前進保險 (PGR) 2010 Q4 法說會逐字稿

Welcome to The Progressive Corporation's Investor Relations conference call. This conference call is also available via an audio webcast. (Operator Instructions).

In addition, this conference is being recorded at the request of Progressive. If you have any objections, you may disconnect at this time. The Company will not make detailed comments in addition to those provided in its Annual Report on Form 10-K, shareholders report and letter to shareholders, which have been posted to the Company's website and will use this conference call to respond to questions.

Acting as moderator for the call will be Chuck Jarrett. At this time, I will turn the call over to Mr. Chuck Jarrett.

Good morning and welcome to Progressive's conference call. Participating on today's call are Glenn Renwick, our CEO, and Brian Domeck, our CFO. Also on the line is Bill Cody, our Chief Investment Officer, and the call is scheduled to last about an hour.

Statements in this conference call that are not historical facts are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. These risks and uncertainties include without limitation uncertainties related to estimates, assumptions and projections generally; inflation and changes in interest rates and security prices; the financial condition of and other issues relating to the strength of and liquidity available to issuers of securities held in our investment portfolios; and other companies with which we have ongoing business relationships, including counterparties of certain financial transactions; the accuracy and adequacy of our pricing and loss reserving methodologies; the competitiveness of our pricing and the effectiveness of our initiatives to retain more customers; initiatives by competitors and the effectiveness of our response, our ability to obtain regulatory approval for requested rate changes and the timing thereof; the effectiveness of our brand strategy and advertising campaigns relative to those of competitors; legislative and regulatory developments, including but not limited to healthcare reform and tax law changes; disputes relating to intellectual property rights; the outcome of litigation pending or that may be filed against us; weather conditions; changes in driving patterns and loss trends; acts of war and terrorist activities; our ability to maintain the uninterrupted operation of our facilities, systems and business functions; court decisions and trends in litigation and healthcare and auto repair costs; and other matters described from time to time by us in other releases and publications.

In addition, investors should be aware that generally accepted accounting principles described when a Company may reserve for particular risk, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding claims activities becomes known. The reported results, therefore, may be volatile in certain accounting periods.

We are now ready to take our first question.

(Operator Instructions). Vinay Misquith, Credit Suisse.

On the Snapshot product, could you help us understand the costs associated with the tracking device, and have you already expensed the cost for the device for the discount? And also, what traction have you got on the Snapshot product in the states that you have already rolled it out in?

I'm going to give you some generalization around Snapshot. A very good question, an important question for us this year. We will likely make Snapshot -- and I think by my saying likely, you can probably put definitely -- a feature of our Investor Relations meeting in June. The reason I say that is there will be some significant developments between now and then. We will increase over the next 60 to 90 days our general marketing activity around this product.

So we have been rolling it out in different states as you know, and we are getting traction. This is a product that we have been dealing with for some period of time, so you can assume from that that we are taking a fair amount of diligence to make sure that we get what we think are the critical elements right. And by the mere fact that we are saying we are ready to approach national rollout and advertising, you can infer from that that we are at a level of comfort that is greater than we have ever been before.

To try to get to a couple of your questions, the Snapshot redesign involves a device that is reasonably expensive. I'm not going to give a lot of numbers here because it seems to have a lot of interest for others as well, so a number that we, of course, incorporate into our pricing. But the new design of Snapshot requires that the consumer only had that device for a period of time. So if you think of sort of inventory terms, we are actually using the device multiple times as we progress, and we recognize that while there are always trade-offs, with the amount of information, we have designed this so that we think we get a very effective contribution to our underwriting by taking as the name implies a snapshot of behavior. Of course, we can all come up with scenarios where that is not a perfect issue. Nothing is perfect in underwriting. We actually feel very good about this approach and good about the fact that the unit itself can be reused on multiple occasions.

There is another cost associated with that, and that is the cost of getting the data. We use essentially a cell network to do that, and that cost is also built into our estimates of what we can afford to discount based on certain behaviors. So there is a little bit of cost add, and there is behavioral characteristics that have been so attractive, which is something that we are just very, very excited about.

Sure. You have also seen some competitors launch similar products. Could you give us a sense for the competitive landscape and the cadence you have in place for the prediction of this idea?

