Good morning and thank you for joining us today for Progressive's first quarter investor event. I'm Doug Constantine, Treasurer Controller, and I will be moderator for today's event.

The company will not make detailed comments related to its results in addition to those provided in its annual report on Form 10-K, quarterly reports on Form 10-Q, and the letter to shareholders, which have been posted to the company's website. Although our quarterly investor relations events often include a presentation on a specific portion of our business, we will instead use the 60 minutes scheduled for today's event for introductory comments by our Personal Lines President and a question-and-answer session with members of our leadership team.

Introductory comments by our Personal Lines President were previously recorded. Upon completion of the previously recorded remarks, we will use the balance of the 60 minutes scheduled for this event for live questions and answers with members of our leadership team.

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 today's event.

Additional information concerning those risks and uncertainties is available in our annual report on Form 10-K for the year ended December 31st, 2025, as supplemented by Form 10-Q for the first quarter of 2026, 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 investor relations section of our website at investors.progressive.com.

To begin today, I am pleased to introduce our Personal Lines President, Pat Callahan, who will kick us off with some introductory comments. Pat?

Good morning, and thank you for joining us today. First quarter results were consistent with the last several quarters: extraordinary profitability and growth well above the industry average.

When performance is this strong for this long, it can be easy to take it for granted. I wanted to take a few minutes to reflect on what the Progressive team has delivered.

First, market share. In personal auto, we gained 1.9 points of market share in 2025, moving us up to an 18.6% share, our second straight year gaining more than 1.5 points, which no other top-20 company has done going back to at least 1996.

To put the last few years in perspective, it took us 84 years to get to 15.2 points of US auto market share, and only two years to add another 23% more on top of that. It's a remarkable achievement and testament to the value that our offerings bring to consumers seeking high-quality and affordable protection products.

Growth is great to see, but profitable growth is our objective, and it's important to note that we gained that share while delivering personal auto combined ratios below 90 in nine of the last 10 quarters. That's just personal auto.

Preliminary industry results for commercial auto suggest the industry combined ratio improved, but once again posted an underwriting loss as it continues to face nuclear verdicts and social inflation. Despite these headwinds, our commercial auto results continue to be excellent, as we continued our streak of underwriting profitability well in excess of the industry.

In property, we're building on last year's exceptional profitability while we continue to invest to ensure we have the risk selection and segmentation, geographic distribution, and distribution footprint necessary to start increasing availability. As we mentioned on the last couple of calls, we're slowly starting to increase our appetite for property growth on our own paper, which is helping us find more growth in the important Robinsons segment.

These results are only possible because of the competitive advantages we've built across the organization, and because we employ people who are truly among the best in the industry. While we're certainly pleased with these results, we got here because we're always looking ahead.

World events continue to create uncertainty in the global macroeconomic environment, and we remain vigilant about how those changes could affect our business. Given our concentration in vehicle lines, higher fuel prices are top of mind.

The direct impact of higher fuel prices on personal auto frequency is difficult to predict because the timing, duration, and magnitude of the price changes matter, as does the broader state of the economy when those price changes happen. Historically, we've seen that when fuel is more expensive, people take fewer discretionary trips, such as cross-country road trips.

While forgoing those trips can reduce total vehicle miles traveled, those miles do tend to be lower-frequency miles, the effect on loss cost is typically smaller than the overall decline in VMTs. To date, fuel prices haven't been elevated long enough to conclude how much, if at all, elevated fuel prices may affect our loss costs.

On the severity side, higher energy costs generally contribute to broader inflationary pressures. However, it takes time for higher costs to make their way through the supply chain, and can be partially offset by lower severity resulting from a lesser mix of higher-speed, higher-severity highway accidents.

In commercial auto, higher fuel prices can immediately pressure trucking margins, adding strain to an industry that has already seen significant change in the post-pandemic environment. As we did in 2021 with higher used-vehicle prices and in 2025 with tariffs, we are monitoring the effects of fuel prices closely and incorporating what we observe into pricing, as appropriate.

While the macro environment could put upward pressure on pricing in the future, today we're still delivering near-record personal auto margins and focused on growing as quickly as possible. The environment remains competitive, as it has been for the last five-plus quarters, we continue to execute state- and product-level plans to maximize PIF growth at target profit margins.

On the new business side, in Q1 we increased media spend by 20% versus Q1 2025, making Q1 of '26 the most we've ever spent on media in a quarter. Top-of-funnel metrics remain robust, with marketplace demand still strong.

