Letter to Shareholders  

致股东信

When late-season, named storms start with letters deep into the alphabet, there’s a good chance it’s been an eventful year for the auto insurance industry; and it was, with the trump card as the finale — Sandy.  

当晚季命名风暴以字母表后段的字母命名时，很可能预示着汽车保险业经历了一个多事之秋；事实也如此，最终的王牌是——桑迪。

Named storms capture headlines, but damage from hail, an exposed vehicle’s worst nightmare, and other wind, flood, and fire events were all at remarkable levels for 2012, and collectively our highest ever number of claims from catastrophes - quite a statement considering the trifecta of Rita, Wilma, and Katrina in 2005. These types of events are ever present reminders that serve to reinforce our raison d’être and the value we are uniquely positioned to provide our customers at such times. So often we find ourselves acting on behalf of our customers and their liability interests, but in these events, fault is rarely the issue, and we get to deal with our customers directly and devote our full attention to getting them back on a path to normalcy. During 2012, we responded to 28 separately declared catastrophes, asking close to 1,300 of our people to stop doing what they had otherwise planned, reassign their work, and immediately travel to the scene of the damage to help our customers alongside our core catastrophe response team. While most measures are relative, and matter most to those in direct management of the situation, to help the reader with an order of magnitude, it’s reasonable to suggest we dedicated close to half a million hours in 2012 helping our customers who experienced the unexpected.  

命名风暴吸引了头条新闻，但2012年冰雹（暴露车辆最怕的灾难）、以及其他风暴、洪水和火灾事件所造成的损失都达到了显著水平，加上灾难性事故索赔总数创下历史新高——考虑到2005年的丽塔、威尔玛和卡特里娜三连击，这一数字相当震撼。这类事件不断提醒我们，强化了我们的存在理由以及在这种时刻为客户提供独特价值的能力。我们经常代表客户及其责任利益行事，但在这些事件中，责任问题很少成为焦点，我们得以直接与客户打交道，全力帮助他们重回正常轨道。2012年，我们应对了28起单独宣布的灾难，要求近1300名员工停止原有计划，重新分配工作，并立即赶赴受损现场，与我们的核心灾难响应团队一起协助客户。尽管大多数衡量标准都是相对的，对直接管理情况的人最为重要，但为帮助读者理解数量级，我们可以合理地推测2012年我们共投入了近50万个小时来帮助经历意外的客户。

Often the logistics of response are challenging - gas, Internet, and hotels, among many things, just don’t work the way we have come to expect, but the gratitude of customers, often with many more issues yet to resolve, provides a sobering perspective. We resolved 94% of all our Sandy related claims before year end and will not be deep into 2013 before completion. Speed is essential and, balanced with good process and economic consideration, highly valued by customers, who once again rewarded us with extremely high Net Promoter® scores (NPS) post our catastrophe responses. This is our time to count and the satisfaction of customers is a clear indication of whether we’re meeting or exceeding their expectations and earning their intention to stay.  

响应的物流常常充满挑战——例如燃油、互联网和酒店等诸多因素常常不如我们预期般顺畅，但客户的感激之情（尽管他们还有许多问题未解决）给了我们一个清醒的视角。我们在年底前解决了94%的桑迪相关索赔，并且在2013年初就已基本完成。速度至关重要，同时在良好流程和经济考量之间取得平衡，这一点深受客户青睐，他们在灾难响应后再次给予我们极高的净推荐值（NPS）。这是我们彰显实力的时刻，而客户的满意度清楚地表明我们是否达到了或超越了他们的期望，并赢得了他们的留存意愿。

Performance is our consumer product; performing well while growing and meeting our economic objectives is our challenge. I reported last year that we straddled a new high of $15 billion with written premiums just over and earned just under. This year I can report both written and earned premiums cleared $16 billion. At a growth rate of 8%, our gain in written premiums did not reach the heights of the 2002-2004 period, but our 2012 growth in written premiums of $1.23 billion pleasingly topped all others. (Industry observers will note that CAGR for auto insurance for the last five years rounds to zero, while the prior five is closer to 5%*). Growth without requisite profitability in our business generally does not lead anywhere good and we had our work cut out for us in 2012 to meet or exceed our very clear profitability expectation of a 96 combined ratio or better, most notably in the closing months courtesy of our aforementioned friend Sandy, but we did so ending the year at a combined ratio of 95.6.  

