The Progressive Corporation, an insurance holding company, provides personal and commercial auto, personal residential and commercial property, business related general liability, and other specialty property-casualty insurance products and related services in the United States. It operates in three segments: Personal Lines, Commercial Lines, and Property. The Personal Lines segment writes insurance for personal autos and recreational vehicles (RV). This segment's products include personal auto insurance; and special lines products, including insurance for motorcycles, ATVs, RVs, watercrafts, snowmobiles, and related products. The Commercial Lines segment provides auto-related liability and physical damage insurance, and business-related general liability and property insurance for autos, vans, and pick-up trucks used by small businesses, as well as non-fleet taxis, black-car services, and airport taxis; tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses, and long-haul operators; dump trucks used by light contractors and heavy constructions; log trucks and garbage trucks used by dirt, sand and gravel, logging, garbage/debris removal, and coal-type businesses; and tow trucks and wreckers used in towing services and gas/service station businesses. The Property segment writes residential property insurance for homeowners, other property owners, and renters, as well as offers manufactured homes, personal umbrella insurance, and primary and excess flood insurance. The company offers policy issuance and claims adjusting services; acts as an agent to homeowners, general liability, workers' compensation insurance, and other products; and reinsurance services. It sells its products through independent insurance agencies, as well as through mobile applications and over the phone. The Progressive Corporation was founded in 1937 and is headquartered in Mayfield Village, Ohio.

Progressive выглядит качественным страховщиком, но текущая оценка уже отражает значительную часть сильного фундаментала. По прибыли и эффективности картина сильная: ROE 26.25%, ROA 7.14% и ROI 21.59% заметно выше медианы отрасли, а рентабельность капитала на материальной основе также очень высокая. При этом динамика эффективности не идеальна: ROE и ROI снизились от более высоких уровней в середине года, что говорит о некотором охлаждении темпа. Мультипликаторы выглядят неоднозначно: P/E 15.03 лишь немного выше отрасли, но P/B 3.33 очень сильно выше медианы, что обычно означает премию за качество, но и ограничивает апсайд. С другой стороны, P/S и P/FCF ниже отраслевых ориентиров, а их снижение по годам поддерживает тезис о том, что денежный поток и выручка оцениваются не чрезмерно дорого. Баланс у компании сильный по долговой нагрузке: debt/equity 0.23 ниже медианы, а долг практически не растёт, что снижает финансовые риски. Однако ликвидность слабая: quick ratio равен нулю, current ratio 0.30, и это типично для страхового бизнеса, но всё же требует осторожности при оценке краткосрочной устойчивости. Выручка, активы и собственный капитал растут, что подтверждает масштабирование бизнеса и укрепление баланса. Чистая прибыль и операционная прибыль также остаются высокими и в целом растут, хотя маржи ниже отраслевых медиан, то есть компания зарабатывает хорошо, но не по самым высоким отраслевым стандартам. Дивидендная доходность фактически отсутствует, поэтому инвестиционный кейс здесь строится не на текущем доходе, а на качестве прибыли и баланса. В сумме фундаментал скорее поддерживает оценку выше нейтральной, но высокая премия к book value и отсутствие дивидендного буфера ограничивают потенциал дальнейшего пересмотра вверх. Для инвестора это история сильного страхового бизнеса с устойчивой прибылью и низким долгом, но уже не с очевидной недооценкой по текущей цене.

Progressive Corporation (The)

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Сильный индекс, без изменений. Рынок на стороне быков.

Strong index, flat. The market is on the bulls' side.

Слабый индекс, незначительно вырос

Сильная прибыльность и низкий долг поддерживают PGR, но высокая премия к book value и слабая ликвидность ограничивают потенциал роста оценки.

