Letter to Shareholders  

致股东信

In naming Progressive, “Progressive,” those who went before this writer left an indelible message of expectations and the role to which we aspire in the industry. Surveys being what they are inform, if not calibrate, but we were delighted by one such survey in 2010 that indexed Progressive higher than all others as - the company most positively changing how auto insurance is done.  

在命名为 Progressive（进步）的过程中，“Progressive” 一词传递出前人留下的难以磨灭的期望和我们在行业中所追求的角色。调查虽然仅起到提供信息而非校准的作用，但我们十分高兴在2010年的一项调查中，Progressive 的评分高于所有其他公司，被评为——最积极改变汽车保险运作方式的公司。

Surveys don’t pay the bills, but often serve as a valuable qualitative read on the company’s brand and future potential. Our performance in 2010 will, however, pay the bills and more.  

调查不会支付账单，但往往能提供关于公司品牌和未来潜力的宝贵定性见解。然而，我们2010年的业绩不仅能支付账单，还远超预期。

We ended the year with net premiums written of around $14.5 billion, up some 3.4% from 2009, and net income of $1 billion, comparable to 2009 performance. What distinguishes 2010 performance for me is the addition of over 750,000 new policyholders and by implication well over a million new customers. Our 92.4 combined ratio from underwriting operations, in tandem with a 7.8% total return on investments, contributed to a very strong capital position. We were delighted to share this performance with shareholders in multiple ways not the least of which was a $1 extraordinary dividend late in the year and a further $0.40 variable dividend reflecting our internal measure of annual performance - Gainshare.  

我们以大约145亿美元的净保费收入结束了这一年，比2009年增长了约3.4%，净收入达到10亿美元，与2009年的表现相当。对我而言，2010年业绩的亮点在于新增了超过750,000个保单持有人，隐含着超过一百万的新客户。我们的承保业务组合比率为92.4，加上7.8%的总投资回报，共同促成了非常强劲的资本状况。我们非常高兴通过多种方式与股东分享这一业绩，其中包括年底发放的1美元特别股息以及反映我们内部年度业绩衡量标准——盈利分成——的额外0.40美元可变股息。

If the decade ending 2010 were a football game, it would be a story of two distinct halves. The first characterized by several years of the industry regaining profitability through rate increases, leading to significant industrywide growth in written premium. Progressive posted growth rates more often than not in the strong double digits zone for this half. As well documented frequency declines emerged and industry rate levels proved to be more than adequate, a six-year period of industry profitability followed. Best efforts interpreting history would suggest that two consecutive profitable years was the previous high water mark. Growth in written premium inevitably slowed, producing a slightly lagged, but matching, period of industrywide written premium declines. Progressive frustratingly posted low single digit growth numbers above and below zero for the same period. While gas prices, driving behavior, Internet adoption, media spending, and the economic crisis at a minimum would be required to fully chronicle the decade, there is little doubt the classic nature of the insurance cycle, with unique wavelength and amplitude to extend the analogy, has played a significant role. The closing years of the decade appear to be the approximate time frame during which industrywide profitability will once again be moderated and sustained industry premium declines will turn positive.  

如果以足球比赛来形容截至2010年的这十年，那将是一场由两个截然不同的半场构成的比赛。第一半场以行业通过提价重获盈利为特征，带来了保费收入的显著行业整体增长。在这一时期，Progressive 的增长率大多保持在两位数的高位。随着记录在案的赔付频率下降和行业费率水平证明绰绰有余，随后出现了六年的行业盈利期。通过历史解读可以看出，连续两年盈利曾是此前的最高标志。保费收入的增长不可避免地放缓，导致了一个略有滞后但相匹配的行业整体保费收入下降期。在同一时期，Progressive 恼人地仅录得个位数的微弱正增长或负增长。虽然完整记录这十年至少需要涵盖油价、驾驶行为、互联网普及、媒体支出以及经济危机，但毫无疑问，保险周期的经典特性——以独特的频率和幅度（类比而言）——发挥了重要作用。十年末期似乎正是行业整体盈利将再次趋稳、持续的保费下降将转为正增长的大致时间范围。

With that as a back drop, it is helpful to review Progressive’s evolution as a company during the same period and, more importantly, our positioning for whatever emerges over the next decade.  

