Subject: Re: Progressive growth/CR
(2024:)I started a small position 3 years (up 112%) after talking to a long-term happy shareholder who is also a BRK shareholder and repetitively hearing how favorable Buffett and Ajit Jain have viewed them over the years.


Likewise. I bought it at about the same time as you (2021) after hearing Buffett and especially Munger admired it so much; Munger said something like "Being #2 is not so awful."*

Just to keep up the frenetic activity on this board, with a follow-up post 2 years later, with the price up from about $180 to $210, after briefly hitting around $280 last Spring:

December looks good, combined ratio of 87.1, 88.0 for the full Q4, 87.4 for FY2025 and 88.8 for 2024, target <96. They are now at about 12 times ttm earnings, but one could doubt whether the CR of 87-88 is going to go on forever. About 10% growth in NPW year over year. I still like this as a long-term hold.


*Actually, here are some quotes, from the 2019 annual meeting:

[Referring to Tesla getting into the car insurance business] “It’s not an easy business at all. And I would bet against any company in the auto business being any kind of an unusual success,” said Buffett. In fact, he said, “I worry much more about Progressive than all of the auto company possibilities getting into the insurance business.”
...
But Jain, splitting the underwriting profit figures for the two auto insurance competitors into the expense ratio and loss ratio components, revealed that Progressive has a significant advantage on the loss ratio side—some 12 points over GEICO. GEICO beats Progressive on expenses with a seven-point expense ratio advantage, Jain said. “So, net-net, Progressive is ahead by about five points,” he said, reporting that “GEICO is very aware of this” loss ratio disadvantage and “very focused on trying to bridge that gap.”
...
Jain concluded: “Sometimes, GEICO is ahead of Progressive. Right now, Progressive is ahead of GEICO, but I’m hopeful they’ll catch up on the loss ratio side and maintain the expense ratio advantage as well.”
...
Buffett described the competition as a, "two-horse race, and we've got a very good horse".
...
Buffett noted that "every once in a while, somebody is a little better at something than we are," regarding Progressive's lead in technology.
...
At that point, Charlie Munger, vice chair of Berkshire Hathaway, interjected. “In the nature of things, every once in a while, somebody is a little better at something than we are,” he said, drawing a laugh from Buffett. “You’ve noticed,” Buffett said to Munger, suggesting that he would settle for second place.