Key Points
Much is made of Berkshire Hathaway's investments, but the real story behind the company's success is the "float."
Auto insurance giant Progressive generated nearly $1 billion from its float in the first quarter of 2026 alone.
The ability to invest premiums until they are needed to pay claims can be hugely profitable for insurance companies.
Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) is one of the most recognized names on Wall Street. That notoriety is based on former CEO Warren Buffett's long history of success as an investor. However, what allowed him to invest is often overlooked. The key ingredient was the so-called "float." And it isn't just Berkshire Hathaway that has benefited from the float, which is the powerful tool that allows insurance companies to generate billions in profits for shareholders. Here's what you need to know.
A timing mismatch is the big win for insurance companies
What, exactly, is the float? An insurance company like Progressive (NYSE: PGR) collects money from its customers as they pay for their insurance coverage. But Progressive doesn't actually pay out any money until a claim is filed. Not every customer files a claim, so Progressive keeps some of the premiums it collects. However, there will always be some number of claims, so Progressive, like all insurers, needs to have money available to pay them. The float is the money an insurance company like Progressive has collected and is holding to pay claims.
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Insurance companies don't put that money in a safe and let it sit idle. They invest it. Some companies are very conservative with the cash, largely investing in bonds to generate income. Others, like Berkshire Hathaway, have taken a more aggressive approach, investing in stocks and, in the case of Berkshire Hathaway, buying entire companies.
Berkshire Hathaway is an unusual case
Warren Buffett's insight was that he could use float in ways others didn't. His investment approach made him a household name and a Wall Street icon, but it was the float that made it all possible. There are other companies that mimic the Berkshire Hathaway model, including Markel Group (NYSE: MKL) and Brookfield Corporation (NYSE: BN), which is currently shifting its business to become what it describes as an investment-led insurance company.
That said, most insurance companies, like Progressive, take a more conservative approach. But even taking a conservative approach to the float can be highly profitable, as Progressive generated investment income of $917 million in the first quarter of 2026 alone. Annualizing that figure puts the insurance giant on pace to generate nearly $3.7 billion in investment income, which would be up from roughly $3.58 billion in 2025.
That said, there is a downside to investing the float. When markets are rising and profits are flowing, the float is a powerful wealth creator. But investing the float puts that money at risk. When a bear market occurs and/or interest rates rise sharply, the value of an insurance company's investments can decline.
Progressive specifically warns that "If the fixed-income or equity portfolios, or both, were to suffer a substantial decrease in value, our financial position, and results of operations could be materially adversely affected." In such situations, an insurance company's financial position would weaken, and reported earnings could be reduced. So the float is a powerful tool, but one that has to be wielded wisely. This is why most insurance companies are not as aggressive as Berkshire Hathaway when investing their float.
Be ready for volatility if you own an insurance company
The big takeaway is that insurance companies can generate billions in profit from the float, but those profits are not risk-free. In fact, insurance companies are likely to be smarting from a bear market at the same time that you are and for similar reasons. That can make insurance stocks hard to hold through the trough of a typical bull/bear market cycle.
But, at the same time, patient investors may also find that bear markets open up attractive investment opportunities in the insurance sector. So, perhaps, dig into the sector now and create a wishlist of insurers you'd like to own if only they were cheaper. Berkshire Hathaway and Progressive could easily find their way onto that list for most investors.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