业绩就是我们的消费产品；在实现增长和达到经济目标的同时表现出色是我们的挑战。去年我曾报告，我们在账面保费刚刚超过150亿美元而已赚略低于150亿美元时达到了一个新高。今年，我可以报告，账面保费和已赚保费均突破了160亿美元。以8%的增长率来看，我们在账面保费上的增幅虽然没有达到2002-2004年期间的高度，但2012年账面保费增长了12.3亿美元，令人欣喜地超越了其他所有时期。（业内观察人士会注意到，过去五年汽车保险的复合年增长率约为零，而前五年则接近5%*）。在我们的业务中，增长如果没有相应的盈利能力通常不会带来好结果，2012年我们面临着满足或超越我们明确的盈利预期——即96的综合比率或更好，尤其在年底受益于前述桑迪的影响，但我们最终以95.6的综合比率结束了这一年。

* Compound annual growth rate (CAGR) was computed using data from A.M. Best Company, Inc.  

* 复合年增长率（CAGR）是根据A.M. Best Company, Inc.的数据计算得出的。

Never becoming comfortable is a critical part of who we are, but if “the take home report card for the year” is growth of 8%, a 95.6 combined ratio, and a total return for the portfolio of 6.8%, we might be permitted a moment to say OK - not bad, and then get back at it with renewed enthusiasm.  

永不满足现状是我们的一项关键特质，但如果“一年期末的成绩单”显示8%的增长率、95.6的综合比率以及投资组合6.8%的总回报，我们或许可以稍作停顿，感叹“还不错”，然后以焕然一新的热情继续前行。

Underwriting profitability is the necessary condition to drive all else at Progressive. In 2012, our post tax underwriting profit was $461 million, less than last year, and also with less assistance from favorable prior year development, but clearly consistent with our self-imposed objectives. Our post tax recurring contribution primarily from investments, less interest expense, was a further $441 million, for a total net income of $902 million, or $1.48 per share. That said, notwithstanding some very impressive results on the investment front in 2012, some yet unrealized, the current investment climate is not one that favors strong interest-rate-based returns and a valid strategic question could be to challenge the expected ratio of income from underwriting versus investments, or more simply put: is our 96 combined ratio objective the optimal calibration at this time?  

承保盈利能力是推动Progressive其他一切的必要条件。2012年，我们的税后承保利润为4.61亿美元，较去年有所下降，并且得益于前一年有利的赔付发展较少，但这显然与我们自定的目标一致。扣除利息费用后，我们来自投资的税后经常性贡献进一步达到了4.41亿美元，使得总净收入达到9.02亿美元，或每股1.48美元。话虽如此，尽管2012年在投资方面取得了一些非常令人印象深刻的成果（其中一些尚未实现），当前的投资环境并不利于依赖利率的高回报，因此一个合理的战略问题可能是质疑承保收入与投资收入预期比例，或者更简单地说：我们的96综合比率目标在此时是否为最佳校准？

Our Business Model  

我们的商业模式

For us a 96 combined ratio is not a “solve for” variable in our business model equation, but rather a constant that provides direction to each and every product and marketing decision and a cultural tipping point that ensures zero ambiguity as to how to act in certain situations. Set at a level, we believe, creates a fair balance between attractive profitability and consumer competitiveness, it’s deeply ingrained and central to our culture, and for me a primary reason our underwriting performance has consistently matched or exceeded any in the industry.  

对于我们而言，96的综合比率不是我们商业模式方程中的一个“待求解”变量，而是一项常数，为每一个产品和营销决策提供方向，也是一种文化转折点，确保在某些情况下行动毫无模糊。我们相信，将其设定在这个水平上能在诱人的盈利能力与消费者竞争力之间创造出一种公平的平衡，这一理念已深植并成为我们文化的核心，对于我来说，这也是我们承保业绩始终能够与业内其他公司相匹配或超越的主要原因。

With clarity as to our business constant, we seek to maximize all other important variables and support with appropriate axioms:  

在明确了我们的业务常数后，我们力求最大化其他所有重要变量，并以适当的原则加以支持：

Grow as fast as we can subject to our ability to provide high-quality service. Our preferred measure of growth is in customers, best measured by policies in force. Other factors affect aggregate written premium growth, including rate level adjustments, geographic mix of policies, and policy-type distributions, but premium growth is a reasonable proxy and most generally used in market share determination. Market share moves more slowly than I might like, but over reasonable time periods ours has been impressive.  

