Progressive Corp (PGR, Financial) had a positive contribution to performance during the quarter. Net Premiums Written (NPW) grew +12% as the Company grew both policies in force and took rate to offset higher loss cost trends that are being driven by inflation. For example, we estimate accident severity for personal auto are up +35% since the beginning of the pandemic. However, this is partially offset by a 20% decline in frequency, due to people driving fewer miles. Progressive is making up for this net rise in cost by raising policy rates in the mid-teens percentage range. Progressive has been relatively early to take rate compared to industry peers, so the Company should be able to aggressively compete for share as competitors play catchup.
From David Rolfe (Trades, Portfolio)'s Wedgewood Partners second-quarter 2022 letter.