During the quarter, we purchased Progressive Corp. (NYSE:PGR) in Ariel Appreciation Fund. Progressive is the fourth-largest auto insurer by market share in the U.S. Investors are skeptical of the company’s growth potential and margin sustainability (given intense competition, a recent move into homeowners and rising frequency losses). We, however, see this as an opportunity for long-term investors to own a rare example of a differentiated insurer, well-positioned to benefit from continued share gains, direct channel efficiencies and eventually, rising interest rates. We did not exit any positions during the quarter.
From John Rogers (Trades, Portfolio)' Ariel Appreciation Fund third quarter 2015 shareholder letter.
