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Progressive Corp.

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Shares of Progressive have outperformed the Zacks categorized Property and Casualty industry, in the last three months. Increasing combined ratio and escalating expenses contributed to the underperformance. Nonetheless, the company strives to become a one-stop insurance destination by catering to customers opting for a combination of home and auto. To this end, the company acquired the majority stake in ARX Holdings. This buyout has started to bear fruit, thereby raising further optimism about the future. The company remains focused on paying back its shareholders via dividends as well as share repurchases that lower share count and boost the bottom line. The company has also been witnessing improving premiums, over the last few years. However, the company’s growth could be challenged by intense competition. Increasing combined ratio, underperforming commercial auto business are other near-term headwinds.

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