1. Automobile Insurance Industry Analysis Chace Estes, Benjamin Fieman, Greg Holt, Anthony Kohrs, Jasmine Olkh, Natalie-Rosanna Rebot

2. Car Ownership Growth Number of registered vehicles increasing at stead rate, translating into growth of auto insurance industry.

3. PEST Analysis None Increased Efficiency Allowed for faster communication between agents and headquarters & shorter claims processing times Installed $28 million computer system Technology Change None Allowed for a more refined pricing system Smart pricing Picking “better risks” Social Change Competition Greater demand for auto insurance Led to increased car ownership Purchasing power increased steadily Economic Change Long Haul Truck Insurance industry was a risky market Forced Progressive to attack other markets. Retroactive price roll-back of 20% and profit-cap. Caused Progressive to move partially out of CA market Prop. 103 & Long Haul Truck Insurance Political Change Threats Opportunities Impact of Change Nature of Change

5. Auto-Insurance Industry Analysis Industry Detail NAICS code NAICS Title (and link to definition) Establishments Revenue ($1,000)‏ Annualpayroll($1,000)‏ Paidemployees 52 Finance & insurance 395,203 2,197,771,283 264,551,401 5,835,214 524 Insurance carriers & related activities 172,299 1,072,784,074 92,230,010 2,327,306 5241 Insurance carriers 38,739 995,511,823 65,858,315 1,588,015 52412 Other direct insurance carriers 23,561 307,694,978 30,374,111 683,119 524126 Direct property & casualty insurance carriers 20,903 299,236,173 28,655,057 639,751

6. Auto-Insurance Industry Analysis

7. Auto-Insurance Industry Analysis

8. Auto-Insurance Industry Analysis Description Market Cap P/E ROE % Div. Yield % Price to Book Net Profit Margin (mrq)‏ Price To Free Cash Flow (mrq)‏ Financial 5367.76B 6.503 16.284 6.888 1.372 13.259 3.116 Property & Casualty Insurance 320.34B 2.3 13.2 2.958 0.91 10.8 4.8 Allstate Corp. 11.54B 56.958 1.089 7.5 0.913 -17.187 NA Hartford Financial Services Gr 3.77B NA -8.557 1.5 0.3 NA 2.471 Mercer Insurance Group Inc. 90.16M 8.492 8.013 2.1 0.713 4.496 -10.947 Mercury General Corp. 1.83B NA -1.648 7.1 1.082 -30.616 19.896 ProAssurance Corporation 1.69B 11.288 12.074 NA 1.265 18.531 -2179.25 Progressive Corp. 8.89B NA -1.53 0 2.109 4.545 NA State Auto Financial Corp. 888.05M 79.61 1.328 2.7 1.126 -4.89 -45.136 21st Century Holding Co. 31.49M 3.739 10.555 18.1 0.395 -9.537 -2.916

9. General Flow of Automobile Insurance Industry Channel of Policy Sold Underwriter Internal sales force Independent agents Remote selling methods Background check Premium determined Policy written Premium paid Invest ROE of 9% Liability Coverage Claims and Operations Immediate Response System $100 $9 $6.40 { File Claim Call 1-800 Fault Action Tow truck Rental car Appraiser Repair Estimate Body shop Return Return car Adjust premium Channel Sales And Service Rate/Quote Underwriting Policy Issuance Claims Processing

10. Progressive Value Chain Inbound Logistics  Operations  Outbound Logistics  Marketing and Sales  After-Sale Service  Customer Premium paid by customer Data Gathering Customer satisfaction Profit Value Added Better Bets Rating, Underwriting and Investing Competitive Premium Policy issuing, billing and collections New policy sales, policy renewals, advertising Increased awareness and direct sales Time value of money Claims, train, recruiting, immediate response system Inbound Logistics After-Sale Service Marketing and Sales Outbound Logistics Operations

11. Value Creating Activities General Flow of Progressive’s Value Creating Activities Inbound Logistics Operations Outbound Logistics Marketing and Sales After Sales Service Satisfied Customers! Number Crunching Billing and Collections Data Gathering

18. Value Creating Activities