Progressive Is Crushing It Again in 2020 -- Is It a Buy?
Progressive (NYSE: PGR) is a great company because it has shown mastery at an insurer's core competency: underwriting. It generates the majority of its profits from simply keeping more in premiums than it pays out in claims -- and it's kept up its stellar performance while other insurers have found that their secret sauce to turning higher profits isn't working quite as well this year.
You see, it's not uncommon for insurers to boost revenue by underwriting policies and then reinvesting those funds in various instruments such as U.S. Treasuries, municipal bonds, and corporate debt. With interest rates near zero, some property and casualty insurance companies less skilled at underwriting are facing issues. But Progressive's discipline has been a key driver of its growing earnings, and it has made this stock a winner for investors as well.
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Source Fool.com