How Insurance Companies Turn Their Premiums Into Billions in Profit

Shares of The Travelers Companies, Inc. TRV have gained 16.2% in the past year, outperforming its industry’s decline of 1.3% and the Finance sector’s growth of 12.4%.
The insurer has a market capitalization of $64.50 billion. The average volume of shares traded in the last three months was 1.4 million.
Image Source: Zacks Investment Research
TRV Trading Above 50-Day and 200-Day Moving Averages
Shares of Travelers closed at $303.36 on Wednesday and are trading above the 50-day and 200-day simple moving averages (SMA) of $299.56 and $288.54, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
TRV Shares are Expensive
Its shares are trading at a premium to the Zacks Property and Casualty Insurance industry. Its price-to-book value of 2.02X is higher than the industry average of 1.38X.
The company has a Value Score of A. This style score helps find the most attractive value stocks.
Shares of other insurers like The Allstate Corporation ALL, W.R. Berkley Corporation WRB and The Progressive Corporation PGR are also trading at a multiple higher than the industry average.
TRV’s Growth Projection Encourages
The Zacks Consensus Estimate for Travelers’ 2026 earnings per share indicates a year-over-year increase of 1.5%. The consensus estimate for revenues is pegged at $48.93 billion, implying a year-over-year improvement of 0.1%.
The consensus estimate for 2027 earnings per share and revenues indicates an increase of 1.2% and 3.1%, respectively, from the corresponding 2026 estimates.
TRV has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company. Travelers beat earnings estimates in each of the past four quarters, with an average surprise of 40.38%.
Optimist Analyst Sentiment on TRV
12 of the 16 analysts covering the stock have raised estimates for 2025, and seven of the 14 analysts have raised the same for 2026 over the past 60 days. Thus, the Zacks Consensus Estimate for 2026 and 2027 earnings has moved up 2.5% and 0.6%, respectively, in the past 60 days.
Average Target Price for TRV Suggests Upside
Based on short-term price targets offered by 22 analysts, the Zacks average price target is $318.95 per share. The average suggests a potential 6.2% upside from the last closing price.
Image Source: Zacks Investment Research
Travelers’ Favorable Return on Capital
Return on equity (ROE) for the trailing 12 months was 24%, which compared favorably with the industry’s 7.4%. This reflects its efficiency in utilizing shareholders’ funds. Sustained operational excellence helped generate double-digit core ROE in nine out of the last 10 years. Travelers aims to generate mid-teens core ROE over time.
Also, return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame. This reflects TRV’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 14.6%, better than the industry average of 5.7%.
Factors Favoring Travelers
Travelers is benefiting from strong underwriting discipline and healthy performance in its Business Insurance segment, which remains a key long-term growth driver. Renewal premium change remained solid, while record new business and double-digit pricing in key commercial lines reflect strong execution and market share gains. Strong underwriting profitability, disciplined risk management and improving Personal Insurance margins continue to support earnings growth and margin stability for TRV.
Travelers’ investment results continue to be primarily driven by strong, reliable returns from its growing fixed-income portfolio and higher returns from its non-fixed-income portfolio. Management reaffirmed its fixed income net investment income outlook by quarter for 2026, expecting roughly $810 million after tax in the second quarter, growing to about $840 million in the third quarter, and around $870 million in the fourth quarter. Travelers has 94% of its investments in fixed maturities and short-term investments, with equity securities, real estate investments and other investments accounting for the remaining 6%.
Travelers continues to invest heavily in technology to improve underwriting, claims and distribution partner experience. Management indicated that it invests more than $1.5 billion annually in technology, including an AI strategy, while pursuing ongoing upgrades to pricing models and field tools. New product enhancements and digital platforms such as TRAVIS and TCAP are helping drive market share gains and stronger distribution relationships.
Risks for TRV
Exposure to catastrophe events, primarily from severe wind and hail storms and winter storms across multiple states, remains a recurring source of underwriting variability for property and casualty insurers. Management continues to describe weather-related severity as an ongoing feature of the loss environment, which can drive quarter-over-quarter earnings swings and complicate near-term margin expectations.
.
Rising reinsurance costs can reduce earnings and constrain underwriting flexibility, particularly after periods of elevated global catastrophe activity.
Higher repair costs and other inflation-linked inputs can lift claims severity in both auto and homeowners lines and challenge pricing and retention.
Conclusion
Strong underwriting, healthy premium growth, rising investment income and sustained pricing strength bode well for future earnings growth. However, catastrophe losses, rising reinsurance costs and inflation-driven claims severity remain the key concerns.
TRV has a track record of 22 consecutive years of dividend increases, with a compound annual growth rate of 8% over that period. Its current dividend yield of nearly 2% is much better than the industry average of 0.3%, making it an attractive pick for yield-seeking investors.
TRV also has a VGM Score of A. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
Higher return on capital, favorable growth estimates and impressive dividend history should continue to benefit Travelers over the long term. Given the premium valuation, it is wise to adopt a wait-and-see approach on this Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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TRV Stock Outperforms Industry, Trades at Premium: Should You Hold?

Investors in The Progressive Corporation PGR need to pay close attention to the stock based on moves in the options market lately. That is because the June 18, 2026 $125 Call had some of the highest implied volatility of all equity options today.
What is Implied Volatility?
Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell-off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.
What do the Analysts Think?
Clearly, options traders are pricing in a big move for The Progressive shares, but what is the fundamental picture for the company? Currently, The Progressive is a Zacks Rank #3 (Hold) in the Insurance - Property and Casualty industry that ranks in the Top 37% of our Zacks Industry Rank. Over the last 30 days, two analysts have increased their earnings estimates for the to-be-reported quarter, while four have dropped their estimates. The net effect has taken our Zacks Consensus Estimate for the to-be-reported quarter from $3.81 per share to $3.74 in that period.
Given the way analysts feel about The Progressive right now, this huge implied volatility could mean there’s a trade developing. Oftentimes, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.
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Are Options Traders Betting on a Big Move in The Progressive Stock?

