What changed in this filing

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Item 1. Financial Statements

2025-05-05 compared with 2024-11-04 · 185 added, 361 removed, 676 unchanged (45% of the section changed)

2 unchanged sentences

Consolidated Statements of Comprehensive Income

Three Months Nine Months

Periods Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

(millions — except per share amounts)

4 unchanged sentences

Net holding period gains (losses) on securities ( 213 ) 302

Net impairment losses recognized in earnings 0 ( 2.3 ) 0 ( 6.8 )

Total net realized gains (losses) on securities ( 212 ) 156

13 unchanged sentences

Other Comprehensive Income (Loss)

Total net unrealized gains (losses) on fixed-maturity securities 1,561.2 ( 388.6 ) 1,461.1 ( 241.0 )

Net unrealized losses on forecasted transactions 0.1 0.2 0.3 0.4

Foreign currency translation adjustment 0.1 0 ( 0.1 ) 0.2

Other comprehensive income (loss) 1,561.4 ( 388.4 ) 1,461.3 ( 240.4 )

Decrease (increase) in total net unrealized losses on fixed-maturity securities 899 ( 208 )

Comprehensive income (loss) $ 3,466 $ 2,123

2 unchanged sentences

Preferred share dividends and other 1

0 10.4 17.0 27.2

Net income available to common shareholders $ 2,567 $ 2,314

5 unchanged sentences

1 All of our outstanding Serial Preferred Shares, Series B, were redeemed in February 2024.

See Note 9 – Dividends for further discussion.

See notes to consolidated financial statements.

1 unchanged sentence

Consolidated Balance Sheets

September 30, December 31,

(millions — except per share amounts) 2024 2023 2023

March 31, December 31,

(millions) 2025 2024 2024

Available-for-sale securities, at fair value:

9 unchanged sentences

$ 608 , $ 931 , and $ 756 )

735.0 868.9 902.1

Common equities (cost:

13 unchanged sentences

Property and equipment, net of accumulated depreciation of $ 1,490 , $ 1,580 , and $ 1,461

688.8 919.8 880.8

Net federal deferred income taxes 860 1,032 954

7 unchanged sentences

Total liabilities 82,455 72,317 80,154

Serial Preferred Shares (authorized 20.0 )

Serial Preferred Shares, Series B, no par value (cumulative, liquidation preference $ 1,000 per share) (authorized, issued, and outstanding of 0 , 0.5 , and 0.5 )

0 493.9 493.9

Common shares, $ 1.00 par value (authorized 900 ;

issued 797.6 , including treasury shares of 211.8 , 212.6 , and 212.3 )

585.8 585.0 585.3

issued 798 , including treasury shares of 212 )

Paid-in capital 2,160 2,029 2,145

7 unchanged sentences

Total liabilities and shareholders’ equity $ 111,409 $ 94,128 $ 105,745

1 Consists of long-term debt.

1 Consists solely of long-term debt.

See Note 4 – Debt for further discussion.

2 unchanged sentences

Consolidated Statements of Changes in Shareholders’ Equity

Three Months Nine Months

Periods Ended September 30, 2024 2023 2024 2023

Three Months Ended March 31, 2025 2024

(millions — except per share amounts)

2 unchanged sentences

Redemption of Serial Preferred Shares, Series B 1

0 0 ( 493.9 ) 0

Balance, end of period 0 0

18 unchanged sentences

Cash dividends declared on Serial Preferred Shares, Series B ($ 0 and $ 15.688377 per share) 1

0 ( 10.3 ) ( 7.8 ) ( 19.8 )

Reinvested dividends on restricted stock units 0 ( 1 )

7 unchanged sentences

1 See Note 9 – Dividends for further discussion.

There are 20 million Serial Preferred Shares authorized.

There are 5 million Voting Preference Shares authorized;

3 unchanged sentences

Consolidated Statements of Cash Flows

Nine Months Ended September 30, 2024 2023

Three Months Ended March 31, 2025 2024

Cash Flows From Operating Activities

30 unchanged sentences

Cash Flows From Financing Activities

Redemption of Serial Preferred Shares, Series B ( 500.0 ) 0

Dividends paid to common shareholders ( 2,695 ) ( 498 )

Dividends paid to preferred shareholders ( 7.8 ) ( 33.2 )

Acquisition of treasury shares for equity award tax liabilities ( 54 ) ( 37 )

Acquisition of treasury shares acquired in open market ( 13.1 ) ( 27.5 )

Net proceeds from debt issuances 0 496.3

Net cash provided by (used in) financing activities ( 1,256.7 ) 207.8

Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents 47.4 ( 82.5 )

Redemption of preferred shares 0 ( 500 )

Dividends paid to preferred shareholders 0 ( 8 )

Net cash used in financing activities ( 2,749 ) ( 1,043 )

Increase in cash, cash equivalents, restricted cash, and restricted cash equivalents 53 68

Cash, cash equivalents, restricted cash, and restricted cash equivalents – January 1 154 100

Cash, cash equivalents, restricted cash, and restricted cash equivalents – September 30

$ 147.0 $ 138.4

Cash, cash equivalents, restricted cash, and restricted cash equivalents – March 31

See notes to consolidated financial statements.

