It is no accident that the rapid rise in living standards over the past century has coincided with tremendous technological progress throughout the economy. At a fundamental level, rising living standards require the economy to generate an ever-increasing supply of
The Progressive Corporation has offered insurance products to consumers since 1937 and is currently estimated to be the fourth largest private passenger automobile insurer in the United States. Progressive trails State Farm, GEICO, and Allstate and has overall market share
J.D. Power released its 2010 U.S. National Auto Insurance Study (pdf) today and found that overall consumer satisfaction with insurance companies declined in 2010 after peaking in 2009. Overall satisfaction averages 777 on a 1,000 point scale which represents a decrease of ten points from 2009. The study measures consumer satisfaction across five factors: interaction, policy offerings, billing and payment, price, and claims. The main factor that led to the 2010 decline in satisfaction was due to price increases, which was reported by 22 percent of customers. Read this article for more details.
Berkshire Hathaway has been attracting more analyst coverage in recent weeks due to the company’s inclusion in the Standard & Poor’s 500 and expanded institutional interest due to factors such as the Burlington Northern Santa Fe acquisition. Earlier this week, Barclays Capital initiated coverage on Berkshire with a price target of $88 on the Class B shares. The report makes predictions regarding all aspects of Berkshire’s businesses including forecasts for GEICO’s combined ratio in 2010 and 2011. The projections specific to GEICO seem excessively negative. Read this article for more details.
Last week, we took a brief look at Berkshire Hathaway’s loss estimation accuracy over the past ten years. As we noted in the article, the process of estimating the ultimate losses resulting from an insurance company’s business is one of the most important tasks facing management. In the case of Berkshire Hathaway, many types of policies expose the company to liabilities that will develop over a very long period of time. Therefore, the ultimate payout to policyholders can vary significantly from management’s original estimate. Read this article for a look at Progressive’s loss estimation accuracy.