Our price competitiveness is also strong, as reflected in higher personal auto conversion year to date. Our product teams continue to execute their business plans, with some states taking modest rate decreases, when appropriate, to capture in-market shoppers.

On renewals, we're actively retaining customers through policy reviews, as we've noted over the last couple of quarters. While possibly temporary, we are also pleased to see a lift in the Florida trailing-three policy life expectancy during the quarter as customers received their premium credits.

At the countrywide level, mix shifts that arose because of a more aggressive new business posture continue to put downward pressure on PLE, although the year-over-year influence of those changes is abating. In commercial lines, we're also seeing a competitive environment, and we are looking to all avenues to stimulate growth.

We're increasing media spend and are looking to reduce rates in some states and business segments where we can bring in business at or below our profit targets. With targeted rate decreases and continued advancements in rolling out our next-generation product models across our core commercial auto, medium fleet, and small business lines, we are well-positioned for growth.

In closing, our business is in a very strong position. The macroeconomic environment will continue to evolve, but we've proven we thrive during periods of disruption as we're among the best at identifying and quickly adapting to uncertainty and changing business conditions.

As we close in on the important milestone of becoming the number one writer of US personal auto, we're not taking our foot off the gas. We'll continue investing in the business and leveraging our scale, advanced analytics, and segmentation leadership as we make progress towards our vision of becoming consumers', agents', and business owners' number one destination for insurance and other financial needs.

Thank you again for joining us this morning. We'll now take your questions.

This concludes the previously recorded portion of today's event. We now have members of our management team available to answer questions.

Questions can only be submitted over the phone by pressing *1 on your keypad. In order to get to as many questions as possible, please limit yourself to one question and one follow-up.

We also ask that you use restraint in re-entering the queue to ask additional questions. I'll take our first question.

Hi, good morning. I want to maybe just unpack some of the prepared remark commentaries a little bit.

Regarding the personal auto industry, right, the industry seems to be excessively profitable, and in your shareholder letter, you kind of mentioned about the competitive environment being intense. Just can you maybe help us think about just where do you see all this end for the personal line or personal auto rather going forward as well as for Progressive, both for the industry and for Progressive?

Are we in a prolonged soft market just given the profitability environment? Should we think about the industry being more competitive and or maybe even profitability declining in 2027?

Can you maybe just help us think about the broader environment where Progressive is situated in, to speak?

I'll try to unpack your question with a bunch of different answers. We don't know how long the soft market will prevail, but we have definitely seen a lot more competition because everyone has great margins and we haven't seen the margins in the industry like we have in '25 and into '26.

That's going to be competitive for all of us, which is great for consumers. We'll continue to make sure that we reach our target profit margins.

Other companies have different targets and run their businesses differently, but we think this is a really great opportunity to continue on our growth trajectory and continue to get more and more policyholders to achieve what Pat had said, and not just to be number one in private passenger auto, but to be the number one destination. That's where we'll get in and focus on more bundles.

It's probably worth saying that after our best year, which we would say it was 2024, in 2025 the private passenger auto market grew written premium about $11.8 billion. $8.9 billion of that was us.

If you take just the top 10 carriers, that combined growth in 2025 was $10.4 billion. We were 86% of that growth.

In quarter one '26, we grew PIFs nearly 1 billion -- 1 million, sorry. Auto PIFs that were 11% of that.

My point is that our focus, it's hard to say what the industry's going to do, but our focus will be to continue to grow as fast as we can at or below a 96. Will margins compress?

Possibly, because we do look at growth in terms of policies, and we want to make sure we continue to have more and more policies. When we get more customers, we gather more data.

When we gather more data, we understand segmentation and risks to rate better, and then we can put that into our next product model. It's a very nice flywheel that we've used for a long time.

What the industry does, I can't foreshadow. Right now it's competitive, that's good for consumers, and we're excited about what we believe could be our future.

It sounds like from a growth perspective, somebody's hogging all the fun. Maybe other people would ask you to share.

Maybe that aside, if we look at personal auto severity, just more of the follow-up, right? You gave some commentaries around severity and frequency.

While higher medical costs, attorney representation still were the callouts in the 10-Q, it does feel like severity improved notably. In fact, if we look at it, aside from 2024, severity on collision hasn't been this good in 5 years.

Can you maybe help us get a better handle on severity trends, specifically collision? Why is it so good, for lack of a better word?

Is this durable as you're growing further and then talking about the 96, to speak?

I'm going to let Andrew Quigg answer that, but you're correct. Severity is about 3% overall, frequency was flat, and so we feel good about those trends.

A lot of things can change, like you said, with bodily injury, specials in generals, but I'll have Andrew give a little bit more color to that.

