Operator

Welcome to The Progressive Corporation's Third Quarter Investor Event. The company will not make detailed comments related to quarterly results in addition to those provided in its quarterly report on Form 10-Q and the letter to shareholders, which have been posted to the company's website. And we'll use this event to respond to questions after a prepared presentation by the company. This event is available via a moderated conference call line and a live webcast with a brief delay. Webcast participants will be able to view the presentation slides live or download them from the webcast site. Participants online can access the slides from the Event page at investors.progressive.com.

欢迎参加The Progressive Corporation（前进保险公司）的第三季度投资者活动。除公司网站上已发布的季度10-Q报告和致股东信中提供的信息外，公司不会对季度业绩作出详细评论。本次活动将通过公司预先准备的演示内容，并在之后回答问题。这场活动通过有主持的电话会议线路和带有短暂延迟的在线直播进行。通过网络观看的参与者可以实时查看演示幻灯片或从直播网站下载。在线参与者可以通过investors.progressive.com的活动页面获取幻灯片。

In the event, we encounter any technical difficulties with the webcast transmission, webcast participants can connect through the conference call line. The dial-in information and passcode are available on the Events page at investors.progressive.com.

如果在直播过程中遇到任何技术故障，参与直播的观众可以改用电话会议线路接入。拨入信息和通行码可在investors.progressive.com的活动页面上找到。

Acting as moderator for the event will be Julia Hornack. At this time, I will turn the event over to Ms. Hornack.

本次活动将由Julia Hornack担任主持人。现在，我将活动移交给Hornack女士。

Julia Hornack

Thank you, Chris, and good afternoon. Today, we will begin with a presentation on our horizon three strategy by our Chief Strategy Officer, Andrew Quigg. Our presentation will be followed by Q\&A with our CEO, Tricia Griffith; and our CFO, John Sauerland. Also joining us by phone for Q\&A, will be our Chief Investment Officer, Bill Cody, and the General Manager of Progressive's Home business, Dave Pratt.

谢谢你，Chris，大家下午好。今天我们将首先由我们的首席战略官Andrew Quigg介绍我们的第三阶段战略。演示结束后将进行问答环节，参与的有我们的首席执行官Tricia Griffith，以及首席财务官John Sauerland。同时，我们的首席投资官Bill Cody和前进保险房险业务的总经理Dave Pratt也将通过电话参加问答。

This event is scheduled to last 90 minutes. As always, discussions in this event may include forward-looking statements. These statements are based on management's current expectations and are subject to many risks and uncertainties that could cause actual events and results to differ materially from those discussed during the event. Additional information concerning those risks and uncertainties is available on our 2018 annual report on Form 10-K, where you will find discussions of the risk factors affecting our businesses, safe harbor statements related to forward-looking statements and other discussions of the challenges we face. These documents can be found via the Investors page of our website, progressive.com.

本次活动预计持续90分钟。和往常一样，活动中的讨论可能包含前瞻性陈述。这些陈述基于管理层当前的预期，但存在许多风险和不确定性，可能导致实际事件和结果与活动中讨论的内容有重大差异。有关这些风险和不确定性的更多信息，可参见我们2018年10-K年度报告，其中包括对影响我们业务的风险因素的讨论、与前瞻性陈述相关的安全港声明以及我们面临挑战的其他讨论。这些文件可在我们网站progressive.com的投资者页面找到。

It is now my pleasure to introduce our CEO, Tricia Griffith.

现在，我很荣幸地介绍我们的首席执行官Tricia Griffith。

Tricia Griffith

Good afternoon, and welcome to Progressive's Third Quarter webcast. I feel like a broken record, but we continue to be really thrilled with our results. I started off my letter talking about having 15 consecutive quarters of net premium written over time. And so to me, at double-digits, I should say. And to us, that is really incredible. And I start thinking about not just growth in premium because, of course, that's very important, but it can be influenced by trends or a mix of business. I started thinking about what we also talk about that is growth in units. And so I looked back and realized that, we've had nine consecutive quarters of double-digit growth in auto policies for us. So to me, that's equally impressive. We continue to be bullish on where we've come from and where we're going, and that would be a lot of what we're going to talk about today. Andrew is going to focus on horizon 3. He's our new Chief Strategy Officer, and he'll talk about how we're thinking about the future. And then we'll have ample time for Q\&A with John Sauerland and myself. So thank you for being in attendance.

大家下午好，欢迎参加Progressive第三季度的网络直播。我感觉自己像是在重复播放的唱片，但我们对我们的业绩依然感到无比激动。我在致股东信的开头提到，我们已经连续15个季度实现了净保费的两位数增长。对我们来说，这是非常了不起的。当然，保费增长本身很重要，但它也可能受到趋势或业务结构的影响。因此我也开始思考另一个维度——保单数量的增长。我回顾了一下，发现我们在汽车保险方面已连续九个季度实现了保单数量的两位数增长，对我来说这同样令人印象深刻。我们对自己过去取得的成绩以及未来的前景都非常乐观，今天的会议将主要围绕这些内容展开。Andrew将聚焦于第三阶段战略（horizon 3），他是我们新任的首席战略官，将介绍我们对未来的思考。接下来会有充分的时间进行问答环节，由我和John Sauerland共同参与。感谢大家出席今天的活动。

You're all familiar with this construct. We call it the 3 Horizons based on McKinsey's 3 Horizons. Today, I'm not going to talk about horizon 3 because Andrew will cover that. He'll also cover a little bit of horizon 2. But as you recall in the last webcast, John Barbagallo and Karen Bailo gave a really deep dive to all the exciting things we're doing in horizon 2, including small business, our BOP coverage, TNC, fleet, Smart Haul, just to name a few. We have a plethora of things that we've invested in a couple of years ago, they're really coming to fruition now, and we're very excited about that. But it doesn't mean that we won't stop thinking about more opportunities in horizon 2, we absolutely will. And we'll make sure that we capitalize on our brand, our acumen in terms of analytics, our segmentation strategy. But probably more importantly, once we get those plans together, the ability for 40,000 Progressive people to execute on those plans.

大家对我们基于麦肯锡模型提出的“三阶段战略”已经很熟悉了。今天我不会讲horizon 3，因为Andrew会专门介绍，他还会稍微讲到一些horizon 2的内容。你们还记得在上一次的网络直播中，John Barbagallo和Karen Bailo深入讲解了我们在第二阶段所做的一系列激动人心的事情，包括小型企业险、我们的BOP（商业业主保单）产品、TNC（交通网络公司险）、车队险、Smart Haul等。我们几年前在这些项目上进行了大量投资，现在已经开始看到成果了，这让我们非常兴奋。但这并不意味着我们不会继续寻找horizon 2的更多机会，我们当然会继续挖掘，并充分发挥我们的品牌价值、数据分析能力以及细分战略的优势。更重要的是，一旦我们制定出这些计划，我们有4万名Progressive员工可以出色地执行这些战略。

Speaking of execute, that's what we call horizon 1. And we've really -- for the vast majority of progressive people over this last couple of years, really want everyone to focus on executing horizon 2. Think of auto and home, bundled, monoline, but taking growth, increasing our market share. It's been something that we're surgically focused on because it can get exciting to think about the horizon 2 and horizon 3 opportunities, and they are, but we have so much to gain here, and I believe our strategy has worked incredibly.

说到执行力，那就是我们所谓的第一阶段战略（horizon 1）。过去几年里，我们希望大多数Progressive员工专注于执行第二阶段战略。比如汽车险与房屋险的组合销售（bundled）或单一产品销售（monoline），目标是实现增长、扩大市场份额。这是我们高度聚焦的领域，尽管第二和第三阶段充满想象力和兴奋点，但我们在第一阶段仍有巨大的增长空间，而我认为我们的战略迄今为止已取得了非常出色的成效。

For the next few slides, I'm going to show our net premium written growth over 10-year period with the exception of our property. I'll show that from 2015 when we took over a controlling interest in ASI. We will look at that, and then we'll look at our combined ratio, the orange line, compared to the industry, the gray line. So as you can see, this is auto for the last 10 years. We've had incredible growth, especially over the last four or five years. In fact, in the last 10 years, we have grown premium \$15.4 billion, and that's over 130% increase.

接下来的几页幻灯片，我将展示我们在过去10年中净保费的增长情况，但不包括房产险。房产险部分我将从2015年我们控股ASI之后开始看起。我们会看到这部分数据，然后对比我们的综合赔付率（橙色线）和行业平均（灰色线）。这是汽车险过去10年的表现，增长非常显著，尤其是过去四五年。实际上，过去10年我们汽车险的保费增长了154亿美元，增幅超过130%。

And probably more importantly is that we've had a delta, on average, of 8 CR points lower than the industry. That to me is really incredible, especially as we've been growing at such a fast rate. On the commercial side, same story, huge growth, especially in the last several years. In fact, we've grown over 150% and \$2.7 billion in premium. More impressively is the fact that the difference on average of the CR between us and the industry is a full 18 points. That is incredible, and that has led us to really understand the segmentation in this industry and continue to invest in horizon 2.

更重要的是，我们的综合赔付率平均比行业低8个百分点。这非常了不起，尤其是在我们增长如此迅速的同时还能保持这样的盈利能力。商业险方面同样表现强劲，特别是近几年增长显著，保费增长了超过150%，达到27亿美元。更令人印象深刻的是，我们的综合赔付率比行业平均低整整18个百分点。这实在令人难以置信，这也让我们更深入理解了行业中的细分市场，并促使我们持续投资于第二阶段战略。

Our property, our home has grown substantially as well as we've kind of expanded across the country. We're about in lockstep with the industry. But that's not satisfactory to us because we want to have every product to make money. We don't subsidize per products. So we will take and have been taking the time to roll out our next product model, continue to increase rates, have some underwriting restrictions and have some coverage changes to make sure that we try to set expectations for next year to be within our target profit margin. But again, looking at these over time, we continue to be impressed with our ability to grow and grow profitably, especially compared to our peers.

我们的房产险业务也随着我们在全国范围内的扩展而大幅增长，目前我们大致与行业持平。但这对我们来说并不令人满意，因为我们希望每一项产品都能盈利，我们不会通过其他产品进行交叉补贴。因此我们已经在推进下一代产品模型，同时持续加价、实施部分承保限制，并进行保障范围的调整，确保我们为明年设定的利润目标能够达成。话虽如此，从长期表现来看，我们仍然对自身在保持增长和盈利方面的能力感到满意，尤其是与同行相比。

The combined success of our insurance products and our investment income has really made a strong ROE, as you can see from these slides. So what you're looking at here is, the blue bar is Progressive, the orange bar is the S\&P 500 P\&C index and the gray bar is the S\&P 500. And as you can see, over a 10- and 20-year period, we have substantially outperformed all the index and the S\&P, and that's really impressive. So we continue to be thrilled with those results. In fact, over the last five years, we've returned 55% of net income to our shareholders in the form of dividends and share repurchases.

我们保险产品与投资收入的结合，带来了非常强劲的股本回报率（ROE），这可以从幻灯片中清晰看到。你们面前的图表中，蓝色柱状是Progressive，橙色是标普500财产与意外险指数（P\&C Index），灰色是标准普尔500指数。可以看到，无论是10年期还是20年期，我们的表现都大幅超越了这两个指数，非常令人印象深刻。因此我们对这些成果依然感到非常满意。事实上，在过去五年中，我们将55%的净利润以股息和回购的形式返还给了股东。

As a reminder, how you think about equity or capital, I should say, as you think about capital, we want to make sure we invest in expanding the business as long as the long term, it reaches our financial policies. Under-leveraged capital, we return to shareholders. And we want to expect -- we expect a return on equity in excess of its cost. The importance of net income, EPS and ROE is never lost on us. But we view achieving long-term performance of these measures is stemming from our consistent focus on the primary elements of our business model. And that's, very clearly, grow as fast as we can at a 96. We have done this since we went public in 1971, so nearly 50 years. You can see from the data on the chart that, that formula works, and we'll continue with that.

在思考权益资本时，我想强调我们在使用资本方面的理念：只要符合我们长期财务政策，我们就会投资于业务扩张；而多余资本我们会返还给股东。同时我们要求资本回报率必须高于其成本。我们非常重视净利润、每股收益（EPS）和ROE这些指标，但我们认为长期实现这些指标表现的关键，在于我们始终坚持的商业模式核心原则，那就是：“以96的赔付率目标实现尽可能快的增长。”自1971年上市以来，近50年来我们一直坚持这个战略。从图表上的数据可以看出，这一战略是有效的，我们将继续坚持。

So now I'd like to introduce you to Andrew Quigg, our Chief Strategy Officer. You've probably seen him on this stage a few times over the years, a little background on Andrew. He has a bachelor's degree in Applied Mathematics and Economics from Yale and an MBA from Harvard. He came to Progressive in 2007 as a Product Manager in the Agency, a division. And he's done a couple of states as a Product Manager in both agency and direct channel. After that, he ran our direct media business. And more recently, he was a General Manager of our customer experience organization in the CRM, and really focusing on retention. He's done a great job there. Last year, we named him our first ever Chief Strategy Officer. And so he's here today to talk about Horizon 3. Andrew?

现在我想介绍我们的首席战略官Andrew Quigg。你们这些年来可能已经在这个舞台上见过他几次。稍微介绍一下他的背景：Andrew拥有耶鲁大学应用数学与经济学学士学位，以及哈佛大学工商管理硕士学位。他于2007年加入Progressive，担任代理渠道的产品经理，并在多个州负责过代理与直销渠道的产品管理。后来，他主管我们的直销媒体业务。最近他担任客户体验部门的总经理，专注于客户保留方面的工作，表现非常出色。去年我们任命他为公司首任首席战略官。今天他将为大家介绍我们的第三阶段战略（Horizon 3）。Andrew，请开始。

Andrew Quigg

Thank you, Tricia. Today, I have the pleasure of sharing some additional details around Progressive's growth strategy. For our agenda, I'll first walk through our four strategy pillars and provide more details on the growth strategy framework, which Tricia discussed earlier. In this area, I'll underscore the mission of the strategy group, which I lead. Second, we'll discuss the important balance we are striking between being aggressive with the opportunities available to the company and our long history of using capital prudently. Finally will be our high level framework for evaluating the Horizon 3 areas of opportunity.

