LETTER TO SHAREHOLDERS  

致股东的信函

This year was truly one for the record books, albeit many of the records we broke were set internally. The spirit of Progressive people is to set audacious goals, and we find that doing so intensifies our collaboration and strengthens our relationships as a collective team. That may sound pedestrian, but it is fundamental to our identity and allows us to consider the enterprise in its entirety and not as siloed functional areas. This isn’t something that we can visibly quantify, but it has worked for over 80 years, and we believe it allows us to balance our achievements with a strong sense of togetherness with our Core Values as the backdrop.

今年确实是创纪录的一年，尽管我们打破的许多纪录都是内部创造的。Progressive 人的精神就是设定大胆的目标，我们发现这样做能加强我们的协作，巩固我们作为整体团队的关系。这听起来可能很平凡，但它是我们身份的根本，使我们能够从整体而非孤立的职能领域来考虑企业。这并非我们可以明显量化的东西，但它已行之有效超过 80 年，我们相信这使我们能够在取得成就的同时，以我们的核心价值观为背景，保持强烈的凝聚力。

To that end, in 2018 we achieved the following:

为此，我们在 2018 年取得了以下成果：

•We moved up one position to become the #3 company in the private passenger auto market. As we’ve stated time and time again, this gets us one step closer to achieving our ultimate vision.

• 我们的排名上升了一位，成为私人乘用车市场排名第三的公司。正如我们一再强调的，这使我们离实现最终愿景又近了一步。

•We crossed the $30 billion net premiums written (NPW) threshold after celebrating $20 billion in NPW only a few years earlier.

• 在庆祝净保费收入（NPW）达到 200 亿美元仅数年后，我们的净保费收入已突破 300 亿美元大关。

•We surpassed 20 million total policies in force (PIF) and 13 million auto PIFs allowing us to be in more homes where we can continue to grow, especially with the Robinsons (customers with auto + home). That rate of growth is incredible and could not have been achieved had we all not been in sync on hiring and training well in advance of need in order to service these new customers.

•我们的有效保单（PIF）总数已超过 2000 万份，汽车保单超过 1300 万份，使我们能够进入更多家庭，继续实现增长，尤其是在 Robinsons（同时拥有汽车和房屋保险的客户）群体中。这种增长速度令人惊叹，如果不是我们所有人在招聘和培训方面提前做好准备，以满足这些新客户的需求，这是不可能实现的。

•We have continued to mount a full court press on retention and now serve over 2 million customers who have been with us for a decade or longer. We do not take this for granted and are acutely aware that we need to earn their business each and every day.

•我们持续全力以赴提高客户留存率，目前服务的客户中已有超过 200 万名与我们合作十年或更长时间。我们不会将此视为理所当然，并清楚地意识到我们需要每天都努力赢得他们的业务。

•We now serve over a million Robinsons and see so much more opportunity to grow in this consumer segment. Having started at Progressive over 31 years ago, it’s a thrill to see how we have evolved from our nonstandard roots and are able to serve every demographic.

•我们现在为超过一百万个 Robinson 家庭提供服务，并看到在这一消费者群体中有更多的增长机会。我在 Progressive 工作已超过 31 年，看到我们从非标准保险起步，发展到如今能够服务于各个群体，令人振奋。

•We concluded a multi-year investment in a new policy processing system, which now manages all auto and special lines policies. 

•我们完成了对新保单处理系统的多年投资，该系统现已管理所有汽车和特殊险种保单。

In a nutshell  

简而言之

We wrapped up the year with a combined ratio (CR) of 90.6 and NPW growth of 20%. The results are extraordinary and especially solid coming off of two very successful prior years of profitable growth. We added over $5 billion in NPW in 2018 after adding $3.8 billion in 2017 and $2.8 billion in 2016.

我们全年综合比率（CR）为 90.6，净保费（NPW）增长 20%。这一业绩表现卓越，尤其是在此前连续两年实现盈利增长的基础上更显稳健。继 2017 年增加 38 亿美元、2016 年增加 28 亿美元后，我们在 2018 年净保费增加超过 50 亿美元。

Our Personal Lines CR was 90.3, with NPW growth of 18% and auto PIF growth of 14%. Both the Agency and Direct channels contributed to these stellar results. Our special lines products PIF growth was relatively flat year-over-year, reflecting our already significant share of this market, specifically with our motorcycle and boat products.

我们的个人业务综合比率为 90.3，净保费增长 18%，汽车保单数量增长 14%。代理渠道和直销渠道均对这些出色的业绩做出了贡献。我们的特殊险种产品保单数量同比增长相对持平，这反映出我们在该市场，尤其是摩托车和船艇产品领域，已占据了相当大的市场份额。

A significant contributor to our results came from our Commercial Lines area. We ended 2018 with a CR of 86.7 and nearly 30% NPW growth and PIF growth just shy of 8%.

