Progressive: Substantial EPS beat in May 2026 as signs of a pivot toward homeowners’ emerge

Research evidence excerpt

Progressive: Substantial EPS beat in May 2026 as signs of a pivot toward homeowners’ emerge

Exhibit 4: While Progressive’s underlying loss ratio (currently 69%) is Exhibit 5: While Allstate’s earnings power is very strong at a 67%

very slowly increasing, its paid to incurred loss ratio is running flat underlying loss ratio over the past 12 months, the paid-to-incurred

(currently 69%), suggesting its very rigid and typically accurate loss ratio ran at 102%. Allstate’s results are more volatile than

underwriting focus continues and the “cash content” of earnings is Progressive’s due to their higher property/homeowners’ content, but

unchanged. the reserve trends are less reliable for forecasting over the long term.

Progressive paid-to-incurred loss ratio, 2022-present Allstate paid-to-incurred loss ratio, 2022-present

115% Quarterly 115% Quarterly

110% T12M 110% T12M

105% 105%

100% 100%

95% 95%

90% 90%

85% 85%

80% 80%

Source: Company filings Source: Company filings

BofA GLOBAL RESEARCH BofA GLOBAL RESEARCH

Exhibit 6: Periods of accelerating growth can artificially cause the paid- Exhibit 7: There are likely several reasons why Allstate’s paid to

to-incurred loss ratio to appear low as “future paid” losses are the incurred loss ratio has increased so much over the past three years, but

current period’s incurred losses and show up in the denominator. decelerating premium volume is likely one of those factors. We would

However, Progressive’s paid-to-incurred loss ratio has stayed flat as expect that Allstate’s underwriting margins are likely less sustainable

growth has decelerated. that Progressive’s as that past year’s results have benefitted from

Progressive year-over-year organic change in net premium earned per reserves releases and net loss reserve decline.