Progressive Insurance Case

1.How did Progressive's average performance during 1995-1999 as an auto insurer compare to those of its key competitors (State Farm, All State, and Geico)?Draw a table (in either Word or Excel) showing calculation results (only results).Use average loss ratio, expense ratio, combined ratio, average net investment income ratio, and average net income ratio,allshown as a percentage of premiums earned, in your comparisons.What are the key findings from this analysis?

(Here, you are asked to calculate the average ratios during 1995-1999 for all four companies. This task is best done in Excel. The raw data are all in the Exhibits 5-8 of the Progressive case, and the annual loss, expense, and combined ratios are largely given so you may only need to calculate the investment income ratio and net income ratio, and then average allratios for the 5 years. The information from Exhibit 1 could be helpful as well on the economics of the whole insurance industry.

Net investment income ratio = (net investment income / premiums earned) x 100%

Net income ratio = (net income / premiums earned) x 100%)

Table: Compassions of Key Insurance Companies' Performance Ratios during 1995-1999

PGR GEICO Allstate State Farm

Loss Ratio % % % %

Expense Ratio % % % %

Combined Ratio % % % %

Net Investment Income Ratio % % % %

Net Income Ratio % % % %

2.How would describe the typical customers for Progressive insurance as of 1993 based on the information given in the case?Were they some of the most coveted customers in the auto insurance market?