我们的商业保险业务对业绩做出了重要贡献。2018 年末，我们的综合比率（CR）为 86.7，净承保保费（NPW）增长近 30%，有效保单数（PIF）增长略低于 8%。

While growth was also strong in Property with NPW and PIF growth of 33% and 32%, respectively, our profit results were vastly affected by weather and natural catastrophes. Our catastrophe reinsurance program limited our retained losses and loss adjustment expenses from Hurricane Michael to $60 million. Unfortunately, our retained catastrophe losses and loss adjustment expenses from hurricanes, hail, winter storms, and the California wildfires totaled $295 million, accounting for 23 points of our Property combined ratio of 106.9. We continue to take rate to get us in line with our profitability target, but this will take time to earn in, since Property policies have annual terms. In addition to rate, we are using underwriting rules and coverage restrictions to manage our portfolio in high risk areas. We remain confident that we will course correct, that is if the elements cooperate.

On the investment side we produced a 2018 total return of 1.2%. The year was characterized by a return of volatility to the financial markets after a relatively placid period in the previous 12 months. Our fixed-income portfolio was able to earn 1.5%, as our relatively shorter interest rate exposure and conservative asset allocation allowed us to earn a positive return in a period of rising rates. Following several years of strong returns, our equity portfolio returned -4.4% in 2018, as domestic equity markets saw a steep drop in the fourth quarter.

在投资方面，我们 2018 年的总回报率为 1.2%。这一年金融市场波动性回升，而此前 12 个月市场相对平静。我们的固定收益投资组合实现了 1.5%的收益，由于我们相对较短的利率风险敞口和保守的资产配置，使我们在利率上升期间仍能获得正回报。在经历了连续数年的强劲表现后，我们的股票投资组合在 2018 年的回报率为-4.4%，主要是由于第四季度国内股票市场出现大幅下跌。

The size of our investment portfolio has grown from $27 billion at the beginning of the year to over $33 billion at the end of 2018. Even as financial markets may offer us more attractive investment opportunities than a year ago, our focus on protecting the balance sheet has not changed. When adding risk to our investment portfolio, we will continue to pursue investments that provide a favorable risk-return profile to Progressive over the long term.

我们的投资组合规模已从年初的 270 亿美元增长到 2018 年底的超过 330 亿美元。尽管金融市场可能比一年前提供了更具吸引力的投资机会，但我们保护资产负债表的关注点并未改变。在增加投资组合风险时，我们将继续寻求长期内能为 Progressive 提供良好风险回报特征的投资。

We accessed the capital markets twice in 2018 in order to support the company’s strong operating growth and for other general corporate purposes. In March, we issued $600 million of 4.20% 30-year senior notes and $500 million of 5.375% cumulative perpetual preferred stock. We returned to the capital markets in October to issue $550 million of 4.00% 10-year senior notes. The combination of internally generated profits and these external financings will both support our future growth and allow us to maintain flexibility in our capital allocation decisions. As in previous years, we bought back enough Progressive shares to neutralize dilution from equity-based compensation. We continue to believe the most efficient use of our capital is to reinvest it into our fast-growing operating business.

我们在 2018 年两次进入资本市场，以支持公司强劲的运营增长及其他一般企业用途。3 月，我们发行了 6 亿美元的 4.20% 30 年期高级债券和 5 亿美元的 5.375%累计永久优先股。10 月，我们再次进入资本市场，发行了 5.5 亿美元的 4.00% 10 年期高级债券。内部产生的利润与这些外部融资相结合，将支持我们未来的增长，并使我们在资本配置决策中保持灵活性。与往年一样，我们回购了足够的 Progressive 股票，以抵消股权激励带来的稀释效应。我们仍然认为，将资本再投资于快速增长的运营业务是最有效的资本利用方式。

We ended 2018 with a Gainshare score of 1.91. This is the best result since 2004 and the 7th year in a row that the score has increased. We declared an annual dividend of $2.514 per common share, based on 2018 results and the formula that we communicated publicly. As previously announced and effective in 2019, we have revised our dividend policy (details discussed later).

我们以 1.91 的 Gainshare 得分结束了 2018 年。这是自 2004 年以来的最佳成绩，也是该得分连续第七年增长。根据 2018 年的业绩和我们公开沟通的公式，我们宣布每股普通股的年度股息为 2.514 美元。如之前宣布的，自 2019 年起，我们已修订了股息政策（详情稍后讨论）。

As we head into 2019, we will continue to focus on policy or unit growth, as we often refer to it, while pursuing our goal of earning at least four cents of underwriting profit. We will watch trends closely to stay ahead of them and not shock our customers with rate increases. Meanwhile, our investment team will continue to focus on their goal of protecting the balance sheet and supporting the growth of the operating side of Progressive.

进入 2019 年，我们将继续专注于保单或单位增长（我们经常如此称呼），同时努力实现至少四美分的承保利润目标。我们将密切关注趋势，保持领先地位，避免因费率上涨而令客户感到意外。同时，我们的投资团队将继续致力于保护资产负债表，并支持 Progressive 运营业务的增长。

Looking to the Horizons  

展望未来

You may recall that in the August 2017 Investor Relations Webcast, we outlined the three Horizons construct. We believe that investing concurrently in the near-, mid-, and long-term future of Progressive will ensure that we create and sustain an enduring business. Our stance is that when we are executing on the core business so well, it is exactly the time to devote time, energy, and dollars to advancing our future business opportunities. We internally refer to this as an “always growing” mindset.