以此为背景，有必要回顾 Progressive 在这一期间作为公司的演变，更重要的是，我们为未来十年可能出现的局面所做的定位。

Underwriting Results  

承保业绩

Our commitment to a profitability target of a 96 combined ratio served well during the decade and at no time did we fail to meet or exceed our targets - a result we view with some pride. The period has seen an emergence of our Direct business as an industry leader and a significant contributor to our growth and profitability, joining our important and now growing Agency operations. With that emergence has come greater recognition for the margin contribution effects in any given calendar year from the timing dynamics unique to Direct distribution, prompting me last year at this time to write, “However, under certain high growth new business scenarios, we would be happy to see the reported monthly and calendar-year combined ratios go above 96 for our Direct business, as long as our new and renewal business consistently meets predefined targets that ensure a lifetime result at or below 96,” and, by implication, without compromise to the attainment of an aggregate companywide 96 in any calendar year. In fact, we were happy to experience high growth scenarios in our Direct business in 2010, notably in the first two quarters, driven by strong double digit new application growth. On three occasions during the year, our monthly combined ratio for the Direct business exceeded 96 but, as designed, our new and renewal cohorts met the necessary targets to ensure both lifetime profitability and aggregate calendar-year performance goals. The Direct business finished the year with a 94.6 calendar combined ratio, about two points higher on an accident-year basis — a strong performance given significant new business.  

我们致力于实现96的综合比例盈利目标，这一目标在这十年中表现良好，我们从未未能达到或超过目标——这一结果让我们颇感自豪。在此期间，我们的直销业务崭露头角，成为行业领袖，并显著推动了我们的增长和盈利，与我们日益壮大的代理业务一道。直销渠道的出现使人们更加认识到，在任何一个日历年度内，由直销渠道独特的时间动态所带来的利润率贡献效应，这促使我在去年此时写道：“然而，在某些高增长新业务情景下，只要我们的新业务和续保业务始终达到预定目标，从而确保终生结果不超过96，我们乐见直销业务的月度和日历年度综合比例超过96，”隐含地表明，这不会影响达到公司整体每个日历年度96的目标。事实上，我们很高兴在2010年直销业务中经历了高增长情景，尤其是在头两个季度，由于新申请数量以两位数的强劲增长推动。在一年中的三次时段内，我们直销业务的月度综合比例超过了96，但按设计，新业务和续保群体达到了确保终生盈利和整体日历年度业绩目标的必要标准。直销业务以94.6的日历综合比例结束了这一年，在事故年度基础上高出约两个百分点——在新业务显著的情况下，这是一个强劲的表现。

The momentum building in the second half of 2009 in our Agency auto production carried into 2010 and we saw attractive growth in new applications and policies in force for the entire year. Similar to Direct, demand was stronger on a year-over-year basis earlier in the year, but Agency, more so than Direct, maintained a reasonably consistent pattern throughout the year. Our policies in force for Agency had fallen from our all-time highs and, while not happy for that experience, we are now back to levels closely approximating our best, with reason to believe in continued momentum and new highs in 2011.  

2009年下半年在我们的代理汽车业务中形成的势头延续到了2010年，我们看到全年新申请和在保单数量均实现了可喜的增长。与直销业务类似，今年初的需求同比更强，但代理业务比直销业务在全年保持了较为稳定的模式。代理业务在保单数量曾从历史最高水平有所下降，虽然对此我们并不满意，但目前我们已恢复到接近最佳水平，并有理由相信2011年将继续保持势头并创下新高。

We ended the year with both channels and all Personal Lines products meeting targets both on the GAAP presentation of numbers and our more preferred accident year presentation. We started the year with significant problems in several large states and personal injury protection (PIP) coverage was one common denominator. Efforts throughout the year to manage these states, involving actions and rate level changes to position us for future profitable growth, were generally effective, with profitability first among priorities. We now have reason to be more optimistic for the growth outlook in these states for 2011.  

我们以两大渠道和所有个人保险产品均在美国通用会计准则（GAAP）和我们更偏好的事故年度表现上均达到目标结束了这一年。我们年初在几个大州遇到了重大问题，其中个人伤害保护（PIP）保障是一个共同问题。全年对这些州的管理工作——包括采取措施和调整费率以为未来盈利增长奠定基础——总体上是有效的，盈利始终被置于首位。如今，我们有理由对这些州2011年的增长前景更加乐观。

In Personal Lines, 4 out of 51 regulatory jurisdictions in which we operate failed to make a profit. One, a recent market entry that in retrospect was mispriced and the recovery while slow is very much on track; one in which extreme and unusual weather is an identifiable condition; one where our management of the PIP coverage is still a work in progress; and a fourth just missed. Several others, while profitable, did not meet their planned targets. I offer this perspective to reinforce the point that we manage the business at the local level with talented product managers focused on the issues and conditions of their state, a view which is not always visible from the aggregate reporting offered in our financial presentations.  