Key Points
Progressive recently became America's largest private auto insurer.
Underwriting profitability remains far above management's long-term target.
Competition is increasing, but Progressive's advantages remain strong.
Over the past several years, few companies have dominated the auto insurance market quite like Progressive (NYSE: PGR). In fact, Progressive recently surpassed State Farm as the largest private auto insurer in the U.S. on a trailing-12-month basis. The company's private auto premiums actually grew 11.6% over the trailing 12 months ended March 31, 2026, while State Farm's auto business was essentially flat.
But make no mistake: Progressive's growth isn't a fluke.
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Pricing discipline
At the end of 2025, Progressive had more than 38 million policies in force across its insurance businesses, up roughly 10% from the prior year. Personal lines policies in force reached 37.4 million in early 2026, growing 11% year over year. Direct auto policies grew 14%, while agency auto policies increased 10%.
One reason for that growth is pricing discipline.
Many insurers were slow to respond as inflation drove up vehicle repair and replacement costs in 2022 and 2023. Progressive moved more aggressively to raise rates and maintain underwriting profitability. The strategy worked.
In 2025, the company generated an underwriting profit margin of 12.6%, well above its long-term target of 4%. Its combined ratio was 87.4%, meaning it paid out less than $0.88 in claims and expenses for every premium dollar collected.
The telematics advantage
The company's telematics platform is another major advantage.
Progressive's Snapshot program (which uses real-world driving data to help determine insurance rates) has now logged more than 100 billion driving miles and delivered more than $2.2 billion in discounts to customers since 2009. The data allow Progressive to more accurately identify risk and price policies accordingly, giving it an edge over competitors relying on less detailed information.
Its direct-to-consumer business also remains a growth engine.
During 2025, Progressive reported direct personal auto policy growth of roughly 14%. The direct channel reduces reliance on agents and helps lower customer acquisition costs.
Of course, the question is, can this growth continue?
Chasing growth
Competition is already beginning to return. Insurers that spent the past few years focused on restoring profitability are once again chasing growth. GEICO, for example, has increased advertising spending and is attempting to regain market share after years of retrenchment. That could make future market-share gains harder to achieve.
Still, Progressive enters this phase from a position of strength.
The company combines industry-leading telematics capabilities, a powerful direct channel, and a demonstrated ability to adjust pricing faster than many rivals. Even if competitors become more aggressive, Progressive appears well-positioned to continue growing its policies in force faster than the overall auto insurance market.
All this leads to the conclusion that yes, Progressive is likely to continue taking market share for the foreseeable future.
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Jeff Siegel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Progressive. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Progressive Keeps Taking Auto Insurance Market Share. Can It Keep Winning?

Berkshire Hathaway's BRK.B planned $6.8 billion acquisition of Taylor Morrison Home Corp. represents a strategic deployment of capital into a well-established homebuilder with significant exposure to favorable long-term U.S. housing fundamentals. The transaction aligns with Berkshire's proven acquisition philosophy of purchasing high-quality businesses with durable earnings, capable management teams and attractive valuations. It also ranks among the first major deals under CEO Greg Abel's leadership.
Berkshire already maintains substantial exposure to the housing market through Clayton Homes, residential real estate brokerage operations and investments in publicly traded homebuilders. Bringing Taylor Morrison into its portfolio would further expand that footprint as it has a strong presence across high-growth Sun Belt markets, including Arizona, Texas, Florida, and the Carolinas, regions that continue to benefit from population inflows and sustained housing demand.
The deal is expected to be closed in the second half of 2026, pending shareholder and regulatory approvals. Berkshire will pay $72.50 per share in cash, implying a 24% premium to Taylor Morrison's closing price on May 29. Including assumed debt, the transaction values the company at approximately $8.5 billion.
The acquisition underscores Berkshire's disciplined capital allocation strategy. The conglomerate typically seeks businesses with strong returns, conservative balance sheets, durable competitive positions and experienced leadership. With roughly $397.4 billion in liquidity, Berkshire is well-positioned to pursue large-scale acquisitions. Its most notable recent transaction was the $9.7 billion all-cash acquisition of OxyChem last year.
Acquisitions have been instrumental in Berkshire's long-term success, enhancing cash generation, broadening revenue sources and creating additional opportunities for shareholder value creation. Taylor Morrison thus fits squarely within that successful acquisition framework.
What About BRK.B’s Competitors?
Progressive Corporation’s PGR acquisition strategy focuses on building scale, technology, and distribution while reinforcing its insurance portfolio. Progressive pursues disciplined, selective deals that deliver strategic value and complement its core strengths. Through targeted acquisitions, Progressive enhances efficiency and customer reach, ensuring long-term competitiveness in a dynamic insurance landscape.
Travelers Companies’ TRV acquisition strategy emphasizes reinforcing core insurance strength while expanding into complementary markets. Travelers seeks disciplined acquisitions that enhance underwriting, technology and distribution capabilities. With a focus on sustainable shareholder value, Travelers carefully evaluates opportunities that bolster its competitive edge while maintaining a conservative balance sheet.
BRK.B’s Price Performance
Shares of BRK.B have lost 5% year to date, outperforming the industry.
Image Source: Zacks Investment Research
BRK.B’s Expensive Valuation
BRK.B trades at a price-to-book value ratio of 1.41, above the industry average of 1.34.
Image Source: Zacks Investment Research
No Estimate Movement for BRK.B
The Zacks Consensus Estimate for BRK.B’s second-quarter and third-quarter 2026 EPS has witnessed no movement over the past seven days. The same holds true for 2026 and 2027 EPS estimates.
Image Source: Zacks Investment Research
The consensus estimates for BRK.B’s 2026 and 2027 revenues indicate year-over-year increases. While the consensus estimate for BRK.B’s 2026 EPS indicates a decline, the same for 2027 suggests an increase.
BRK.B stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Will Berkshire's Taylor Morrison Deal Strengthen its Housing Bet?