Thanks for the question, Bob. I'll start on the frequency side.

I know you're asking about severity, but of course they're linked. We've seen frequency moderating a little bit.

The trailing-12 has been more negative, and in this quarter we were more flat for frequency. We had a shift to preferred over the past year, and as we open up underwriting, we're seeing frequency go back to kind of normal.

On the severity side, you mentioned BI. Yes, as we mentioned in the Q, large losses and attorney rep mix have impacted BI severity.

For PD and collision, we do see higher parts prices, and so that is impacting. Now we have some offsetting, cost of labor and things like that are not accelerating as fast as parts prices.

Going forward for collision severity, it's hard to know. Our crystal ball gets cloudy.

Certainly, we stay vigilant on what's happening with tariffs, what might happen with the conflict in Iran. All those might impact severity going forward, but we've been able to find ways to offset severity increases that we see through parts prices by how we manage the claims process.

It's hard to say on collision going forward, but we feel good about the trends we're seeing today.

Thank you for that. Really appreciate it.

Thank you, good morning. On the topic of AI's disintermediation on brokers, I always felt like if any carrier could bypass brokers on the commercial lines side, but given that you guys made so much traction on direct personal lines over the years, I see that your commercial line business, 90% of that is distributed through independent agents.

I'm wondering why not more on the direct side? Could that piece grow?

We definitely think it can grow, Tracy, and that's why we've been investing a lot in that area. I think just like when we went to auto on the internet, it takes a while, especially in the commercial lines product because they're much more complicated.

Think if I'm a small business owner, I want to make sure I'm covered with all the right things, and sometimes I want to sit knee-to-knee with an agent. We do think that more and more consumers, whether they're personal auto or commercial, will want to do business directly with companies, and that's really what we've been building over the last few years.

We do feel that we will continue to grow in both channels in our commercial lines business. Pat talked about it a little bit in the opening comments, that we're really well-positioned for growth based on our margins and our segmentation.

That's great. One of your larger competitors is getting into the independent agency channel for personal auto, and I notice that AI is becoming a larger piece of the overall distribution pie.

Any update on the competitive landscape on the AI side of personal insurance?

It's hard to say how, with AI, how things are competitive because all of us, I think, are investing and investing differently. What I would say to have any competition getting into really any channel, we think that's great because I think it puts more pressure on all of us to be better for consumers and to continue to make sure, like I talked about, having more data, segmenting better, making sure our brand is out there.

While we just think competition is good, AI, I think, will come in different reforms. I think initially, even whether it's AI with predictive in the past or generative now, I think we'll start with helping to make sure that all of us are more efficient and can get tasks out of the work that will ultimately lead to more competitive prices.

That's really has been our focus. Now, but we, like I said in the last call, from an innovation perspective, we've been working on some form, whether it's a chatbot or predictive AI and now GenAI, for a long, long time.

I think others are starting to invest as well.

Thank you.

Hi, thanks. Good morning.

My first question, I wanted to ask on written premium per policy. It continued right to go down in agency, kind of flat in direct.

I was just hoping to get a little bit more color on just the drivers there and how you would expect, especially right as there is less rate through the system, how you would expect the written premium per policy to trend from here?

I think it'll be dependent on the pricing actions that we take in order to grow. Right now it's been down about one in private passenger auto, 1%.

We'll continue to watch that. Like we've said in the past, our real measure of growth for long term is policies in force.

We want to make sure we can do that. With that, we're going to make sure that we do a couple things: have the right rates in the system, but also in the last year or so, we've opened up our aperture, you're going to look at different premium per type of customer.

We were pretty closed when we were trying to get rate in the system, our mix has changed, and so with that mix change, I think that you might see some changes. I don't think there's going to be anything dramatic, but we're going to, like we do, we're going to go state by state, channel by channel, to make sure that we're priced adequately in order to achieve our goal of growing as fast as we can.

Thanks. Then my second question is on policies in force, right?

Historically, right, PIF and just shopping has been more focused, right, during earlier months in a year. Obviously, over the last few years, right, as there's just been rate taking in the market and there's been differing trends, how do you think just policies in force relative to seasonal factors and just overall growth views will trend over the balance of the year with kind of the seasonality factor in mind?

I'm going to have Pat add in on that, but what I would say is I think with just so much competition, because it's been a long time where the industry has had the profit margins that we've had, and so things have shifted a little bit, and there's a lot of shopping. We've talked a lot about whether it's our customers even reshopping with us, or us doing policy reviews, I think that's happening sort of across the industry.