您可能还记得，在 2017 年 8 月的投资者关系网络直播中，我们概述了“三个视野”的架构。我们相信，同时投资于 Progressive 的短期、中期和长期未来，将确保我们创建并维持一个持久的业务。我们的立场是，当我们在核心业务上表现出色时，正是投入时间、精力和资金来推进未来业务机会的最佳时机。我们在内部将这种理念称为“持续成长”的思维模式。

Horizon One (Execute): This has been our focus since the company was founded in 1937 and, in more recent years, we have been more surgically focused on growth and gaining a larger share of both the auto and home markets, as well as creating more Robinsons. This focus has clearly paid off and we believe there is much more room for growth, so this will continue to be an area of concentration.

第一阶段（执行）：自公司 1937 年成立以来，这一直是我们的重点。近年来，我们更加精准地专注于增长，扩大在汽车和房屋市场的份额，并创造更多的“Robinsons”。这种专注显然已取得成效，我们相信未来还有很大的增长空间，因此这将继续成为我们的关注领域。

Horizon Two (Expand): In this horizon, we are focusing on adjacencies — building upon our existing capabilities and market position to offer more products and services to our current and potential customers. We have made large investments in developing a business owners policy product, which we expect to launch this year, as well as offering other coverages for small businesses that desire to shop directly with Progressive. We’ve made people, systems, and brand investments and see this as an area where we can excel and profitably grow. In another sector, we continue to deepen our relationship with Uber and have gone from 1 state in 2016 to 4 in 2018 and expect to expand to 13 states in total in early 2019.

第二阶段（扩展）：在这一阶段，我们专注于相邻领域——在现有能力和市场地位的基础上，为现有及潜在客户提供更多产品和服务。我们已大量投资于开发企业主保险产品，预计今年推出，同时也为希望直接通过 Progressive 购买保险的小型企业提供其他险种。我们在人力、系统和品牌方面进行了投资，并认为这是我们能够脱颖而出并实现盈利增长的领域。在另一个领域，我们继续深化与 Uber 的合作关系，从 2016 年的 1 个州扩展到 2018 年的 4 个州，并预计在 2019 年初扩展到共计 13 个州。

Horizon Three (Explore): As I communicated in last year’s letter to shareholders, in December of 2017, we formed an internal eleven-person, part-time Strategy Council to take some time to understand future trends and market shaping forces. The team focused on opportunities where we can use our skills to define ideas for future business initiatives and invest in areas where we believe we can win. In July of 2018, we named Andrew Quigg our Chief Strategy Officer. He has created a new full-time strategy team that will concentrate on designing products that solve unmet consumer needs. We are excited to explore, test, and invest in this horizon to achieve our goal of always growing.

第三视野（探索）：正如我在去年的致股东信中所述，2017 年 12 月，我们成立了一个由 11 人组成的内部兼职战略委员会，以花时间了解未来趋势和市场塑造力量。该团队专注于利用我们的技能，明确未来业务计划的构想，并投资于我们认为能够取胜的领域。2018 年 7 月，我们任命 Andrew Quigg 为首席战略官。他组建了一个新的全职战略团队，专注于设计能够满足消费者未被满足需求的产品。我们很高兴能够在这一视野中探索、测试并投资，以实现我们持续增长的目标。

Managing Capital for the Future

为未来管理资本

We take great pride in our transparency around communicating significant changes. Although we provided some detailed Q&A with our November earnings release, I would like to expand upon our capital management philosophy and how we plan to use that capital.

我们非常自豪于在沟通重大变化时保持透明。尽管我们在 11 月的收益发布中提供了一些详细的问答内容，但我想进一步阐述我们的资本管理理念以及我们计划如何使用这些资本。

At Progressive, effective capital management is an important component of our financial brand. When considering how to deploy capital, we have consistently said that we will look first to invest to support the growth of the current and future earnings power of Progressive. If we have capital beyond what is needed to fund growth and innovation, that is, when we have “underleveraged capital,” we will return it to shareholders. We have historically used three tools to send underleveraged capital back to our shareholders: an annual dividend, share repurchases, and special dividends. We believe this approach is a strong indicator of our thoughtful stewardship of capital. 

在 Progressive，有效的资本管理是我们财务品牌的重要组成部分。在考虑如何配置资本时，我们一直强调，我们首先会投资于支持 Progressive 当前和未来盈利能力增长的领域。如果我们的资本超过了支持增长和创新所需的水平，即当我们拥有“未充分利用的资本”时，我们将把这些资本返还给股东。我们历来使用三种方式将未充分利用的资本返还给股东：年度股息、股票回购和特别股息。我们相信，这种方法充分体现了我们对资本的审慎管理。

Many years ago, we articulated a formula for calculating our annual variable dividend, which considered the business and investment results. At that time, we had moderate growth expectations and attractive investment returns and routinely generated more capital than we needed. Our formulaic variable dividend, and special dividends when warranted, served us very well, returning on average about 50% of comprehensive income annually. Since the inception of the variable dividend program, we produced an annual return on shareholders’ equity of 17% and grew our book value just over 100%, which is among the best in the industry, even after the significant amount of cash we returned to shareholders over that same time. We are very proud of these results.