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Schwab U.S. Large-Cap Growth ETF (Symbol: SCHG) where we have detected an approximate $270.0 million dollar inflow -- that's a 0.4% increase week over week in outstanding units (from 1,731,400,000 to 1,739,050,000). Among the largest underlying components of SCHG, in trading today Progressive Corp. (Symbol: PGR) is up about 1.4%, Parker Hannifin Corp (Symbol: PH) is up about 0.4%, and Danaher Corp (Symbol: DHR) is lower by about 1.7%. For a complete list of holdings, visit the SCHG Holdings page » The chart below shows the one year price performance of SCHG, versus its 200 day moving average:
Looking at the chart above, SCHG's low point in its 52 week range is $27.685 per share, with $35.42 as the 52 week high point — that compares with a last trade of $35.10. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Further SCHG Research:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Noteworthy ETF Inflows: SCHG, PGR, PH, DHR

Key Points
JPMorgan Chase is a money center bank that benefits from higher rates because it controls what it pays on deposits.
American Express works with wealthy customers and generates consistent revenues from processing fees.
Higher rates boost Progressive's income from the float it holds.
High energy prices, driven by the geopolitical conflict in the Middle East, are impacting the global economy. While gas prices are a quick hit to consumers, the broader cost impact of rising energy costs takes a little time to work through the economy. The hit is starting to show through, as inflation has been on the rise. The Federal Reserve specifically highlighted inflation as a concern during its last meeting.
Financial companies are directly affected when the Federal Reserve raises rates, which it does to slow the economy. While some may see an adverse effect, these three should hold up fairly well: JPMorgan Chase (NYSE: JPM), American Express (NYSE: AXP), and Progressive (NYSE: PGR). Here's why.
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JPMorgan Chase controls what customers earn
JPMorgan Chase is a diversified banking giant. However, a key part of its business model is offering basic banking services, like checking accounts, deposit accounts, and certificates of deposit. The consumer and banking business alone holds nearly $1.1 trillion in deposits at the end of the first quarter of 2026.
This is interesting because the basic banking model is fairly simple. A bank like JPMorgan takes deposits and lends that money out. It pays depositors less than what it earns in interest on the loans it makes, with the difference representing profits for the bank. If the Federal Reserve increases interest rates, JPMorgan's ability to earn money on the loans it makes increases. But it doesn't have to increase the rate it pays depositors. Or, at the very least, it doesn't need to increase what it pays by as much as its income increases.
In other words, higher rates could be supportive of JPMorgan's business. But it isn't the only financial company that's positioned well for an increase in rates.
American Express has an attractive high-end model
American Express issues credit cards largely to higher-net-worth customers. Such customers tend to be more resilient to financial distress, allowing them to keep spending regardless of the economic environment. This is a double benefit because American Express also processes its customers' card transactions, generating fee income. If the Federal Reserve increases interest rates, it won't have much impact on the company's core business model.
However, rate increases are specifically meant to slow economic growth. If economic growth slows too much, it can lead to a recession. Generally speaking, that would be a bad outcome for consumer spending and could lead to slower transaction volume. But American Express' high-net-worth customers are likely to keep spending more than less wealthy consumers, who are being more directly impacted by the economic weakness. Even in the worst-case scenario, American Express should be a relatively strong performer.
Progressive gets the benefit of the float
Progressive is an insurance company. It collects premiums from customers up front and pays out under its policies when a claim is made. In the meantime, the company gets to hold onto the premiums and invest them. Progressive can't be too risky with its investments, as it will eventually need the cash to pay claims. Normally, a significant portion of this money, often called "the float," is held in short-term debt investments.
In the first quarter of 2026, Progressive generated just over $900 million in investment income. The float and the income it generates are an important part of the company's business model. If the Federal Reserve increases interest rates, Progressive can earn more interest on the float without taking on any additional investment risk. In other words, a rate hike is actually a big win for the insurer.
Rate hikes aren't all bad news
While the general perception is that Federal Reserve rate increases are bad for the finance industry, that isn't true across the board. Some companies, like JPMorgan and Progressive, may actually benefit. Others, like American Express, should see little impact. You don't have to fear a rate hike; just be prepared for one, which may include adding some of these resilient financial companies to your portfolio.
Should you buy stock in Progressive right now?
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JPMorgan Chase is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Express, JPMorgan Chase, and Progressive. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

