Question-and-Answer Session
Operator
(Operator Instructions) Michael Philips, your line is open for your question. Please state your company name.
Michael Phillips - Stifel Nicolaus
Stifel Nicolaus. First question, what percent of your customers are you seeing lower limits or at high deductibles or just fewer coverage's overall?
Glenn Renwick
Michael, I actually don’t have a number I can give you as a fair percentage on that. Clearly, I’ve seen reporting of others talking about lower coverage and deductibles. We are not seeing in a macro sense we're not seeing great deal of that. New business we are seeing reduced endorsement activity, so I would say for Progressive that is not a major issue, it's one we understand, we watch. I don’t have a good percentage on it right now; and therefore, it’s not hugely material.
We might see the current buying spurt. You think about a billion dollars equaling about 250,000 vehicles we might see at least on the first round of Cash for Clunkers. We might see a little bit of stimulus in buying, that will generally mean a trade up in the coverage for those vehicles with the lien holder and so on and so forth, but that will probably be relatively muted in terms of the entire effect, but those effects that are going on, but nothing that I think is material.
Michael Phillips - Stifel Nicolaus
Okay. Thanks Glenn and follow up, can you, just curious to hear your thoughts on what you’re seeing in the markets in both California and Michigan for personal auto?
Glenn Renwick
Sure. I’ll start with California and for us it’s worthwhile breaking that out into two distributions because that’s really probably a place where there the most different. Our California or agency business has actually been pretty hard sledding all year. We’ve not been happy with our production there.
We’ve been trying to file for and have now successfully filed and had approved a rate reduction, which will go into effect, September 1, so our California agency business would be one of the spots that I would say is underperforming expectations primarily on a volume basis, the profitability is just fine. So we’d like to get that going again in September 1st, a rate reduction, an appropriate rate reduction is the way we'll stimulate that but very hard sledding there.
On our direct business, we’ve actually been quite pleased with our direct production in California. Its one of a few states in the nation where our direct production is actually greater than our Agency production, so it's an important part of our business, and that’s going on just fine. We are seeing obviously continuous movement in California as to, their willingness to look at, accepts things like mileage-based rating, but nothing overly dramatic to report yet, but those things that could actually play to our favor eventually as well.
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