多年前，我们制定了一个计算年度浮动股息的公式，该公式考虑了业务和投资业绩。当时，我们对增长的预期适中，投资回报也颇具吸引力，通常产生的资本超过了我们的需求。我们的公式化浮动股息，以及在适当情况下发放的特别股息，效果非常好，平均每年返还约 50%的综合收益。自浮动股息计划实施以来，我们的股东权益年回报率达到 17%，账面价值增长略超 100%，即使在同期向股东返还了大量现金后，这一表现仍位居行业前列。我们对这些成果感到非常自豪。

More recently, we have been experiencing faster growth in a very low-return investment environment, creating a need for more capital to underpin growth. While our business does not consume massive capital for property, plant, or equipment, the regulatory construct and need for contingent capital, due to weather and other unforeseen circumstances, requires significant capital reserves. Given our strong growth and outlook, we decided that it was a good time to take a step back and reassess our dividend policy, especially given the fact that our business model is evolving as we think about our long-term growth potential. We are committed to investing our capital when we have compelling opportunities to do so and to being flexible and nimble to drive shareholder value and to attract a broad and diverse set of shareholders. Given the current business environment, our opportunities to grow, and our commitment to shareholder value, we decided to alter our approach to our annual dividend.

最近，我们在投资回报率极低的环境下实现了更快的增长，因此需要更多资本来支持这种增长。虽然我们的业务并不需要大量资本用于房地产、厂房或设备，但由于监管结构以及天气和其他不可预见情况所需的应急资本，我们需要保持大量的资本储备。鉴于我们强劲的增长和前景，我们认为现在是时候退一步重新评估我们的股息政策，尤其是考虑到我们的业务模式正在随着我们对长期增长潜力的思考而不断演变。我们致力于在有吸引力的机会出现时投资资本，并保持灵活性和敏捷性，以推动股东价值，并吸引广泛而多元化的股东群体。鉴于当前的商业环境、我们的增长机会以及我们对股东价值的承诺，我们决定调整年度股息的策略。

It is difficult to forecast the amount of capital that we will need to invest to pursue the opportunities that will be developed in all three Horizons and, therefore, we believe that a flexible dividend policy is appropriate for Progressive. At the same time, we recognize that many of our shareholders and prospective shareholders value a predictable cash return from their investments. Therefore, we adopted a new dividend policy that will pay a regular quarterly dividend, which we expect to be $0.10 per common share through 2019, with the potential for an annual, variable dividend at year end. The variable component of the dividend will reflect the performance of the business and the growth and investment opportunities we see and will be determined by the Board of Directors. While the old dividend formula was affected by the company’s Gainshare factor, the new approach will not be so influenced. We found that the Gainshare factor reflects performance and does not capture growth and investment opportunities, which had the potential to increase dividend payouts when it could be advantageous to retain the capital in the business to support growth. While less formulaic than our previous variable dividend approach, the new variable dividend will avoid the binary nature of the current dividend’s payout based on the restriction of comprehensive income necessarily exceeding after-tax underwriting income.

我们很难预测为把握所有三个发展阶段的机会所需投入的资本金额，因此，我们认为灵活的股息政策对 Progressive 而言是合适的。同时，我们也意识到许多现有及潜在股东看重投资所带来的可预测现金回报。因此，我们采纳了一项新的股息政策，将支付定期季度股息，预计 2019 年每普通股为 0.10 美元，并可能在年底支付年度浮动股息。股息的浮动部分将反映公司的经营表现以及我们所看到的增长和投资机会，并由董事会决定。此前的股息计算公式受到公司 Gainshare 因素的影响，而新的方法将不再受此影响。我们发现 Gainshare 因素反映的是业绩表现，并未涵盖增长和投资机会，这可能导致在更有利于将资本留存于公司以支持增长时，反而增加了股息支付。 尽管新的浮动股息方式不像我们之前的浮动股息方法那样公式化，但它将避免当前股息支付方式的二元特性，即综合收益必须超过税后承保收入的限制。

We have been pleased with how our variable dividend has complemented our overall capital strategy for the past decade and are equally excited about the modified dividend policy and the flexibility it affords us to pursue sustained growth for the benefit of shareholders. We remain committed to investing our assets to grow our business and maximize value and, when our growth does not require all of the capital we have available, to returning underleveraged capital to shareholders.

过去十年来，我们对浮动股息如何补充整体资本战略感到满意，并同样对调整后的股息政策及其为我们提供的灵活性感到兴奋，这将使我们能够追求持续增长，以造福股东。我们将继续致力于投资资产以促进业务增长并实现价值最大化，当我们的增长不需要使用全部可用资本时，会将未充分利用的资本返还给股东。

Our Four Cornerstones  

我们的四大基石

On many occasions, we’ve shared the construct we use to think about having a competitive advantage and we fittingly named it our four cornerstones. The first three make up the foundation and reflect who we are (Core Values), why we’re here (Our Purpose), and where we’re headed (Our Vision). The last, and where I will provide a few highlights of several of the investments we’ve made, we refer to as our four Strategic Pillars (how we’ll get there).