谢谢你，Tricia。今天我很高兴能够进一步分享关于Progressive增长战略的一些详细信息。我们今天的议程是这样的：首先，我将介绍我们的四大战略支柱，并对Tricia之前提到的增长战略框架做进一步阐述，这部分我还会强调战略部门的使命；其次，我们将讨论如何在大胆把握机会和一贯审慎使用资本之间实现平衡；最后，我会讲解我们用于评估第三阶段机会（Horizon 3）的高级框架。

So let's get going with Progressive's business strategy. Executives, investors and analysts, all discuss company strategy, but it can take on a variety of meetings and approaches depending on the context. Definitions for the word strategy generally fall in two realms. Broadly, strategy can be any plan. Narrowly, strategy can be known as a plan for military action. But neither of these really correspond to strategy in the context we're discussing today. I feel the topic was well examined in a Harvard business review article from 1996 by Michael Porter, appropriately titled, what is strategy? In this article, Professor Porter asserts that differences in performance between companies is the result of the many, many activities that companies undertake. A company can outperform its rivals if it executes similar activities better. This is operational effectiveness. An example of this is segmentation. Every auto insurer segments their pool of risks. A company can also outperform if they choose different activities than rivals.

那么我们来看看Progressive的商业战略。高管、投资者和分析师都在讨论公司的战略，但根据不同的语境，“战略”这个词可以有不同的含义和方法。广义上，战略可以指任何计划；狭义上，它可以是军事行动的计划。但这两种定义其实都不适用于我们今天的语境。我认为这个话题在1996年Michael Porter发表在《哈佛商业评论》上的一篇文章《什么是战略》中得到了很好的阐述。在这篇文章中，Porter教授指出，公司业绩之间的差异来源于它们所执行的大量活动。如果一个公司能把相似的活动做得更好，它就能超越竞争对手，这就是“运营效率”。比如风险细分（segmentation），每家汽车保险公司都会对风险池进行细分。如果公司选择与竞争对手不同的活动，也能实现超越。

This is strategic positioning, a historical example for Progressive has been Snapshot. Progressive uniquely invested in Telematics starting in 1998 and continues to differentiate ourselves in this space today. Professor Porter also argues that operational effectiveness is necessary, but not sufficient over the long run for outstanding performance. This is due to the rapid diffusion of best practices through talent movement, consultants and benchmarking. Instead Porter and many academics believe that choosing different activities is the basis for prolonged differentiation in performance. In particular, Porter detailed a method of looking at the activities of the firm and how they reinforce the strategy, the activity map.

这就是“战略定位”。Progressive的一个历史性例子是Snapshot。我们早在1998年就独家投资车载数据技术（Telematics），直到今天仍在这一领域保持差异化。Porter教授还认为，运营效率虽然是必要条件，但从长期来看，它不足以支撑卓越绩效，因为最佳实践会随着人才流动、咨询服务和对标学习迅速扩散。因此，Porter以及许多学者认为，选择不同的活动才是实现长期差异化的根本基础。Porter特别提出了一种方法，即用“活动图谱”（activity map）来审视公司的各项活动，以及它们如何相互强化战略。

Strategic positions are strongest for firms where the activity map demonstrates a high degree of fit and internal consistency. On the screen is the activity map for Southwest Airlines in 1996 from the Porter paper. Each circle represents a strategic position of Southwest that was different than at least some of their competition. As a low cost carrier, activities like automatic ticketing machines and quick gate turnarounds were important to keeping costs in check. However, not all of the activities were low cost if viewed in isolation. Southwest pay their employees more than others, recognizing high quality employees would help keep asset utilization high.

对于那些活动图谱显示出高度协调性和内部一致性的公司来说，其战略定位最为稳固。现在屏幕上展示的是Porter论文中1996年西南航空（Southwest Airlines）的活动图谱。图中每一个圆圈代表西南航空一个有别于竞争对手的战略选择。作为一家低成本航空公司，他们通过自动售票机和快速登机等举措控制成本。但如果单独来看，并不是所有活动都是低成本的。比如西南航空支付给员工的薪酬比同行更高，因为他们认为高素质的员工有助于提高资产使用率。

With that background, let's turn to Progressive's business strategy. We have four general strategy pillars at Progressive. People and culture, competitive prices, broad needs and leading brand. Our core values, purpose and vision also sit at the middle of these strategy pillars as a unifying focal point. Progressive has provided webcast over the years to our investors outlining additional aspects of our organization. The webcast provide a good overview of the additional activities and the fit of Progressive's activities. For example, in the fourth quarter of 2017, marketing and acquisition leaders discussed our leading brand and the supporting marketing tactics and innovations. In the first quarter of 2018, and our business unit controllers discussed operational efficiency from many different lenses, including how technology and automation play a role in reducing our expense ratio. In the second quarter of 2018, CRM President, John Murphy; and CIO, Steve Broz, outlined investments in relationships with our customers as we continue to refine our customer-centric approach.

有了这些背景，我们来看看Progressive的具体商业战略。我们有四大战略支柱：人才与文化、具有竞争力的价格、覆盖广泛的需求，以及领先的品牌。在这些战略支柱的中心，是我们的核心价值观、使命和愿景，它们作为统一的指导原则。多年来，Progressive通过网络直播向投资者介绍了我们组织的各个方面。这些直播很好地展示了我们各种业务活动的协同与契合。例如，在2017年第四季度，我们的市场和客户拓展主管介绍了我们品牌领先优势以及配套的市场策略和创新；2018年第一季度，我们的事业部财务主管从多个维度讨论了运营效率，包括技术和自动化如何帮助我们降低费用率；2018年第二季度，CRM部门总裁John Murphy和首席信息官Steve Broz介绍了我们如何持续加大客户关系投资，进一步优化以客户为中心的服务模式。

In the third quarter of 2018, Personal Lines President, Pat Callahan, demonstrated how the speed of innovation and product development creates a competitive moat. In the fourth quarter of 2018, our CHRO, Lori Niederst, outlined how our people and culture creates sustainable competitive advantage for the company. And finally, in the first quarter of 2019, our portfolio managers, Rich Madigan and Jonathan Bauer, discussed how our investment approach supports our strategy pillar of competitive prices. The choices we make in these interlocking activities represent our unique strategic position, which is not as simple as low cost or focused on one segment. In my role, I have the fortune of interacting with external advisers, consultants and partners. Each of them views Progressive differently and believes that some aspect of this activity map is the most important. I know I speak for the entire executive team when I say that it is truly the internal consistency of all these activities that makes Progressive special. It is extremely hard to duplicate the success of Progressive by replicating one bubble without the full tapestry.

2018年第三季度，我们的个人险业务总裁Pat Callahan展示了创新速度和产品开发如何构建竞争护城河。2018年第四季度，我们的首席人力资源官Lori Niederst介绍了我们的人才与文化如何为公司带来可持续的竞争优势。最后，在2019年第一季度，我们的投资组合经理Rich Madigan和Jonathan Bauer讲解了我们的投资方法如何支持“有竞争力价格”这一战略支柱。我们在这些相互关联的活动中所做出的选择，构成了我们独特的战略定位，而这一定位并不像“低成本”或“聚焦某个细分市场”那样简单。在我的岗位上，我有幸与外部顾问、咨询机构和合作伙伴互动，每个人对Progressive的看法都不同，他们认为活动图谱中的某一部分是最重要的。我可以代表整个高管团队说：正是这些活动之间的高度一致性与内在协调性，造就了Progressive的独特性。试图只复制其中一个环节而不复制整个体系，是几乎无法复刻我们成功的。

Along the bottom of this page are parts of our strategy that have emerged over the past decade and a half. Broads needs, in particular, became more pronounced as we entered into the destination era. We want to solve the broad needs of our customers over their lifetimes. This requires us to investigate the needs of our customers and adjacent areas where we can serve them. Broad needs also provides Progressive with an avenue for diversification as we look to disrupt other products and as we monitor changes in the mobility environment.

本页下方展示的是我们在过去15年中逐渐形成的战略要素。尤其是“广泛需求”在我们进入“目的地时代”（destination era）后愈发重要。我们希望覆盖客户整个生命周期的各种保险需求。这就要求我们深入研究客户的核心和周边需求，找出可以切入的服务场景。“广泛需求”也为Progressive提供了多元化的路径，帮助我们探索颠覆其他产品的机会，并密切关注出行领域的变化。

Tricia articulated this investigation of new products and services in Progressive growth strategy utilizing 3 horizons. We think of horizon 1 as executing on our current core products within property and casualty insurance. On the right-hand side, you can see that the market share we currently have today, only 8% of Personal Lines and 2% of Commercial Lines. We are fortunate to have ample headroom to grow. Horizon 2 includes expanding to adjacencies within property and casualty insurance. And beyond horizon 2, horizon 3 represents an opportunity to explore close-end opportunities to leverage our core competencies. We think of this area as generally being outside of property and casualty insurance. As an example of horizon 2, we have Commercial Lines. In August, John Barbagallo and Karen Bailo discussed how commercial -- the Commercial Lines business is expanding their addressable market from \$14 billion to more than \$50 billion.

Tricia在讲解Progressive增长战略时指出，我们通过三阶段战略（3 horizons）系统性地探索新产品与新服务。我们将第一阶段（horizon 1）视为聚焦于现有的核心财产险与意外险产品的执行层面。右侧图表显示，我们目前的市场份额仅为个人险8%、商业险2%，这意味着我们拥有巨大的增长空间。第二阶段（horizon 2）指向保险业务中的相邻领域扩张。第三阶段（horizon 3）则是寻找那些可以利用我们核心能力、但大致位于财产险与意外险之外的创新机会。以第二阶段为例，商业险业务在持续扩展其可服务市场，正如John Barbagallo和Karen Bailo在8月所讨论的，商业险的可服务市场从140亿美元扩展到了500多亿美元。

On the right-hand side are the efforts underway in Commercial Lines. Some of these reflect improvements in our core Commercial Auto product, but a large part of the expansion is from new products, general liability and BOP that are horizon 2 initiatives within Commercial Lines. For horizon 3, the executive team decided to invest in a small group, the Progressive strategy group, to focus on horizon 3 in order to keep the vast majority of Progressive employees and resources focused on horizons 1 and 2. The vision for the strategy group is building and enduring Progressive for future generations, always growing. Our mission is to create lasting value by leading and establishing businesses beyond the core and supporting expansion of our property and casualty business.

右侧展示的是商业险当前的推进工作。其中一部分是对我们核心的商业车险产品的改进，但更大部分增长来自新产品，包括一般责任险（general liability）和商业主保单（BOP），这些都是商业险下的第二阶段（horizon 2）举措。至于第三阶段（horizon 3），管理团队决定投资建立一个小型团队——Progressive战略小组，专注于探索第三阶段机会，同时确保大多数Progressive员工与资源聚焦在前两个阶段。战略小组的愿景是：构建一个能够代代相传、持续成长的Progressive。我们的使命是：通过引领和打造核心业务之外的新业务，同时支持财产险业务的扩展，从而创造持久价值。

With that introduction to Progressive's strategy overall and the strategy group's mission within this, I'd like to turn to the important balance we are attempting to achieve in horizon 3. We have enormous growth potential as a company as we increase scope. We saw this play out in our acquisition of ASI, now Progressive Home, where we generated revenue synergies and leveraged our data footprint. On the revenue synergy side, you have heard over the past few years, how we've created additional opportunities to sell the Progressive Home product. This included expanding their state footprint from 27 to 44 states, adding thousands of agent groups and establishing the Platinum program. And finally, investing in direct sales through our Progressive Advantage Agency, adding an online quote-and-buy process and adding analytical triggers for our customers. In total, the impact is impressive as you can see on the right-hand side of this page.

在介绍完整体战略和战略小组的使命之后，我想谈谈我们在第三阶段中努力实现的平衡。随着业务范围的扩大，公司拥有巨大的增长潜力。我们从收购ASI（现为Progressive Home）中就看到了这一点，这笔收购帮助我们创造了营收协同效应，并充分利用了我们的数据资产。在营收协同方面，过去几年你们已经听说过我们如何创造出更多销售Progressive Home产品的机会，包括将其服务州范围从27个扩大到44个，新增了数千个代理人团队，并建立了Platinum白金计划。最后，我们还通过Progressive Advantage Agency投资直销渠道，新增了在线报价和购买流程，并为客户加入了数据触发机制。从右侧图表可以看到，这些举措的整体成效非常显著。

As we abstract away from this example, our base of customers help us generate revenue synergies from new efforts. As a reminder, we have existing relationships with about 15% of U.S. households and hundreds of thousands of small businesses. Our proven ability to extend relationships is the first component of our growth value as a company. Possibly even more important is our data footprint. As an example, on the screen, we have two auto policy attributes and their impact on homeowners loss cost. We continue to find that auto behaviors are predictive of homeowners losses. In general, we see product upgrades at Progressive Home, including auto, methods and variables, are much more powerful than using isolated product information.

将这个案例抽象出来看，我们的客户基础为我们带来了新业务的营收协同效应。提醒一下，目前我们与大约15%的美国家庭和数十万家小企业有现有关系。我们已经证明具备拓展客户关系的能力，这是我们实现增长价值的第一大支柱。可能更重要的是我们的数据资产。比如，屏幕上展示了两个汽车保单属性与房屋险损失成本之间的关系。我们持续发现，汽车行为可以预测房屋险的损失情况。总体而言，在Progressive Home中进行的产品升级，包括使用汽车险中的模型与变量，明显优于仅依赖单一产品信息的做法。

To build on this further, we have historically seen our data footprint is driving data. What we found with Progressive Home is that we have responsibility data. Our data seems to be predictive of a number of behaviors. And our data footprint is larger than just our current insurance. We believe we have data on about 30% of U.S. households. When we combine our quote data, active customers and recently expired policies. This is the second facet of our growth potential as a company.

进一步说，我们的数据资产不仅限于驾驶行为数据。在Progressive Home中，我们拥有“责任数据”（responsibility data），这些数据似乎可以预测许多行为模式。而且我们的数据覆盖面不仅限于当前的保险客户。综合我们的报价数据、活跃客户和近期到期保单，我们估计掌握了约30%的美国家庭数据。这构成了我们公司增长潜力的第二个关键要素。

If we go back to our activity map, we can see that to execute on the Progressive Home synergies, we were able to leverage the entire network of activities and by reinforcing new activities, an ability to market additional protection to our customers and to leverage responsibility data for broad needs.