Yes, I'm probably not going to do a whole lot of talking about what competitors are doing and patent protection and so on and so forth. And I'm certain whatever I say will be more than some would want me to say. But for the most part, I'm going to focus on doing what we do best. We get to the marketplace, we understand data, we use data that we get every day and try to do something better with it the next day, and from my personal attention and the large number of folks that are working on this, what I have told them is keep your head down, get it to market, be the leader, and that is where we are best.

To the extent that we have some patents and we told you about those patents, and probably another issue that is worthwhile noting is that regulators have been very I think appropriate and accommodating with us and allow us to file our algorithms with them but under a nondisclosure to the public. So this is not something that is readily determined, and I think that's a very constructive way to have worked when there are patents in place.

To the extent that the intellectual property we have, we will protect that. We will take actions, but I will let rule of law of America to determine exactly how to deal with those things after the fact. What I want to make sure is Progressive is in the driving seat, and we are going ahead and just doing what we do best.

That is great. The second follow-up, if I may, shares on the competitive dynamics within the industry. We have seen higher marketing from some competitors, and GEICO's combined ratio has improved 3 points this year versus last year. So if you could talk more on the competitive pressures, especially from your direct competitor and help us understand the rating that is going?

Yes, I think GEICO had a good year, a great company. I have said on numerous occasions I think both GEICO and Progressive sort of valid -- obviously we have our independent agency channel, which we are very proud of, and that is working terrifically well. But they validate the whole direct to the consumer model, and while we will be arch-competitors always, we recognize that in some sense both of the models are producing very successful results.

What I see from them and I think you have probably seen if you have read the brochure report is that they also are quite successful in the concept of bundling with their homeowners approach, and we are seeing very parallel results with our almost identical type approach in the marketplace.

So the ability to keep growing and improve margin and improve retention, all characteristics you have heard me talk about a lot and I am sure they are important to them as well, are all a function of actions that are very easily determined in the marketplace. And while we are interested in every segment of the business, it is pretty exciting to see some of the things we have been able to do by bundling, and I think that model that both is executed by GEICO and Progressive has received, quite frankly, in my opinion -- just simply my opinion -- a lot of validity over the last several years. That consumers that choose to buy their auto directly are quite comfortable bundling with a carrier that is selling them a quality product for their home. And that will continue to produce growth for both of us, and those are very good customers, and we should be able to price them at good margins as well.

Josh Shanker, Deutsche Bank.

My first question is sort of a carry-on from what Vinay was talking about with Progressive Home Advantage. I would be interested to know how you are succeeding upon the benchmarks you established for sales adoption among agents in selling a PHA product since the Investor Day presentation you gave last year? And two, wondering as you roll out the Snapshot marketing over the next 60 to 90 days whether we will see a new ad spot or the current ad spots we will to sell it?

PHA I would say in short exceeded expectations on the direct side. On the agency side, we have work to do to give our agents a better overall product. It is heartened by what we know is available and what we can do. More work to do on the agency side to get PHA overall to the level that we would like for our agents. On the direct side, it has actually probably exceeded expectations, and we have got very significant directions that we intend to take and add to, and I will not go into details there. But it is a quite a few things we have got on the agenda for this year. We would like to get a better and greater distributed agent solution.

And whether you're coming up with a new ad to promote Snapshot over the next 60 to 90 days?

The short answer to that is yes. We actually have like just yesterday I saw the post shoot, first cuts on some of what we have actually come up with for a new campaign. So what you will be seeing in the relatively near future, that is not next week or next month but relatively near future, will be a whole new series of commercials I think that we took a long hard look and wanted to develop both the character of Flo and the character of Messenger, and you will see more of those. And intertwined in there, you will see some additional advertising for Snapshot.

Well, good luck to you. Thank you very much.

Paul Newsome, Sandler O'Neill.

I was wondering if you could revisit a little bit of the PIP issues that cropped up over the last year in New York and Florida? Some of your peers are kind of talking about it anew, and I think in your shareholder report, it sounded like you had put some rate through and the problem was -- it sounded like it was finished, but is that really true?

Let's take -- we will add one more market to your New York, Florida. We will put Michigan in there. There are other markets -- New Jersey and Minnesota and stuff. But let's just focus on the three, and I think that covers the spectrum.