在个人保险业务中，我们经营的51个监管辖区中有4个未能盈利。其中一个是最近进入市场的州，事后看来定价失误，虽然复苏进程缓慢，但基本按计划进行；另一个州因极端和异常天气情况而明显受到影响；还有一个州我们的 PIP 保障管理仍在进行中；第四个州则仅差一点盈利。虽然其他一些州虽然盈利，但未达到预期目标。我提出这一观点，旨在强调我们在地方层面上进行业务管理，依靠专注于本州问题和状况的优秀产品经理，这一观点在我们财务报告的汇总数据中并不总能显现。

Our Commercial Auto business, largely distributed by our agents, had about as good of a year as we could expect. Our year-over-year reduction in active policies was a very small negative by year-end, down somewhat more on a multi-year basis, reflecting general economic and employment conditions. Profitability was strong at an 87.5 combined ratio and meaningful signs of growth were emerging during the year. We will need large and important states to reflect greater growth going forward to regain lost ground in this segment. Similar to our work in all products, our Commercial Auto group has been actively redesigning its product offering to reflect our best knowledge and experience and has done a great deal of work, in a period of less robust growth, to position for the future.  

我们的商业汽车业务主要通过代理分销，表现大致达到了预期。到年末，我们活跃保单的同比减少仅略微为负，多年趋势中略有下降，这反映了总体经济和就业状况。盈利能力强劲，综合比例为87.5，并且年内出现了显著的增长迹象。未来，我们需要大型且重要的州实现更大幅度的增长，以弥补这一细分领域的失地。与我们在所有产品中的工作类似，我们的商业汽车组一直在积极重新设计其产品供应，以反映我们最佳的知识和经验，并在增长较为疲软的时期做了大量工作，为未来奠定基础.

A Destination Company  

目的地公司

One way I have described Progressive today is having evolved from a “Transaction” company to a “Destination” company. As a transaction company, we were and remain very focused on the essential transactions of insurance — presenting rates to our agents with the best possible technology; settling claims in a fast, fair, and efficient manner; providing 24/7 service on all manner of issues; changing rates to reflect current market conditions quickly; and the many other critical functions of our business.  

我今天描述 Progressive 的一种方式是，Progressive 已经从一家“交易型”公司演变为一家“目的地”公司。作为一家交易型公司，我们过去及现在都非常注重保险的基本交易——利用最先进的技术向代理展示费率；以迅速、公正和高效的方式处理理赔；在所有问题上提供全天候24小时服务；迅速调整费率以反映当前市场状况；以及我们业务中许多其他关键功能。

What has evolved now is the distinct overlay of a customer-care culture, making our actions even more consistent with a company our customers can expect to be their long-term auto insurance destination. While few service companies would have differing objectives, we feel very good about our intensity and progress. Industry surveys would support our feelings, but most importantly customer policy life expectancy continues to lengthen and our 2010 actions, including our improved loyalty programs and commitment to rate stability at renewal, continued our push, with both channels increasing policy life expectancies during the year to all-time highs. Our effective use of Net Promoter® Scores as an internal barometer of our progress leaves open considerable room for improvement and will remain a top priority.  

现在发展起来的是一种独特的客户关怀文化，使我们的行动更加符合客户期望的长期汽车保险目的地。虽然很少有服务公司有不同的目标，但我们对自己的专注和进步非常满意。行业调查支持我们的感受，但最重要的是客户保单的生命周期不断延长，而我们2010年的举措，包括改进的忠诚计划和对续保费率稳定性的承诺，推动了这一进程，两个渠道在年内都将保单寿命延长至历史最高水平。我们对净推荐值（Net Promoter® Scores）的有效使用，作为内部进步的晴雨表，也表明仍有很大的改进空间，并将继续作为重点。

Increased rigor around customer segments in recent years highlighted the need to provide our customers with other products they need over time and may have had to leave Progressive to acquire. Offering a homeowners product underwritten by others, but packaged with our auto product, has met a consumer need and resulted in very attractive retention characteristics. We ended the year closing in on a million customers with multiple products purchased from Progressive, with a significant and growing percentage of those bundling homeowners’ or renters’ with their auto coverage.  