在许多场合，我们分享过我们用来思考竞争优势的框架，并恰当地将其命名为我们的“四大基石”。前三个构成了基础，分别体现了我们是谁（核心价值观）、我们为何存在（我们的宗旨）以及我们的前进方向（我们的愿景）。最后一个，即我将重点介绍我们所做的一些投资的部分，我们称之为我们的四大战略支柱（我们如何实现目标）。

Pillar 1: Progressive people and our culture are collectively our most powerful source of competitive advantage.

支柱一：Progressive 的员工及我们的文化共同构成了我们最强大的竞争优势来源。

Sufficiently describing our unique and special culture continues to elude me. Maybe it’s the pride of knowing that we are making a difference in each other’s lives and doing our best to be there for our customers when they need us the most. It might be the small, subtle gestures that are witnessed so frequently that it would take a novel to share every kind action that takes place within and outside our walls. What we do know is that the basis of our distinct culture starts with our Core Values and we follow them diligently in order to get great results in the right way.

充分描述我们独特而特别的文化对我而言仍然难以做到。也许是因为我们为能够改变彼此的生活而感到自豪，并尽最大努力在客户最需要我们时陪伴左右。也可能是那些微小而细致的举动，它们如此频繁地发生，以至于要记录下公司内外每一次善意的行动都足以写成一本小说。但我们清楚的是，我们独特文化的基础始于我们的核心价值观，我们始终如一地践行这些价值观，以正确的方式取得卓越的成果。

I often comment about there not being a spreadsheet that I can reference to prove how incredible our culture is (and you know we like our spreadsheets). That said, we did receive countless recognitions from outside sources. I won’t name them all, but they came in the form of accolades like best company to work for, best workplace for diversity, best workplace for women, parents, veterans, and millennials. Lists don’t define us and we wouldn’t change what we do just to be put on those lists. We do strongly believe that if you treat people like they want to be treated and create a workplace where you can feel comfortable bringing your whole self to work, you tend to get noticed.

我经常提到，没有一张电子表格可以用来证明我们的企业文化有多么出色（而你们知道我们很喜欢电子表格）。尽管如此，我们确实收到了来自外部的无数认可。我不会一一列举，但这些荣誉包括最佳雇主、最佳多元化职场、最适合女性、父母、退伍军人和千禧一代的职场等称号。榜单并不能定义我们，我们也不会为了登上这些榜单而改变自己的做法。但我们坚信，如果你以他人希望的方式对待他们，并创造一个让每个人都能自在地展现真实自我的工作环境，你自然会受到关注。

Pillar 2: Meeting the broader needs of our customers throughout their lifetime.

支柱二：在客户生命周期中满足其更广泛的需求。

We continued heavy investment in our digital customer service products in 2018. We recognize that when someone decides to start a relationship with Progressive, we must support that relationship with world-class experiences and treatment in all areas, especially digital. This includes a focus and investment on a smart, simple, and satisfying digital offering that meets our customers’ needs wherever, whenever, and however they choose. As such, we continued a large commitment to revamp our self-service website experience in conjunction with extending our mobile app offering. This undertaking included not just a new web interface, look, and set of features, but also a new technology stack. With these investments, going forward we’ll be better positioned to continue advancing in innovative ways, across all digital touchpoints, in a way that builds stronger and longer relationships with our customers.

2018 年，我们继续大力投资于数字化客户服务产品。我们认识到，当客户决定与 Progressive 建立关系时，我们必须在所有领域，尤其是数字领域，以世界一流的体验和服务来支持这种关系。这包括专注并投资于智能、简单且令人满意的数字化服务，以随时随地、以客户选择的任何方式满足他们的需求。因此，我们继续大力致力于改进自助服务网站体验，同时扩展我们的移动应用程序服务。这项工作不仅包括全新的网页界面、外观和功能，还包括新的技术架构。通过这些投资，我们将更好地定位自己，以创新方式持续推进所有数字化接触点，从而与客户建立更牢固、更长久的关系。

We also leveraged new technologies to meet the evolving expectations of customers and to drive additional expense reduction.  Of note here, we launched our virtual assistant in our mobile app in November. Leveraging the star of our Superstore marketing campaign, we dubbed this virtual assistant “Ask Flo.” It allows customers to get instant support by interacting with an automated bot in a chat-like interface — with the heart and personality of our brand as personified by “Flo.”  

我们还利用了新技术，以满足客户不断变化的期望，并进一步降低成本。值得一提的是，我们于 11 月在移动应用程序中推出了虚拟助手。借助我们 Superstore 营销活动中的明星，我们将这个虚拟助手命名为“Ask Flo”。客户可以通过类似聊天界面的自动机器人即时获得支持，这个机器人体现了我们品牌的核心和个性，由“Flo”来体现。

To deliver our ideal customer experience, we also believe it’s critical to understand and recognize that different customers have different needs and preferences. In order to personalize at scale, we have been working on a project to personalize the renewal experience and give customers a compelling reason to continue their relationship with Progressive. To that end, we’re standing up a technology platform that will enable us to test personalized experiences, deployed in a coordinated fashion across all of our customer communication channels. Our vision is to create truly customized journeys, aligned with how each customer prefers to interact with us.