如果我们回到活动图谱，会发现要实现Progressive Home的协同效应，我们利用了整个活动网络，并通过强化新活动来向客户推广更多保障产品，同时利用责任数据来满足更广泛的需求。

While growth potential is exciting to consider, we are very cognizant of the fact that we have a historic reputation for being prudent stewards of capital. Progressive has an excellent reputation for efficiently generating returns for our shareholders and returning capital. Our comprehensive ROE since 2010 has been consistently high, especially in the past few years, and we have returned these earnings to shareholders at a high rate. More than 50% of comprehensive income is returned to our shareholders. This reputation has provided the company with a solid valuation and low cost of capital. Continuing to add to these high returns is a daunting task that is ever-present in my mind. It is our goal that these additional business lines will add to these impressive results while growing the company.

虽然增长潜力令人振奋，但我们也非常清楚Progressive一贯以审慎使用资本著称。公司在高效创造股东回报并返还资本方面享有良好声誉。自2010年以来，我们的综合ROE一直保持在较高水平，尤其是近几年，并且我们以较高比例将收益返还给股东，超过50%的综合收益已回馈给股东。这一声誉也为公司带来了良好的估值和较低的资本成本。持续保持并提升这种高回报，是我始终铭记在心的重要使命。我们期望这些新增业务不仅能推动公司增长，也能延续并增强我们的卓越业绩。

We also know that diversification is inherently risky. As an example, Bain has produced some insightful research on growth diversification. Let me describe this chart. Along the left-hand side are different dimensions by which a new business can be judged. The dimensions are the 5 Cs: customers, costs, channels, capabilities and competitors. As the new business shares less and less of these aspects, they are defined as being further steps away from the core. Bain finds that each step away reduces the probability of success by about 60%. This work, and others like it has caused us to isolate certain factors like customers, channels and capabilities, as we think about new products and services.

我们也深知多元化本身就是一种风险。以Bain公司的一项研究为例，他们对增长型多元化做了有洞察力的分析。让我来解释这张图。图的左侧列出了衡量新业务的五个维度，也就是“五个C”：客户（customers）、成本（costs）、渠道（channels）、能力（capabilities）和竞争者（competitors）。一个新业务与现有核心业务在这些方面的相似性越低，说明它离核心越远。Bain的研究发现，每远离核心一步，成功概率就下降约60%。这类研究促使我们在评估新产品和服务时，重点关注客户、渠道和能力这些关键因素。

To summarize, we see both immense opportunities for Progressive, and we'll continue to balance these with a sober perspective of the challenges. With that background, I'd now like to spend some time explaining how we will identify and execute on horizon 3 ideas. We think about high potential ideas in three ways. First is market attractiveness. We want to invest in horizon 3 businesses, where the overall market makes it more likely that we'll have success growing. We look at a number of factors here. Trends, we track a number of trends and have a subset of macro trends, which we believe will impact our industry and adjacent industries. Market metrics, factors such as size, profitability and market concentration, can be observed and evaluated for industries. Market dynamics, like Porter's five forces provide greater insights into the power structure of value chains. Next, we look at Progressive's ability to win. For any possible area, there needs to be a fit with Progressive. Here, we examine the fit with our strategic pillars and our activity map. We look at assets that we could leverage like relationships and data. Finally, we consider the proximity to our core and the likelihood of success. In the intersection of these two areas, we also need to find an unmet consumer need.

总结一下，我们认为Progressive面临巨大的发展机遇，我们会始终用清醒的眼光去权衡这些机遇与挑战。接下来我想花些时间讲讲我们如何识别并执行第三阶段（horizon 3）战略。我们从三个维度思考高潜力机会：第一是市场吸引力。我们希望投资于那些市场本身具备良好成长条件的第三阶段业务。我们会从多个因素来评估，包括趋势——我们追踪一系列趋势，并筛选出影响本行业和相邻行业的宏观趋势；市场指标——例如市场规模、盈利能力、集中度等；市场动态——比如用Porter的五力模型来洞察价值链中的力量结构。其次，我们会看Progressive自身的胜出能力。任何一个潜在机会都必须与Progressive的战略支柱与活动图谱相匹配。我们会评估可利用的资产，比如客户关系和数据资源。最后，我们会评估新业务与核心业务的接近程度，以及成功的可能性。在上述两个维度的交集中，我们还要发现一个“未被满足的消费者需求”。

These horizon 3 potential opportunities appear at the top of our horizon 3 process. Our strategy process team, led by Navin Verma, generates and researches these opportunities. Once we have an area of interest and a consumer need, we have two approaches to execute that are not mutually exclusive. We have formed a corporate development team under Erwin Raeth to investigate external organizations that fulfill our ideas. We also have an internal growth incubator, led by Azadeh Hardiman to build new businesses. We believe building has a longer timeline, but with lower risk. We're doing a pause for a moment on corporate development, given that Progressive has not traditionally been an acquisitive company.

这些第三阶段（horizon 3）的潜在机会处于我们战略流程的最上层。由Navin Verma领导的战略流程团队负责生成并研究这些机会。一旦我们锁定了感兴趣的领域与未被满足的消费者需求，我们有两种执行方式，且二者并不互斥：其一是由Erwin Raeth领导的企业发展团队，负责寻找能够实现我们构想的外部机构；其二是由Azadeh Hardiman领导的内部增长孵化器，用于自主孵化新业务。我们认为自主孵化周期更长，但风险相对更低。鉴于Progressive一贯不是一家以并购为导向的公司，我们目前对企业并购路径处于暂停阶段。

We still believe that this will be a rare event. Beyond acquisitions, the corporate development team has two additional methods to engage with companies, strategic alliances and strategic investments. Progressive has a long history of alliances through Progressive Advantage. On the screen, you can see 15 Progressive Advantage relationships that stretch across many products. We continue to believe that our Progressive Advantage organization is a well suited path to meet the needs of our customers and provide income without capital requirements. An example of a successful horizon 3 product is life insurance, specifically, term life insurance. On the left-hand side, you can see our view of the market attractiveness.

我们仍然认为并购只会是极少数情况。除了并购，企业发展团队还有两种方式与外部公司建立联系：战略联盟与战略投资。Progressive通过Progressive Advantage建立联盟已有很长的历史。屏幕上展示了15个Progressive Advantage合作关系，涵盖多个产品类别。我们仍然认为Progressive Advantage是一个非常合适的路径，既能满足客户需求，又能为公司带来无需资本投入的收入来源。一个成功的第三阶段产品例子是人寿保险，特别是定期寿险。图表左侧展示了我们对该市场吸引力的评估。

It has medium to low attractiveness from a market perspective. However, Progressive's ability to win is higher, given that it is approximate to our core and could leverage our pillars and assets. We also find, in our research, that many families go unprotected due to a complex research and purchase process. In addition, based on our brand, customers have told us, they can see us offering the product more than other leading brands. Finally, we've been able to work with a carrier to distribute life insurance products and have increased sales by about 10 times over the past eight years. In addition to protecting consumers, Progressive has generated millions in commissions and materially increased retention for bundled customers on our core auto product. In addition to strategic alliances, we leverage strategic investments in the corporate development group.

从市场角度看，定期寿险的吸引力处于中等或略低水平，但Progressive在这个领域的胜出能力却相对较强，因为它与我们核心业务相邻，并可利用我们的战略支柱和现有资产。我们的研究发现，许多家庭因为研究和购买流程复杂而未能获得保障。此外，基于我们品牌的影响力，客户表示他们更能想象由Progressive提供此类产品，而非其他知名品牌。最终，我们与一家保险公司合作销售定期寿险产品，在过去八年中实现了约10倍的销售增长。这不仅保护了消费者，也为Progressive带来了数百万美元的佣金收入，并显著提升了核心车险客户的保单续保率。除了战略联盟外，我们的企业发展部门还通过战略投资参与外部布局。

As you may have noticed in our quarterly and annual reporting, we do own a small amount of nonredeemable, preferred securities in private companies. Today, these preferred securities represent strategic investments from Progressive. On the screen, you can see two of our representative investments so far in Upstart, our personal loans partner, and KeepTruckin, our commercial EBI partner. Strategic investments allow Progressive to better understand industry dynamics where Progressive has interest and better strategically and economically align with key partners.

你们可能已经在我们的季度和年度报告中注意到，我们持有部分私人公司的不可赎回优先股。这些优先股即代表了Progressive的战略投资。屏幕上展示了我们目前的两个代表性投资：Upstart——我们的个人贷款合作伙伴，以及KeepTruckin——我们的商用EBI合作伙伴。通过战略投资，Progressive可以更好地理解我们关注行业的动态，并与关键合作伙伴在战略与经济利益上实现更紧密的协同。

My purpose today was to keep you apprised of our investments, approach and progress in horizon 3. I hope the past 20 minutes have been helpful in providing this context. As we reach material milestones in this exploration, we'll certainly provide additional updates. To recap our conversation, we believe that we have a robust strategic position that has been underscored by previous investor presentations. We have generated impressive revenue and data synergies with Progressive Home and believe this will continue as we consider additional products and businesses. We balance this with a recognition that growth beyond the core is challenging, and we will continue to be prudent with our capital. Finally, we have our framework to evaluate opportunities and make them actionable, both through external and internal approaches.

我今天的目的是向大家通报我们在第三阶段战略中的投资路径与进展。希望过去20分钟的介绍能帮助大家更好地理解全局。随着我们在探索过程中取得实质性成果，我们也会继续发布更新。总结一下，我们认为自己具备稳固的战略定位，这在过往的投资者简报中也已有所展现。我们通过Progressive Home实现了令人印象深刻的营收与数据协同效应，未来在拓展新产品和新业务时也将持续发挥这一优势。同时我们也清楚核心以外的增长具有挑战性，因此会继续在资本使用上保持谨慎。最后，我们拥有一整套评估机会并将其落地的框架，能够通过外部合作和内部孵化的双路径加以实施。

I'll now turn it back over to Tricia and John Sauerland for Q\&A.

接下来，我将把时间交还给Tricia和John Sauerland进入问答环节。

Question-and-Answer Session

问答环节

A - Julia Hornack

[Operator Instructions]

【主持人提示说明】

Before we get started with questions from the conference call line, Tricia, I have received quite a few questions about the change in dividend policy we announced in December of 2018. So why don't you start with a little bit of that history and the reasons for that change.

在我们开始接听电话会议线上的提问之前，Tricia，我已经收到不少关于我们在2018年12月宣布的分红政策变更的提问。你能否先简要回顾一下这项变更的背景和原因？

Tricia Griffith

Absolutely, so the Board terminated the dividend policy that we had for many years in December of last year. Let me give you a little bit of background. So in 2007, we initiated a very formulaic variable dividend policy. And what we -- the three items we looked at, one was a full year after-tax underwriting profit. We multiplied that by our internal gain share factor. And that is a factor we used -- then we looked in growth and profitability across the board. And it is for our employee bonus that it's on a range from 0 to 2.0. And then Board would decide a percentage on that. So it would be the after-tax underwriting profit times the factor, times at that point 20% divided by the number of shares. And that's how we came up with the very formulaic dividend policy.

当然可以。公司董事会于去年12月终止了我们多年来使用的分红政策。我来简单介绍一下背景。2007年我们启动了一项非常公式化的可变分红政策。我们当时考虑的三个要素是：第一，全年税后承保利润；然后将这个利润乘以内部的“增益分享因子”（gain share factor），这个因子是我们用来评估整体增长与盈利水平的，主要用于员工奖金，范围从0到2.0；接着董事会会决定分红比例。所以计算方式是：税后承保利润 × 因子 × 当时设定的20% ÷ 股数。这就是我们那套公式化分红政策的来历。

We made a tweak in 2008 and we said that if comprehensive income was less than the after-tax underwriting profit, there would not be a dividend. And that was, although, just kind of a nuance was very important because in 2009, after the financial crisis, we did not pay a dividend. So it was kind of a prudent change to the dividend policy. 2010, the only change we made was we raised the percentage from 20% to 25%. And then in 2011, we raised it to 33.3% and that stayed the same until the end. We have done a couple of extraordinary dividends. In addition, in 2010, '12 and '13, and we gave $1 per share or an extraordinary dividend in top of the variable dividend.

我们在2008年做了一个调整：如果综合收益低于税后承保利润，就不派发股息。虽然这是一个细微调整，但在2009年金融危机之后，它显得尤为重要——我们那年就没有分红。这是一项审慎的策略调整。2010年，我们将分红比例从20%提高到25%；2011年又进一步提高至33.3%，此后一直保持不变。我们也曾在2010年、2012年和2013年派发特别股息，每股1美元，这些是除了可变股息之外的额外回馈。

So as we started really growing in earnest around 2016 and going to the debt market occasionally because we needed capital because how fast we were growing.

到了2016年前后，我们的增长进入快车道，并因快速扩张的资本需求而偶尔进入债务市场融资。

We started thinking about, does this still work? And the logic around it was that our shareholders would kind of be in lockstep with our employees. And that does work on a calendar year basis, but when we think of shareholders, we really want to think of how are we creating this enduring business? And does it always make sense, to have -- when we have a lot of capital, to give it back or when we need capital to give it back. And it didn't -- it really wasn't aligned.

于是我们开始思考，这个旧的分红机制是否还适用？它的原始逻辑是让股东的回报与员工激励挂钩。在日历年度层面，这个逻辑确实可行，但当我们从股东长期价值的角度思考时，我们真正想做的是打造一家可持续发展的企业。问题是：当我们有很多资本时，是否总是应该返还？当我们急需资本时，又是否仍该返还？这显然并不合理，二者并未保持一致。

So we took a look, and we said we really want something that was a little bit more flexible. And so we spoke with the Board about it. They terminated the dividend as we know it in December of 2018. And for us, this really allows us some flexibility. And its flexibility if we need capital, its flexibility, if there's some opportunistic event that we might want in horizon 2, horizon 3, and so this is the first year.

因此我们进行了重新审视，并意识到我们需要一个更灵活的机制。我们与董事会进行了讨论，最终在2018年12月正式终止了原有的分红政策。对我们来说，这项变更带来了极大的灵活性——当我们需要资本时可以保留它；当出现horizon 2或horizon 3的战略机会时，也能从容应对。今年就是新政策实施的第一年。

As you know, on a quarterly basis, we -- shareholders earn a $0.10 per common share. And then in the fourth quarter, the Board will discuss any variable dividend and that will be payable in first quarter 2020. We did a Q&A in December, I think -- I believe, in December of 2018, and that was -- that's on our investor website under stock and the dividend policy. So we did a bunch of Q&As, if you want a little bit deeper dive into that. But that really is the history of our dividend policy. It's evolved as we have evolved, but I think it's been nice -- it will be nice, continue to have some flexibility given our current state of thinking about so many growth opportunities in the future. John, do you want to add anything to that?

