The Progressive Corporation is an American P&C (property and casualty) insurance company (yes, the one with Flo in all of its commercials). Founded in 1937 and headquartered in Mayfield, Ohio, Progressive is known for insuring personal and commercial vehicles, as well as motorcycles and watercraft. It’s currently one of the largest auto insurers in the country and holds about 15% of the US auto insurance market, with a market cap of $124.11 billion.
Thesis
This week’s pick revolves around the recent Fed rate hike. Insurers are major beneficiaries of higher rates, as yields flow straight to net income, so the current higher-rate environment will help PGR’s top and bottom line. In its most recent quarter (Q2 2026), PGR beat both EPS and revenue estimates, positioning the stock as a compounder that will benefit from the rate-hike tailwind. It’s also important to note that higher rates influence the number of claims filed by customers, especially when it comes to minor auto accidents, which could help PGR recover its margins.
Why-to-Buy
While it might not be the flashiest stock and doesn’t have the hype of a new AI growth play, PGR also adds diversification to the CFR portfolio. We currently do not hold a position in an insurance company, and given the recent hike and possibly future hikes, it’s the perfect time to take a position. For its recent growth following its Q4 2025 tumble, the potential for further margin recovery with higher rates, and the rate-hike tailwind setting up P&C insurers in the US, PGR is CFR’s pick of the week!