I can foresee that it could continue to happen, we really can't tell, but that's one of the reasons why we wanted to leverage our ability with our brand and our marketing engine to increase our media spend to continue that growth. Do you want to add anything, Pat?

Sure. You're right, we've seen kind of unprecedented shopping, and we don't expect to see it slow down.

Historically, there has been a seasonal pop in Q1, and then the echo in Q3 as policies renew, and we're seeing kind of continued strong shopping as inflation and affordability for consumers remains tough and insurance is a higher percentage of their disposable or household income. We intend to continue to invest while it remains efficient, and we're seeing signs like older shoppers, longer-tenured shoppers coming into market in ways that we previously had not seen.

When some of these long-tenured shoppers shop, they may not have shopped for 10 years previously. Once they do, they realize that the world's changed, and it's relatively easy, with high information transparency and low switching costs, to change auto insurance in particular providers.

We think that's a good thing. If people can leverage the competitive nature of the voluntary market and save themselves money on quality coverage, that's good for them.

As Tricia mentioned, being a value provider who uses lots of data to ensure we have the best matching of rate to risk, we think we win when more people shop and find that Progressive offers a competitive price for the value for coverage they're seeking.

Thank you.

Thanks, good morning. First question's on productivity.

This past winter, Tricia, you spoke to productivity gains that I think ASB would allow Progressive to do maybe up to 10% more with the same level of employees. Maybe you can elaborate on what specific technologies are driving those efficiency gains, because I'd love to try to better decipher whether some of those benefits will endure more so to Progressive versus peers as well.

I won't go into all the specifics that we're using, but we do have several generative AI solutions in production, and we believe they're delivering meaningful benefits that we think will be long-term, and that's across personalized experiences for consumers, agents, business owners, and we're really, I think, just at the tip of that. It's really a continuation of how we've invested in technology over the years, whether it's from digital ability in claims, or actually in CRM as well.

We're just trying to kind of be where consumers need us to be, and that's one of our strategic pillars: to have broad coverage and be where customers want to shop, want to be serviced. We believe, and we just finished our three-year strategic plan and presented it to our board of directors, we believe that we can continue to reduce non-acquisition expense ratio over the foreseeable future.

We do a three-year plan, because we think it's really important to even with the margins we have to continue to have pressure on us to have the most competitive price, but also the right rate to risk. We believe that we can continue to put pressure on expenses.

Through technology, changes, yeah.

That's helpful. Just switching gears, lastly, to a question on capital management.

Are you willing to kind of maybe elaborate more on why Progressive chose a very large special dividend earlier this year versus directing more of those excess funds towards a buyback? I don't know if you're willing to kind of share some of the math equation or thought that drove that allocation decision, thanks.

I'll have John Bauer from Progressive Capital Management talk about that, but, as we've got lots of uses for capital. We had a lot of capital last year because of our growth, I'll just start with that, and we need a lot when there's high growth in terms of our regulatory needs and our contingency capital.

Then we have to make choices, and we work very closely with our investment and capital team with the board of directors to determine how much we buy back, which we did buy back a fair amount in the first quarter of this year, and what we do with dividends. Ultimately, they make the decision, but maybe I'll just have Jonathan Bauer go over a little bit more about our process around how we think about overall capital management.

John, maybe even just talk about the debt raise we just did.

Thanks so much for the question. I would start by pointing everybody back to our first quarter presentation, where we talk through how we think about capital.

At a high level, we start with, can we reinvest that capital that we have back into the business? For much of the last few years, what Pat was talking about and others, our company was growing so fast, we needed much of the capital we were generating to reinvest in our business to fund that growth.

As we've seen over the last 18 to 24 months, the business has been producing prodigious amounts of capital, even as we've continued that growth. As we think about what to do with that excess capital, after we get through the initial reinvest in the business, we think about a few different things.

One is share repurchases, another is potential corporate development opportunities, and the other is investment risk. We look across those three lenses and say, do we see valuable opportunities there?

When we think about our share repurchase, we specifically look at a few different measures, the same that we see in many of your reports, things such as price-to-earnings, price-to-book, and then we have our own internal model. We look to see, do we believe our shares are trading cheap to our view of fair value?

Then we look to scale the share repurchase plan that we have through 10b5-1s on a going-forward basis based on how much of a discount we see that the shares are trading to versus what our view of fair value is. You should expect that we will continue to scale that repurchase based on how much excess capital we have, what are the other opportunities we see for that capital, and where we see the valuation of our shares trading in the market versus our view of fair value.

