As television commercials go, they're all quirky, humorous and unusually watchable. Ads run by the auto insurers that feature such memorable characters as a talking gecko, a bunch of cavemen that appear stuck in the '80s, and a snappy salesgirl sporting a big name tag with "Flo" emblazoned on it, inhabiting a strange ethereal superstore.

IN PICTURES: 8 Tips For Starting Your Own Business

But in terms of effectiveness, it appears that "Flo" is producing the kind of results for her sponsor, Progressive Corp. (NYSE:PGR) that has the company's shareholders laughing all the way to the bank.

Progressive Winning Market Share Battle
Based on the strong response that the ad appears to be getting from auto insurance buyers, combined with the company's aggressive pricing policies, Progressive appears to be gaining market share against its principal rivals Allstate Corp. (NYSE:ALL), and Berkshire Hathaway's (NYSE:BRK.A, BRK.B) insurance unit Geico.

And those share gains are now translating into impressive bottom line performance. The company recently reported a 27% jump in quarterly profit that sailed past analysts' expectations. Strong premium growth was largely behind the profit gains. This is the fifth quarter that Progressive's auto policy count has been up; a striking contrast to the disappointing performance of Allstate, which has seen its auto policy business volumes decline for eight straight quarters.

But, despite the increase in business competition, Allstate has still managed to report an increase in its latest quarterly results, primarily from a reduction in losses on the investment side of its balance sheet.

Industry Hit Hard During Financial Meltdown
Huge investment losses resulting from the financial market meltdown have hurt the broader insurance industry. Life and property insurance giant Hartford Financial (NYSE:HIG) recently moved back into the black after suffering huge losses connected to stock-market linked annuities and investments. That forced the company to take $3.4 billion in government bailout money.

The Bottom Line
Recent strong auto sales appear to be driving the growth in demand for auto insurance. And Progressive's gal appears to be winning over new customers with her quirky appeal and competitive prices. (Find the perfect policy that suits both your coverage and budgetary needs. to learn more, read Beginner's Guide To Auto Insurance.)

Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    What Exactly Are Arbitrage Mutual Funds?

    Learn about arbitrage funds and how this type of investment generates profits by taking advantage of price differentials between the cash and futures markets.
  2. Investing News

    Ferrari’s IPO: Ready to Roll or Poor Timing?

    Will Ferrari's shares move fast off the line only to sputter later?
  3. Stock Analysis

    5 Cheap Dividend Stocks for a Bear Market

    Here are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
  4. Investing

    How to Win More by Losing Less in Today’s Markets

    The further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
  5. Fundamental Analysis

    Use Options Data To Predict Stock Market Direction

    Options market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
  6. Stock Analysis

    2 Oil Stocks to Buy Right Now (PSX,TSO)

    Can these two oil stocks buck the trend?
  7. Investing News

    What Alcoa’s (AA) Breakup Means for Investors

    Alcoa plans to split into two companies. Is this a bullish catalyst for investors?
  8. Stock Analysis

    Top 3 Stocks for the Coming Holiday Season

    If you want to buck the bear market trend by going long on consumer stocks, these three might be your best bets.
  9. Investing News

    Could a Rate Hike Send Stocks Higher?

    A rate hike would certainly alter the investment scene, but would it be for the better or worse?
  10. Investing News

    Corporate Bonds or Stocks: Which is Better Now?

    With market volatility high, you may think it is time to run for corporate bonds instead of stocks. Before you do take a deeper look into which is better.
  1. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
  2. What is the difference between called-up share capital and paid-up share capital?

    The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
  3. Why would a corporation issue convertible bonds?

    A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>
  4. How does additional paid in capital affect retained earnings?

    Both additional paid-in capital and retained earnings are entries under the shareholders' equity section of a company's balance ... Read Full Answer >>
  5. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  6. What is the difference between issued share capital and subscribed share capital?

    The difference between subscribed share capital and issued share capital is the former relates to the amount of stock for ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!