大家知道，我们目前每个季度会派发每股0.10美元的普通股固定股息。而在第四季度，董事会将讨论是否派发可变股息，该部分将在2020年第一季度支付。我们在2018年12月做过一次问答环节，相关内容现在也在我们投资者网站“股票与分红政策”一栏下可以找到。如果大家想更深入了解，可以参考那些Q&A。这就是我们分红政策的演变历史。它随着我们的发展而逐步调整。我认为，考虑到我们未来在众多增长机会上的思考方向，这种灵活性是非常有价值的。John，你有没有想补充的？

John Sauerland

Sure. The trigger around comprehensive income being greater than after-tax underwriting income, certainly, it was instrumental in 2009. In 2018, however, it was potentially an issue for us in that investment income was very low. And you may recall, it was a material sell-off in December, underwriting income was robust. Around a 90 combined ratio, growing 20%, but comprehensive income was very close to becoming less than after-tax underwriting income. And so we are in a place where we were potentially not going to pay any variable dividend or potentially pay what we ultimately paid, which was about $1.5 billion. And we think that sort of binary trigger there isn't optimal, either for the company or management or shareholders. So I think that's another benefit of moving away from the previous approach to the variable dividend.

当然。当初我们设定综合收益必须大于税后承保利润的触发条件，在2009年确实发挥了关键作用。但到了2018年，这项规定却可能对我们不利。那年我们的投资收益非常低，大家可能还记得12月份发生了一次大规模市场抛售，而我们当时的承保利润表现非常强劲，综合赔付率约为90%，保费增长达到20%。但综合收益差点就低于税后承保利润了。这意味着我们可能根本无法派发可变股息，或者只能勉强发放——最终我们还是支付了大约15亿美元。但这种“非黑即白”的触发机制，其实对公司、管理层或股东来说都不是最优选择。因此，我们认为改用新的、更加灵活的分红机制，是另一个明显的进步。

Obviously, the dividend is part of a capital management plan. We've been fairly transparent in our capital management philosophy. Obviously, we have capital requirements from a regulatory perspective, 3:1-ish for auto, about half of that for property. On top of that, we can carry a contingent capital layer, both of those, generally speaking, grow as we grow. So we have additional needs for capital. That said, at this point, we are in a very good position from a capital perspective, and we will continue to follow the path we have, as Tricia noted earlier, around returning under-leveraged capital to shareholders in the form of dividends or deploying them in share buybacks. So I guess, in aggregate, as Andrew noted, I think our financial stewardship has been good over the years. We have, as Tricia showed, achieved fairly impressive returns on our equity and it is certainly our aspiration and intent to continue to do so.

显然，分红只是我们资本管理计划中的一部分。我们在资本管理理念上一直保持透明。从监管角度来看，我们的资本要求大约是：车险业务维持3:1左右的资本比率，房产险则大约是其一半。此外，我们还会持有一部分应急资本层，这些需求通常会随着业务增长而增长。因此我们需要更多资本。尽管如此，目前我们的资本状况非常稳健，正如Tricia之前提到的，我们将继续执行既定路径——将未充分杠杆化的资本通过分红或回购返还给股东。总体而言，正如Andrew所说，我认为我们在财务管理上的表现多年来一直是稳健的。正如Tricia展示的，我们实现了非常出色的股本回报，我们也有志并有意愿继续保持这种绩效。

Julia Hornack

Great. So Chris, can you please introduce the first caller from the conference call line?

太好了。Chris，请介绍第一位来自电话会议线上的提问者。

Operator

The first question comes from the line of Yaron Kinar at Goldman Sachs.

第一位提问者是来自高盛的Yaron Kinar。

Yaron Kinar

I had a couple of questions. First, we did see a moderation in auto severity this quarter. And at the same time, a little less favorable frequency. Could you maybe talk about both of these shifts and what you see as underlying causes for those?

我有几个问题。首先，这一季度我们看到车险的理赔率出现了一定的缓和，但与此同时，事故频率方面的表现略显不利。你们能否谈谈这两项变化的原因是什么？

Tricia Griffith

So are you referring to collision, in particular?

你说的是碰撞险（collision）部分吗？

Yaron Kinar

I'm referring to -- I think it was even more broad than that. I think it was overall severity and overall frequency.

我说的范围更广，不只是碰撞险，是整体的理赔率和事故频率。

Tricia Griffith

Yes, the frequency, overall, was a little bit less, more in the 2% range. And severity is a little bit up. We look at it differently in collision versus PD. So collision was -- the severity was less than in prior quarters. And there could be a lot of reasons, but we believe our mix of business is changing from a preferred perspective. But on the severity front, we know that it is costing more to fix cars and the components of the vehicles continue to be more expensive. And so we relate a lot of severity to that in total losses, but the frequency is still in the range. It's a little bit less -- I mean, the frequency, the frequency is a little bit less. And that, of course, is really hard to predict. That can go up and down, but we don't see anything systemic.

是的，整体来看，事故频率略有下降，下降幅度大约在2%左右；而理赔率则略有上升。我们会区分来看，比如碰撞险和财产损失险（PD）。在碰撞险方面，理赔率较前几个季度有所下降，原因可能有很多，但我们认为这与业务组合的变化有关，偏向“优选型”客户。在理赔率方面，我们也知道修车的成本越来越高，零部件价格持续上涨，因此我们认为理赔率上升与车辆全损（total loss）的情况增多密切相关。但频率整体仍在合理区间内，略有下降——我强调一下，是略有下降。当然，这种波动很难预测，可能会上下变动，但目前我们没有看到任何系统性的问题。

Yaron Kinar

I thought that property damage already actually came in, in the quarter.

我记得财产损失险的理赔率在这个季度其实已经体现出来了。

Tricia Griffith

The property damage -- may you repeat that?

你是说财产损失险（PD）部分？你能再重复一下吗？

Yaron Kinar

That property damage severity came in this quarter.

我是说财产损失险的理赔率在本季度已经体现出来了。

Tricia Griffith

Yes.

是的。

John Sauerland

Yes. I would sort of characterize it. So a point or two, quarter versus year, we don't normally view that as a material trend. It's tough to project as it is. But if it's 6% severity change for the quarter, 7.4%, year-to-date. We consider that to be a similar severity trend. And from what we can see, our severity trends are fairly consistent with those of our competitors. We obviously don't have full transparency there, but we have pretty good insight, and we think severity is in the 6% to 7-ish percent range right now. Frequency, down 2% to 3%. And that's generally speaking, what we are thinking going forward as well.

对，我大致是这么看的：如果季度与全年之间的差异只有一个百分点或两个百分点，我们通常不会认为这是一个重要的趋势。即使如此，这种变化本身就很难预测。就目前而言，本季度的理赔率上涨大约为6%，年初至今约为7.4%，我们认为这属于同一类的理赔趋势。从我们掌握的情况来看，我们的理赔率趋势和同行相当一致。虽然我们不能完全看清同行的内部数据，但我们有相当不错的洞察，目前看来理赔率大致在6%到7%左右。至于事故频率，下降了2%到3%。总体而言，我们对未来的预期也大致如此。

Yaron Kinar

Okay. That's helpful. And then my second question is around the agency new application conversion rates this quarter. Seem to be a significant decline there. Could you maybe talk about what drove that?

好的，这很有帮助。我的第二个问题是关于本季度代理渠道的新申请转化率。这个数字似乎出现了明显下降，能否谈谈背后的原因？

Tricia Griffith

Well, I think there's -- we've talked a little bit about a soft market, and there's less shopping when people's rates aren't changing. And so if you look over the last couple of quarters, there's been either rate decreases or less increases, so less shopping. And so as we've talked about in the past, we continue to advertise, and that affects both our agency and direct to make sure that we grow and the growth is slowing a little bit. We believe our conversion is still solid based on when people do shop, we have a competitive rate. But yes, we definitely have seen a slowing down because there's either been rate decreases or less increases. And I think we'll have to see if that changes are not based on what we're hearing from the industry, as you just talked about, from severity.

我认为这与市场环境偏软有关。我们之前提到过，当保费不怎么变化时，消费者的比价行为会减少。回顾过去几个季度，市场上要么是降价，要么是加价幅度趋缓，所以整体比价意愿下降了。正如我们之前强调的，我们持续进行广告宣传，这对代理渠道和直销渠道都起到了拉动作用，以确保我们保持增长。虽然增长有所放缓，但我们认为，在客户有意愿投保时，我们的转化率依然是稳健的，因为我们的报价具有竞争力。但确实，目前的增长放缓，是因为市场上保费上涨压力在减弱甚至在下降。我认为后续能否改善，还要继续观察市场情况，特别是如你刚才提到的理赔率趋势。

John Sauerland

Just to add that... Sorry.

我想补充一点……抱歉打断。

Yaron Kinar

I just would have thought that the lower rates would have driven lower new applications but not necessarily decrease the conversion rate of these new applications.

我的理解是，保费下降会减少新的投保申请数量，但不一定会影响这些申请的转化率。

Tricia Griffith

Well, yes. Well, good version is usually based on -- is the rate. When you do shop, is it the right way for you and some people, if it's not significant, it won't convert.

确实如此。通常转化率与报价息息相关。当客户在比价的时候，是否选择我们，关键就在于我们能否提供有吸引力的报价。如果价格差异不大，客户可能就不会转化为我们的保单。

John Sauerland

On a year-over-year basis, actually in both the agency and the direct channel, conversion has been up. And it's been sort of a highlight of our product model introductions. And I would also add that its conversions has been improving in segments that we're targeting. So we're targeting more and more preferred customers, especially in the agency channel. We've seen nice shifts up and preferred characteristics of the business we're writing, and that's predominantly driven by the new product models and the conversion that is driven by those models and that we're getting more competitive by introducing factors for the preferred end of the segment that are more competitive.

从同比角度看，无论是代理渠道还是直销渠道，我们的转化率其实是提升的。这也是我们近年来推出新产品模型的一大亮点。我还想补充一点，我们在重点目标客户群的转化效果也在改善。我们正越来越多地聚焦“优选客户”（preferred customers），尤其是在代理渠道。我们看到我们所承保的业务客户特征正明显向“优选型”上移，这在很大程度上是由新产品模型推动的，这些模型在转化率方面表现更好，而且我们引入了更多有竞争力的定价因子，专门针对优选细分市场，从而提升了整体竞争力。

Tricia Griffith

Yes, I think the only one we haven't -- where we haven't grown new apps on the agency channel with an inconsistently insured, which we call Sams.

是的，我认为唯一一个我们在代理渠道上没有实现新投保增长的群体，是那些保险覆盖不稳定的客户群，我们内部称之为“Sams”。

Operator

The next question comes from the line of Gary Ransom at Dowling & Partners.

下一位提问者是来自Dowling & Partners的Gary Ransom。

Gary Ransom

Tricia, you mentioned in your letter on Snapshot, you said that your program encourages customers to improve their driving behavior. That's a little bit different from what I've heard over the last several quarters of measuring for pricing, using Snapshot to measure pricing as opposed to changing behavior. Is there something behind that message that you're doing differently, either in your newer distracted driving measurements or in something else?

Tricia，你在致股东信中提到Snapshot项目鼓励客户改善驾驶行为。这与过去几个季度你们强调主要用于定价的说法略有不同。请问这背后是否有一些变化？比如在分心驾驶的数据监测或其他方面有什么不同做法吗？

Tricia Griffith

No. Not necessarily. I mean, we use that, obviously, as our most predictive variable, but we also do want to encourage people to understand when, from a distracted driving perspective, as an example, when they are using their telephone, hands free, not hands free, et cetera, mostly for the safety of every other drivers. So we've always cared about it, and we've tested different things, whether it's beeps, start giving you the information right away. It's still -- it's mainly used as a variable. But obviously, we want to give the best drivers, the biggest discounts. And so both of those things important, it's understanding our rate to risk as well as of helping people to drive better.

没有特别的改变。我们确实将Snapshot作为我们最具预测力的定价变量之一，但我们同时也希望能借此让人们意识到，比如说在分心驾驶方面，自己什么时候在使用手机，是免提还是非免提，这样做主要是为了道路上其他驾驶者的安全。所以我们一直都重视这个问题，并测试过很多方式，比如蜂鸣提示、实时反馈信息等。当然目前它还是主要被作为定价变量使用。但我们确实希望把最大幅度的折扣给予最佳驾驶者。因此这两者都很重要：一方面是准确衡量风险来制定费率，另一方面是帮助客户改善驾驶习惯。

Gary Ransom

Do you have any intention of changing your -- the Snapshot concept of you just measure for 6 months, and you're done and make it continuous?

你们有没有计划调整Snapshot的模式，比如现在是只测6个月就结束，未来是否可能改成持续测量？

Tricia Griffith

You know what, we're actually -- we talk about that a lot, and that might make more sense on the mobile device versus the dongle we have right now. So we're always talking about that. And I'm always talking about different ways with which to use that data, whether it be for claims, et cetera. So we're always kind of in discussion around that.

其实我们确实经常在内部讨论这个话题。如果是用手机App来持续监测，这样做可能比现在使用的硬件插头（dongle）更有道理。所以我们一直在探讨这个方向。我个人也在考虑各种利用这些数据的新方式，比如说用于理赔流程等等。所以我们始终在围绕这一问题进行持续讨论。

Operator

And the next question comes from the line of Amit Kumar with Buckingham Research.

下一位提问者是来自Buckingham Research的Amit Kumar。

Amit Kumar

I wanted to go back to Yaron's question on loss cost trends and maybe build on that. If you look at the frequency and severity data by quarter, it has been stable. But in the queue, you talk about additional pricing actions. So all those being equal, why would that not translate into additional margin pressure from here as we head into 2020?

我想回到Yaron刚才提到的理赔成本趋势问题，并在此基础上进一步追问。如果按季度来看，事故频率和理赔率数据是比较稳定的。但你们在季报中提到还会有额外的定价措施。那在其他因素不变的前提下，这是否意味着2020年之后会面临更多利润率压力？

Tricia Griffith

Well, I think that depends on each one of our products. Obviously, I talked about property, and we're seeing some high loss cost on property. So of course, that affects trends. So our focus right now is to get into that profitability and expand our products and our segmentation skills and make some underwriting changes. But I think what we will look at is the continued severity trends, understand those where we feel like we're in a really good position as we haven't, in certain areas, where we've thought that small decreases would increase conversion. We've done that. But we haven't done it to the extent that some of our competitors have.