Paul, PIP is one of those coverages that gives me nightmares throughout my career because whenever something goes wrong, it always seems to be associated with PIP whether it is in any one of those states. So, with some guard rails on a statement, the actions we have taken in Florida, Florida was not a great success for us last year. It was going backwards on growth trying to correct the issues that we needed to correct.

The good news is, and I think I started to indicate this toward the latter part of the year in some of my writings, is that Florida while slowed down also had to come back to profitability and rate levels that we think were comfortable. Our expectations now, and literally as of today, are that Florida is in a good position, and we have started to grow again in Florida. It is a high average premium state for us.

We absolutely want to grow there. That is an important contribution to Progressive overall top and bottom line. And we think we have got the PIP issues under appropriate control, and some of that was rate, some of that was underwriting. We don't typically do a lot of underwriting per se. We do pricing more than we do underwriting. In some cases, PIP has to be a little bit more dramatic. All those things have been done. We have no current activity that is in place -- in other words, trying to sort of work their way through. We have got all the activities that we expected to put in place in place, and we are actually looking for Florida to be a real contributor this year. So that will be nice.

New York, I think the story is similar. Michigan is still one where PIP is of great concern. For those of you who don't know in Michigan, the limits in PIP in Michigan are actually quite different than any other state, allowing the underlying limit before it goes onto the state pool in excess of $400,000. So this is the sort of place that we really need to get it right.

So PIP is a generally much better outlook picture. New York and Florida specifically, New Jersey look like they could be contributors this year in ways that they were not yet last year, and Michigan is still a work in progress, but the work has been done. We just need to see it come through and produce the results we expect.

Brian, do you have --

Just one other point, just in terms of lost trends themselves for the PIP coverage. We have seen both frequency and severity moderate. Some of it is a function of some of the rating actions we are taken or underwriting actions we have taken, etc. But for us our lost trends for PIP have significantly moderated, frequency down slightly, and severity is up about 3% last year, but that is much more moderate than what we had seen in the previous year.

So, on that side, at least lost trends have moderated somewhat for us.

And this may be just editorial for you, but sometimes -- and I suspect we are not alone in this in the industry -- I have personally done it; I think Brian has done it -- is that when we get into a difficult situation with the coverage, we price to that, but our corrective actions sometimes change the mix, and sometimes you find the pendulum swung a little bit more than you expected one way or another. Florida I think is now giving us a chance to both get our reserving right and our pricing right, and I like what I see there. This is actually quite encouraging, and we are back in the growth column in both distributions.

Great. Knock on wood. You mentioned New Jersey briefly. I wanted to ask you for a little while passing of the reforms there, have things sort of stabilized in New Jersey? Do we think the reforms worked?

I think it always depends on who's view you are looking at for reforms to work. Not being reluctant to answer your question in the way that I think you might want, I spend less of my time thinking about what the reforms are and just what are the rules and how do we work with those?

And from our perspective, we actually are finding New Jersey now to be reasonably comfortable, and I say it is a high every premium state. There is a lot of things different there. You have got to keep your eye on the ball there all the time. But New Jersey is actually for us now a state that we are very pleased we entered when we did, and it is a very contributing state for us. So we are glad we are there.

(Operator Instructions). Meyer Shields, Stifel Nicolaus.

Glenn, you talked about how in agency there is more work to do with regard to selling the Homeowners companion product. Is there any regional difference there? Because we are certainly seeing, I think, in let's say the Midwest competitors raising rates, and I'm wondering whether that works out to your advantage maybe more than other states?

Yes, I will try to get to that, but the work -- what I'm really saying is that I think we have got some very nice attractive options in direct distribution, and that works well. Clearly our agent distribution is hugely important to us. I'm just not -- I'm being very honest -- I'm just not as comfortable we have got that one to the point that we will have it 18 months, two years, whatever. We will definitely get there.

With regard to product and results, clearly in that case these are other people's results for us, but it affects us, especially when the Company might be using, perhaps does not want to quote certain people or something like that. We have worked very hard over the last year to make sure that we get the do not quote or the rejection levels down since that is now not our fundamental philosophy on auto. We will quote everybody. And you're right to assume, if you broke the country up into segments -- and I will just use two right there -- the Northeast is very different, has had historically very different homeowner results, very acceptable homeowner results, whereas the Midwest less so. So it tends to be more problematic for the underwriters.

