When Progressive’s chief executive officer weighed the words that should go into the management discussion section of the company’s first-quarter 10-Q report, she considered two possibilities to describe anticipated growth for the balance of 2024.
“Was ‘maximize’ growth the right word” to use? Or was it “optimize?” Tricia Griffith asked.
“I felt ‘maximize’ was absolutely the right word to use because that’s exactly what we’re going to do,” Griffith told an analyst during a first-quarter conference call this week. The analyst was worried about the possibility that seasonality explained Progressive’s nearly record growth in the first quarter.
“We are increasing our media spend to maximize growth and will continue to do so as long as we remain on track to achieve our target profitability and generate sales at a cost below the maximum amount we are willing to spend to acquire a new customer,” the 10-Q states several times.
“That segmentation piece is really important—understanding our rate to risk…It is really a special sauce. And it’s not something that you build in a year or two. In fact, we’ve been building this for many decades.”
During the quarter, Progressive’s companywide combined ratio of 86.1