If after the share repurchase, the corporate development, and the investment risk decisions, we still have what we deem to be excess capital versus what we need for our business, then we would look to return that, as we did with our variable dividend at the end of last year. I will point out, with last year, we had something besides just our internal cash flow generation, which was the switch to at several of our subsidiaries, 3.5:1 premiums to surplus.

That afforded us to have an even greater amount of excess capital that we were able to move up to our non-insurance subsidiary that allowed for both the increase that we saw in our share repurchases in 2025, as well as the large variable dividend that you talked about. I'll briefly just also mention we raised some money in the corporate debt markets this year.

We thought that it was a good time to issue. We obviously have a billion dollars of debt maturities coming in 2027.

We thought that valuations were attractive in the market, and we saw, as many of you have seen, that our financial leverage, which normally has ranged between 20% and 30%, we have our 30% limit, had fallen pretty significantly below 20%. With the issuance that we did in the capital markets, our financial leverage at the end of the quarter moved up over 20% to a more efficient level.

I would again just circling back to where I started, point everyone to that first quarter presentation and our focus on driving strong returns for our shareholders, and the way we think about doing that is with that strong return on equity that Progressive has driven over its history. That means being incredibly efficient with our capital, both the total amount of capital that we are holding, as well as the split of that capital between debt and equity.

Let me know if that answered your question.

That's helpful. I need to check, should we be earmarking some of that debt capital towards buybacks potentially, or am I misinterpreting?

Thanks.

We don't separate out, oh, that debt raise is for share repurchases or for something else. How I would think about it is Progressive is in an incredibly strong capital position, even after the dividend, the share repurchases that we've done, and even pre that debt raise.

Even after that debt raise, we feel like we're even in a stronger capital position. We have the opportunity to invest that capital in all of the elements that I talked about, share repurchase being one of them, and we will continue to look at what the split is between our view of fair value and where our shares are trading, and if we think that we should be repurchasing a greater amount of shares, we will.

For us, it's very important to determine how big of a discount to fair value our shares are trading at.

Thank you.

Hey, thanks. Maybe I'll just follow up on the capital management discussion.

Progressive has disclosed that the firm can get to a maximum 3.5 times premium to surplus on a statutory basis. From the outside, it seems like maybe you're not comfortable going that high.

How should we think about your criteria for premium to surplus on a GAAP basis, and should we expect that to trend upwards towards the three times range?

John, do you want to take that, and if John Sauerland, either one of you, because you're both involved in those conversations?

Sure, I will start and then John, I'm happy for you to add on to anything there. We got the approval at several of our subsidiaries to move to 3.5:1 from the 3:1.

It was not across all of our insurance subsidiaries, but a significant amount of them. This approval only came in 2025, we moved the capital up that we could within the course of 2025 to move up that premiums to surplus to as efficient as we could be in 2025.

We will continue to look in 2026 and 2027 to optimize that premiums to surplus at our operating subsidiaries, because we feel a huge amount of confidence in the underwriting business that Pat talked about, that we are holding more capital there than we need for the risk that we have. We will continue to optimize that over time.

Our overall premiums to surplus, including our non-insurance subsidiaries, will include the capital that we're holding for other things that we just talked about: share repurchases, corporate development, investment risk, contingent capital, and things like that. That capital will continue to be optimized, but we will also look to hold some of that capital for future opportunities.

The goal is to optimize the capital at those insurance subsidiaries as much as we can over time, and then the capital that we hold at our non-insurance subsidiary will go up and down based on opportunities we see to use that capital, and if we are looking to hold back certain capital for future opportunities. John, I don't know if you want to add anything to that.

I would, as John Bauer did, refer folks back to our first-quarter presentation, where we detailed our financial policies, our capital structure, as well as the change in premium-to-surplus targets. We got approval to go to 3.5:1 in by far the majority of our operating entities.

That said, we were not able to move as far as we desired in 2025 to those ratios. Our aspiration is to continue to move premium-to-surplus ratios up in those entities in which we have received approval.

I would also highlight that we've received approval largely because our risk-based capital ratios are exceptional in those operating entities. We have a great track record, especially in personal auto and underwriting margin, we have a conservative investment portfolio, we have, relatively speaking, little loss reserve development.

All those factors go into the risk-based capital ratios, which is what at the end of the day, I believe regulators look at to see their comfort level in the solvency of insurance companies. We've fared extremely well on RBCs in those companies, even at the higher premium-to-surplus ratios, and our aspiration, working with regulators, is to continue to move those ratios up, which obviously allows us to decrease the total equity we require on a GAAP basis, which obviously then can lead to higher ROEs.