Okay. Thank you. And second question if I can, there have been over the past couple of years, I think, in addition to yourself and GEICO, a number of, let's say, second tier direct competitors that are becoming a little bit more prominent and a little bigger. Does that matter yet from your perspective?

Just as long as I'm not the one doing the characterization of the tiers, although I like the implication that we are first-tier.

I think what you should read from that is that anybody that is watching a marketplace whether it is in technologies, what we are doing on smartphones or anything else, people everyone has got to have realized that people want a lot of choices and that the direct choice that you can have through a call center or through an Internet -- and I will touch on what I really think is the future in a second -- I think everybody has to take notice.

So it's not surprising that there many others entering direct or doing a direct program as part of what they are doing or perhaps in the case of Esurance so much a focused direct company, that does not surprise me at all.

What is interesting and I think it's important for all of you to have your own theories on this of just how difficult it is to break into a marketplace with the level of advertising that is going on today. Whether I like it or don't like it, it sets a lot of parameters as to how to play in that space, and we intend to play very aggressively. But no, I'm not surprised.

I think the movement beyond this, which almost certainly would have to be on everybody's radar screen, is mobile. And the implications for what mobile can do, we like to think of it as not just making mobile a smaller Internet application. It really is about what is mobile able to do that forms our interactions that the consumer could not allow you to do, and I suspect that will be a whole new battlefield and a really exciting one for the next several years.

Brian Meredith, UBS.

A couple of questions here for you. The first one, could you talk about expectations for ad spend in 2011, particularly given that we have been seeing the direct distribution PIF growth decelerating here?

Yes, Brian, you know we don't give specific numbers, but let me give you some color there. I think with direct you probably heard myself or Brian say on more than one occasion we calibrate our spend relative to yield, and we're not going to lose discipline, and that is true. And I think that there is clear evidence at least of some de-acceleration of prospects right now.

On the other hand, I mentioned earlier that we really have a very nice set of new commercials that we are comfortable with that I think they give a real fresh look to a lot of what we have been doing. I think it needed to be freshened up some. We have got a messenger campaign coming along, which is a nice companion campaign. We have got Snapshot ready to sort of break loose over the next 60, 90 days, and those are really very exciting things for us, and we intend to support them.

So for us I think we have different and better creative. We have different and better messages. We have some bundling messages along with the comments I made earlier on our PHA. So you are going to see Progressive continue to advertise because we have got real messages to get out there.

Relative to spending, I would say spending will be up slightly from last year. And unfortunately having said that, I cannot tell you that the share of voice will be any greater because I think there are probably one or two others that are spending just a little bit more as well.

Thank you. And then a second question, I wondered if you could talk about the spike we have seen in oil prices recently, and do you expect that you're seeing any impact on frequency and also on severity to the extent that it is factoring into raw material costs for auto parts?

Too soon to have anything meaningful to say, but I will try to give you a little insight here. One of the advantages of having something like usage-based insurance, we will be able to, as we all now get the benefit of seeing things like comScore and [Kecwive] and so on and so forth that give us at least some proxy for things that are going on that we could not see before in perhaps more traditional channels.

Now that we actually have measurement devices in cars, I don't know that we will be able to relate that directly to frequency, but we will start to have a much earlier indication of whether cars are driving the same number of miles per day, per month, whatever it might be. And it is just too early for us, but we do actually -- it's a very valid question to ask us, and I hope we will be able to answer it with more of a reasonably analytical answer as opposed to just sort of a qualitative judgment.

Brian, this is Brian. Just in response in terms of the advertising question, as Glenn mentioned, obviously over the last several years, we have increased our ad spend quite significantly. I think in 2011 it will increase, but keep in mind that we always and in June we talked about a discipline that we will always maintain and is assessing the yield of that spend. So we will not spend indiscriminately, and we will always compare our yield on that ad spend relative to what we call our targeted acquisition costs. And if we are comfortable with that relationship, we will keep spending, and when we become uncomfortable, then we will have to reassess that. So I think we will always have a disciplined assessment relative to the economic yield of it.

I guess on that, so the yield that you are generating is still significantly better than what your targeted acquisition cost is right now because you have got some room?

Right now we feel comfortable with the yield that we are receiving right now basically, particularly in 2010 very comfortable, and it is early into 2011, and we will continue to see. But we feel comfortable with where we are at.

Alison Jacobowitz, Bank of America/Merrill Lynch.

