Long-term investors may find potential value in share price weakness as the stock market has experienced a significant recovery following earlier declines this year. As of November 7, 2025, the S&P 500 index has recorded an impressive return of 14.4%. Technology stocks, particularly those involved in generative artificial intelligence, have garnered considerable attention, with several experiencing remarkable gains, including a 40.1% appreciation in Nvidia’s share price.
In contrast, certain sectors have not performed as well, specifically the S&P 500 financials sector, which has only managed a 9% increase this year. This raises the question of whether there are bargains to be found within the financial group.
One notable company to examine in the financials sector is Progressive, the well-known insurer widely recognized for its extensive advertising campaigns. Progressive operates primarily in the property and casualty (P&C) insurance sector, offering coverage for automobiles, motorcycles, recreational vehicles, and homes, among other areas.
The insurer has a strong track record of underwriting. Its effectiveness is reflected in its combined ratio, an important metric that indicates underwriting profitability. For 2023 and 2024, Progressive reported combined ratios of 83.4 and 84.1, respectively. Ratios below 100 signify profitability, with lower figures indicating better performance. Notably, Progressive’s underwriting profitability surpasses that of the broader P&C insurance industry, which has seen combined ratios ranging from 97.3 to 103.9 between 2014 and 2023. This profitability stems from Progressive’s accurate pricing of risks in its policies, contrasting with many competitors who often rely on investment income to remain profitable.
In terms of growth, Progressive has also increased its policy offerings, with premiums written in 2024 soaring to approximately $6 billion, marking a 22% rise year-over-year.
However, despite these positive indicators, some investors expressed concern following the company’s third-quarter results. While net premiums written rose 9% from the previous year to $6.8 billion, the company’s combined ratio worsened to 100.4 from 93.4. This increase was partially influenced by a recent law in Florida mandating insurers to return a portion of profits exceeding certain thresholds for the 2023 to 2025 period. Progressive recognized a $950 million policyholder credit expense in September due to this regulation, affecting its combined ratio. Nonetheless, analysts suggest this issue is not due to inappropriate risk management or pricing strategies.
The share price of Progressive has experienced a downturn, declining 9.3% this year, which places it behind both the overall S&P 500 and the insurance sector. The decline has been particularly pronounced in the latter half of the year, exacerbated by a negative market reaction to the company’s third-quarter earnings results.
Currently, Progressive’s stock trades at $225.18, with a market capitalization of $132 billion. It has a price-to-book (P/B) ratio of 3.6, a significant drop from over 6 at the beginning of the year. Although this ratio remains higher than the S&P 500 Financials’ P/B of 2.4 as of the end of October, such a decline may present an opportunity for long-term investors.
Despite not appearing to be a bargain relative to the broader financial sector, Progressive’s recent price weakness, combined with its strong operational metrics, positions it as an attractive option for those looking to invest in a well-managed P&C insurer.
