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Cgable01 t1_j25ykod wrote

Reply to comment by SunriseSurprise in Progressive: The Valuation Enigma by 2ndSifter

Insurance companies have a combined loss ratio For example Progressive spends $1.14 for every dollar they bring in via direct written premium (I didn’t look it up but it’s around that with most carriers).

Their money comes for their investments which make up for the loss.

I would expect that ratio to actually rise as insurance rates are increased due to the increase in car price and other associated costs like providing rentals at higher rates and for longer periods due to delays in parts and labor.

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0dteSPYFDs t1_j27c0e8 wrote

That’s way higher than average. Generally, you want your combined ratio under 1. Also, more so than the property, social inflation has been one of the main drivers of increased loss costs. Liability claims are far more costly for carriers than properly claims.

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