我认为这取决于具体的产品类型。比如我刚才提到的房产险，我们确实看到其理赔成本偏高，这自然会影响整体趋势。因此我们目前的重点是在这方面恢复盈利，同时拓展产品线、提升风险细分能力，并进行一些承保调整。但我们确实会持续跟踪理赔率趋势，并在我们有信心的领域做出调整。我们在某些细分市场中判断，小幅降价可以带来更高的转化率，于是我们就进行了相应的调整——但幅度远不及一些竞争对手那么激进。

So as things change, we believe we'll have to -- our rates would have to change substantially. And we've always talked about that with our customers because we know our customers want to have stable rates. And so when we think about increasing rates substantially or decreasing rates substantially, for that matter, we try to make them stable. So that it will be less sort of a topsy-turvy. But we'll follow the trends. And we will, as we've said in the past, take small bites of the apple. We've always said if we increase rates, we want to be out ahead of it and understand 1 -- 3:1 is better than 1:3, we used to say, to take small, small bites, so customers stay with us because another big part of, obviously, our growth strategy is retention.

随着形势变化，我们认为未来确实可能需要更大幅度的调价。我们一直在跟客户沟通，因为我们知道他们希望费率保持稳定。所以无论是大幅涨价还是降价，我们都尽可能让变化更平滑，避免剧烈波动。但我们会持续跟踪市场趋势，正如我们过去所说，我们倾向于“咬小口的苹果”（small bites of the apple）。我们常说，“3:1比1:3要好”，意思是小步快跑比后知后觉更好。我们希望提前做出调整，每次幅度都不大，这样客户才会更愿意留下来——而客户留存率显然是我们增长战略的关键部分之一。

Amit Kumar

Got it. The only other question I have is on commercial auto. In the queue, you talk about the change in loss cost trend. You talked about the shift in the mix of business towards for higher tracking as one piece. Intuitively, as the book pivots and other pieces versus a monoline book grows, would that translate into a higher initial loss pick as we get into 2020?

明白了。我还有一个关于商业车险的问题。在季报中你们提到理赔成本趋势的变化，以及业务组合向更高风险的“重型卡车”业务倾斜。从直觉上讲，当业务结构发生转变，尤其是从单一产品（monoline）转向更复杂的组合业务时，是否意味着进入2020年时初始理赔率（loss pick）会相应提高？

Tricia Griffith

I wouldn't take 1 quarter or 1 month of commercial to be -- to something -- we feel like it's not a very alarming trend. In fact, if you look at our year-to-date, we're in the high 80s. So we feel very comfortable with that. And in fact, if you look at accident year, it's even better, about 2 points better. So what we do, again, we surgically look at every BMT, every state, new and renewal, and we watch that closely. We take rate when we need it. As evidenced by -- if you remember, back in 2016, Commercial popped up a bit, and we reacted quickly and got back in the track. So we watch new business. We watch our renewal business. We watch our competition. You saw the delta we had in the combined ratio on Commercial Auto in comparison to the industry. So we are on that very aggressively all the time as we see something change because a lot of this could be affected by macroeconomic trends, we are on that. So if we see loss cost on a certain BMT go up, and we believe that trend is going to continue, we will be on that with rates or changes or underwriting restrictions.

我们不会因为某一个季度或某一个月的数据就断定商业车险出了什么大问题。目前来看，我们对此并不感到担忧。实际上，从年初至今的表现来看，我们的综合赔付率处于80%后段，这让我们感到很安心。如果按事故年度（accident year）来看，还要再好两个百分点。所以我们的做法是一项项、逐州、逐类BMT（Business Market Target）地精细分析，不论是新业务还是续保业务，我们都密切监控。必要时我们会调价。举个例子，你可能还记得2016年时商业险的赔付率出现了抬头，我们当时迅速反应并纠正了趋势。所以我们会密切关注新业务、续保业务以及竞争对手的动向。你也看到，我们的商业车险综合比率比行业平均高出不少。我们一旦发现变化，都会积极应对，因为很多这些趋势其实是由宏观经济因素驱动的。如果我们看到某个细分类别的理赔成本在上涨，且判断这一趋势会持续，我们会立即采取加价、改条款或加强承保限制等措施。

John Sauerland

I would just clarify that our loss ratios are always bottom-up. They're not top-down. So you mentioned a loss ratio pick going into the next year. That's not how we reserve. So we actually have average reserves for losses that adjustors set below a threshold. And above that, we use the adjustor's estimate for the loss. We also have inflation factors that apply to other losses in the average layer over time so that if we think generally, severity trend is X, we are baking that in over the course of the year. So we then -- when we actually incur claims and add that to our IBNR, that's how we derive our loss ratio. We are seeing more large losses. And as I'm sure you noted, and Tricia alluded to, we did take a reserve change on commercial lines. In September to reflect those trends. But again, we don't go into the year with a loss pick and then develop that, we take a bottom-up approach.

我想澄清一下，我们的理赔率始终是采用自下而上的方式制定的，而不是自上而下。所以你提到的“初始理赔率估计”（loss pick）并不是我们进行准备金估算的方式。我们通常在理赔金额低于某个门槛的案件中设定平均准备金，超过门槛的则使用理算员的个案估算值。此外，我们还会对平均赔付层中的损失应用通胀因子，确保若我们预计全年理赔率趋势为某个水平，我们能将其合理嵌入到全年准备金估算中。因此，在发生实际理赔、并将其加入未决赔款准备金（IBNR）时，我们的理赔率就是这么算出来的。确实，我们看到大额赔案有所增加，Tricia刚才也提到了，我们在9月对商业险做了准备金调整，以反映这种趋势。但再次强调，我们不会在年初先设一个理赔率目标再倒推储备，我们始终坚持的是自下而上的精算方式。

Operator

And the next question comes from the line of Mike Zaremski at Crédit Suisse.

下一位提问者是来自瑞士信贷的Mike Zaremski。

Mike Zaremski

This is actually Charlie on for Mike. First question, one of your competitors recently announced initiatives that cut its expense ratio. Do you feel your expense ratio or loss adjustment expense ratio can fall in the coming years based on any specific initiatives that you are undertaking?

我是Charlie，代Mike提问。第一个问题是，近期你们的一位竞争对手宣布了一些可以降低费用率的举措。请问在你们目前正在推进的具体举措中，你们是否也认为未来几年内有机会进一步降低费用率或理赔费用率（LAE）？

Tricia Griffith

We always look to have competitive prices. When you think about -- what Andrew went over, sort of our cornerstones and our pillars, it's really important for us to have competitive prices. So we constantly look for ways to be efficient. And there's a few things that we've talked about in the past. When you think of LAE, we talk about just gain efficiencies through more estimates that -- we can do through photos, making it efficient and customers are happy with that. That works as long as there's no supplements, et cetera, but we've continued to work our way into having a higher percentage of losses settled in this way.

我们始终致力于保持价格的竞争力。正如Andrew之前提到的，我们的战略支柱之一就是要有有竞争力的定价。因此我们会持续寻找提高效率的方式。此前我们也提到过一些方法，比如在理赔费用（LAE）方面，我们通过照片估损的方式来提升效率，这样做既提高了处理速度，客户也很满意。只要后续没有补充索赔，这种方式非常高效。我们正在努力将越来越多的赔案通过这种方式结案。

We continue to use our technology to get out in front of that. In terms of expense ratio, we talk about that all the time and my team, we're headed into our objectives for 2020. And we're talking about how we think about both expense ratio and LAE and have a goal to reduce that over the years. I talked about that a few years ago where we wanted to get down to a certain percentage. We continually do that. Of course, you don't want to do it, as an example, with claims, there's that balance of having the right amount of people, the right amount of talent because you could reduce your LAE substantially. But if it increases your indemnity, then it's not worth it. So we look at that all the time.

我们也持续应用新技术来领先市场。在整体费用率方面，我和团队经常进行讨论，并已将其作为2020年目标规划的一部分。我们始终在研究如何降低费用率和理赔费用率，并设定了长期下调的目标。我几年前就讲过，我们希望将这些比率降到某个特定水平，这方面我们持续在努力。当然，也不能简单地一味压低费用，比如在理赔端，人力的数量和素质要达到平衡。你可以大幅削减LAE，但如果因此导致赔偿金额上升，那就得不偿失了。所以我们一直在细致地评估这种权衡。

It's really about people. It's about making sure that people have the right technology, and we've obviously used some things on the CRM side with AI to make sure that when our customers call in for really simple needs.

这一切归根结底是关于“人”的问题，是确保员工具备合适的技术工具。我们在CRM方面也引入了一些AI手段，确保当客户打电话来处理一些简单问题时——

We don't necessarily have to have a person on the end of the line. That, of course, makes sense, and it's easier for the customer. And helps with expenses. But yes, that's a big part of it. We know price is big. We know that we have to be competitive, and we will continually try to make sure we do the right thing, but we reduced our expenses across the board.

我们不一定需要由人工接听。这种做法显然更合理，对客户来说也更便捷，同时有助于控制成本。是的，这确实是我们努力的一个重要方向。我们很清楚价格因素的重要性，也知道必须保持竞争力，因此我们会持续确保各项举措方向正确，同时在多个层面降低费用。

Our non-acquisition expense ratio, I should say, on the other side, because we -- in terms of advertising, we'll spend as much as we think we should to make sure that we have efficient use of our media. And if our level costs are too high, then we won't. But we've been really happy about increasing our media spend. So we look at that a little bit differently. We look at non-acquisition expense ratio.

至于非获客类的费用率（non-acquisition expense ratio），我想特别说明一下。就广告而言，我们会根据需要投放适当的预算，确保媒体投放效益最大化。如果边际成本过高，我们就会缩减。近来我们非常乐于看到媒体预算的增长取得了积极成效。所以这一部分我们会以不同角度看待，重点关注非获客类的费用率。

Mike Zaremski

Got it. And then can you update us on the take-up rate for Snapshot? And what percentage of users stay on the program after the initial period? And whether there's been any changes in that rate recently?

明白了。那么你们能否更新一下Snapshot的参与率？在初始阶段之后，有多少用户会继续留在该项目中？近期这个比例有没有发生变化？

Tricia Griffith

Yes. I think the -- well, the take rate on the direct side is much higher. And probably, I think, around 40%?

是的，我想……直销渠道的参与率要高得多，现在大概是40%？

John Sauerland

40%.

对，40%。

Tricia Griffith

40%, it's single-digits on the agency side, we continue to work with our agency workforce to, kind of, to understand that. We would say, at any given time right now, our policies enforced, someone's been on the Snapshot program at some time, about 15% of our policy enforced would say that. So we're really trying to make sure people understand the discount, understand what we're looking for. A lot of people, it's just -- it's that they don't want to do it because of big brother. I think it's sometimes hard to explain from the agency side, partly because we give a participation discount.

40%左右，而在代理渠道的参与率还只是单位数百分比。我们还在持续与代理人网络合作，推动他们更好地理解这个产品。目前来看，在我们的有效保单中，大约有15%的客户在某个时间点参与过Snapshot项目。所以我们正努力帮助客户理解这个折扣机制，以及我们评估的维度。很多客户不愿意参与，是因为担心“被监控”（big brother）的问题。在代理渠道尤其难解释清楚，一部分原因是我们提供了“参与折扣”（participation discount）。

But when we have the data, we make sure that you can get either a 20% decrease, which is great, or you could get a 20% surcharge. And so I think some people that try it may know that they're not going to get the discount and that won't work out for them. But we think it's -- we think it's, obviously, a great rating variable. We think it's a great for society because hopefully, you do change your habits. But the take rate has been pretty stable, but much higher on the direct side.

不过一旦我们收集到驾驶数据，客户就有可能获得最高20%的保费折扣（这是非常有吸引力的），但也可能面临最高20%的附加费。所以有些客户可能意识到自己得不到折扣，就选择不参加。尽管如此，我们仍然认为这是一项非常优秀的定价变量。从社会层面看，它也具有正面意义——希望能促使人们改变驾驶习惯。总体而言，参与率保持稳定，但直销渠道显著更高。

John Sauerland

I would take the opportunity to add that in the commercial space, we now have an analogous offering we call Smart Haul, and our commercial business is still largely -- by far and away, largely agency based. And the take rate for the commercial business for Smart Haul has been far more promising than it has in the Snapshot side for the Personal Auto. There we are working with our agents to target the for-hire transportation segment. So I think interstate trucking, those premiums are fairly substantial. So if you can offer a customer a material discount, and they're an independent operator many times. It's a material consideration for them because that's a business cost.

我想借此机会补充一下，我们在商业险领域也推出了类似产品，叫Smart Haul。我们的商业险仍然主要通过代理渠道销售。而Smart Haul在商业险中的参与率，远高于个人车险领域的Snapshot。我们正与代理人合作，重点面向“营运运输”（for-hire transportation）细分市场推广该产品。例如，跨州货运客户的保费通常比较高，如果我们能提供一个实质性的折扣，对这些通常是独立运营的客户而言，这是非常重要的成本因素。

And we're seeing great -- as in the last quarter, I had John Barbagallo share our commercialized precedent, along with Karen Bailo, shared some of the results from that program, which are very promising. Loss ratio is very predictive from the information that comes from the electronic logging devices. And we're providing, as I mentioned, significant discounts as well as, surcharges. But even -- given that, our loss ratio line, if you will, is still fairly steep. So we think there's tremendous continuing potential with our Smart Haul program in Commercial lines.

在上个季度，我们请John Barbagallo和Karen Bailo分享了Smart Haul项目的一些成果，表现非常令人鼓舞。从电子日志设备（ELD）采集的数据来看，其预测能力对损失率非常强。正如我之前提到的，我们确实为一些驾驶行为提供了显著的折扣，也对不良行为实施附加费。但即便如此，我们的损失率曲线仍然保持陡峭，这说明该项目在商业险中的潜力非常巨大，我们非常看好它的持续发展。

Operator

And the next question comes from the line of Greg Peters at Raymond James.

下一位提问者是Raymond James的Greg Peters。

Greg Peters

In your comments, you mentioned the capital requirements for your property business being about half that for auto. And I'm curious if that changes your expectations about underlying combined ratios or combined ratio targets. And in your letter, you also introduced the ASL agreement. And I was wondering if you could provide color on that.