在能够提供高质量服务的前提下，尽可能快地增长。我们首选的增长衡量标准是客户数量，最好以现有保单数量来衡量。其他因素也会影响账面保费的总体增长，包括费率水平调整、保单的地域构成和保单类型分布，但保费增长是一个合理的代理指标，也是市场份额确定中最常用的指标。市场份额的变化比我期望的要缓慢，但在合理的时间内我们的表现令人印象深刻。

Extend policy life expectancy. Our preference is for the flexibility of shorter policy periods, highlighting however, the importance of retaining customers at policy renewal. Our work is fully inclusive of all points throughout a customer’s tenure and is a never-ending focus, tailored for every customer segment. Our use of Net Promoter scoring provides for a much more dynamic, but highly correlated, measure of policy life expectancy and is an internally acceptable proxy for our ultimate goal of extended life expectancy. Necessary rate increases, many taken in 2012, work against improving either measure; whereas, extraordinary claims response serves to enhance both. Progress sometimes can feel like two steps forward and one step back, but that’s our challenge to accept. Becoming a “destination” insurance company for customers has been a major transformation in the last decade and much work remains, but equally much has been accomplished.  

延长保单寿命。我们倾向于较短保单期所带来的灵活性，但同时也强调在保单续约时保留客户的重要性。我们的工作涵盖客户整个服务期的各个环节，并且始终专注于此，为每个客户群体量身定制。我们采用的净推荐值评分为保单寿命提供了一个更为动态但高度相关的衡量标准，并且在内部被接受作为我们延长保单寿命终极目标的代理指标。必要的费率上调（许多发生在2012年）不利于改善这两个指标；而卓越的索赔响应则有助于两者的提升。进展有时会让人感觉两步向前、一后退，但这正是我们必须接受的挑战。成为客户“目的地”保险公司是过去十年一项重大转型，虽有许多工作仍待完成，但同样取得了大量成就。

The operations summaries included in this report for Personal Lines and Commercial Auto provide more commentary on our numerous activities to maximize these business drivers and Figure 1 provides them in tabular form for 2012 and over time.  

本报告中包含的个人险和商业车险的运营摘要，对我们为最大化这些业务驱动因素所进行的众多活动提供了更多评论，而图1以表格形式展示了2012年以来及历时的数据。

Clarity as to our objective means other elements of the business model must be appropriately designed to strongly support, but not necessarily amplify, the risk of maximizing all things at the same time. Our articulation of our most critical investment objective is a good example:  

明确我们的目标意味着商业模式的其他要素必须得到恰当设计，以强有力地支持，但不一定同时最大化所有事物的风险。我们对最关键投资目标的表述就是一个很好的例子：

Invest in a manner that does not constrain our ability to underwrite all the profitable insurance available to us at an efficient premiums-to-surplus leverage. We often refer to underwriting capacity as the protected asset and for us it is a clear determination of where the risk of leverage is best allocated. We have every reason to be proud of our investment performance, but relative comparisons often lack similar context or constraints on liquidity and risk.  

以一种不会限制我们以高效保费与盈余杠杆比例承保所有可获利保险的方式进行投资。我们经常将承保能力称为受保护的资产，对我们来说，这是明确确定杠杆风险最佳分配位置的重要依据。我们完全有理由为我们的投资表现感到自豪，但相对比较往往缺乏类似的背景或对流动性和风险的限制。

The importance of net income, earnings per share, and return on equity is never lost on us, but we view achieving strong, long-term performance of these measures as stemming from our consistent focus on the primary elements of our business model.  

净收入、每股收益和股本回报率的重要性我们始终铭记于心，但我们认为，这些指标的强劲、长期表现源于我们始终如一地专注于商业模式的主要要素。

A Snapshot of 2012  

2012年快照

The “closing speed” with which I characterized the end of 2011 in fact did carry over into 2012 and volume was strong in the early part of the year. Unseasonably warm weather in much of the country suppressed winter automobile claim frequency, while at the same time advanced the motorcycle riding (and accident) season. Concurrently, we started to see claim severity increase faster than recent history – a combination I labeled as “dangerous.” By mid-year we had our answer and results had shown that the frequency change was not sustained but severity increases were. Our underwriting results had slipped to a “disappointing” quarterly result of 97.6 and thus our rate revision infrastructure was in full response mode. My more encouraging headline for the third quarter was “While better never to fumble, the next best thing is a recovery.” With the benefit of hindsight, our reaction time to the changing environment was too slow. That said, our reaction was well executed, leading to a marginally better than 96 third quarter, which was sustained and improved on, in part with seasonality of special lines products, with a 94.6 combined ratio in the fourth. Any attempt to simplify the combination of multiple products over 51 U.S. regulatory jurisdictions and two distinct distributions, is just that, a simplification, but the flavor of the year for the most part is captured in the fast start, corrective action, and fine tuning game plan outlined above.  