If the Fed Hikes Again, These 3 Financial Stocks Should Still Hold Up

Key Points
Progressive is a leader in telematics, and it has nearly two decades of data, an economic moat.
It uses the data to match rate to risk, driving profitable growth in its auto insurance business.
Progressive (NYSE: PGR) is one of the largest U.S. insurance companies, covering all stripes of policies. Although there are many insurance technology start-ups using artificial intelligence (AI) and machine learning to provide accurate pricing and a digital experience, Progressive has an edge in the auto space through its telematics program. Here's why that matters.
Staying on top of technology
Telematics is a program that insurance companies use to track driving records and price policies accordingly. It's a usage-based system, and drivers who opt in can benefit from lower rates if their safety records indicate that they're low-risk. Drivers can use a phone app or plug-in device to track things like speeding, acceleration, and seatbelt usage.
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Although telematics is widely used among insurers today, Progressive was the first one to adopt the technology. It began its first program in 2008, and by 2013, it had a 57% awareness rate. By 2015, it had 3 million customers in what is now called the Snapshot program.
Progressive has tons of data at this point about every facet of driving that helps it match rate to risk, the ultimate goal of an insurance company. This gives it an edge over competitors of any kind, including the new upstarts. This data and the insights Progressive gets from it compound over time, and through machine learning, it constantly improves. That creates a wide moat and protects its lead in this space.
Beating the market
Progressive has two segments: personal and commercial. Since auto policies represent 90% of the personal line, and the personal line is 83% of the company's business, auto insurance is the company's main area.
Given its outsized role in the business, having an edge in the auto segment is critical for the company's growth. Personal line payments in force increased 11% year over year in the 2026 first quarter, or an additional $1.3 billion, on top of 22% last year. Progressive added its newest Snapshot model to 14 states, representing 44% of net premiums written over the trailing 12 months, improving its segmentation and risk selection. That's leading to competitive rates and its highest conversion levels in more than 20 years.
It also helps Progressive keep its combined ratio low. The ratio measures how much it pays out as claims, and it was 86.4% in Q1, well below the 96% goal.
But it's the long-term effect that's crucial. Today's growth comes from the company's nearly two-decade investment in this space, and that's what will power its continued trajectory. Despite being an established leader, Progressive has been a market-beating stock for years. It's slipping this year as the market prices in worries about comparisons with an excellent 2025, which led to it becoming expensive. The auto business gives it an essential advantage in keeping up market-beating performance long term.
Should you buy stock in Progressive right now?
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Progressive. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Progressive's Telematics Edge Is Quietly Reshaping Auto Insurance. Here's Why That Matters.