That is the game plan we laid out in our first-quarter call, and as John Bauer did, I would refer folks back to that call for more detail.

Thank you both.

Thank you, that's helpful. Maybe just a follow-up on advertising in the competitive environment.

We've noticed Progressive is accelerating advertising spend, and obviously generating significant PIF growth. It does look like to us that peer ad spend has somewhat flattened out at levels well below Progressive.

What types of advertising is Progressive finding incrementally attractive today to deploy the additional advertising dollars? Why do you think Progressive is uniquely able to effectively deploy so much ad spend?

I'll start and then I'll have Pat Callahan add in. Like we talk about often, we are not going to advertise unless we think that we will get customers for that.

We want to make sure it's efficient, we'll advertise if our cost per sale is under our targeted acquisition cost. We target differently depending on the cost, and in each year, of course, we'll pay some upfront cost for mass media on TV.

You have to do that well in advance, and then most of our incoming is in the digital area. We sort of look across the spectrum of all ways with which to get eyes on our brand, and of course that's a specific part of, you think, you can market, but if you don't have a well-thought-out and well-defined brand, it may not work.

We obviously do. For over a decade we have, whether it's our characters or our message, ultimately resulting in people wanting to shop and wanting to convert with us when we have competitive prices.

That's the key. I'll have Pat add some color to that.

Sure. One of the differentiators, I think, within our customer acquisition, marketing, media, is a really strong in-house media team, where we buy virtually all of our media in-house.

What that does is closely couples our media team with our product teams to understand, at a more granular level, the ultimate cost of a piece of media as it translates through the performance of the media funnel, meaning what the cost per impression is, how well it converts, what the average premium is, and then ultimately what the lifetime profitability on that risk may be. We've talked for years that segmentation's in our blood, and segmentation, when it comes to media and operating our media buys highly efficiently, is what we continue to do.

We continue to add to that team, and that team continues to work with media partners to find new ways to efficiently reach customers and, ultimately, get them to come try what we think is a phenomenal value in insurance protection products. As Tricia started out with, we will continue to spend as long as it's efficient, and we monitor the efficiency of not only what we do from a run-the-business perspective, but we're constantly testing and learning, and scaling winners and shutting off losers.

Similar to the flywheel, there's adverse selection in media purchasing, meaning when we bid to a certain extent and back away and someone else outbids us, we're pretty confident the efficiency of that spend isn't going to return what they expected it would. We do that in product, and we do that in media, and we do that in other parts of our business.

Thank you very much.

Yes, thank you for taking my question. If we look at the declining premium per policy in the agency segment, a lot of that seems to be, or at least some of it, the growth rate of Sams and Dianes relative to Wrights and Robinsons, and you're just growing faster in a lower-premium bucket of consumers.

If you're a big believer in Progressive as the signature destination for insurance shoppers, part of that promise, you have to grow the Robinsons and the Wrights. Maybe you have to grow them faster than the Sams and the Dianes.

What are you doing right now to address that imbalance in the growth rates?

I think we are definitely growing Sams again, and like I've said many times, that is okay because Sams were our bread and butter for a lot of years. As long as we can price them accurately to make sure we have our profit margins that we target, it's important.

Now, yes, you've hit on something important. I've talked about in the last couple of quarters, we definitely, in order to achieve that new goalpost that Pat talked about in the opening comments, we want to be the number one destination, which means private passenger auto is a piece of that, but property has to be another piece of that.

We definitely want to grow more on both the Robinsons and the Wrights. If you think about our agency channel, that is going to be the Progressive home product, and the direct channel be a stable of companies in that are non-affiliated.

We've been doing a lot of things. I've talked about the blueprint, I've talked about kind of where we're going.

I'll reiterate that and then talk about a couple more things we're doing, and then give you some kind of a highlight or foreshadowing into our Q2 call, our deep dive. We talked about new business readiness.

That is, do we have the right rate level? Do we have the right segmentation or the product model in play?

Do we have cost sharing in the contract? Interstate diversification, and what are the regulatory and marketing conditions?

We have about 38 of our 47 states have identified where we're in growth mode. We'll add a couple more states in quarter two.

We want to increase availability, expand distribution, and expand our underwriting appetite. A couple of the new things that we're doing in this first quarter into second quarter is we're really trying to, in the agency channel, like you had said, understand and address the barriers to growth and conversion, and what are some agent pain points?

Our property team and our agency distribution team have been doing sort of roundtables with our platinum agents. We've done 29 roundtables in quarter one in 13 states, and we'll do another 19 in 10 states in Q2.