为了实现我们理想的客户体验，我们也认为理解并认识到不同客户拥有不同的需求和偏好至关重要。为了实现规模化的个性化，我们一直致力于一个项目，以个性化续约体验，并为客户提供令人信服的理由继续与 Progressive 保持关系。为此，我们正在搭建一个技术平台，使我们能够在所有客户沟通渠道中协调部署和测试个性化体验。我们的愿景是创造真正定制化的客户旅程，与每位客户偏好的互动方式保持一致。

We understand that price is critical to insurance consumers, so we need to do all we can to lower costs to enable competitive prices.  Of course, this can’t be at the expense of a positive customer experience.  With this in mind, we’ve been able to find solutions that properly balance lower costs and a great customer experience. 

我们明白价格对保险消费者至关重要，因此我们必须竭尽所能降低成本，以实现有竞争力的价格。当然，这不能以牺牲良好的客户体验为代价。基于这一点，我们已找到能够恰当平衡降低成本与卓越客户体验的解决方案。

We’re also heavily experimenting and utilizing artificial intelligence (AI). One example of this is in a new chatbot application where we use AI to interpret incoming chat requests and provide automated responses based on the perceived intent of the customer.  In some cases, the response provides answers to the most commonly asked questions related to that topic, and in other cases it provides a phone number so that the customer can contact the group best positioned to address their issue.  The model reduces the effort required to deliver straightforward answers on simple issues.

我们也在积极尝试并运用人工智能（AI）。其中一个例子是新的聊天机器人应用，我们利用 AI 来解读客户发来的聊天请求，并根据客户的意图自动提供回复。在某些情况下，回复会提供与该主题相关的最常见问题的答案；在另一些情况下，则会提供电话号码，以便客户联系最适合解决其问题的团队。这种模式减少了在简单问题上提供直接答案所需的工作量。

Another example of our use of AI is a Progressive-built application we call Docuflash.  It uses artificial intelligence to discern document content to forward incoming documents without human intervention. Docuflash leverages optical character recognition (OCR) to “read” incoming documents, classify them appropriately, and forward them to the appropriate group for additional work as needed.  Eliminating this more rudimentary work generates expense savings and creates the opportunity for our people to focus on the more complex tasks of acting on the incoming documents.

另一个我们使用人工智能的例子是 Progressive 自主开发的一款名为 Docuflash 的应用程序。它利用人工智能识别文件内容，无需人工干预即可转发收到的文件。Docuflash 利用光学字符识别（OCR）技术“读取”收到的文件，进行适当分类，并将其转发给相应的团队以便根据需要进行进一步处理。消除这些较为基础的工作可节省开支，并使我们的员工能够专注于处理收到文件的更复杂任务。

We also introduced new technology into our voice experience by replacing our legacy touch-tone interactive voice response (IVR) system with one where our customers can speak naturally when calling Progressive. Our new experience is easier and allows more self-service options for customers to interact with us without a Progressive consultant getting involved. We believe these advancements allow us to meet customers’ needs by providing a superior customer experience while giving us an expense benefit.

我们还在语音服务中引入了新技术，将原有的按键式交互语音应答（IVR）系统替换为客户拨打 Progressive 电话时可自然对话的系统。新的体验更加便捷，并为客户提供了更多自助服务选项，无需 Progressive 顾问介入。我们相信，这些进步使我们能够通过提供卓越的客户体验来满足客户需求，同时也为我们带来成本优势。

Pillar 3: Maintaining a leading brand recognized for innovative offerings and supported by experiences that instill confidence.

支柱三：保持领先品牌地位，以创新产品著称，并通过增强信心的体验提供支持。

We designed and released an all-new quoting experience for and on behalf of our agents to make it easier to support quoting bundled policies for our customers. Our For Agents Only (FAO) Portfolio quoting (also referred to as Portfolio), is now live for all agents appointed to write new business in three states with plans for future state releases and expectations to share Portfolio with agents countrywide by mid-2020. 

我们为代理商设计并推出了全新的报价体验，以便更轻松地为客户提供捆绑保单报价支持。我们的“仅限代理商”（FAO）组合报价（也称为 Portfolio）现已面向三个州内所有获授权开展新业务的代理商上线，未来计划将在更多州推出，并预计于 2020 年中期向全国代理商推广 Portfolio。

Portfolio offers the following: 

投资组合提供以下内容：

Less data entry: Portfolio reduces quote time by finding available customer, vehicle, and property information. In addition, Portfolio auto-fills customer information across products so agents can spend less time typing and more time forming relationships with their customers.

减少数据输入：Portfolio 通过查找现有的客户、车辆和财产信息，缩短报价时间。此外，Portfolio 还可跨产品自动填写客户信息，使代理人减少输入时间，有更多时间与客户建立关系。

The more (products) the merrier: Thanks to Portfolio, FAO can now support bundled quotes for the first time. When agents start a quote from the FAO homepage, Portfolio's product picker displays all available products, allowing agents to select multiple products right from the beginning. Supported products—those that agents can quote and sell within Portfolio—include auto, special lines, home, condo, and renters.

