Progressive Corporation (The)

Welcome to the Progressives Corporation first quarter investor event. The company will not make detailed comments related to quarterly results in addition to those provided in its quarterly report on form 10Q and the letter to shareholders, which have been posted to the company's website. We will use this event to respond to questions. Acting as moderator for the event will be Julia Hornack. At this time, I will turn the event over to Ms. Hornack. Please go ahead.

Thank you, Jake, and good morning. Although our quarterly investor relations events typically include a presentation on a specific portion of our business, we will instead use all of the 60 minutes scheduled for today's event for a question and answer session with our CEO, Tricia Griffith, our CFO, John Sauerland, Personal Lines President, Pat Callahan, Commercial Lines President, John Barbagallo, Chief Investment Officer, Jonathan Bauer, and the General Manager of our property business, Dave Pratt. Call-in participants may ask questions via the telephone. Dial-in instructions may be found at investors.progressive.com backslash events. As always, discussions in this event may include forward-looking statements. These statements are based on management's current expectations and are subject to many risks and uncertainties that cause actual events and results to differ materially from those discussed during the event. Additional information concerning those risks and uncertainties is available on our 2019 annual report on Form 10-K and our first quarter's quarterly report on Form 10-Q, where you will find discussions of the risk factors affecting our businesses, safe harbor statements related to forward-looking statements, and other discussions of the challenges we face. In particular, note that our quarterly report on Form 10-Q includes discussions of the risks and uncertainties arising directly and indirectly from the COVID-19 pandemic. These documents can be found on our website, investors.progressive.com. Before going to our first question from the conference call line, our CEO, Tricia Griffiths, will make some introductory comments. Tricia?

Good morning. Before we open up for your Q&A, I'd like to make just a few remarks of how Progressive has responded to COVID-19. because I'm extraordinarily proud of my team and the nearly 43,000 people that make Progressive the incredible company and culture that we all enjoy. As you know, with our incredible growth over the past several years, I've had the opportunity to welcome thousands of new people into Progressive. I take an hour to meet with new hires and talk about our core values and our culture. I sometimes struggle describing our special culture because it is somewhat indescribable. I usually say that it becomes crystal clear when something really great happens or when there is a crisis. This unprecedented situation has allowed all of our Progressive family to visibly live our core values and concretely understand why this is such a unique place. The actions we have taken for both our employees and customers have absolutely created and reinforced their loyalty to Progressive. Let me walk you through a few specifics. We immediately determined the needs of each of our constituents and started to develop plans, forming teams to address each party. We've named the program the Apron Relief Program, a nod to our brand icon that symbolizes protection and strength. Let me start with our employee base. We knew we needed to get the majority of our employees home to be able to work and take care of our customers. We immediately put into play our business continuity plan to protect our people. Currently, 95% of our workforce is working from home. and for the employees that need to continue to come into the office, we've adjusted the workspaces to increase social distances, and we've intensified our cleaning measures. We also knew that even though every progressive employee has a job, that many of them have spouses and significant others that aren't as fortunate. In order to help our employees have financial confidence, we paid our non-equity employees a portion of their annual gainshare bonus in April. We also have created and committed $2 million to the Progressive Employee Relief Fund to assist our employees experiencing hardship. Our employees have really appreciated the communication from every level of leaders at Progressive. I send a weekly video from my home and have literally received thousands of notes from our employees. I'll share one that will give you a sense of the sentiment. In a time of uncertainty, I wanted to let you know your videos in Progressive have been so encouraging and uplifting. I have never been prouder to be part of our Progressive family. I bleed blue and orange, but all that we are doing during this most difficult time to help each other and others is inspiring. Thank you for taking the time to be so honest and for opening your home and family to all of us. It's refreshing seeing you and your family's experiences are similar to ours. I love your journey through the years at Progressive and how approachable and friendly you've always been. I know we try to be not what you'd expect in an insurance company for our customers. but I'm very grateful and proud that it is also for our employees. And I receive so many of those. The customers that we're privileged to serve need us now more than ever. We are providing premium credits of 20% to personal auto policies enforced at the end of April and May, which amount to approximately $1 billion. In addition, we temporarily suspended cancellations and non-renewals on personal and commercial lines policy, paused collection activities, and have deferred some deductibles. We also provided delivery meals for our four hired trucking customers, first responders, and healthcare providers. I'll share one of the many comments we've received from a first responder. I'm so impressed with Progressive and what they are doing about the COVID situation. You guys are really helping our customers and even providing food to our table. Thank you. These kinds of things make you want to stay with the company forever. For our communities, we've given $8 million of donations to charities focused on hunger, health, and homelessness. I recently received a call from Claire, the CEO of Feeding America, and she was so thankful that we were providing meals to so many who need them now more than ever. I also recently received a letter from Gail, the CEO of the American Red Cross. I'll read a short excerpt. I wanted to reach out to you with a personal note to express my most sincere appreciation for the Progressive Insurance Foundation's recent and truly impactful gift to the Red Cross, empowering the continued delivery of our life-saving mission nationwide amidst the coronavirus outbreak. As our humanitarian organization continues to adapt to meet the new challenges presented by this pandemic, your generosity ensures the Red Cross is there to provide vital blood and disaster relief services to people around the U.S. who rely on us when help can't wait. We also care immensely about our partners and helping them get through this trying time. For our body shops and independent agent partners, it's about loyalty, but it's also about minimizing the disruption of our supply chain as we get on the other side of this crisis. For our more than 35,000 independent agents, we are partnering with agent associations to provide over $2.5 million in grants to help agents address new challenges presented by the virus, and we're also administering an internal fund to provide additional targeted relief to our agents. Additionally, we've made over $40 million available to agents by advancing performance bonus payments to more than 4,500 of our agents. While the opt-in period is still open, to date we've had over 1,600 agents opt in for a total of $20 million. In addition, we sent $1,000 to each of our network body shops to use as they saw fit. We saw this as another opportunity to help when they needed it most and show them how much we value them. One shop owner called in tears to tell us how much that was appreciated. Lastly, we aren't sitting still and have our eyes focused on the future. In fact, we formulated three distinct scopes of work outlined under a construct we call Resolve, Return, and Reimagine. Resolve. First and foremost, we are addressing the immediate challenges COVID-19 presents to our workforce, customers, agents, communities, and other stakeholders. Return. Next, we are creating detailed plans to return business back to scale quickly as the virus evolves, lasting impacts are more understood and effects become clearer. Reimagine. Lastly, we have formed several teams under this category, and the goal is to understand how the environment may shift and reimagine the next normal and how we can position ourselves to flourish. All of this to say, our shareholders should feel very comforted that we've got this covered for the short, medium, and long term. Our resilience is shining brighter than ever, and we will come out of this stronger. That I'm confident in. Thank you, and now I'll take the first question.