在你们的发言中提到，房产险业务的资本要求大约是车险的一半。我想知道这是否会改变你们对基本综合赔付率或目标综合赔付率的预期？另外，在你们的信中提到了ASL协议，能否进一步说明一下这个协议的具体内容？

Tricia Griffith

Yes. No, I think that capital requirements are really from a regulatory perspective to make sure that we have the right amount in case of losses. And then I think John referenced briefly, when we talked about the dividend policy, we also have a self-imposed contingency layer in case things happen, should it be a big catastrophe or whatever. So our capital requirements won't change based on that. Our reinsurance does in terms of us understanding the ultimate loss costs. So we went into the ASL a couple of years ago. And basically, we wanted it help us. It doesn't prevent going over 100 clearly, but we wanted to kind of lessen the downside depending on if we have not just name storms because now that's part of the ASL, but it used to be 63 LAE and non-storm or liability. It's really just another protection factor besides our name storms, our 1 in 100 years name storms. So that's something that we've had for a couple of years now. Just more of a downside protection.

是的。我的看法是，资本要求主要是从监管角度出发，确保在发生损失时我们有足够的资本储备。正如John在谈到股息政策时简要提到的，我们还设有一层自我设定的应急资本，以应对可能发生的重大灾害等突发情况。因此，资本要求本身不会因为这点而改变。但我们的再保险安排，会帮助我们更好地理解最终的损失成本。我们在几年前引入了ASL协议（Aggregate Stop Loss，累计损失上限协议），其主要目的是在面对风险时为我们提供支持。虽然它并不能完全防止综合赔付率超过100，但它确实可以在多种情境下降低下行风险。ASL协议最初主要涵盖63条LAE（损失调整费用）和非风暴责任，但现在也包括具名风暴。这只是我们除了应对“百年一遇”的具名风暴以外，设立的又一道风险保护机制。我们已经使用这项协议几年了，主要目的是提升下行保护能力。

John Sauerland

And just to elaborate on the combined ratio part of your question there. We target, generally speaking, return on capital across our product lines in the same neighborhood. So you're correct in that if we have to have more capital around for property, we target combined ratios for property that are lower than auto. You might quickly point out that, that is not right now, our performance, and we're very cognizant of that. As Tricia mentioned in opening comments, taking actions to improve profitability in the property space.

我想进一步补充你关于综合赔付率的问题。我们通常希望各产品线的资本回报率处于相近水平。你说得没错，如果某一产品需要配置更多资本（例如房产险），那么我们对其设定的目标综合赔付率就会低于车险。目前的现实是，房产险的实际表现距离这个目标还有差距，我们对此非常清楚。正如Tricia在开场时提到的，我们正积极采取措施，以提升房产险业务的盈利能力。

Greg Peters

My follow-up question. And I'm using the words from your conference call about an environment where there's less shopping. I'm curious if you can tell us how you might adjust your advertising budget, considering that we might be in this new environment where there is less shopping, as you described it, from your consumers?

我有一个追问问题。你们在电话会议中提到，目前处于一个“客户购物意愿较低的环境”。我想知道，在你们认为消费者的投保比较行为减少的背景下，你们是否会调整广告预算？

Tricia Griffith

Yes. So how we look at our media spend is really, we believe, if -- we have an allowable cost per policy. And if our cost per sale is less than that, we'll continue to advertise if we believe it's efficient. We watch, what we call, NP6, which is new prospects that haven't shopped us in the last 6 months, and then we watch conversion. As long as those numbers, we believe, are within the guidelines that we set, then we'll continue to advertise. We want to make sure that we advertise across the board of all of sort of our customer set. So we offer -- advertise a savings message, protection message for auto and home, and we watch those to make sure how good each commercial is, how good each digital advertising are. We have -- we do such deep analytics from our media spend that we will continue to spend as long as we think it's efficient and if not, we'll pull back.

是的。我们看待媒体投放的方式是：我们有一个每张保单可接受的销售成本（cost per policy）。如果我们的实际获客成本（cost per sale）低于这个标准，并且我们认为广告是有效率的，我们就会继续投放。我们会关注一个叫做NP6的指标，也就是在过去6个月内没有接触过我们的新潜在客户数量，然后也会关注转化率。只要这些数字仍然在我们设定的指导范围内，我们就会继续投放广告。我们会确保广告覆盖我们所有目标客户群体，例如针对汽车和房屋保险，我们会推送“节省开支”和“保护保障”的信息。我们会监测每条电视广告、每一项数字营销活动的效果。我们对媒体投放效果的分析非常深入，只要它们还具有效率，我们就会继续投放，否则就会收紧预算。

John Sauerland

Yes, we think that some of the lower levels of shopping over the previous periods has been driven by the fact that many competitors have been actually lowering rates. We think that environment has changed, and we're starting to see far less rate decreases and more rate increases. And naturally, as customers receive rate increases, they're far more likely to shop than the rate decreases. So it's a dynamic environment. As Tricia mentioned, we manage spend very dynamically, even daily. And when we're seeing changes in the environment, we can react very quickly.

是的。我们认为过去一段时间购物意愿减弱，部分是由于很多竞争对手实际上在降价。但我们认为这种环境正在发生变化，现在我们看到行业中降价的情况少了，涨价的情况多了。很自然地，当客户收到涨价通知时，他们会更有可能去比较投保方案，而不是降价时那样“无动于衷”。所以这是一个动态变化的环境。正如Tricia提到的，我们的广告投入是高度动态管理的，甚至可以做到按天调整。一旦我们发现市场变化，就能迅速做出反应。

Tricia Griffith

We don't want to -- you don't want to pull back either. Obviously, we still feel really good about our spend. But you don't want to pull back because as the environment changes, you want to consistently be out there because people will have awareness of you and then ultimately, if they shop you, that would be a consideration. So we even see a couple of the trends or the turning point where some -- there is some increases. So we can't predict what's going to happen. But John and I often talk about and look at data and challenge ourself "is the soft market softening," because we have seen a turning point from that based on what we believe are consistent industry severity trends.

我们也不想贸然减少投放。我们目前对广告支出还是非常满意的。但你不能在这个时候撤退，因为环境会变化，而我们希望品牌始终保持在客户视野中，这样一旦他们开始购物比较时，我们就会是他们考虑的对象。事实上，我们已经观察到了一些趋势或者说“拐点”，也就是出现了价格上调的迹象。我们无法预测接下来会发生什么，但我和John经常讨论、研究数据，不断地挑战自己，问：“这个软市场是否正在软化？”因为根据我们对行业理赔严重度趋势的理解，确实出现了变化的信号。

Unidentified Company Representative

I'm actually going to take a question from the webcast now because it kind of builds on a question that Greg just had. The question is, what specific actions is the company taking to achieve underwriting profitability in the Property segment? Should investor -- why should investors, excuse me, be confident that Progressive will get this line to underwriting profitability, when that has been a challenge during the last several years?

我现在想从网络直播中选取一个问题，因为它和Greg刚才的问题有一定关联。问题是：公司目前正在采取哪些具体措施以实现房屋险业务的承保盈利？过去几年中这一业务始终面临挑战，投资者为何应相信Progressive能够使这一领域实现承保盈利？

Tricia Griffith

We -- let me start with the end one. If you know the history of Progressive, when we set up to do something we execute it. And so I referred to in 2016, when our trends went up and we were a little bit over 96. We got together. We made changes in our expense ratio, and we got rate, et cetera. And we nailed that in really a short period of time. And Dave Pratt, you're on the phone, you can add in. So what we've looked at over the last couple of years, obviously, if you take out cats, we're profitable.

让我先从问题的后半部分回答起。如果你了解Progressive的历史，你就会知道我们只要定下目标，就一定会执行到位。2016年我们也曾面临趋势恶化，当时综合赔付率稍高于96%。我们马上组织团队，在短时间内通过降低费用率、调整费率等措施解决了这个问题。Dave Pratt也在线，可以随时补充。从过去几年来看，如果剔除灾害（catastrophes）的影响，我们的房屋险业务本身是盈利的。

The catastrophes, especially wind and hail have been substantial. And so we are basically -- we're changing some of our underwriting guidelines. We're changing some of our coverages, some of our deductibles in specific states, where we see that hail and wind. We're rolling out our 4.0 product. We have it in, I think, three states now, maybe three more by the end of the year, and then we'll have an aggressive rollout in 2020.

近年来灾害理赔，尤其是风灾和冰雹的损失特别严重。因此，我们正在采取一系列措施：调整部分地区的承保标准、保单责任范围和免赔额，特别是在那些频繁出现冰雹和风灾的州。同时我们也正在推出4.0版房屋保险产品。目前已经在三个州上线，预计年底前会新增三个州，并计划在2020年大规模推广。

If we have to pull back a little bit on growth, we will. We obviously have reinsurance as well. And now I think the beauty of having the ASI Progressive is that we have the auto R&D in pricers, the home R&D in pricers, and we can share that data to really understand loss experience across different consumer segments. So for us, we have all hands on deck.

如果需要暂时放缓增长，我们也愿意这么做。当然，我们还有再保险保护。现在Progressive和ASI整合的一个重大优势是，我们拥有汽车和房屋两大保险领域的定价和研发资源，可以共享数据，从而更深入理解不同消费群体的损失经验。所以现在我们是“全员上阵”状态。

I will leave from here today to go down to St. Pete to Progressive Home. We are encouraged about what we're seeing. It takes a little time because some of these are annual policies. But I feel very confident we will get where we need to go. And as a reminder, when we think about growth and profit, we always want to do both. And this has been an amazing several years where we've been able to grow substantially and make a lot of money. If we have to make a choice and we never want to, profit comes first. So we do what we can to make sure we make our target profit margins.

我今天会离开这里前往圣彼得堡（St. Pete），亲自到Progressive Home团队现场了解进展。我们对目前的情况感到鼓舞。当然，结果需要一点时间显现，因为房屋险很多是年单业务。但我对实现目标非常有信心。顺便提醒一下，我们在制定战略时，始终希望实现“增长+盈利”双目标。过去几年，我们确实在这两方面都表现出色。如果必须二选一，虽然我们不愿意这样做，利润优先。所以我们会采取一切必要的措施，确保达成既定利润目标。

Dave Pratt

Tricia, I could add just a little detail on the wind and hail comment, if that's appropriate.

Tricia，我可以补充一点关于风灾和冰雹的细节，如果你觉得合适的话。

Tricia Griffith

Yes, please.

好的，请讲。

Dave Pratt

Because you're right, if you look at our losses, the weather losses in the last few years have been higher than we had priced for. The non-weather claims in water, fire, theft, liability, et cetera, we've been right on our pricing targets. And so we've -- when we price for weather because it's so volatile, we can't really use our own experience from the last few years as a good predictor of next year's losses. So we rely pretty heavily on models to do that. The models for hurricane performed pretty well. But what we've found as we've dug into this problem was that most of the tools we had been using for severe convective storms, so thunderstorms that cause wind and hail. We're not performing well at all. And so we've done a lot of work. We've adopted a new tool from Karen Clark and company that we think, with some proprietary adjustments on our part is a much better predictor of future losses. And we're using that to guide our pricing in states with significant wind and hail exposure. So I feel much more confident going forward that we're going to have -- we'll be priced to the risk accurately. And then we'll manage our risk concentrations in areas that get a lot of hail, just to make sure that we don't have an overconcentration in a place where we don't want to.

你说得对，如果你看我们过去几年的损失，天气相关的损失确实超过了我们的定价假设。而像水灾、火灾、盗窃、责任等非天气因素的理赔，与我们的定价目标是基本一致的。由于天气事件非常波动，我们在做天气风险定价时，不能简单地用过去几年的自身经验来预测未来一年的损失。所以我们非常依赖模型。飓风相关的模型表现尚可，但我们深入研究后发现，我们原本用于严重对流风暴（比如引发风灾和冰雹的雷暴）的工具并不好用。因此我们进行了大量工作，目前采用了Karen Clark & Company开发的一套新工具，我们还加入了一些专有的调整。我们认为这套工具对未来损失的预测准确性更高。我们现在用这套工具来指导在风灾和冰雹风险较高州的定价策略。因此我对未来的信心比以前更强，因为我们能够更准确地按风险定价。同时我们也会控制高冰雹风险地区的业务集中度，避免风险过于集中。

Tricia Griffith

Yes. And Dave is down in St. Pete right now, and I'll tell you, he's got an extensive career at Progressive doing many of these things. And if there's anybody that can right this ship, it will be him. And really, we have all hands on deck. So my confidence level is very high.

没错。Dave现在就在圣彼得堡，而且我可以说，他在Progressive有着非常丰富的经验，长期负责类似工作。如果有谁能把这艘船开回正轨，那一定是他。而且我们整个团队都已经全力投入，所以我对实现目标非常有信心。

Greg Peters

Great. I actually have a follow-up question, sort of related, but it kind of speaks to the questions and the comments, I guess, that Dave had about weather and weather data. But the question is, what do you think the impact to the company will be in the long-term from the risks of climate change?

很好。我其实有一个后续问题，跟刚才Dave关于天气和天气数据的讨论有关。问题是，从长期来看，你认为气候变化带来的风险会对公司产生什么影响？

Tricia Griffith

I mean, that's really hard to say. And clearly, we will continue use of reinsurance to, again, protect that downside. I think what Dave said is right on target with that question as well in terms of us understanding the models better and understanding how they affect our book of business. And so he said, we have some very specific work we've been doing on severe convexity in the last several months, we feel good about it. We'll continue to tweak those things, continue to -- if we have to pull back, have underwriting guidelines, et cetera. It's really hard to say overall, how it will affect us, but we'll do things to understand it better and protect ourselves better.

这个问题确实很难回答。从我们的角度来看，我们当然会继续使用再保险来对冲下行风险。我认为Dave刚才讲得非常准确，重点是要更好地理解模型，并理解这些模型如何影响我们的业务结构。过去几个月，我们在严重对流天气（severe convective storms）方面做了很多细致的工作，我们对进展感到满意。未来我们也会继续优化模型，必要时收缩部分业务、调整承保标准等。总的来说，气候变化究竟会如何影响我们还难以界定，但我们会努力提升认知，并采取一切措施保护自己。

Operator

And the next question comes from the line of Ryan Tunis with Autonomous Research.

接下来是来自Autonomous Research的Ryan Tunis的提问。

Crystal Lu

This is Crystal Lu in for Ryan Tunis. For our first question, can you please talk about what is driving the increased severity trends in the parts of your commercial auto book that are seeing higher losses? And why those drivers or characteristics are not impacting the healthy portion of your commercial auto book?