产品越多越好：得益于 Portfolio，FAO 现在首次支持捆绑报价。当代理人从 FAO 主页开始报价时，Portfolio 的产品选择器会显示所有可用产品，使代理人从一开始就能选择多个产品。Portfolio 支持的产品（代理人可在 Portfolio 内报价和销售的产品）包括汽车、特殊险种、房屋、公寓和租客险。

The power of choice: Rather than working directly through an insurance company's quoting system, many agents use comparative rater software to shop multiple companies for their customers. Agents can easily add products to a rater quote before completing the sale in Portfolio.

选择的力量：许多代理人并非直接使用保险公司的报价系统，而是通过比价软件为客户比较多家公司的报价。代理人可以在 Portfolio 中完成销售前，轻松地向报价中添加产品。

It all comes together: The namesake Portfolio page gives agents and their customers an overview of premium, bundle savings, and applied discounts. Agents can add or remove a product with one click, speeding up the sales process. 

一切尽在掌握：同名的投资组合页面为代理商及其客户提供了保费、捆绑优惠和已应用折扣的概览。代理商只需点击一下即可添加或移除产品，加快销售流程。

Our highly recognized brand grants us a venue to clearly communicate our innovative offerings to our customers and consumers alike. Few brands have sustained a single icon for over a decade. Flo is one of the longest-running brand characters, appearing in over 150 ads that take place in our alternate-reality “Superstore.” To keep our flagship show fresh, this year we introduced Flo’s Squad, her ever-expanding crew of colleagues who represent our long-lasting commitment to providing impressive service and protection at an affordable price.

我们备受认可的品牌使我们能够清晰地向客户和消费者传达我们的创新产品。很少有品牌能将单一形象持续使用超过十年。Flo 是持续时间最长的品牌角色之一，已在超过 150 个广告中出现，这些广告均发生在我们虚构的“超级商店”场景中。为了保持我们旗舰节目的新鲜感，今年我们推出了 Flo 的小队，她不断扩大的同事团队代表着我们长期致力于以实惠的价格提供卓越的服务和保障。

  

In addition to expanding our characters, we also expanded our messages, in order to more firmly align them with the needs of our customers. As an example, in new ads like “Fluent in Insurance,” we promoted our online insurance jargon translator, Progressive Answers. We doubled the number of media impressions focused on auto/home bundle messages in 2018, compared to 2015. And, in partnership with national media outlets, including “The Today Show,” we more widely publicized our Keys to Progress® program, which in recent years donated, on average, 100 refurbished cars per year, to veterans in need.

除了丰富我们的角色形象外，我们还拓展了宣传信息，以更紧密地贴合客户需求。例如，在“精通保险”等新广告中，我们推广了在线保险术语翻译工具 Progressive Answers。与 2015 年相比，我们在 2018 年针对汽车/房屋捆绑套餐信息的媒体曝光量增加了一倍。此外，我们与包括《今日秀》在内的全国性媒体合作，更广泛地宣传了我们的“Keys to Progress®”项目，该项目近年来平均每年向有需要的退伍军人捐赠 100 辆翻新汽车。

Creative was not the only area of optimization. We also delivered some exciting portfolio shopping experiences, including Progressive HomeQuote Explorer® (HQX) and Progressive BusinessQuote Explorer® (BQX), leading digital home and business insurance marketplaces.

创意并非唯一优化领域。我们还推出了一些令人兴奋的组合购物体验，包括 Progressive HomeQuote Explorer®（HQX）和 Progressive BusinessQuote Explorer®（BQX），领先的数字化家庭和商业保险市场平台。

Pillar 4: Offering competitive prices driven by industry-leading segmentation, claims accuracy, and operational efficiency.

支柱四：通过行业领先的细分、理赔准确性和运营效率，提供具有竞争力的价格。

Our auto policies in force grew over 14%. As we shared with you during our third quarter webcast, our expanding ability to segment has accelerated policy growth in recent periods. During the time frame from 2013 to 2016, it took us 30 months to add a million auto policies in force. The next million policies took us 15 months with the subsequent million taking only 8 months. Most recently, we added 1 million policies in force in a mere six months. We attribute this to our large investments in our product design focused on segmentation and risk selection (matching rate to risk).

我们的有效汽车保单增长超过了 14%。正如我们在第三季度网络直播中与您分享的，我们不断增强的细分能力加速了近期的保单增长。从 2013 年至 2016 年期间，我们花了 30 个月才增加了 100 万份有效汽车保单，接下来 100 万份保单用了 15 个月，再接下来 100 万份仅用了 8 个月。最近，我们仅用了 6 个月就增加了 100 万份有效保单。我们将此归功于我们在产品设计方面的大量投入，专注于细分市场和风险选择（使费率与风险相匹配）。

In addition, we continue to evolve our usage-based insurance segmentation. We introduced, in 10 states, a new algorithm that adds distracted driving to the other already powerful variables we track, and we plan to roll it out more broadly in 2019.