I have got two questions. The first is I was wondering if you could talk a little bit more about the policy in force growth, which remains good but did slow over the past six months. Could you give us a little color around that and maybe what you -- whether or not that trend is going to continue?

And the second, if you are comfortable, is there any way you could maybe put not maybe specific numbers but quantify to some extent what drag the challenge, the PIP-challenged states may have had on the top and bottom line in 2010?

Sure. Just starting at the last one, I think it's a very reasonable question. I don't have an answer. We are guessing at that, so I prefer not to do that but I get the question. Other than I would tell you that when you have got your largest single state by market share not contributing from a growth perspective, it is a meaningful drag, but I don't have a better quantification of that. So I don't want to guess at it. Sorry.

With regard to the PIP growth, yes, it was actually a great year. Last year nice year. Anytime you put on another 750,000 customers it is great. But having said that, we have done better than that. So this is not something that we are saying is some high watermark, and we can do better. We can do a lot better.

PIP growth is a function of several things. You know them. Policy life extension. We gave you some data in the annual report and 10-K with regard to policy life extension, so we are seeing better PLEs, our measure that makes the most sense. Clearly last year was the story at least for direct of two half years, the first half-year very, very strong new business growth. Not nearly as strong in the second half. We recognized that.

I have acknowledged deceleration a little bit through that second half and leading into the first month of this year. But the plans that I have outlined with new advertising with Snapshot, I should have probably thrown in there our Special Lines season, which starts anytime the sun breaks through, which can happen in February, but normally it is a little bit more to late March and April. We have announced in late February a very, very significant deal with Harley-Davidson to be the exclusive supplier to the Harley-Davidson franchises that sell insurance on their premises.

So lots of very good things happening there for us. So we think that our actions on retention continue, and we see no reason why they will not continue to show the trends that we have been reporting for several years now. So that will help with PIF growth as well, and new business generation, the ideas that I went through, those are certainly things that I would like to see the new business growth perhaps this half-year is a different way than last year. It starts a little slower and builds during the course of the year.

Absolute numbers are still pretty strong. It really is a little bit -- there is no excuse implied here -- a numerator/denominator issue. We had just a very, very strong first couple of months into 2010. Does that get your --?

Yes, thank you very much.

Ian Gutterman, Adage.

I was wondering if you could tell us if there is any rough quantification you can give us of the mixed changes you have seen towards a more preferred book? And the reason I ask is, when I try to look at a lot of your metrics, they have been skewed by the mixed change so that they have lost a lot of their comparability, and things like premium per PIF have been down for a while, which I assume is the change to preferred. Arguably your frequency is lower than peers because of a change to preferred. Is there some help you can give us on how much mix shift has been affecting comparability of some of those items?

You are asking exactly the right question. I'm trying to figure out how best to answer it because we really only focus on state-by-state. There is one other factor to consider also as you have got at least a couple of the right ones there is that some geographic mix can drive. There are quite dramatic differences in average premium by states, and I have already mentioned Florida being a lower contributor. So that will be another change.

Unfortunately, as I look at macro numbers, I know exactly what you're asking. I don't think there is any easy way to answer that. That really has to be at what we call mixed level reporting at the state, vehicle type, customer type, multi-car, single car.

But the general direction that we try to give -- and I know it is very broad in the 10 or Annual Report that it is a mix issue. My suspicion is that it will not -- I don't know that we will necessarily see the same kind of -- I'm not making any prediction about average premium, but we will continue to see mix changes happen. As long as we have got the unemployment rate that we have, I don't think we will see a correspondingly attractive growth in our nonstandard part of the business.

I absolutely want to be totally positioned to take that part of the business. That is part of the business we know and like. That is a mix shift that would happen if the economy changed with regard to preferred as long as we continue to do the sorts of things that we are doing in PHA, adding carriers, taking an approach where we can give a quote without necessarily making it feel like it is two quotes, more of a combined quote. We have done a lot to make our servicing of that customer through a household perspective rather than a customer perspective. My suspicion is we are going to continue to make penetration into the preferred marketplace. So we are going to continue to see mix shifts for some time. I appreciate the question.

Let me give some consideration to how maybe we can give you a better insight into that. I don't think it is a one-word answer, and maybe we will incorporate that into our June meeting in New York where we can perhaps give -- I'm liking the idea -- some way of creating a framework where you can see and ultimately appreciate the mix shift relative to some of the metrics that we provide you.