我是Crystal Lu，代替Ryan Tunis提问。我们第一个问题是：您能否谈谈导致部分商用汽车保险组合出现更高损失严重度趋势的原因？以及为什么这些驱动因素或特征没有影响到商用车业务中表现良好的部分？

Tricia Griffith

I think the primary driver of a lot of the severity is medical costs, and they are affecting the book overall, whether it's auto or commercial auto, it's just more pronounced in the for-hire trucking.

我认为导致严重度上升的主要原因是医疗成本的上涨。这一趋势影响了我们整个车险业务，无论是个人车险还是商用车险，只是在营运货运领域表现得更加显著。

Crystal Lu

Okay. And can you also talk about which parts of the commercial auto reserves you reviewed in September and which parts of the book are going to be reviewed in fourth quarter? And maybe whether or not you pulled forward any reserve reviews when you found some trends of increasing severity in certain parts of the book?

明白。您还可以谈谈9月份审查了商用车险准备金的哪些部分？哪些部分将在第四季度审查？当你们发现某些部分的严重度趋势上升时，有没有提前进行准备金审查？

Tricia Griffith

Yes. I'm going to let Gary Traicoff, he's in the audience. I'll have him come up because he will know specifically what he's reviewing and, ongoing, what we're going to review. But I would tell you, just as he gets -- comes down here, we review a big portion of the book of our entire organization on a very frequent basis to understand that we're reserved. And when we think there's any trend that we see, we really want to strengthen the reserve. And that's why I wrote my letter this quarter to make sure that we knew we were strengthening because we saw those, and we wanted to get out in front of it. Gary, do you want to add?

这个问题我会请Gary Traicoff来回答，他现在就在会场。他会更清楚地知道我们具体审查了哪些部分，以及接下来还要审查哪些。但我可以先说，我们整个公司都会定期对大量业务组合进行审查，确保准备金的充分性。一旦我们发现有任何趋势，我们就会主动加强准备金。这也是我本季度致股东信中特别提到的内容：我们之所以加强准备金，是因为我们发现了相关趋势，必须抢先应对。Gary，你补充一下？

Gary Traicoff

Sure. Everybody, I'm Gary Traicoff, Chief Actuary. With respect to commercial auto, we review roughly about 90% on the reserves in commercial every quarter. And bodily injury, for example, where we took the $25 million increase, we look at every quarter. So from the perspective of are we changing the ways in which we're looking at the reviews in terms of timing. No. We cover pretty much everything every quarter. The other 10% would be more of our smaller coverages such as collision, property damage, et cetera, that might be reviewed a couple times a year. In general, just to give you a sense as well, we -- across all of our products, we would look at about 80% to 85% of the reserves every quarter. So we are touching them multiple times through the year. And then most of our injury coverages, we will hit those four times a year.

当然。我是Gary Traicoff，首席精算师。关于商用车险，我们每个季度大约会审查90%的商用车准备金。例如，我们对人身伤害险的准备金增加了2500万美元，而这类险种我们每季度都会审查一次。所以从审查频率来看，并没有发生变化，我们几乎每个季度都覆盖全部内容。剩下10%的部分主要是像碰撞险、财产损失险等小险种，可能一年审查几次。总体来说，让大家有个概念：在所有产品中，我们每个季度大约会审查80%到85%的准备金，一年中多次覆盖。而像人身伤害类的险种，我们每年大概会审查四次。

Tricia Griffith

Thanks, Gary.

谢谢你，Gary。

John Sauerland

I'll just add, while we're on that topic. Again, referring back to our last quarterly webcast, John Barbagallo and/or Karen Bailo. I forget exactly which shared a chart with you all around commercial auto prior year reserve development from, I believe, 2012 through 2018 and showed what Progressive had developed and what the rest of the industry has developed. And I will give kudos to Gary Traicoff and team in saying that the Progressive dots were fairly close to the 0 line. Not always on 0, obviously, we're not going to be perfect all the time. But within 1 to 2 points every single year. This year, we're a little over 2 points year-to-date. And the industry was an average that was far greater, and in some years, was even experiencing 9 points of prior year development. That level of reserve accuracy helps the product managers in commercial auto price accurately. We also reserve down to, I think, a finer level than some of our competitors in that space. So again, that drives more accurate prices that makes us more profitable and more competitive in the marketplace. So we have had some development. It's a little higher than we've seen historically. I think the product managers in commercial lines in the appropriate areas are right on top of taking rate, as Tricia was mentioning, it is their job to do. And I think they've got great data to make sure they're doing it in the right place.

我来补充一下，既然提到这个话题。回顾我们上个季度的网络会议，John Barbagallo 或 Karen Bailo（我记不清是谁）曾展示了一张图表，比较了2012年至2018年期间Progressive在商用车险准备金发展情况与行业整体的差异。我要为Gary Traicoff及其团队点赞，我们的数据点几乎都接近于零线。虽然不可能年年完美，但我们每年的误差都在1到2个百分点以内。今年截至目前略高于2个点。而行业平均水平要高得多，有些年份甚至有高达9个点的前期准备金发展。这种准备金的准确性帮助商用车险的产品经理更精准地定价。我们对准备金的设定也比行业内一些竞争对手更细致。这反过来也促进了更准确的定价，让我们在市场上更具盈利能力和竞争力。虽然今年有所发展，但仍然在可控范围内。我相信正如Tricia提到的，我们的商用车险产品经理正积极行动，确保在适当的区域调整费率。他们手上也有非常好的数据来支撑他们做出正确的判断。

Operator

And the next question comes from the line of Jeff Schmitt with William Blair.

接下来是来自William Blair的Jeff Schmitt的问题。

Jeff Schmitt

Could you provide us with an update on your efforts to move into the small business market? Obviously, a pretty big opportunity. But any details you can give on your growth outlook there?

你们在进入小型企业市场方面的努力有最新进展吗？显然这是一个很大的机会。能否分享一下你们在这方面的增长前景？

Tricia Griffith

Yes. We see, obviously, the growth outlook we see as extraordinary, but it's really too early to talk about. So our focus is on the 30 million small businesses with 20 or fewer employees. And we just rolled it out in the agency channel. And so we're going to continue to learn. When we have anything to tell we will, but we believe that really fits in our opportunities and we're excited about it, but nothing really to tell yet.

是的，我们确实认为增长前景非常可观，但现在谈这个还为时过早。我们目前聚焦于美国3000万个员工不超过20人的小企业。我们刚刚在代理渠道推出了这项业务，我们还在持续学习和摸索。如果有值得公布的进展，我们会及时分享。但我们确实认为这个方向非常契合我们的发展机会，我们对此感到很兴奋，不过目前还没有更多可以报告的内容。

Jeff Schmitt

Got it. Okay. And then just a question on catastrophe losses. They've been left out the last three or four monthly reports. And then looking in the queue, I think they're close to $160 million in the third quarter. It's obviously very useful to look at those sort of underlying loss trends with those backed out. But should we expect those to return to the monthly results? Or are they going to be sort of left out going forward?

明白了。那我还有一个关于灾难损失的问题。在最近三四个月的月度报告中，这部分被省略了。而在10-Q中，我看到第三季度这部分接近1.6亿美元。显然，在剔除这些损失后来看基本损失趋势非常有价值。那么未来灾难损失数据是否会重新出现在月报中？还是说未来仍然会继续省略？

Tricia Griffith

Well, we've had a long-standing sort of policy that we will put cat information in the monthly reports if it's 2 points or more on the combined ratio. And so that's been decades old. And so we doubt we'll change that. We feel like we're pretty transparent with the monthly reporting and with, obviously, we share a lot during this webcast. So the likelihood of us changing that, I think is low. We'll always consider it, but that's really kind of the -- where we delineate when we share it on a monthly basis versus a quarterly basis.

我们一直以来的政策是，如果灾难损失对综合赔付率的影响达到或超过2个百分点，我们就会在月报中披露这部分信息。这项政策已经实行几十年了，我们不太可能改变它。我们认为我们的月度报告已经足够透明，而且我们在季度电话会上也会分享大量信息。所以我们认为未来改变这一做法的可能性很低。当然我们会持续评估，但基本上这是我们区分月度披露与季度披露的标准。

Operator

And the next question comes from the line of Meyer Shields with KBW.

下一位提问者是来自KBW的Meyer Shields。

Meyer Shields

Well, that really swept my question, but I do want to at least throw in a vote for including the information. Because that way we'll be able to have a better read on what's going on. I understand that you're not expecting to change it, but I did want to urge a reconsideration. I wanted to get your comments on the softening of the softening in personal auto. And to see if you can break down whether -- like how much of to be expected Progressive response is to maybe pull back on the modest rate decreases you've been taking or to anticipate improving top line growth -- or policy organic growth, I should say.

其实我本来想问的问题已经被覆盖了，不过我还是想表达一下希望你们能重新考虑披露相关信息的建议。这样我们才能更好地理解目前的情况。我理解你们可能不打算改变政策，但我还是想敦促你们重新考虑这个问题。另外，我想听听你们对“个人车险软市的软化”现象的看法。是否可以详细说明一下，Progressive的应对是更多地收回之前采取的温和降价措施，还是更着眼于推动保单数量的自然增长，也就是提升保费的增长率？

Tricia Griffith

Yes. I mean, we always look to improve on top line growth. We took really modest decreases across the board. And it really was to balance out that growth and profitability in terms of getting higher conversion. Just watching the competition and seeing the whole industry, when you combine everything, things have been pretty stable. And in fact, you have seen a couple of our competitors take a few small increases. And that's what we think about when we think about trends and we're watching severities. Like, okay, if this is turning, how are we positioned? And we believe that we're really well positioned because we didn't say, okay, we have this margin, let's take huge decreases to take on -- to take on growth or maybe not take on growth commensurate with those increases.

是的，我们当然一直在寻求保费收入的增长。我们此前确实在整体上采取了一些非常温和的降价措施，这主要是为了在增长与盈利之间取得平衡，提高转化率。我们持续关注竞争对手以及整个行业的动态，综合来看，目前整体还是相对稳定的。事实上，我们看到有几家竞争对手已经开始小幅提价了。所以我们在评估趋势、观察赔付严重程度时也在问自己：如果市场走势在转变，我们的定位是否合适？我们认为我们的定位是非常稳健的，因为我们没有因为拥有利润空间就贸然大幅降价去抢市场份额，或者说去冒险推动一场不成比例的增长。

We're very deliberate in understanding, okay, if we take a little bit, how does that convert to balance that great margin, but also that great unit growth. So we feel like -- and the softening of the softening, that's just John and I talking in the hallway because we're like, what do you think? And we'll look at numbers together. We are just going to watch that surgically. And what I would say is, we're in a really good position because we are -- we feel really good about our rate to not have to take huge increases. If we need to take increases across the board, we always will. But again, if we do, and the trend continues to be able to take smaller increases. And of course, I'll have the caveat we always say, that could be different in terms of states and channels and products, et cetera. Do you want to add anything?

我们在做定价调整时非常审慎，我们会评估，如果只是小幅调整，是否可以同时维持良好的利润率和合理的保单增长。所以关于“软市的软化”这个说法，其实就是我和John在办公室走廊里开玩笑时讲的，因为我们总是一起看数据、讨论市场动向。我们会密切监控市场发展。当前我们的定价处在一个很不错的位置，我们没有必要大幅提价。如果有必要，我们当然会适时调整定价，但如果趋势允许，我们也更倾向于逐步小幅调整。当然，我也要加一句老话，不同的州、渠道和产品都会有所不同，这些都是我们会细致考虑的。你还要补充吗？

John Sauerland

[Indiscernible]

[听不清，未能辨认]

Tricia Griffith

Is that good?

这样可以吗？

Meyer Shields

Yes. On my end, it is. I had a quick follow-up question, if I can. I was just curious, when we look at the responsibility relationships between auto data and Homeowner data. I was wondering whether the claims that don't necessarily reflect responsibility, is there any relationship there?

可以。那我再追问一个简单的问题。在分析车险和房屋险数据之间的责任相关性时，那些在理赔中未必能直接反映出责任归属的数据是否存在某种联系？

Tricia Griffith

We're just looking into that in terms of sharing data with, specifically, only and only Progressive Home with Progressive Auto. But we do see there's overlap. And so there's some interesting just components that we're looking at to better understand how to segment. So yes, there is a relationship. I don't have a lot to talk about with it publicly now, but yes, we're definitely seeing that sharing that data is gathering insights for both auto and home.

我们目前正在专门分析Progressive Home和Progressive Auto之间的数据共享情况。确实发现其中有一些重合的地方，所以我们现在正在研究其中的一些有趣的因素，以便更好地进行细分定价。因此，是的，两者确实存在一定的关联。目前我们还没有太多可以公开分享的内容，但可以明确的是，通过数据共享，确实为车险和房屋险业务都带来了新的洞察。

Operator

And the next question comes from the line of Adam Klauber at William Blair.

下一位提问者是来自William Blair的Adam Klauber。

Adam Klauber

Could you give us an idea how the -- how your digital acquisition is expanding? Just any ballpark over the last three to five years, how much of your auto -- personal auto business is coming through the digital channel, whether it goes to your agents internally to sort direct? What was it like 3 years ago compared to today? And then where are you on the homeowners and bundled as far as your digital rollout?

您能否介绍一下你们数字化获客的扩展情况？比如说，在过去三到五年里，您们的个人车险业务中大致有多少是通过数字渠道获客的？无论是通过内部代理还是直接面向客户。三年前的数据和现在相比变化大吗？另外，在房主险和车房组合产品方面，你们的数字化推进到了什么程度？

Tricia Griffith

I would say, the acquisition on the digital side -- I can't tell you exactly percentage, has increased substantially over the years compared to when you look at mass media. We're assuming we actually -- you don't know if somebody sees it if they end up calling an agent. So we believe it likely helps the direct side more often because it may be a different kind of customer who's looking online versus going into your agent and kind of wanting to sit knee to knee for the that consultation. But I would say, it's -- I know that it's increased substantially. I don't know the exact percentage.