近年来对客户细分更加严格的要求凸显了为客户提供他们随着时间需要而可能不得不离开 Progressive 去获得的其他产品的必要性。提供由他人承保但与我们的汽车产品捆绑销售的房主保险产品，满足了消费者的需求，并产生了非常有吸引力的客户保留特性。我们以接近一百万名从 Progressive 购买多种产品的客户结束了这一年，其中捆绑房主或租客保险与汽车保险的比例显著且不断增长。

Creating the environment where customers want to stay involves some bolder strategic moves, such as offering homeowners and concierge claims service, but more so a relentless focus on the thousands of details in product design, customer service, claims delivery, and every other aspect of our business. Progressive today is a different company and, in the broadest of terms, the asset value of the company, represented by numbers of customers and future months and years of life expectancy, is a different product by far than at the start of the decade.  

创造让客户愿意留下的环境涉及一些更大胆的战略举措，例如提供房主和礼宾理赔服务，更重要的是对产品设计、客户服务、理赔交付以及我们业务各个方面中数以千计细节的不懈关注。如今的 Progressive 是一家不同的公司，从最广泛的角度看，公司所代表的资产价值——以客户数量和未来几个月、几年的寿命来衡量——与十年初相比是截然不同的产品。

Brand Strategy  

品牌策略

Our success and ability to communicate our brand has built consistently during the decade and 2010 was perhaps one of our best years. With the same caveat regarding survey results as in my opening, we are encouraged that consumer awareness of our brand continues to grow and the substance of their awareness is consistent with our intentions.  

在这十年中，我们在品牌传播方面的成功和能力持续建立，而2010年可能是我们最好的一年之一。与我开头所述关于调查结果的保留意见相同，我们感到鼓舞的是消费者对我们品牌的认知持续增长，并且他们认知的实质内容与我们的初衷一致。

In addition to greater recognition of the company that changes how insurance is done, we are perceived as a company that “Has unique and distinctive features” and “Makes the entire auto insurance process easier.” These are more than acceptable consumer characterizations. Our now quite recognizable employee spokesperson “Flo” continued to be the central figure in our advertising for 2010, and while no one taste satisfies all, “Flo’s” appeal is very real. With nearly 2.5 million Facebook fans, she has no comparables in the insurance industry and one needs to look to the Boston Celtics or The Daily Show for a closer match.  

除了对改变保险运作方式的公司的更高认可外，我们还被视为一家“具有独特而显著特点”的公司，并且“使整个汽车保险流程更为便捷。”这些都是消费者对我们的高度认可。我们现在颇为知名的员工代言人“Flo”在2010年的广告中继续扮演核心角色，尽管没有一种风格能满足所有人，但“Flo”的吸引力确实存在。她在 Facebook 上拥有近250万粉丝，在保险行业中无人能及，想找到相似的例子，人们不得不去看波士顿凯尔特人队或《每日秀》以求相近。

The insurance advertising space was very active in 2010, as we expect it will be going forward, and making our brand truly distinctive requires continuous product innovation and compelling messaging. Last year I covered in greater detail the effectiveness of “Flo” not just in creating demand, but as the model of brand ambassadorship she exhibits and the stylized, but accurate, portrayal of our more than 24,000 employees. Expect to see much more of “Flo” in 2011.  

2010年的保险广告领域非常活跃，正如我们预期的那样，未来也会如此，使我们的品牌真正独特需要不断的产品创新和引人注目的信息传递。去年，我详细介绍了“Flo”的效果，不仅在于创造需求，更在于她作为品牌大使所展示的典范以及她对我们超过24,000名员工的风格化但准确的呈现。预计2011年将看到更多“Flo”的身影。

Complementing the point of view expressed through “Flo” and the superstore will be the point of view of a satisfied customer as an advocate or promoter. This character feels licensed to comment on other people’s shopping experiences based on his knowledge and experience with Progressive. The character, we call the “Messenger,” will help tell the Progressive story from a different point of view while incorporating meaningful points of branding with our established campaign. Developed and tested in late 2010, we have high hopes this identifiable character will provide added weight to our “Flo” of customers (I know).  