我对2011年末所描述的“收官速度”实际上延续到了2012年，而且年初的业务量非常强劲。全国大部分地区异常温暖的天气抑制了冬季汽车索赔频率，同时也提前了摩托车骑行（及事故）季节。与此同时，我们开始看到索赔严重程度的增长速度比近年更快——这一组合我称之为“危险”。到了年中，我们找到了答案，结果显示索赔频率的变化并未持续，但严重程度的上升却持续存在。我们的承保结果下降到了97.6的“令人失望”的季度水平，因此我们的费率修订机制全力启动。第三季度我更鼓舞人心的标题是“虽然避免失误总是最好，但下一个最佳选择是恢复”。事后看来，我们对变化环境的反应时间过慢。话虽如此，我们的应对执行得当，第三季度综合比率略好于96，并在第四季度部分得益于特种产品的季节性因素，达到了94.6。任何试图简化涵盖51个美国监管辖区和两种不同分销渠道的多种产品组合的尝试，都仅仅是简化，但这一年的整体风貌基本上体现在快速启动、采取纠正措施和精细调整的总体计划中。

Needless to say, momentum in new applications, policy life expectancy, and NPS all paralleled the rating track and often gains from the early part of the year were tempered and/or offset in the latter. We reduced our advertising spend in the second half of the year, ending on a full-year basis, for media and creative development, only slightly ahead of last year. We are more than willing to spend any amount on advertising we feel is supported by our yield expectations, but only when rate level is expected to match our profitability targets. Happily as we end 2012 and enter 2013, we see no reason to adjust our spending based on rate level. We do however appreciate that market competitiveness is a function of the actions of others and our conversion rates are something we watch very closely and, in many cases, we have not yet seen them return to early 2012 levels.  

不用说，新申请、保单寿命以及净推荐值（NPS）的势头都与费率轨迹平行，年初取得的收益在年后期往往被调和和/或抵消。我们在下半年减少了媒体和创意开发上的广告支出，全年的支出仅略高于去年。我们非常愿意在广告上花费任何金额，只要我们认为这符合我们的收益预期，但前提是费率水平预期能匹配我们的盈利目标。令人欣慰的是，随着2012年的结束和2013年的到来，我们看不到基于费率水平调整支出的理由。不过，我们也清楚市场竞争力取决于其他参与者的行动，我们密切关注转换率，在很多情况下，尚未看到它们恢复到2012年初的水平。

While advertising levels may have been down, we believe the messages were strong.  

尽管广告投放量可能有所下降，我们相信传播的信息依然强有力。

Snapshot® , our usage-based insurance program, continues to be the most exciting breakthrough in rating in my career and more than deserved the considerable attention devoted to it in this letter last year.  

The annual premium of customers accepting the Snapshot challenge to improve their insurance rates based on their personal driving signature - something I’ve characterized as the “statistics of one” - now tops a billion dollars. Every bit as valuable is the data collected that allows for constant refinement and improvement. Last year we commented that our cumulative miles of Snapshot driving experience was equivalent to multiple round trips to Mars; 2012 added a few more.  

接受Snapshot挑战、根据个人驾驶特征（我称之为“个体统计”）来改善保险费率的客户年保费现已超过十亿美元。同样宝贵的是所收集的数据，这些数据使得我们能够不断进行完善和改进。去年我们曾评论过，我们累计的Snapshot驾驶里程相当于多次往返火星；2012年又增加了几次。

Another year confirmed, in no uncertain terms, that observed and measured driving behavior is an extraordinarily powerful basis for matching a rate with the risk presented. As such, we are way past the concept test. However, fully integrating with our existing product infrastructure, a process more detailed than suited for description in this letter, will be a challenge for some time to come and one we have fully embraced.  

又一年毫无疑问地证明，观察和衡量驾驶行为是将费率与所呈现风险匹配的极其有力的依据。因此，我们早已超越了概念测试阶段。然而，将其与我们现有产品基础设施完全整合——这一过程的细节远超本信所能描述——在未来一段时间内仍将是一项挑战，但我们已经全力迎接这一挑战。

An inescapable reality of our business today is the massive amounts of data available for collection and analysis, perhaps highlighted by our Snapshot program but matched on other fronts, such as determining the effectiveness of online advertising served at staggering rates in different combinations on incredibly large numbers of websites. An initiative, which by designation of our internal funding mechanism gets special oversight (loosely translated that means me), is in place to ensure that our skills and techniques in data acquisition, storage, and analysis are advancing consistent with the emerging science and field of “Big Data” capabilities, thus ensuring our ongoing ability to do what we do best.  