That would be helpful if you can. And just related to it, is there a -- is it possible that that mix shift had some impact on the reserve releases last year? The only reason I'm guessing at that is, you guys always talked about trying to get it right, which seemed to bias you to have a little bit less favorable development than peers. And last year you seem to have more than in peers. So it seems there was something that may be surprised your book more than the average book. I did not know if that could have been it.

Yes, I would like to say no to that, and I think the real answer is no. But it is also true that higher limit bodily injury has been a place where we have seen a little bit more of the reserve released than anywhere else. So those two are not totally unrelated.

So I don't want to talk out of both sides of my mouth. It should not. We are on it. I don't think I would conclude what you are perhaps line of reasoning would lead you to. But it does mean that we are having a different mix of limits in our reserving methodologies, and those are things that we will get as good at as we have been at everything else. I love having the data.

Great. And then just a last quick one on Snapshot is, I know obviously you have talked about not using the customer information in a way that will cause any privacy concerns. But I guess one thing I have found on, I guess, call it the small print on your webpage is -- and I think others have the same disclosure -- is that I guess the authorities can use it for discovery.

I'm just wondering how much of a concern that the CFA or someone like that makes some noise over this at some point. Because I know you have disclosure, but my guess is Flo is not going to be talking about, be careful; the police can use this or a lawyer can use this if you are in an accident. So how do you try to get across that hurdle so people are not surprised if they respond favorably to the advertising?

You know, that is a serious question that deserves the right answer -- so can I take the liberty of saying I know it's a couple of months off -- we will absolutely address that in June.

Perfect. Okay.

I will tell you, as someone who has it in their car right now, I have, therefore, the same issues.

I will tell you after our period of observation and it is important to see how this redesign was actually targeted at addressing several issues, after the period of observation, which is sort of a 30 days and will give you an indication and in six months we will tell you what we now believe, send back the chip. We are going to reuse that chip. There is no -- we store no customer data after that period of time. We obviously store the relative data, but it's not tied to a customer.

So the only period of exposure there, and I will have a clearer answer as to what possible subpoena or anything else that could be applied, would be during the period you actually had it in your car. For the most part, I would hope that we see -- and I'm forecasting here into the future, so just go with me on the vision -- that this is fundamentally an underwriting question.

If we could ask the question, how good a driver are you, we would ask it. Unfortunately there is no way to answer that. So this is an observe and verify and quantify, and we think we can do that very effectively with a six-month snapshot. But after that, we have no real reason or interest for that matter. In fact, we have a vested interest in not knowing what you are really doing because we don't want to be involved in your privacy or anything else.

So it is only an exposure period of six months, and we have no interest whatsoever in doing anything with the data, other than what is in our best interest to give people an accurate rate that reflects their driving behavior. But the six-month period is a valid question, and we will address it in June.

(Operator Instructions). Vinay Misquith, Credit Suisse.

Just to follow up on the Snapshot marketing campaign and looking at some competitors like State Farm is offering 40% lower rates than competitors. At least that is what their marketing says, and you don't have a need to have sort of a device in your car. How would your marketing campaign necessarily get a 30% discount to compare with that, and how effective do you think the marketing is going to be?

Well, we have been at this a while. By the way, it is up to 30% because not everybody is going to get 30%. Just the economics on that certainly would not work. We feel that what we have -- first of all, we also have a large number -- I'm not going to give any numbers at this point in time.

We are not amateurs at this. We really have had a lot of people try it over the almost decade we have been working on it. We know what sort of rubs them the wrong way. We know their concerns, and we think we have designed this program so that it is very consumer friendly. I think you will hear in the next 60 to 90 days, and part of our marketing campaign you will hear from consumers. So you will get the impressions that we have that this is very marketable and not only very marketable but very valuable to the consumer. And regardless -- now I'm going to be a little parochial and get myself in trouble -- but regardless no one is even close to where we are with a definitive program of this type and the filings that we have and the number of states we have them in.

That is our last call. Thank you.

Thank you. That concludes The Progressive Corporation's Investor Relations conference call. An instant replay of the call will be available through May 18 by calling 1-866-465-2111 or can be accessed via the Investor Relations section of Progressive's website for the next year.

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