We're learning, incorporating feedback, and I'm certain that will ensure changes or revisions to our product going forward, because we want to make sure that we have more Robinsons. That will be how we understand how we get to our ultimate destination.

We're trying to understand that. We don't want to swing the pendulum all the way.

Obviously, we've had some volatile years. Yes, we agree with you, that is a big part of our growth strategy.

We have a great team on that. I'm going to let Pat talk if he wants any more of that, but I did want to say that our next deep dive will be on both overall property growth and Robinson growth, and so if you could, so that we're able to answer your questions adequately or accurately if there's information that we want to share, get those questions you have on both Robinson growth and property growth overall to Juliana, our new head of investor relations, because she can start to gather those.

As John Curtiss, our head of national property, and Jim Curtis, no relationship, our head of auto, they're going to be doing the deep dive next quarter. They can get those questions and try to really be able to answer them in-depth.

That's my one ask of you between now, our call will be in August, get those as soon as you can so we can get information sort of gathered to adequately address any of those questions. Do you want to add anything else, Pat?

Just a couple quick things, Josh. You mentioned the decline in average premiums in the agency channel, and that's driven by a lot of different things, not just the mix shift potentially to some Sams and Dianes.

Part of it is we're writing fewer annual policies than we were previously, and not all premium declines are compressing margins. We see mix shift to better risks and different states that bring with them potentially a different average premium.

I wouldn't want you to think that it's just a mix shift to Sams and Dianes, which there's a little bit of that as we're growing those rapidly. Now we're growing PIFs across segments, but we're growing those faster than we are the more preferred segments, and Tricia talked a little bit about that.

I guess I'd close with the focus on unlocking the Robinsons' access. We'll spend some time on in August, and for us, it represents a $40 to $50 billion top-line opportunity.

We have roughly 20% share of Sams, Dianes, and Wrights, and penetrating 40% of the $240 billion US personal lines Robinsons' opportunity is just massive top-line growth, and that's why we're focusing on it, but doing it in a smart way to ensure it's deliberate, it's consistent, and most importantly, profitable growth that we generate from that segment. I'm

very thorough. I'll hesitate to ask a second question, and thank you for taking the time.

Thanks, Josh.

Hey, thanks. Good morning.

Just wanted to get an update on where cost per sale compares to your targeted acquisition cost now versus 3 months ago or maybe 6 months ago, and how you're thinking about potentially increasing it by more, over the next several months or quarters?

It's still under our targeted acquisition cost, probably a little bit tighter. Again, we look at that differently depending on the customer that we are acquiring, and so sometimes that target could move depending on type of media, type of customer.

Far, we've seen no reason to stop our current trend of advertising. If we see some decline or some reason, we'll pull back a little bit.

We're pretty excited about continuing our growth, and part of that is our increased media spend.

Got it, thanks. Then just following up to an answer to a previous question.

I think it was Pat who spoke about some shoppers who maybe not have shopped for the past 10 years now shopping. I'm assuming those are potentially Robinson customers.

I guess maybe just a high level, is that true? Then just maybe high level, how are you guys thinking about where the book of Robinsons stands today as a percentage of the total mix?

As you guys ease some of those property restrictions in certain markets, what's the expected timeline for that to show up in auto PIF, and maybe actually a bit on the premium per policy side as there's more bundled auto business?

The comment that I made about longer-tenured in-force shoppers shopping is coming from a LexisNexis meter. It's interesting data, and it's doesn't have necessarily our segment breakdown to know whether they are Robinsons, but I follow your intuition that if they're long-tenured, they are likely a more stable insurance risk whether they choose to place both their auto and home with the same carrier or not.

Long-tenured and stable risk do overlap well with where we want to go with the Robinsons segment. We're under-penetrated.

We think there's a massive upside potential in that segment, continue to invest against it, but it's also a pretty competitive segment. It's an area that the captive or exclusive agent companies own a large portion of that market share.

As we know, those companies that are mutuals, or in some cases reciprocals, have different objective functions and a different time horizon for how they think about pricing their products. We know that competition for those customers is high, will be high, but it's encouraging to see that once those customers seem to get a taste of the competitive market or the ease and savings that comes from the choice model of the independent agency distribution channel, that we've seen them coming back and realizing that having choice, having breadth and depth of coverages potentially better meets their needs as an insurance consumer over their buying lifetime.

Those are encouraging signs that we see, and that's why we continue to invest heavily in the independent agency channel, where ease and savings come from the choice model.

Hey, good morning, everyone. In the limit just because I know you're running out of time, I'll just ask one question.