当今我们业务中不可回避的现实是，存在大量可供采集和分析的数据，或许这一点在我们的Snapshot计划中表现得尤为突出，但在其他方面也同样如此，比如确定在大量网站上以惊人频率、不同组合投放在线广告的效果。通过我们的内部资金机制指派的一项计划获得了特别监督（大致来说，这意味着由我负责），以确保我们的数据采集、存储和分析技术与新兴的“大数据”科学和领域保持一致，从而确保我们持续发挥最佳能力。

2012 saw the awarding of our fourth, fifth, and sixth patents on usage-based insurance and while exclusivity has its place, we see many benefits to ourselves, consumers, and regulators to license our patents in the future to the broader industry for a fee, which we believe should be attractive to both parties. Pleasingly, consumer surveys report a 57% awareness of Snapshot, and an even more pleasing 82% attribution to Progressive. I would generally bet against consumers caring a great deal about insurance rating details, notwithstanding our advertising, but Snapshot seems to resonate with them as simply making sense. If we had any setbacks in 2012 for Snapshot, it would be that our free Snapshot challenge, “Test Drive,” where consumers could participate and benefit themselves with the information without changing their current insurance and evaluate their options later, did not meet our expectations. In 2013, we will determine if it was our expectations or our messaging clarity that was off-base. Warning – New Snapshot Marketing Ahead.  

2012年，我们基于使用量的保险又获得了第四、第五和第六项专利，尽管独占性有其存在的意义，但我们认为，将我们的专利以许可费的方式在未来授权给更广泛的行业，对我们自身、消费者以及监管机构都有诸多好处，这对双方来说都应该具有吸引力。令人欣喜的是，消费者调查显示有57%的人知道Snapshot，更令人满意的是82%的消费者将其归功于Progressive。尽管我们的广告并未使消费者对保险定价细节表现出极大关注，但Snapshot似乎与他们产生了共鸣，因为它直观合理。如果说2012年Snapshot有任何挫折，那就是我们的免费Snapshot挑战——“试驾”（Test Drive），让消费者可以在不改变当前保险的情况下参与并从中受益，稍后再评估他们的选择——未能达到我们的预期。到了2013年，我们将确定问题出在预期还是信息传达的清晰度上。警告——全新Snapshot营销即将来临。

Survival without a smartphone or similar device seems at times a hardship disproportionate to the time we have actually had them. Be that as it may, the breadth of transactions, services, and data retrieval available is only going in one direction. In 2012, we successfully built on our early work on mobile applications and services, overcoming prior limitations such as single vehicle quoting, to make the functionality of mobile devices more closely approximate the desktop capabilities of agents or websites and, where possible, to extend and exceed prior capabilities.  

没有智能手机或类似设备的生存，有时似乎是一种与我们实际拥有它们的时间不成比例的困境。不管怎样，可用的交易、服务和数据检索的广度正朝着一个方向不断扩展。2012年，我们成功地在移动应用和服务的早期工作基础上再接再厉，克服了单一车辆报价等先前的限制，使移动设备的功能更接近代理或网站的桌面功能，并在可能的情况下扩展并超越以往的能力。

Our agents tested tablet versions of their primary interface with us and while broader use will take time, we, and they, see significant opportunities in the flexibility provided.  

我们的代理商测试了他们与我们主要界面的平板电脑版本，虽然更广泛的应用需要时间，但我们和他们都看到了这种灵活性所提供的重大机遇。

More and more of our direct quoting activity was from mobile devices, and now represents a meaningful transfer of what were once web-based transactions. Similarly, self-service and payment transactions have all materially increased year-over-year. In a relatively short time, our focus on mobile has gone from new and high potential to mainstream and we’re very pleased with our market positioning, in-place capabilities, and commitment to early development.  

Our third notable multi-year initiative is Progressive Home Advantage®. To aspire to policy life expectancies far in excess of our current experience rests in part on having products and services available to meet consumer needs at any stage of their insurable life. Access to home and renters insurance is essential. Our brand has become compelling enough for our customers, that when their needs change they look to us to fulfill them. A significant percentage of our placed home and renters coverage comes from current relationships. Equally, more and more customers are starting their relationship with us with multiple products and the depth of offerings we have available is an important consideration in meeting their needs.  