此外，我们继续改进基于使用情况的保险细分方法。我们在 10 个州推出了一种新算法，将分心驾驶纳入我们已追踪的其他强大变量中，并计划在 2019 年更广泛地推广。

Operational efficiency is a key component of our competitive prices strategy pillar.  At 20.4%, our expense ratio is among the lowest in our industry.  A bit more than half of that ratio is comprised of commissions paid to our agents and advertising costs, or what we refer to as acquisition costs. We view increasing these acquisition costs as generally requisite to growing profitably. To grow and ensure the viability of the agency distribution channel, we pay competitive commissions and we target aggregate commission at around 10.5% of agency premium. We’ve grown advertising costs to over $1.4 billion in 2018 and have done so optimizing incremental spend at the lowest level possible. We did this not only in digital media but increasingly in mass media and even down to cost per incremental sale metrics at the television show and daypart level.  We buy the majority of our media in-house and analyze massive amounts of data, often in real-time, to ensure very competitive advertising spend. 

运营效率是我们竞争性价格战略支柱的重要组成部分。我们的费用率为 20.4%，在行业内处于最低水平之一。其中略超过一半的比例由支付给代理商的佣金和广告费用组成，我们称之为获客成本。我们认为增加这些获客成本通常是实现盈利增长所必需的。为了实现增长并确保代理分销渠道的可持续性，我们支付具有竞争力的佣金，并将代理佣金总额目标设定在代理保费的 10.5%左右。2018 年，我们的广告费用已增长至超过 14 亿美元，并且在优化增量支出方面做到了尽可能低的水平。我们不仅在数字媒体领域如此，在大众媒体领域也越来越多地如此，甚至细化到电视节目和时段层面的每笔增量销售成本指标。我们的大部分媒体采购由内部完成，并分析大量数据，通常是实时分析，以确保广告支出极具竞争力。

We also focus on non-acquisition costs as we believe lowering these costs while still providing great service and a great work environment allows us to grow faster.  We invest in technology to drive cost out of our processes while improving the customer and agent experience and allowing for our people to focus on higher value-added work.  Policies in force per FTE (full-time equivalent) and revenues per FTE are key metrics in driving towards a lower cost structure and we’ve made great progress on both of these.  Our ultimate metric of underwriting cost effectiveness is what we call our non-acquisition expense ratio (NAER).  For 2018, we reduced our Personal Lines NAER by 0.7 points to 9.1% and for our Commercial Lines business, we reduced NAER by 0.8 points to 11.0%.  These improvements allow us to continue to keep our rates competitive and meet or exceed our profitability targets.

我们也专注于非获客成本，因为我们相信，在降低这些成本的同时，仍能提供优质服务和良好的工作环境，将使我们实现更快增长。我们投资于技术，以降低流程成本，同时改善客户和代理人的体验，使我们的员工能够专注于更高附加值的工作。每名全职员工（FTE）对应的有效保单数和收入是我们实现更低成本结构的关键指标，我们在这两方面都取得了显著进展。我们衡量承保成本效益的最终指标是非获客费用比率（NAER）。2018 年，我们个人业务的 NAER 降低了 0.7 个百分点至 9.1%，商业业务的 NAER 降低了 0.8 个百分点至 11.0%。这些改善使我们能够继续保持费率的竞争力，并达到或超出我们的盈利目标。

The costs to settle a claim, or loss adjustment expense (LAE), is balanced along with customer service, work environment, and settling the claim accurately. We are extremely pleased that our accuracy performance improved in a year with significant growth in both claim counts and claim employees, while lowering the cost to settle our average auto, special lines, and commercial lines claim features by over 2%. In concert with growing average premium per policy, this lower cost per claims feature allowed us to lower our loss adjustment expense ratio by 0.7 points for the year to 10.2%.

理赔成本或损失调整费用（LAE）的控制需要与客户服务、工作环境以及准确理赔之间取得平衡。令我们非常满意的是，在理赔数量和理赔员工人数均显著增长的一年中，我们的理赔准确性表现有所提升，同时将汽车险、特殊险种和商业险的平均理赔成本降低了超过 2%。伴随每份保单平均保费的增长，每项理赔的成本降低使我们全年的损失调整费用比率下降了 0.7 个百分点，至 10.2%。

That’s a wrap  

就此收工

As we put a bow on 2018 and reflect on the numerous celebrations that took place over the year, it reminded me of something that Peter B. Lewis always said — make sure to have fun. We all worked hard and together achieved a tremendous amount on the business front, but along the way we had a lot of fun, which exemplifies the spirit of Progressive.

当我们为 2018 年画上圆满句号，并回顾这一年中举行的众多庆祝活动时，我想起了彼得·B·刘易斯常说的一句话——一定要享受乐趣。我们所有人都努力工作，共同在业务方面取得了巨大成就，但在这个过程中，我们也收获了许多乐趣，这正体现了 Progressive 的精神。

We are so thankful for our partners, our agents, and the customers that motivate us to do better every day. You all have our commitment that we will work hand in glove to excel as we sprint into 2019.

我们非常感谢我们的合作伙伴、代理商以及激励我们每天进步的客户。我们向大家承诺，在迈入 2019 年之际，我们将齐心协力，共创佳绩。

I am especially grateful to the over 38 thousand Progressive people that inspire me daily. The accomplishments that we collectively achieved this year mean so much more when they are attained with people you enjoy working with side-by-side.

我特别感谢超过三万八千名 Progressive 员工，他们每天都在激励着我。今年我们共同取得的成就意义非凡，因为这些成就是与我们乐于并肩共事的人们共同实现的。

Thanks for all that you do.

感谢您所做的一切。