Tricia, you talked about presenting the three-year plan to the board, and I know almost every quarter you guys give us an updated view on autonomous vehicles. I just want to pull out the growth in your TNC business, which seems to be positive in commercial auto.

There's the oncoming wave of Waymos, Teslas that are self-driving, etc. I'm just curious when you map out your three-year plan, how you're thinking your TNC business might evolve over the course of the next couple years?

Thanks, Gregory. I'll have Andrew talk a little bit more about that, but that was a big part of what we update the board on.

I think we've talked about this. Since probably, oh, maybe right around 2013 or so, we have what we call a runway model, and we look at the addressable market.

We look at all trends, but obviously we want to look at AVs and each level of AV, what that means from a market perspective, a safety perspective. We have relationships with TNC providers.

Some of that increase could come from mileage, there's some different ways that things increase in the TNC space. We are very close to that data, and we have models that we work in terms of, hey, if this happens conservatively, cuz I think you can read the articles just like you would read about self-driving cars 10 or 15 years ago and get hyped up about it.

It doesn't mean we're putting our head in the sand. What it means is we're watching it closely and understanding very clearly that there's a lot of opportunity to continue to grow and work with a lot of these providers, because I think it's going to be a great for consumers.

It's very different also depending on states, weather, driving, geofencing, all of that. Andrew, you want to give a little bit more insight?

It's definitely a topic of conversation with our board. We have an ongoing dialogue about autonomous vehicles and specifically in the TNC space.

The only I'd say material commercialization right now is from Waymo, and they have a ride sharing service right that competes directly with our TNC customers. It's something we pay attention to.

Right now, Waymos are in many fewer urban areas than our TNC partners, and they are limited in the amount of vehicles that they have there. Right now, at least from an insurance side, we don't see cannibalization of the opportunity, but we're cognizant of it.

As we plan for the future, of course we want to be careful on how we do that. We think there's robust demand.

There's seasonality that's present in the TNC market. Certainly in winter, people choose TNCs more than they do during nice weather in the summer.

When it's raining, there's more choice. When in the mornings or the evenings, and so there's this variability and seasonality of demand that's present in the TNC space that's hard to solve with a fixed set of vehicles as that we might see from Waymo or other AV providers.

For the long term, we think that there will be a combination of both AVs and TNC companies with human operators even in the far future. Something we pay attention to, something we think about.

Who knows, but we try to be cognizant of the risks that are there and the opportunities.

I would also add, Gregory, that that's one of the reasons why several years ago, regardless of what happens, we decided to really diversify more in our commercial lines organization. We've had our 5 BMTs for a long time, but as we've gone into more fleet, especially medium fleet, our BOP program, going direct.

That's one of the reasons why we have been investing and will continue to invest. Pat talked about it in his opening comments.

We feel like we're in a really pivotal position right now with commercial lines. That industry lack of profit has been around for a long time, even though it's getting a little bit better.

We think that 2025 CR's right ex-Progressive is right about 105, but we have profit as one of our core values, we want to make money in all lines. We think we have a really good point of growth right now in our commercial lines business.

Regardless of what happens, and we'll continue to do modeling and be on top of AVs, that's one of the big reasons why we've diversified our product line in our commercial lines organization.

There are approximately 5 minutes left in the event. We'd like to reserve those 5 minutes for some closing remarks from Tricia.

Those left in the queue with questions can direct them to myself or Juliana directly. Tricia?

Thank you. I just want to take a few moments.

One, I want to welcome Juliana Paterra as our new Director of Investor Relations. Many of you have met her.

We're super excited to have her on the team. As I said, please get her any questions you have on Robinsons, on property, just so we can really adequately try to address your needs when we do our Q2 call in August.

Then hot off the press, I want to congratulate Doug Constantine on his new role in Progressive as IT Controller. We just announced it to the organization yesterday.

Typical with Progressive, we love moving people around. Doug has been in PL, has been in CL, and now he's been our right-hand guy prepping us for these calls for many, many years, and his work has been really appreciated.

Thank you so much and congratulations, Doug. Then lastly, John Sauerland, this is his last IR call.

He announced that he'd be retiring in July, and he has been instrumental in making these successful and sort of being everyone's right-hand guy. There's the weekend before when we start to get sort of competitor news and different things, I always turn to John to get any answers, and of course he's been mentoring Andrew as we pass the baton.

I would like to, for those of you in the room, give John Sauerland a round of applause.

Thanks, Tricia. Rebecca, I'll hand the call back over to you for the closing scripts.