我们的第三项显著的多年计划是Progressive Home Advantage®。期望保单寿命远超我们当前经验的部分原因在于，我们必须提供产品和服务，以满足消费者在其可保期内任何阶段的需求。获得房屋和租客保险是必不可少的。我们的品牌已足够吸引客户，以至于当他们的需求发生变化时，他们会寻求我们来满足这些需求。我们所承保的房屋和租客保险中有相当大比例来自于现有客户关系。同样，越来越多的客户开始与我们建立多产品关系，而我们所提供产品的深度是满足其需求的重要考量因素。

We’ve been very happy with the options available for those of our customers choosing to deal with us directly, but struggled in the early years of the initiative to find a combination of home insurance to match our auto and special lines products that suited the needs of our agents and their customers. Our relationship with American Strategic Insurance (ASI) and their home insurance offering has gone a long way to resolving that void, and, in 2012, we took a significant step to cement our already strong relationship by acquiring a non-controlling interest in the company. While the investment is important, this is much more a statement of their, and our, commitment to bringing independent agents a well-integrated home and auto offering from providers they respect in their product fields with features only possible in such a relationship. Independent agents over-index in their share of bundled home and auto offerings and it’s often the need for that combination of products that influences the consumer to choose an agent. The ASI offering is not available to agents in all states, but that number has been steadily increasing.  

对于选择直接与我们合作的客户，我们对于所提供的选项感到非常满意，但在该计划的早期阶段，我们曾苦于找不到一种与我们的汽车及特种产品相匹配的房屋保险组合，以满足代理商及其客户的需求。我们与American Strategic Insurance（ASI）及其房屋保险产品的合作在很大程度上解决了这一空白，并且在2012年，我们通过收购该公司的一部分非控股股权，迈出了巩固这一已建立牢固关系的重要一步。虽然这项投资很重要，但这更是在表达他们和我们致力于为独立代理商提供一个整合良好的房屋与汽车保险组合的承诺，而这种组合仅可能通过这种关系实现。独立代理商在捆绑销售房屋与汽车保险方面的比重超出常规，而这种产品组合的需求往往影响消费者选择代理商。ASI的产品并非在所有州均可供代理商使用，但这一数字正稳步上升。

The percent of our customers who are multi-product customers today is in the low teens, something we’re quite proud of given our starting position, but clearly recognize the potential. Whether those multi-products are some combination of Progressive’s auto, commercial auto, motorcycle, RV, or boat, or the home or renters product of a business partner, these are the customers that are viewing Progressive as their insurance destination.  

如今，多产品客户在我们的客户中所占比例为个位数的低位，考虑到我们的起点，我们对此颇感自豪，但也清楚地认识到潜力所在。无论这些多产品是Progressive的汽车、商业车险、摩托车、房车或船只的某种组合，还是业务伙伴提供的房屋或租客产品，这些客户都将Progressive视为他们的保险首选目的地。

Insurance operations for 2012 were very solid and singling out a couple of highlights leaves many more important contributions unheralded, at least in this letter.  

2012年的保险业务运作非常稳健，挑出几个亮点就会使许多其他重要贡献在这封信中未能得到表彰。

Claims in the Spotlight  

索赔聚焦

Our claims organization, in addition to responding to catastrophes, continued a long streak of extraordinary results in claim resolution quality and making it even more notable this year they did so notching our lowest ever run rate of loss adjustment expense. While an attractive combination, it would be completely unacceptable if declines in employee or customer satisfaction were the balancing items – and without doubt they were not. Our relentless focus on improving process efficiency and the customer experience is now realizing what is sometimes the illusive IRR of long-term efforts; and we’re not done yet. The spotlight has been, in part, directed on the delivery of our concierge level of claims service, at our 54 service centers, to see what stones have been left unturned that might yet take usage, of what all parties agree is our best customer option, to even higher levels. Early work suggests that manageable changes for us to be even more responsive to customer time preferences may move the needle to very exciting levels. More to follow…  

我们的索赔部门除了应对灾难外，还在索赔解决质量方面连续取得了卓越成绩，今年更是创下了我们历史上最低的损失调整费用运作率。虽然这是一种很有吸引力的组合，但如果员工或客户满意度下降作为平衡因素，那将是完全不可接受的——而毫无疑问，这并未发生。我们对提高流程效率和客户体验的不懈关注如今正实现那些有时难以捉摸的长期内部收益率（IRR）；而且我们还未止步。目前部分关注点集中在我们54个服务中心提供的礼宾级索赔服务上，以探索是否还有未被挖掘的潜力，能够将被各方一致认为是我们最佳客户选项的服务水平提升到更高水平。早期工作表明，通过可控的改变，使我们对客户时间偏好的响应更加迅速，可能会带来非常激动人心的成果。后续将有更多内容……

Over the next few years, we will provide more of our ever expanding customer population the service center option with the addition of several new facilities, each co-located with full function community claims offices.  