与“Flo”和超级商店所表达的观点相辅相成的，是一位满意客户作为倡导者或推广者的视角。这个角色凭借他对 Progressive 的了解和经验，认为自己有资格评论他人的购物体验。我们称这个角色为“传递者”，他将从不同的角度讲述 Progressive 的故事，同时在我们既定的广告活动中融入有意义的品牌元素。该角色在2010年末开发并测试，我们高度期望这个具有识别性的角色能够为我们的“Flo”客户群体增加分量（我知道）。

The rate of change in the diversity of media available to all of us as consumers has been, and will continue to be, game changing in creative development and media placement disciplines. While our skills and talents have been building to match the environment and importance, we did not yet have the leadership in this area that would ensure performance standards comparable to our other essential disciplines. I’m happy to report that I think this has changed with Jeff Charney accepting my invitation to join Progressive as our Chief Marketing Officer late in 2010.  

对于我们这些消费者而言，可用媒体多样性的变化速度一直是，并将继续在创意开发和媒体投放领域带来颠覆性变化。尽管我们的技能和才华正不断提升以适应环境和重要性，但我们在这一领域尚未拥有能确保与其他关键领域相媲美的业绩标准的领导力。很高兴地报告，我认为这一状况已随着 Jeff Charney 在2010年末接受我的邀请加入 Progressive 担任首席营销官而改变。

Product Development  

产品开发

Product development is at the core of Progressive, whether continuously refining our product at the macro level or for state-specific adaptation. 2010 saw the culmination of multi-year efforts to take the best features of our product designs independently derived for the Agency and Direct channels and integrate them into one design with maximum flexibility to serve both channels. Consistency of product, not necessarily price, regardless of whether presented by an agent or directly by Progressive, is a meaningful advantage along with the attendant reduction in maintenance costs and talent dilution associated with multiple systems.  

产品开发是 Progressive 的核心，无论是在宏观层面不断改进我们的产品，还是进行州级特定的调整。2010年见证了多年努力的成果，即将我们为代理和直销渠道独立开发的产品设计中最优的特性整合到一个设计中，从而以最大的灵活性服务于两个渠道。产品的一致性（而不一定是价格），无论是由代理人还是由 Progressive 直接呈现，都是一个重要优势，同时还减少了多系统带来的维护成本和人才分散。

More dramatic product features and packaging, like Name Your Price® (NYP), provides consumers wishing to shop online a very real opportunity to leverage technology and explore the options available to them. Agents have always helped customers reach smart decisions on price and coverage. We believe NYP contributed very nicely to our growth in 2010, but equally as important is consumer realization and appreciation that Progressive is a company willing to challenge and change how things are done.  

更具戏剧性的产品特性和包装，例如“自定价格®”（Name Your Price®，简称 NYP），为希望在线购物的消费者提供了真正利用技术并探索可选方案的机会。代理人一直帮助客户在价格和保障上做出明智决策。我们认为 NYP 在2010年为我们的增长作出了很大贡献，但同样重要的是让消费者认识到并欣赏 Progressive 是一家愿意挑战并改变现有做法的公司。

These types of product presentations are only possible with great consumer facing technology. Progressive has been recognized as the industry leading Web site and received 16 out of 17 Keynote awards. However, consumer facing technology now is a much expanded category with smart phones and tablets providing form factors we intend to exploit to extend our product presentation and drive profitable growth. As NYP leveraged technology in one way, the potential for devices that are on your person, often with a camera and location software, is a whole new and really exciting dimension for all aspects of our business. Expect more next year.  

只有借助出色的面向消费者的技术，这类产品展示才成为可能。Progressive 已被公认为行业领先的网站，并获得了17项 Keynote 大奖中的 16 项。然而，面向消费者的技术如今是一个大大扩展的类别，智能手机和平板电脑提供了我们打算利用的形式因素，以扩展我们的产品展示并推动盈利增长。正如 NYP 在某种程度上利用了技术，随身设备——通常配备相机和定位软件——为我们业务的各个方面带来了全新且令人兴奋的可能性。预计明年会有更多惊喜。

Ironically, usage-based insurance, a concept correctly associated with Progressive, has been around for most of the last decade, but the technology to track in-vehicle data and the insurance product development were for the most part experimental. The later years of the decade saw rapid improvement in the technology and the cumulative knowledge we had acquired was leading to a better product and increasingly improved commercialization of the idea. 2010, however, was a breakthrough year. We dramatically repackaged the concept, making the consumer experience easier, incorporated usage as a product feature within our mainstream product offering, simplified the marketing message, and reduced the costs, all, we believe, while maintaining the rating effectiveness we know and understand. Early rollout and transitions from prior versions suggest that we are very much on-track with the redesign objectives. Our repackaged product known as SnapshotSM, reflecting the “snapshot” of driving behavior we seek in the monitoring period, is available through participating agents and for online consumers. It’s hard not to be excited by the potential for this concept and our redesign. Our 2011 plans call for increasing the number of states in which we offer the product, further improving the customer experience, and active marketing.  

