In 2006, the Progressive Corporation announced a change in its dividend policy. From now on, the dividends will be paid annually rather than every three months, and, more importantly, will be set in accordance with a formula that can lead to much greater year-to-year variability than it was historically. Under the new policy, the dividends will be tied to the company's underwriting results, its performance against predetermined objectives, and the ratio of target payments. The new policy of progressive was intended to help with the overall management of capital in a cyclical business and property casualty insurance.
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by Timothy A. Luehrman, Brenda Chia Source: Harvard Business School 12 pages. Publication Date: August 21, 2008. Prod. #: 209004-PDF-ENG
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