在未来几年内，我们将通过增加数个新设施，为我们不断扩大的客户群提供更多服务中心选择，每个新设施都与功能齐全的社区索赔办公室共址。

Brand and Marketing  

品牌与营销

Accepting our role as a participant, it would still have been hard to imagine just a few years ago the ubiquity and awareness auto insurance advertising has achieved. Media and advertising options are ever expanding and often dilutive of the cost effective consumer communication we all seek. Reaching people when and how they want to be reached, and doing so from the wide range of involvement options, is making the allocation of dollars spent a science now highly comparable to our indemnity science of segmentation. This, along with our quantitative research on consumer insights and advertising effectiveness, are welcome extensions of our core skills and we have comfortably leveraged our capabilities into what we believe are high performing results.  

接受我们作为参与者的角色，几年前很难想象汽车保险广告已达到了如此普及和知名度。媒体和广告选择不断扩大，往往会削弱我们所追求的成本效益高的消费者沟通。以消费者希望的时间和方式接触他们，并通过广泛的参与选项来实现，这使得花费分配变成了一门科学，现在已与我们的分段赔付科学高度相似。再加上我们对消费者洞察和广告效果的定量研究，这些都是我们核心技能的受欢迎延伸，我们已充分利用我们的能力取得了我们认为表现卓越的成果。

Our central campaign, usually set in our insurance superstore, starring “Flo” had a great 2012. We continued challenging the creative boundaries, taking her out-of-store occasionally, searching to find that elusive balance between the benefits of a highly recognizable campaign while keeping content fresh and engaging. Among our many measures, the one suggesting Flo’s already strong appeal increased during the year is perhaps the most rewarding to the efforts of so many. She continues to be highly imitated by costumed look-a-likes and this year walked-off with a boatload of recognition awards, including Advertising Age’s addition of her to their “Top Ten Female Ad Icons of All Time” - who knew, Flo and Rosie the Riveter together.  

我们的核心广告活动通常以我们的保险超市为背景，由“Flo”主演，2012年表现非常出色。我们继续挑战创意界限，偶尔将她带出超市，努力寻找到在保持高度识别性广告活动优势的同时，又使内容保持新鲜和引人入胜的那种难以捉摸的平衡。在我们众多衡量指标中，显示Flo已具有强大吸引力并在年内有所提升的这一指标，或许是对无数努力最有回报的肯定。她继续被装扮成模仿者广泛效仿，今年更是收获了一大堆认可奖项，包括《广告时代》将她列入“史上十大女性广告偶像”——谁能想到，Flo与工厂女工罗茜竟会并肩出现。

Our plans for 2013 are every bit as ambitious and we’ll keep pushing the boundaries to ensure our creative efforts maximize every dollar spent and even more importantly communicate a clear consumer mindset about who we are as a company and what you should expect as a customer.  

我们对2013年的计划同样雄心勃勃，我们将不断突破界限，确保我们的创意工作使每一美元的投入都发挥最大效益，更重要的是，传达出一个明确的消费者心态，即我们是谁以及作为客户您应期待什么。

Investments and Capital Management  

投资与资本管理

Most readers can remember times when a 6.8% total return, for us, nearly $700 million post tax, on a heavily weighted fixed-income portfolio, would not be particularly notable; in 2012 it deserves that recognition. Very significant appreciation from our holdings of preferred stocks, many of which were the focus of significant mark-to-market reductions in “crisis” years, helped fuel our overall strong fixed-income returns, along with attractive results from our common stocks; a healthy reminder of the value of an investment, capital, and reporting philosophy that focuses on total return over a reasonable time frame and never places us in a position of forced disposition at market lows before the quality we saw in our asset selection can distinguish itself from more global market forces.  

大多数读者可能还记得，以前我们重仓固定收益组合中6.8%的总回报——税后近7亿美元——并不算特别引人注目；但2012年这一成绩理应受到认可。我们持有的优先股大幅升值（其中许多在“危机”年份曾大幅按市值计价下调），加上普通股的出色表现，共同推动了我们固定收益整体回报的强劲表现；这健康地提醒我们，专注于在合理时间框架内总回报的投资、资本和报告理念，其价值在于永远不会让我们在市场低迷时被迫出售资产，从而让我们所选资产的质量能够从更全球化的市场力量中脱颖而出。

Our recurring interest income is frustratingly low at a pretax book yield now just under 3%, but we remain confident that our preference for shorter duration during times of extremely low interest rates is our best positioning to achieve our investment objectives.  

