A.M. Best Affirms Rating for the Progressive Casualty Pool; Affirms Debt Rating.Business Editors OLDWICK, N.J.--(BUSINESS WIRE)--March 3, 2003 A.M. Best Co. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the financial strength rating of A+ (Superior) for the Progressive Casualty Pool, (Mayfield Village, OH). At the same time, A.M. Best has affirmed the "a+" senior debt rating for The Progressive Corporation's (NYSE NYSE See: New York Stock Exchange : PGR PGR Project Gotham Racing (game) PGR Procuraduría General de la República (Mexico) PGR Patriot Guard Riders (national motorcycle group based in Centennial, CO) ) existing debt securities and the indicative rating of "a+" for senior debt under the company's $650 million shelf registration, of which $250 million remains. The rating outlooks are stable. The ratings reflect Progressive's solid capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. , excellent operating performance and sustainable competitive advantages, which have enabled it to become a market leader in the private passenger automobile insurance industry. The group's strong operating performance is derived from steadily increased levels of investment income and profitable underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. results, which have resulted in solid annual surplus growth. Progressive continues to benefit from an innovative management team with creative operating strategies, brand name recognition, a dynamic multiple channel distribution platform and extensive utilization of cutting edge underwriting and claims handling technology. Furthermore, Progressive benefits from its extensive data mining capabilities and technology advantages that enable detailed pricing of various risk classes and distribution sources. The ratings further consider Progressive's financial flexibility, which maintains moderate financial leverage, excellent cash flow to fund fixed charges and access to capital markets. Progressive ranks among the top ten property/casualty groups in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. in terms of net premiums written. These positive rating factors are partially offset by Progressive's above average underwriting leverage, which was driven by aggressive growth in net premiums written and associated liabilities, although this has been partially mitigated by favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before . A significant portion of premium growth was reflective of rate adequacy, improved customer retention and an increase in new business policies that resulted from competitor rate increases, as well as underwriting restrictions, withdrawals or moratoriums by other national and regional insurers. For a complete listing of Progressive's financial strength and debt ratings, please visit http://www.ambest.com/press/030305progressive.pdf. A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com |
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