Key Points
Progressive leverages massive scale and proprietary data to maintain high profitability in the competitive auto insurance market.
Lemonade utilizes an artificial intelligence-driven model to capture younger demographics and expand its multi-line insurance offerings.
Should you prioritize a proven cash flow giant or a high-growth tech disruptor for your portfolio?
The insurance landscape in 2026 presents a stark choice between a battle-tested industry titan and a digital-first challenger. Deciding between Progressive (NYSE:PGR) and Lemonade (NYSE:LMND) requires balancing established stability against aggressive technological expansion.
Progressive operates as a dominant force in the property and casualty market, using decades of data to price risk with precision. Lemonade attempts to disrupt this model by using automated bots to streamline the customer experience and lower administrative costs.
The case for Progressive
Progressive provides a wide range of coverage, including auto, home, and business insurance, to millions of customers across the United States. A notable portion of its Commercial Lines business comes from Uber Technologies subsidiaries, which accounted for approximately 14% of net premiums written in this segment in 2025. Customer concentration like this adds a layer of risk to the business, as a loss of this partnership could impact geographic coverage.
In FY 2025, the company reported revenue of nearly $87.6 billion, up roughly 16.3% from the previous year. This growth supported a net income of approximately $11.3 billion for the period. The company achieved a net margin of close to 12.9%, reflecting its ability to convert premiums into profit after paying claims.
As of its December 2025 balance sheet, the company maintained a debt-to-equity ratio of roughly 0.2x. This ratio measures total debt against the money shareholders have invested, suggesting a conservative use of borrowed funds. The current ratio, which indicates the ability to pay short-term obligations with current assets, was nearly 0.6x, while free cash flow reached approximately $17.2 billion. Free cash flow is the cash left over after the company pays for its operations and capital expenses.
The case for Lemonade
Lemonade offers a tech-driven approach to insurance stocks by providing renters, pet, car, and life insurance through a mobile-first platform. The company serves roughly 3.1 million customers across the United States and several European countries as of early 2026. By utilizing proprietary AI and automated bots for pricing and claims, the business aims to lower the barrier to entry for younger consumers.
During FY 2025, the company generated revenue of nearly $737.9 million, which was an increase of approximately 40.2% year over year. Despite this rapid top-line expansion, the company reported a net loss of roughly $165.5 million. The net margin for the fiscal year was approximately -22.4%, as the business continues to prioritize customer acquisition and market expansion over immediate profitability.
Based on the December 2025 balance sheet, the debt-to-equity ratio was nearly 0.3x, showing a relatively modest reliance on debt. The current ratio stood at approximately 1.5x, suggesting the company has sufficient liquid assets to cover its upcoming liabilities. Free cash flow was negative at roughly $25.9 million, which is the cash remaining after paying for operations and capital equipment.
Risk profile comparison
Progressive faces intense pressure from large, well-capitalized national insurers and potential new entrants, such as vehicle manufacturers. Severe weather events, including hurricanes and floods, can cause sudden and material losses for its property business. Furthermore, the company relies on accurately predicting loss reserves, meaning any error in estimating medical costs or driving patterns could hurt its financial condition.
Lemonade competes directly with established giants such as State Farm and Allstate (NYSE:ALL), which have significantly more brand recognition and capital. The business is heavily dependent on proprietary algorithms, so any bugs in its AI could result in improper pricing or unauthorized policy issuance. Additionally, the company relies on reinsurance contracts to manage volatility, and any increase in the price of this secondary insurance could limit its ability to grow.
Valuation comparison
Progressive appears more attractive for value-oriented investors due to its lower earnings multiple, while Lemonade trades at a premium reflecting its higher revenue growth rate.
Forward P/E
12.1x
122.4x
16.6x
P/S ratio
1.3x
6.0x
n/a
Sector benchmark uses the SPDR XLF sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
On the surface, the decision between Lemonade and Progressive seems to be this: AI-driven disruptor vs. traditional insurer. It goes a bit deeper than that, though, since new isn’t always better and older isn’t always safer.
Lemonade uses AI chatbots to make its underwriting and claims processing more efficient. It started with homeowners and renters insurance, and now offers term life, pet health, and auto insurance. Its ease of use has helped it attract younger and first-time insurance customers. It has been steadily growing its customer base and revenue, and its technology could lead to savings for insurers and better margins for the company. But with this potential comes significant risk, because its profitability has been inconsistent.
Progressive is more than just clever TV ads. It also has decades of experience, a strong underwriting record, and a history of profitable growth. It also uses technology to underwrite customers’ policies and determine insurance rates, but it isn’t banking on new tech to pay off in the future. It’s already generating substantial earnings and cash flow.
So, which type of investor are you? One who embraces higher risk in pursuit of greater upside, or one who prefers a more predictable path? Or do you prefer predictability and a more conservative investing strategy? It might be interesting to open a small position in Lemonade, but I’d put more of my money into Progressive stock.
Should you buy stock in Progressive right now?
Before you buy stock in Progressive, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Progressive wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $471,072!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,303,352!*
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Pamela Kock has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Lemonade and Progressive. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Progressive vs. Lemonade: Which Financial Stock Is a Better Buy in 2026?