我们持续性的利息收入令人沮丧地低，目前税前账面收益率略低于3%，但我们依然相信，在极低利率时期偏好较短久期的策略，是实现我们投资目标的最佳定位。

During the year, we realized more than $300 million in gains leaving a little over $1.3 billion unrealized at year end – a 2012 increase of $277 million. We publish monthly both net and comprehensive income measures of earnings per share and trailing 12-month return on equity, internally preferring the comprehensive measures as the best all-in assessment, and were pleased with the 23% year-over-year increase in comprehensive EPS to $1.78 and the comprehensive ROE of 17.4%.  

在这一年中，我们实现了超过3亿美元的收益，年末还有略超过13亿美元的未实现收益——2012年增加了2.77亿美元。我们每月公布净收益和综合收益的每股收益以及滚动12个月的股本回报率，内部更倾向于采用综合指标作为最佳总体评估，对综合每股收益同比增长23%至1.78美元和综合股本回报率达到17.4%感到非常满意。

We spend significant time and effort modeling our capital requirements and sizing what we call “layers of capital” to satisfy regulatory requirements and any contingencies we can envision for our business. Capital in excess of these layers is available for share repurchases, acquisitions, and shareholder dividends. For 2012, we had some of each. Reflecting our clear philosophy regarding capital above our needs over a reasonable planning horizon, we returned about $600 million as a $1 per share dividend paid in November and further declared a variable dividend in  

December contingent on final gainshare and underwriting profit numbers for the year that amounted to $172 million, or just over $0.28 per share. Our capital actions fell more to dividends in 2012, with share repurchases totaling around $174 million for 8.6 million shares. Acquisition was a very minor use of capital and represents the purchase of the equity position in ASI referenced earlier.  

我们投入大量时间和精力对资本需求进行建模，并确定我们所称的“资本层级”以满足监管要求以及我们能够预见的任何业务应急需求。超过这些层级的资本可用于股票回购、收购以及向股东分红。2012年，我们在这几个方面都有所作为。反映出我们关于在合理规划期内资本超出需求的清晰理念，我们在11月以每股1美元的股息返还了约6亿美元，并在12月进一步宣布了一项或有股息，其金额取决于当年最终的利润分享和承保利润，总计1.72亿美元，约合每股0.28美元。2012年的资本运作主要体现在分红上，同时股票回购总额约为1.74亿美元，共计回购860万股。收购只占用了很小一部分资本，这代表了之前提到的在ASI中购买股权的行为。

We enter 2013 with a strong and well-structured capital position, rate levels that we believe are well suited to achieve our underwriting objectives, exceptionally solid insurance operations, and an investment portfolio positioned to support our objectives. An improved investment environment with interest rates that more comfortably match our longer-term income expectations would be perfect, but, by design, in any given period, we are not dependent on it.  

我们以稳健且结构良好的资本状况进入2013年，费率水平我们相信非常适合实现我们的承保目标，保险业务运作极其稳健，同时拥有一个能支持我们目标的投资组合。若能有一个与我们长期收入预期更匹配的利率水平的改善投资环境那将是完美的，但按设计来说，在任何特定时期，我们都不依赖于此。

Our People and Culture  

我们的团队与文化

Each year writing this valediction becomes a time of some reflection, and recognition of the complexities of a human system designed to consistently produce extraordinary customer experiences and economic results. Catastrophe response, where I started this letter, is simply one visible part of the iceberg with so much more embedded in the pride and passion of all Progressive people committed to what they are doing and the customers we serve.  

每年撰写这封告别词都成为一次反思的时刻，让我们认识到这个旨在不断创造卓越客户体验和经济成果的人性系统的复杂性。从灾难响应开始的部分仅仅是冰山一角，更多的成就深植于所有Progressive员工的自豪感和热情中，他们全心投入于所做的工作以及为客户提供服务。

It’s with this in mind that our first priority must always be to continuously refine our work environment to one where we’re all motivated to do our best work, where we can grow constantly, and that others will want to join. Our people, culture, and aspiration to be “Consumers’ #1 Choice for Auto Insurance” are what make us - Progressive.  

正因如此，我们的首要任务始终是不断完善我们的工作环境，让我们都能受到激励发挥最佳水平，持续成长，并使他人愿意加入。我们的员工、文化以及成为“消费者首选汽车保险”这一追求，成就了我们——Progressive。

To the people of Progressive, our agents and brokers, customers, and shareholders:  

致Progressive的全体员工、我们的代理与经纪人、客户以及股东：

Thanks for all you do to make Progressive, progressive.  

感谢你们为使Progressive不断进步所做的一切。