total capital below 30%. We expect the ratio to fluctuate somewhat, but our policy remains our benchmark.
我们以强劲、均衡的资本状况进入2008年，股东权益有所减少，但长期债务水平有所上升。我们的债务与总资本比率为30.6%，略高于我们保持低于30%这一政策。我们预计这一比率会有些波动，但这一政策仍然是我们的基准。
No quarterly dividends were paid in 2007, since this is the first year of the annual variable dividend documented in prior reports. This annual dividend was declared by the Board of Directors on December 14 using year-end results for after-tax underwriting income and the final Gainshare factor of .74. The dividend, paid on January 31, was 14.5 cents per share, compared to 2006 total dividends of 3.25 cents per share.
2007年没有支付季度股息，因为这是前期报告中首次记录的年度可变股息年份。董事会于12月14日根据年终税后承保收入和最终的收益共享系数0.74宣布了这一年度股息。该股息于1月31日支付，每股14.5美分，而2006年的总股息为每股3.25美分。
The Board has established a 20% target of after-tax underwriting income as the base to which the 2008 Gainshare factor will be applied for the 2008 calendar year dividend calculation. We anticipate no substantive change in the dividend format or calculation, but will add the pragmatic constraint that if our comprehensive income (which includes investment income and realized and unrealized gains and losses) is less than after-tax underwriting income, no dividend will be payable.
董事会已将税后承保收入的20%确定为基准，用以适用2008年的收益共享系数以计算2008日历年的股息。我们预计股息的形式或计算方法不会发生实质性变化，但会增加一个务实的限制条件：如果我们的综合收入（包括投资收益以及已实现和未实现的盈亏）低于税后承保收入，则将不支付股息。
The Gainshare calculation is recalibrated every year, but the structure generally remains similar. Last year, we introduced greater accountability for the new and renewal business components of growth in our Direct business. We are very comfortable with the calibration and approach and will extend that structure to all business units in 2008 consistent with our efforts to maximize retention of our customers.
收益共享计算每年都会重新校准，但总体结构大体保持不变。去年，我们在直销业务中针对新业务和续保部分的增长引入了更高的问责制。我们对这种校准及其方法非常满意，并将在2008年将这一结构扩展到所有业务单元，以配合我们最大化客户留存的努力。
If 2007 was a year of “adjustment” for auto insurance rates, it pales in comparison to the “adjustment” in the mortgage-backed investment markets. Our strategy of maintaining a high-quality investment portfolio served us well during the disruptions that emerged in the second half of the year. However, relying on bond ratings and largely avoiding direct exposure to sectors that performed poorly was not enough in 2007.
如果说2007年是汽车保险费率“调整”的一年，那么相比之下，抵押贷款支持证券投资市场的“调整”更为显著。我们维持高质量投资组合的策略在下半年出现的动荡中表现出色。然而，在2007年，仅依靠债券评级并在很大程度上避免直接暴露于表现不佳的行业还远远不够。
While our direct exposure to sub-prime related instruments was small (less than 2% of the portfolio at any point during the year), we do have exposure to many of the largest banks and financial institutions that have taken significant losses from their positions in similar holdings. We invest in the bonds and preferred stocks of these institutions. The market value of these investments has declined as the underlying credit quality of these institutions deteriorated and many needed to raise capital.
尽管我们对次贷相关工具的直接敞口很小（全年任何时候均低于投资组合的2%），但我们确实持有许多最大银行和金融机构的债券及优先股，这些机构在类似持仓上遭受了重大损失。随着这些机构的信用质量恶化、许多机构不得不筹集资金，这些投资的市值均有所下降。
We ended the year with net unrealized gains on the overall portfolio of $715.4 million, and a total return of 4.7% for the year.
我们以总投资组合未实现净收益7.154亿美元结束了本年度，总回报率为4.7%。
Reflecting the generally heightened interest of investors, we have increased our disclosure on individual asset classes in our annual reporting.
反映出投资者普遍增强的兴趣，我们在年度报告中对各类资产的披露有所增加。
Looking forward
展望未来
We are continuously motivated by our aspiration of becoming Consumers’ #1 Choice for Auto Insurance throughout their insurable lives.
我们始终受到“成为消费者终生首选汽车保险”的愿景激励。
Our opportunities are clear and exciting and include:
我们的机遇明确而令人振奋，主要包括：
•Building a stronger brand and communicating it well;
• 建立更强大的品牌并有效传播；
•Building on our retention gains and providing continuity of coverage throughout a customer’s lifetime;
• 利用客户留存率的提升，确保客户终身享有连续保障；
•Maintaining a focus on operating at a lower cost than competitors, while providing remarkable service;
• 坚持以低于竞争对手的成本运营，同时提供卓越服务；
•Creating more responsive product and service offerings for the consumers we currently do not reach; and, as always,
• 为当前未覆盖的消费者创造更迅速响应的产品和服务，同时，
•Continuing to be innovative in all we do.
• 在一切工作中不断保持创新。
In March of 2007, we celebrated 70 years in business. Many things have changed during that time, and our challenges and opportunities have evolved. The important constants are the contributions of Progressive people and the independent insurance agents who choose to represent us. Our achievements are a result of their efforts and we sincerely thank them.
2007年3月，我们庆祝了成立70周年。期间许多事物都发生了变化，我们面临的挑战和机遇也在不断演变。而不变的重要因素是Progressive员工及选择代表我们的独立保险代理人的贡献。我们的成就正是他们努力的结果，我们由衷地感谢他们。
Equally important are the customers we are privileged to serve and the shareholders who support what we are doing. Thank you.
同样重要的还有那些我们有幸服务的客户以及支持我们工作的股东。谢谢大家。
/s/ Glenn M. Renwick
Glenn M. Renwick
President and Chief Executive Officer
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