Progressive Insurance: Disclosure Strategy Harvard Case Solution & Analysis

Progressive Insurance has refused to play the game to earn on Wall Street. Progressive failed to reported earnings management also instruct analysts. Management then considers their unique strategy disclosure is another step to become the first to go to the monthly performance reporting. Significant benefits had accrued from the progressive failure to pay to play the game. Time management was not in vain, or manipulation of reported results to analysts and reported number is misleading internal or external decision making. However, there are significant costs as well. Unmanaged analysts' forecasts are also often on the brand, resulting in a share price for the Progressive strongly fluctuate around quarterly earnings announcements. Ability of analysts forecast seemed to be getting worse - for four consecutive quarters in 1999-2000, the management was forced to give a mid-quarter warning that earnings would fall well below the consensus forecast of the first call. To eliminate the need for such mid-quarter warning management to move to monthly reporting of performance. With this data, analysts seem to be able to update their forecasts. Management must decide if the release of the monthly results of the competition will give the information to use against the progressive, and if the release of the monthly results will increase or decrease the share price volatility of the Progressive. "Hide
by Amy P. Hutton, James Weber Source: Harvard Business School 17 pages. Publication Date: July 9, 2001. Prod. #: 102012-PDF-ENG

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