具有讽刺意味的是，以使用量为基础的保险，这一与 Progressive 紧密相关的概念，在过去十年中大部分时间都存在，但用于跟踪车内数据的技术和保险产品开发大多处于实验阶段。十年后期技术迅速改进，加上我们累积的知识不断提升，催生了更优的产品以及这一理念商业化程度的不断提高。然而，2010年是一个突破性的一年。我们对这一概念进行了大幅度的重新包装，使消费者体验更为简便，将使用量作为主流产品特性纳入其中，简化了营销信息并降低了成本，我们相信这一切都在保持我们所了解和理解的定价效果的前提下完成。早期的推广和从先前版本的过渡表明，我们在重新设计目标上正稳步前进。我们重新包装的产品，称为 SnapshotSM，反映了我们在监控期间所寻求的驾驶行为“快照”，通过参与代理和在线渠道向消费者提供。这一概念及我们的重新设计所带来的潜力令人难以不感到兴奋。我们2011年的计划包括增加提供该产品的州数量，进一步改善客户体验，并积极开展营销。

Operational Skills  

运营技能

Marketing, product design, and distribution, perhaps for some are the more visible elements of Progressive, but our success is directly dependent on our operational skills and the talented individuals who execute, lead, and design the processes we follow. It is here the customer care culture really has been operationalized. Claims resolution, our call centers operations, and our technology operations all had very good years in 2010.  

营销、产品设计和分销或许是 Progressive 较为显眼的元素，但我们的成功直接依赖于我们的运营技能以及那些执行、领导和设计我们所遵循流程的才华横溢的人员。正是在这里，客户关怀文化真正得以落实。2010年，理赔处理、呼叫中心运营和技术运营均表现出色。

Claims resolution continues to produce quality results and operating costs that in no small way reflect in our aggregate performance. Our numerous call center operations continue to seek ways to increase their focus on customer retention and agent satisfaction through superior, yet efficient, service. This commitment is now leading us to begin using technology that will help provide insightful diagnostics of a phone call, not just statistics, including consumer interaction styles and points of consumer stress during the call and by so doing provide for greater feedback on the emotional adaption required of us to provide the best possible future service. And while there are moments we can’t live with it, we know we can’t live without it. Technology makes all that has been featured in this letter possible and getting it right and getting it fast and getting it cost effective is a never-ending challenge.  

理赔处理持续带来高质量的成果，其运营成本在很大程度上反映在我们的整体业绩中。我们众多的呼叫中心持续寻求通过卓越且高效的服务来提升对客户保留和代理满意度的关注。如今，这一承诺促使我们开始使用技术，不仅提供电话呼叫的统计数据，更提供有洞察力的诊断，包括消费者互动方式和电话中消费者压力点，从而为我们提供更好的反馈，以适应情感上的调整，以提供尽可能最佳的未来服务。虽然有时我们无法忍受这种状态，但我们知道没有它我们将难以生存。技术使本信中所提到的一切成为可能，而将其正确、高效且具成本效益地实现是一项永无止境的挑战.

Continuously innovating and changing things that work because there is a better way is difficult and demanding and requires a special mindset and motivation. Relentlessly improving our products and services, providing reasons for customers to stay and others to join is never ending. That is what we do. The decade has seen a lot of changes and 2010 was as big a year as any. I like the changes and the options we’ve created. I like the greater breadth of customers that we have been able to attract as a destination insurer. I like the customer culture that our leaders have created.  

不断创新和改变那些有效的事物，因为总有更好的方式，这既困难又苛求，并且需要特殊的心态和动力。不断改进我们的产品和服务，提供客户留下和吸引他人加入的理由，这是永无止境的。这正是我们所做的。这十年见证了许多变化，而2010年则是一个非常重要的年份。我喜欢这些变化和我们所创造的选择。我喜欢作为一家目的地保险公司，我们能够吸引到更广泛的客户。我喜欢我们领导者所创造的客户文化。

Investments and Capital  

投资与资本

Investment and capital management, happily, had a year further removed from the hot seat imposed by prior years. The challenge became the return of underleveraged capital and effective asset management in a low interest rate world. We positioned our portfolio near the low end of our duration guidelines, with preference for credit and reinvestment risk over interest rate risk. Implicit in this positioning was an asymmetric view on the future directions of interest rates – more likely up than down from such low levels. While we cannot be sure of the timing on this positioning, we are sure that we will continue to invest in a manner that recognizes that our ability to underwrite all the insurance available to us is the “protected asset.”  