我想说的是，从数字渠道的获客方面来看，虽然我无法给出确切的百分比，但与传统的电视等大众媒体渠道相比，这部分增长是显著的。其实很难判断一个客户看到广告后是直接打电话给代理人还是在线购买，但我们认为，这种数字广告更多地有助于吸引直接客户，因为这些客户更倾向于上网查找信息，而不是坐下来和代理人面对面咨询。我可以肯定的是，数字获客增长幅度非常大，但具体的百分比我手头没有。

And then with Home Bundle, we continue to change our message. So forever, it was auto. And our assumption was that when you bundled that it extended auto PLE. What we're finding is from -- when we do the ads where we talk about home actually or auto, that helps to measure that bundle. So I would assume that happens again on the digital side. It's hard to say because you have so many ads coming your way, what actually makes that happen. But we have increased on our spend in the digital portion of our media spend.

至于房屋与车险的组合产品，我们也在持续调整我们的传播策略。以前我们主要强调的是车险，而我们当时的假设是，捆绑销售可以延长车险保单生命周期。但我们发现，当我们在广告中同时强调房屋险或车险时，对推广组合产品是更有效的。所以我猜测，这种效果在数字广告渠道中也同样存在。当然这很难说得准，因为消费者每天都会接触到大量广告，究竟是哪一条起了决定作用很难追踪。不过可以肯定的是，我们在数字媒体上的广告投入确实在不断增加。

John Sauerland

To that, I would add -- by far the majority of our auto sales now are digital, and that has continued to climb, as Tricia noted. I think the other important trend there to understand is the majority of those are now mobile. So it's amazing to me, frankly, that so many people are willing to buy their insurance on their mobile device and that trend doesn't seem to be abating either. That trend has yet really to transfer to home as much. We're starting, as Tricia noted, to build the capabilities for people to efficiently quote and buy property insurance online. We're seeing some interest in the mobile space for property. But the property -- I mean, sorry, the auto trends are pretty amazing and very digital and very mobile.

我补充一点，如Tricia所说，我们目前绝大多数的车险销售都是通过数字渠道完成的，而且这个比例还在持续增长。更重要的是，其中大部分是通过移动设备完成的。坦白说，我自己也觉得令人惊讶，有这么多人愿意直接在手机上购买保险，并且这个趋势丝毫没有减弱的迹象。不过，这种趋势目前还没有完全转移到房主险上。正如Tricia提到的，我们正在开发相关功能，让客户能够更高效地在线获取报价并完成房屋保险的购买。目前在移动端我们也看到了一些房主险的兴趣。但车险这边的数字化和移动化趋势确实是非常显著的。

Tricia Griffith

And I was talking about, he was -- John added on the acquisition side. And I think I was interpreting your question more as the advertising, which we, of course, equate to acquisition. But again, we believe that what we're spending with Home will eventually go that way as well. So for years, people didn't buy digitally. On our HQX, our HomeQuote Explorer, we now have Progressive Home, the buy button, in 12 states. We'll have 14, we're expected to have 14 by year-end. So just to continue to make it easier, have less questions, all those things. We're going to continue to invest in that because we believe that will go the way of auto and just trying to make it easy, especially if we have data that is publicly known that we can help to guide the coverage for your home.

我刚才回答的是广告相关的问题，而John补充的是更偏向实际获客流程的内容。当然，在我们看来广告本身也是获客的一部分。我们相信，房屋险方面的投入也终将会走向和车险一样的数字化路径。过去很多年人们并不会在线上购买房屋险，但现在在我们的HQX，也就是HomeQuote Explorer上，Progressive Home已经在12个州上线了“立即购买”按钮。我们预计年底前将扩展至14个州。我们会继续优化购买流程、减少问题，努力让客户购买房屋险也变得像车险一样简单，尤其是我们可以借助一些公开数据帮助客户更合理地制定保障范围，所以我们会持续在这方面进行投入。

Operator

[Operator Instructions] The next question comes from the line of David Motemaden with Evercore.

[操作提示] 下一位提问者是来自Evercore的David Motemaden。

David Motemaden

Just wanted to get an update on the process improvements in the 5 states where you were addressing some of the BI severity on the auto side. And sort of how those are progressing? And when we should start to see any improvement there?

我想了解一下关于你们在那5个州为应对车险人身伤害（BI）赔付严重性问题所做流程改进的最新进展。这些措施目前进展如何？我们大概什么时候能看到改善效果？

Tricia Griffith

Yes. So a couple of things. We've done some deep dives. And there's a couple of things that we've tweaked, nothing substantial. We really see that it is inherent in the industry. And in the spirit of transparency, as we've kind of looked and stepped back and we do a lot of audits across the board in our claims organization. I would say, it's likely now more low double digits. And so we see that even more in the five states that we talked about before. In looking at the industry, we believe that it's really just inherent with increased medical costs.

是的，有几点可以更新。我们确实做了一些深入分析，并对流程做了几处调整，但没有什么特别重大的改变。我们更倾向于认为这个问题是整个行业普遍存在的。出于透明的原则，我们回顾并审视了理赔部门的整体操作，也做了很多审计。从现在来看，我们认为这方面的赔付严重性大概处于低双位数的水平（low double digits），而且在我们之前提到的那五个州，这种情况更为明显。结合整个行业的情况，我们相信这主要还是源于医疗费用的持续上升。

We've also seen an increase really over the years in a attorney rep rate. Not necessarily litigation, but having the attorney there at some point in the claim, sometimes at the actual first notice of loss. When I looked back at data around March 2013, we started to see increase in auto countrywide. And I would say, from 2013 to now, there's been about 6 points of increase in ultimate attorney rep percentage. And so for us, we're seeing that. Obviously, when you have an attorney they need to get their fee, so it's going to be more expensive. And that said, we haven't seen a huge increase in general damages, more on the medical side. So we feel like it's more usage. We've seen more injectables, et cetera.

我们也注意到，这些年法律代理率（attorney rep rate）在上升。这里不一定指诉讼，而是指在理赔过程中某个阶段出现律师介入，有时甚至是在出险报告的第一时间。从2013年3月左右开始，我们就看到全国范围内车险的法律代理率开始上升。从2013年至今，代理率大约上升了6个百分点。对我们而言，这是一个现实。很显然，一旦有律师介入，就会产生额外费用，这会使赔付变得更贵。但与此同时，我们并未看到普通损害赔偿（general damages）有明显上升，上涨更多体现在医疗费用上。所以我们认为问题主要出在医疗资源的使用上，比如注射治疗等出现得更多。

So what we're really trying to dig into is, is this a trend? Is there something we can do about it? Because if someone's treating and they're with an attorney, we can't necessarily influence that. We always try to get out in front of the customer to make sure we take care of them and walk them through the process because it is very emotional when you're injured. But some people get attorneys right away, which does make the ultimate cost more expensive. Again, not necessarily litigation, but attorney repped. So we're working on those things all the time. But really, as we have watched the results come in for this quarter from the industry, it seems very consistent with what everybody is seeing in terms of higher medical costs.

我们现在真正要深入探讨的是：这是不是一种趋势？我们能不能采取措施来应对？因为一旦客户接受治疗并聘请了律师，我们并不一定能对整个过程产生太多影响。我们始终尽力在出险后第一时间联系客户，确保他们被妥善照顾，引导他们走完整个流程，因为受伤时客户的情绪也很复杂。但现实是，一些人一出事就立刻聘请律师，而这无疑提高了整体理赔成本。再强调一次，这不一定是诉讼，只是律师参与。我们一直在持续处理这些问题。但从我们看到的本季度行业整体数据来看，普遍都面临更高的医疗费用，这一点非常一致。

David Motemaden

Got it. Great. And just switching gears. I noticed in the queue, there is just some discussion of a higher portion of bundled auto policies that have 12-month policy terms. Just wondering how you think about this going forward as you shift your mix more towards the preferred segment? Are we going to see this continue -- the 12-month policies continue to increase? Any sort of difference in profitability in those products versus others? And I guess, just how you view -- it obviously can enhance retention if your mix moves in that direction. But then it also kind of prevents or limits your ability to reprice as quickly based on experience.

明白了，非常好。换个话题，我注意到财报中提到，越来越多的打包车险保单采用了12个月的保单期限。想请教一下，随着你们逐步将业务结构转向优选客户群体，未来是否还会继续增加12个月保单的占比？这些产品的盈利能力是否与其他保单有所不同？我理解这样的做法确实可以提升客户留存率，但同时也可能会限制你们根据经验快速调价的能力，你们是怎么权衡的？

Tricia Griffith

Yes. That's true if you were following us back in 1999 or 2000, but we are very cognizant of being able to be nimble when you have 12-month policies. One of the things when we went with Progressive Home in the agency channel is we wanted to make sure, for competitive reasons, too, that we could have yearly policies on the home for the agents, which was consistent with the other preferred companies that they were purchasing. We watch those very closely and make sure that -- especially because sometimes they'll get multi-policy discounts. We watch this closely to make sure that we maintain profitability and flexibility. We do have a higher percentage of those, which we think it is good when you're priced right. But again, we watch it closely, and we'll continue to likely talk more about that.

是的，如果你从1999年或2000年开始关注我们，那种担忧确实存在，但我们在有12个月保单的情况下非常注重保持灵活性。当我们在代理渠道推广Progressive Home时，我们就希望出于竞争原因也能提供年度保单，这样可以与代理们所销售的其他优选保险公司保持一致。我们对这类保单的表现监控得非常紧，尤其是考虑到它们有时会叠加多保单折扣。我们密切关注这些保单，以确保同时兼顾盈利能力和调价灵活性。目前这类保单的占比确实在上升，我们认为只要定价合理，这是件好事。当然，我们会持续密切关注，并可能在未来进一步讨论相关情况。

John Sauerland

One fact that I'd point out on that question. As Tricia noted, we had some bad experience back in '99, 2000, where we overweighted our annuals. And we learned from that. And today, we don't price our annual policies, generally speaking, at twice the 6-month. We actually price them higher than that to offset or mitigate the trend risk that you mentioned. So we are, yes, growing. It's still not a large percentage of our policies, and it's just in the agency channel right now where we have annual auto policies, and we think we're managing it pretty well.

我想补充一个事实，正如Tricia提到的，我们在1999年和2000年曾因为年度保单占比过高而有过一些不佳的经历，我们从中吸取了教训。现在我们在定价上并不是简单地将年度保单定价设为半年保单的两倍，而是定得更高，以对冲你刚才提到的趋势风险。因此，虽然年度保单确实在增长，但目前在我们整体保单中仍然占比较小，而且只限于代理渠道。我们认为这一块的管理是比较稳健的。

Tricia Griffith

And I think, too, I just -- I've been -- I've had a couple sessions with some big agents. And we have been really for years, wanting to make sure that we're seen as the preferred company or 1 of their preferred companies in agency. And with that, for them to get bonuses, their loss ratio has to be within a certain percentage as well. So it's -- it behooves them to put on really good business.

另外我想再补充一点，我最近也和一些大型代理做过交流。多年来我们一直希望被视为他们首选或其中一个首选的合作公司。而对于代理来说，要想拿到奖金，他们的赔付率也必须控制在一定范围内。因此，从他们自身利益出发，他们也有动力承保质量更高的业务。

Julia Hornack

I'm going to finish up with maybe another one or two questions from the webcast. The first one is can you quantify the improvements you've seen so far with Model 8.6 in the five states where it's been rolled out?

我来结束今天的问答，可能再从网络提问中挑一两个问题。第一个是，能否量化一下你们在已经推行 Model 8.6 的五个州中观察到的改进效果？

Tricia Griffith

Early read is that it's doing very well. Again, that's early, but we're happy with the results.

初步反馈显示运行效果非常好。当然目前还只是初期阶段，但我们对结果感到满意。

Julia Hornack

Okay. And then the last question I have in here is what is the growth prospect for commission income at Progressive? So this is the service revenue line in our income statement. This investor makes the assumption that it's typically a high profit margin and is given a high multiple by investors. So what will Progressive do, if anything, to highlight this expanding revenue stream of the company?

好的，最后一个问题是关于Progressive佣金收入的增长前景。这部分反映在你们财报的“服务收入”一栏。有位投资者认为这通常是高利润率收入，也因此在投资者眼中享有较高的估值倍数。那么请问Progressive是否有任何计划来突出这一日益增长的收入来源？

Tricia Griffith

Well, the commissioning that we get from a lot of non-affiliate carriers that we work with -- and I think Andrew talked about the life insurance company we work with, which is great. But we also offset that to make sure that we fund what we call the Progressive Advantage agency. So we use that sort of that contract spends to fund that. So we continue to grow that because we continue to grow. I don't -- we don't have actually any goal with that. It really is about making sure that we have the right amount of carriers for the customer base that comes into our door. And obviously, we want to be competitive with commissions based on the companies that our unaffiliated partners work with.

我们从很多非关联保险公司获得佣金收入——我记得Andrew之前提到了我们合作的一家寿险公司，这确实是很好的合作。不过，我们也会用这部分收入来支持我们所谓的Progressive Advantage代理业务。我们用合同佣金来资助这个平台。随着我们自身业务的增长，这一部分也会自然增长。我们并没有为此设定特定的目标，它的核心在于确保我们为进入我们平台的客户群体配备足够多的合作公司。当然，我们也希望在佣金方面具备竞争力，与我们那些非关联合作伙伴的水准相匹配。

John Sauerland

Yes. So the commission revenue is great. You're right. Service revenues are becoming material. But I hasten to remind that the primary intent there is to keep those auto customers longer and to keep the most profitable auto customers longer. So the commission is great. We are also offering Progressive Home in that same space, but the primary intent is to, as we say, bundle and extend. Meaning, get more of the household into the Progressive family and continue to ensure we meet all their insurance needs for decades to come.

是的，佣金收入确实非常不错，你说得对，服务收入已经变得越来越重要。但我要特别强调的是，我们这方面的主要目标并不是收入本身，而是延长客户的留存期，特别是留住那些最具盈利能力的车险客户。虽然佣金收入不错，我们也在这一领域提供Progressive Home产品，但我们所谓的“打包并延展”（bundle and extend）才是核心战略。也就是说，希望将更多的家庭纳入Progressive体系中，并持续满足他们未来几十年的各类保险需求。

Julia Hornack

Great. That actually is our last question for today. So I'm going to give it back to Chris for the closing scripts.

很好，那是我们今天的最后一个问题了。现在我将时间交还给Chris来做结束语。

Operator

That concludes the Progressive Corporation's third quarter investor event. Information about a replay of the event will be available on the Investor Relations section of Progressive's website for the next year. You may now disconnect.

以上即为Progressive公司第三季度投资者活动的全部内容。相关回放将在Progressive公司官网投资者关系页面上保留一年时间。您现在可以断开连接了。