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MAYFIELD VILLAGE, Ohio (

TheStreet

) -- Since

Progressive

(PGR) - Get Report

introduced "Flo" -- the geeky but friendly store assistant played by actress Stephanie Courtney -- in 2008, the percentage of quotes completed on its Web site has risen as much as 137%, according to the company.

The lovable sales clerk has her own following, complete with "I Love Flo" T-shirts. The hype is bringing more attention to Mayfield Village, Ohio-based Progressive, but does it deserve your investment? Even if you're not a fan of Flo, the company's cheap shares and growth potential merit a second look.

Progressive, previously considered the insurance choice for risky drivers, has gone mainstream, wooing customers with cleaner records by promising lower prices and better customer service. Its Web site has been a key part of its success, with a "name your price" feature that allows customers to design coverage that suits their wallets. Policyholders who go paperless get 5% discounts on their premiums.

Progressive, the 13th-largest insurance firm in the U.S., boasts a market cap that's over $10 billion. The company's second-quarter net income rose 16% from the year-earlier period. Its total assets grew 4.8% over the first quarter, with policies in force up 4% (12% for direct auto) since June 2008.

It's one of two major insurers whose price-to-book values exceed 150%;

Aflac

(AFL) - Get Report

is the other. While smaller rival

Principal Financial Group

(PFG) - Get Report

offers a price-to-book value of 290%, its price-to-earnings ratio is 14, the same as Aflac's.

In contrast, Progressive's price-to-earnings ratio stands at 10, helped by $5.1 billion in share repurchases during the past five years. The company has also paid $1.6 billion in dividends during that time.

Allstate has a lower price-to-book value at 116%, even though it's expected to record a profit that's twice as big as Progressive's this year and in 2010, according to SNL Financial estimates.

Not only are Progressive shares cheap, but they're undervalued in an industry rife with bargains. Analysts consider 76% of insurance stocks undervalued.

Progressive shares are up 9.5% this year, while those of

Allstate

(ALL) - Get Report

and Aflac are down 15%. Analysts forecast Progressive shares to gain 6% by year-end.

Is there anything that should concern you, the investor? Not debt. Progressive hasn't increased its debt over the past year and has no repayments due for three years.

The only dark cloud could be

Moody's

(MCO) - Get Report

recent credit downgrade of $31 million of bonds held in Banc of America Securities, a unit of

Bank of America

(BAC) - Get Report

. But with cash and investments of over $13.6 billion this shouldn't be a serious concern for Progressive.

We rate Progressive "hold." Flo or no Flo, the company is on the road to boosting returns for shareholders.

-- Reported by Gavin Magor in Jupiter, Fla

.

Gavin Magor joined TheStreet.com Ratings in 2008, and is the senior analyst responsible for assigning financial strength ratings to health insurers and supporting other health care-related consumer products, including Medicare supplement insurance, long-term care insurance and elder care information. He conducts industry analysis in these areas. He has more than 20 years' international experience in credit risk management, commercial lending and analysis, working in the U.K., Sweden, Mexico, Brazil and the U.S. He holds a master's degree in business administration from The Open University in the U.K.