幸运的是，投资和资本管理这一领域在这一年远离了前几年所面临的压力。挑战变成了在低利率环境下，如何实现未充分杠杆化资本的回报和有效的资产管理。我们将投资组合定位于我们久期指南的低端，更偏好信用和再投资风险，而非利率风险。这一定位隐含着对未来利率走势的非对称看法——在如此低的水平上，更可能上升而非下降。虽然我们无法确定这一定位的时机，但我们确信将继续以一种认识到我们承保所有可用保险能力是“受保护资产”的方式进行投资.

Signs late in the year suggest this positioning had merit. We were comfortable with the composition of our portfolio during 2010, but, as with everything we do, there is always room for review and improvement. Our decision to increase our corporate bond, asset-backed, and commercial mortgage-backed portfolios helped us earn a strong return. Portfolio results contributed $765.7 million to comprehensive income in 2010. Municipal budget woes, and by extension municipal bonds, became front page news during the second half of 2010. We began selling some of our municipal bond exposure during 2009 and continued into the first quarter 2010 when valuations were high. Later in the year, when valuations were lower and, to us, at more attractive levels, we increased our holdings. We continue to diligently manage our credit exposure to all of our investments, including municipal bond positions. Adding to our common equity position during the year produced good results and, with hindsight, could have been larger. We finished the year with 24% of our invested assets in what we call Group I, which includes common stocks.  

年末的一些迹象表明这种定位是有价值的。我们对2010年投资组合的构成感到满意，但正如我们所做的一切，总有改进和审查的空间。我们决定增加企业债券、资产支持证券和商业抵押贷款支持证券的投资组合，这帮助我们获得了可观的回报。2010年，投资组合的业绩为全面收益贡献了7.657亿美元。市政预算困境，以及由此延伸的市政债券问题，在2010年下半年成为头条新闻。我们在2009年开始出售部分市政债券敞口，并在2010年第一季度高估值时继续出售。随后，在估值较低且对我们而言更具吸引力的时候，我们增加了持仓。我们继续认真管理所有投资的信用风险敞口，包括市政债券头寸。年内增加我们的普通股头寸取得了良好效果，事后看来，规模本可以更大。我们以24%的投资资产处于我们所谓的集团 I（包括普通股）结束了这一年.

Our capital position was very strong throughout the year and by mid-year we were actively considering a range of actions, consistent with our long-standing philosophy of returning underleveraged capital to shareholders when appropriate to do so, in addition to the 13.3 million shares we repurchased during the year. Our first notable capital action, which took place last summer, was the retirement of $223 million of our outstanding hybrid debt issue, which we were able to do paying 95 cents on the dollar. Prior to that transaction, we were required to gain consent from the holders of our 2032 senior debt issue to terminate a replacement capital covenant. We were successful in our solicitation to eliminate that requirement. This combined transaction was a very effective use of underleveraged capital and creates a significant increase in the freedom we will have in future years regarding the remaining hybrid debt. Our debt-to-total capital ratio closed the year at 24.5%, well below our 30% guideline, preserving significant debt capacity should we need or choose to use it.  

我们的资本状况在全年都非常强劲，到年中时，我们正在积极考虑采取一系列行动，这与我们长期以来的理念是一致的，即在适当的时候将杠杆率不足的资本返还给股东，此外，我们还在年内回购了 1330 万股股票。去年夏天，我们采取的第一项值得注意的资本行动是清偿了 2.23 亿美元的未偿还混合债务，我们以每美元 95 美分的价格清偿了这笔债务。在这项交易之前，我们需要征得 2032 年优先债务持有人的同意，以终止替代资本契约。我们在征求意见时成功地取消了这一要求。这项合并交易非常有效地利用了杠杆率较低的资本，并大大增加了我们未来几年在剩余混合债务方面的自由度。本年度结束时，我们的债务与总资本比率为 24.5%，远低于 30% 的准则，这为我们在需要或选择使用债务时保留了大量的债务能力。

We spend significant time and effort modeling our capital requirements and sizing what we call layers of capital to satisfy regulatory requirements and the contingencies for all manner of risks we can envision in our business. Based on this modeling, we formulate our minimum capital requirement and, by definition, a sizing of any underleveraged capital. Based on this work, and after considering all options, the Board of Directors approved a $1 extraordinary dividend, which was paid in December.  