Shares of Berkshire Hathaway Inc. BRK.B have lost 3.2% in the past three months compared with the industry’s 2.4% decline and the Finance sector’s 0.8% decrease. The Zacks S&P 500 composite has gained 8.9% in the same time frame.
Berkshire Hathaway is a conglomerate with more than 90 subsidiaries engaged in diverse business activities. This provides it stability in various economic cycles.
BRK.B vs Industry, Sector, S&P 500 in 3 Months
Image Source: Zacks Investment Research
BRK.B’s peer, Chubb Limited CB, has lost 3% in the past three months, while another peer, The Progressive Corporation PGR, has lost 5.8% in the same time frame.
BRK.B is Expensive
Shares of Berkshire Hathaway are overvalued compared with its industry. The stock is currently trading at a price-to-book multiple of 1.44, higher than the industry average of 1.38 but below the three-year median of 1.52. It has a Value Score of C.
Image Source: Zacks Investment Research
Berkshire Hathaway is relatively cheap compared with PGR and CB.
The Case for BRK.B Stock
Berkshire Hathaway’s insurance operations remain at the core of its business model, accounting for nearly a quarter of total revenues and serving as a major engine of long-term value creation. The segment benefits from disciplined underwriting practices, extensive market presence and a strong track record of profitability across economic cycles. A key strength is the sizable underwriting float generated by the business, which Warren Buffett has consistently utilized as a low-cost funding source for investments across Berkshire’s diversified operations.
At the same time, Berkshire Hathaway continues to rebalance its investment portfolio to enhance income stability and geographic diversification. The company has expanded its exposure to Japanese trading houses while reducing stakes in payment companies and increasing focus on airline investments.
The insurance strength is complemented by Berkshire Hathaway’s diversified operating businesses. Berkshire Hathaway Energy (BHE), the regulated utility subsidiary, delivers stable and predictable cash flows while steadily expanding its renewable energy portfolio. These investments position BHE to benefit from long-term themes such as electrification, decarbonization and sustainability.
BNSF Railway also remains a strategically valuable asset and one of the largest freight rail operators in the United States. Despite near-term challenges from weaker freight demand and lower fuel surcharge revenues, BNSF continues to represent a durable, high-quality business supported by essential transportation needs.
Additionally, Berkshire’s Manufacturing, Service and Retail businesses provide further diversification. Although these operations are more cyclical, they offer meaningful upside potential during periods of stronger economic activity through higher sales volumes and margin expansion.
Financially, Berkshire maintains a highly conservative capital allocation strategy. Cash and U.S. Treasury holdings exceeded $370 billion at the end of 2025, providing substantial liquidity for acquisitions while also generating steady investment income. Berkshire’s insurance float, which reached $176.9 billion as of March 31, 2026, remains a powerful source of low-cost capital supporting long-term shareholder value creation.
Berkshire Hathaway’s Return on Capital
Return on equity (ROE) in the trailing 12 months was 6.6%, underperforming the industry average of 7.4%. Return on equity, a key profitability measure, reflects how effectively a company utilizes its shareholders’ funds. It is noteworthy that though BRK.B’s ROE lags the industry average, the metric has been improving consistently.
The same holds true for return on invested capital (ROIC), which has increased every year since 2020. This reflects BRK.B’s efficiency in utilizing funds to generate income. However, ROIC in the trailing 12 months was 5.4%, lower than the industry average of 5.7%.
Analyst Sentiment on BRK.B
The Zacks Consensus Estimate for 2026 revenues indicates a 3.7% year-over-year increase, but the same for earnings implies a 0.6% year-over-year decrease. However, the consensus estimate for 2027 revenues and EPS indicates a year-over-year increase.
The consensus estimate for 2026 and 2027 earnings has moved 1.2% and 0.5% north, respectively, in the last 30 days.
Image Source: Zacks Investment Research
The consensus estimates for CB’s 2026 and 2027 earnings moved north in the last 30 days.
Estimates for PGR’s 2026 and 2027 earnings moved down in the same time frame.
Parting Thoughts on BRK.B Shares
Berkshire Hathaway has been a cornerstone of investor portfolios for decades, generating steady shareholder value under Warren Buffett’s nearly 60-year leadership. The spotlight now shifts to the next chapter, with Greg Abel as CEO, while Buffett remains executive chairman.
Despite the stock trading at a premium, given optimistic analysts' sentiment, one can consider adding this Zacks Rank #2 (Buy) stock to their portfolio.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
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This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Progressive Corporation (The)

Market sentiment

Bearish sentiment

Share of longs and shorts

Confidence Index

Bulls

Support Index

Bulls

Cash flows Index

Bulls

Momentum

Hold

Hold

Metrics since the start of the current trend:

Protective stop levels