Progressive Corporation's chief executive said the auto insurer that built its business on direct-to-consumer marketing is making moves to strengthen its relationship with independent agents.

Rolling out new products to enhance the company's offerings with agents is part of the strategy, said Glenn M. Renwick, Progressive president and CEO.

He reported the company is seeing more business from agents through the use of rating engines. In the past, much of that business came to the company from agents placing nonstandard business. By utilizing rating engines, more standard lines business is coming to the company, he explained.

Mr. Renwick described the effort with agents during an analyst's conference call to discuss the company's 2007 financial results.

He said to further help augment the relationship with agents, the company is beginning to offer homeowners and umbrella coverage in some states that would allow agents to bundle coverage.

“Some of our agents are beginning to see Progressive as a preferred standard carrier,” Mr. Renwick said. “We are starting to provide them with better solutions where they can look at us for a bigger range of their customers.”

He said the company will be rolling out some new products that agents should find “exciting” and that will grow the relationship even more.

In response to a question about agents' commissions affecting sales, Mr. Renwick said while the company pays a rate that is lower than some others, it is competitive at around a yearly aggregate of 10.5 percent.

He said there are other factors that affect an agent's decision to do business with Progressive, primarily ease of doing business through technology, customer service and claims support.

Brian C. Domeck, vice president and chief financial officer, said he believes that for Progressive “the vast majority of rate changes are only positive but will take some time for that premium, per exposure, to go up.”

Mr. Renwick said he did not believe regulators would “be surprised to see the trends become positive after a long time of frequency driven negatives.”

The insurer said pricing pressures helped drive the Mayfield Village, Ohio-based company's combined ratio up 5.9 points to 92.6 for 2007.

For 2007, the company's net income was $1.18 billion–a drop of 28 percent, or $465 million, compared to 2006. This translated into a 45 cent drop in earnings per share to $1.65. Revenues were at $15 billion–a decrease of less than 1 percent, or $100 million.

The company issues monthly results rather than reporting quarterly.

Progressive said it will soon be writing insurance in all 50 states, anticipating writing private passenger insurance in Massachusetts by the second quarter of this year. The coverage will be offered on a direct-to-customer basis initially and later through independent agents, said Mr. Renwick.

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Progressive Seeks Stronger Agent Relationships

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