我们花费大量时间和精力对资本需求进行建模，并确定我们所称的资本层次，以满足监管要求以及我们业务中可以预见的各种风险的应急需求。基于这一建模，我们制定了最低资本要求，并定义了任何未充分杠杆化资本的规模。基于这项工作，并在考虑所有选项后，董事会批准了1美元的特别股息，该股息于12月支付.

While the timing was similar, our declaration of an annual variable dividend is quite distinct from the extraordinary dividend. Our performance as a company is reflected in our Gainshare score, a measure of some complexity that reduces to a score between 0 and 2. Our final score for 2010 was 1.50, a welcome rebound from prior years and I believe a very fair reflection of the year. Companywide performance compensation has the Gainshare score as a base as does our shareholder variable dividend. The 1.50 score, after-tax underwriting income of $704.3 million, and the 25% target factor established by the Board, combined for a variable dividend of $0.3987 per share paid in February 2011 for 2010 performance.  

虽然时间相近，但我们宣布的年度可变股息与特别股息有着截然不同的性质。公司的业绩通过我们的盈利分成评分反映出来，这一指标具有一定复杂性，最终化为0到2之间的分数。我们2010年的最终得分为1.50，这是较前几年令人欣喜的反弹，我认为这非常公正地反映了当年的情况。公司范围内的绩效补偿以及股东可变股息均以盈利分成评分为基础。1.50的评分、7.043亿美元的税后承保收入以及董事会确定的25%目标因子，共同构成了2010年业绩在2011年2月支付的每股0.3987美元的可变股息.

We remain very confident that the variable dividend is an appropriate part of our capital management arsenal, and now have several years that have tested its formulation. With minor changes to reflect a constraint that comprehensive income exceed underwriting income and an increase last year in the percentage of underwriting income, the design has achieved exactly what we had hoped. For 2011, the Board of Directors has changed the target factor, which is the percentage of underwriting income available to be distributed by the formula, to 33-1/3%. It is more likely than not that this target factor will remain at this level for some time.  

我们依然非常有信心，可变股息是我们资本管理武器库中的合适组成部分，并且经过了几年的考验。通过对设计进行微调，以反映综合收入超过承保收入的约束，以及去年承保收入百分比的增加，该设计正好达到了我们的预期。对于2011年，董事会已将目标因子——即公式可分配承保收入的百分比——调整为33又1/3%。这一目标因子很可能在一段时间内保持在这一水平.

Our People and Culture  

我们的员工与文化

Addressing groups within Progressive, I often simplify our business to two critical components to make a point — “We don’t have many characteristics of other businesses – the tangible product features of consumer electronics, the intellectual property of the pharmaceutical business, the production lines of the manufacturing segment, …” we have “People” and “Reputation.” Much of this letter and report, as is appropriate and the custom, focuses on this year’s economic and tactical accomplishments along with an accounting-based presentation. It doesn’t fit well in that format, but it is simply not a complete report without due recognition to all the people who make it possible and upon whom our reputation rests. Our people and our culture are what make us special.  

在向 Progressive 内部各团体讲话时，我常将我们的业务简化为两个关键组成部分以说明问题——“我们不像其他业务那样拥有许多特性——消费电子产品的有形产品特性、制药业务的知识产权、制造业的生产线，……”，我们拥有的是“人”和“声誉”。这封信和报告的大部分内容，按照惯例，侧重于今年的经济和战术成就以及基于会计的数据呈现。虽然这种格式不完全适用，但如果不适当表彰所有使这一切成为可能且我们的声誉赖以建立的人士，这份报告就不算完整。我们的员工和文化正是使我们与众不同的所在.

My close each year thus is appropriately the most constant part of this letter for it is the most public forum I have to thank the people of Progressive, our agents and brokers, customers and shareholders for their support.  

因此，我每年的结束语都是这封信中最恒定的部分，因为这是我向 Progressive 的员工、我们的代理和经纪人、客户以及股东表达感谢的最公开的场合.

To all the people who make Progressive, “Progressive” – Thank you.  

感谢所有成就 Progressive “Progressive” 的人——谢谢你们.