Mattyice,
Going purely from memory from a few years ago, I have memory of Progressive retention somewhere in the 82% range, Geico around 86 or so, and major carriers showing up in 87-89 range, and then at the top of the pile companies like State Farm with maybe 94% or so. USAA is higher, but it's generally viewed as more of a special situation. Again, that's completely from memory and I don't remember the context other than it was a few years ago.
You can do the math to determine how much new business you have to write each year to replace 18% of your business (Progressive) vs. 6% (State Farm). Like we discussed, at a certain size it's difficult to keep growing because there simply aren't that many people shopping for insurance, and retention becomes a limiting factor instead of sales capacity. I viewed this as a huge opportunity for Progressive and am uncertain if their retention levels have increased. If so it helps their business considerably as retained business not only isn't expensive to acquire, but it also tends to be more profitable. If they have done anything in the property area this would also help their retention - although most of the monoline auto line companies really don't (didn't) want to get into property because of the reserve requirements and catastrophe risk.
Anyhow, all imho. I need to go through and refamiliarize myself with what is going on in the space. This discussion has me interested in looking into PGR to see how it's evolving. |
