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Public Markets Investor, Opportunistic Buying & Cost-Basis Management
Progressive's durable AI-era edges would be proprietary data for pricing risk and underwriting discipline, since AI also brings real risks to insurers. Autonomous vehicles could cut accidents and policy prices; widely available AI could intensify competition and, at pricing-accuracy parity, spark a race to the bottom. More accurate pricing shrinks premiums and float, cutting investment income, and agentic shopping eases price comparison. Progressive trades at about 10x GAAP net income. x.comÂ
AI agents pushing more drivers to shop their auto insurance favor Progressive and hurt Allstate, so the two should not trade as one consumer-inertia package. Per JD Power/TransUnion, 12.6% of drivers shopped in Q2 and 4.5% switched; the roughly 87% who never shop fund a loyalty tax of renewals priced above new-customer rates. JD Power found shoppers using AI tools over 1.3x likelier to switch. Progressive's direct book, built for price shoppers, grew 14% to 16.0M policies in 2025. x.comÂ
EverQuote is an insurance lead-generation middleman in a cyclical business during unpredictable times, with a potential threat if LLMs like GPT start connecting people directly to the best quotes. The financials are better than expected: strong revenue growth, gross profit outpacing operating expenses and booming free cash flow, though growth slowed. Technically, support sits near $14 and resistance near $25. Despite the good financials, the long-term idea does not appeal. x.comÂ
Self-driving cars give Root and Lemonade no edge, because if accidents fall, everyone benefits and insurers charge less, so the whole auto insurance industry shrinks. On the surface the risk looks like self-driving's threat to Uber, but the mechanics are completely different, and insurance companies are not attractive to own in general. The view is offered tentatively, as a non-expert. x.com x.comÂ
Root is an interesting company with an ambitious CEO, but it belongs in the too-hard pile without any edge in judging insurance businesses, despite encouraging fundamentals noted by others. x.comÂ
Hippo Holdings looks too risky as a turnaround story focused on home insurance, one of the worst lines because big events such as wildfires create heavy losses. x.comÂ
Lemonade is reducing transparency on a key indicator of whether it can scale efficiently. Earnings reports once showed in-force premium versus opex, then switched to premium versus employee count, presumably as opex rose, and now show premium alone. Investors are tiring of waiting for EBITDA profitability, and the missing comparative metrics give less insight into how Lemonade gets there. The stock had run ahead into earnings, so a reset was due without a blowout. x.com x.comÂ
Root is cheap and could be a better buy than Lemonade here, because it is proving it can grow and make money at the same time. It picked the difficult personal auto market and executed exceptionally, with underwriting improving quarter after quarter and capital-efficient scaling showing up as high ROIC. The market will likely reward that. The choice versus Lemonade, which is building a long-term insurance brand, remains nuanced and depends on what an investor wants. x.comÂ