4 unchanged sentences

The consolidated financial statements reflect all normal recurring adjustments that, in the opinion of management, were necessary for a fair statement of the results for the interim periods presented.

The results of operations for the period ended September 30, 2024, are not necessarily indicative of the results expected for the full year.

The results of operations for the period ended March 31, 2025, are not necessarily indicative of the results expected for the full year.

These consolidated financial statements and the notes thereto should be read in conjunction with Progressive’s audited financial statements and accompanying notes included in Exhibit 13 to our Annual Report on Form 10-K for the year ended December 31, 2024 (2024 Annual Report to Shareholders).

3 unchanged sentences

The following table summarizes changes in our allowance for credit loss exposure on our premiums receivable:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(millions) 2025 2024

2 unchanged sentences

( 140 ) ( 148 )

( 107.5 ) ( 140.2 ) ( 383.5 ) ( 381.8 )

Allowance for credit losses, end of period $ 473 $ 328

1 Represents the incremental increase in other underwriting expenses.

2 Represents the portion of allowance that is reversed when the premiums receivable is written off.

2 Represents the portion of allowance that is reversed when the premiums receivable balances are written off.

Premiums receivable balances are written off once we have exhausted our collection efforts.

Property – Held for Sale

Included in other assets in our consolidated balance sheets are properties that are classified as held for sale (HFS).

At September 30, 2024 and 2023, and December 31, 2023, we had HFS properties of $ 150.4 million, $ 81.6 million, and $ 77.2 million, respectively.

When properties are determined to be HFS, the property is written down to its fair value less estimated costs to sell, as applicable.

The increase in HFS properties since December 31, 2023, primarily reflects a decision in the first quarter 2024 to sell certain regional properties to optimize our real estate portfolio by consolidating employees into existing alternative properties.

Earnings Per Share

We redeemed all of our outstanding Serial Preferred Shares, Series B, in February 2024.

See Note 9 – Dividends for further discussion.

To determine net income available to common shareholders, which is used in the calculation of the per common share amounts, we reduced net income by preferred share dividends, and, for 2024,

• underwriting discounts and commissions on the preferred share issuance,

• initial issuance costs related to the preferred shares, and

• excise taxes related to the preferred share redemption.

Other Assets - Reclassification

Goodwill and intangible assets are included in other assets in our consolidated balance sheets and the amortization of intangible assets in other, net, in cash provided by operating activities in our consolidated statements of cash flows.

The September 30, 2023 amounts, which were presented separately in the balance sheet and statement of cash flows in the prior year, were reclassified to conform to the current year presentation.

At March 31, 2025 and 2024, and December 31, 2024, we had held for sale properties of $ 117 million, $ 170 million, and $ 129 million, respectively, which are included in other assets on our consolidated balance sheets.

New Accounting Standards

Adopted – On January 1, 2024, we began amortizing the remaining original cost of tax equity investments to the provision for income taxes, since certain conditions were met, on the modified retrospective basis, pursuant to an Accounting Standards Update (ASU) issued by the Financial Accounting Standards Board.

Previously, these investments were accounted for under the equity method of accounting and the amortization was recognized as a net impairment loss on the consolidated statements of income.

The adoption of the ASU had no cumulative effect on retained earnings and did not have a material impact on our financial condition or results of operations.

The amount of income tax credits and investment amortization recognized for the three and nine months ended September 30, 2024, and the carrying amount of the tax credit investments at September 30, 2024, were not material to our financial condition or results of operations and, therefore, no additional disclosure is provided.

We did not adopt any new accounting standards during the three months ended March 31, 2025, and there were no recently issued accounting standards that are expected to materially impact our financial condition or results of operations.

The following tables present the composition of our investment portfolio by major security type:

Our securities are reported in our consolidated balance sheets at fair value.

The changes in fair value for our fixed-maturity securities (other than hybrid securities) are reported as a component of accumulated other comprehensive income (loss), net of deferred income taxes, in our consolidated

balance sheets.

The net holding period gains (losses) reported below represent the inception-to-date changes in fair value for the hybrid and equity securities.

The changes in the net holding period gains (losses) between periods are recorded as a component of net realized gains (losses) on securities in our consolidated statements of comprehensive income.

($ in millions) Cost Gross

(Losses) Fair

September 30, 2024

March 31, 2025

Available-for-sale securities:

18 unchanged sentences

(Losses) Fair

September 30, 2023

March 31, 2024

Available-for-sale securities:

37 unchanged sentences

$ 79,242 $ 145 $ ( 1,935 ) $ 2,798 $ 80,250 100.0 %

1 At September 30, 2024 and 2023, we had $ 468.5 million and $ 167.3 million, respectively, of net unsettled security purchase transactions included in other liabilities, compared to $ 45.6 million included in other assets at December 31, 2023.

The total fair value of the portfolio at both September 30, 2024 and 2023 included $ 4.1 billion of securities held in a consolidated, non-insurance subsidiary of the holding company, net of unsettled security transactions, compared to $ 4.2 billion at December 31, 2023.

Certain fixed-maturity securities previously categorized as redeemable preferred stocks in our footnote disclosures are currently classified as corporate and other debt securities to reflect the accurate categorization based on the underlying features of these securities.

The September 30, 2023 and December 31, 2023 amounts, which were presented separately as redeemable preferred stocks in our Note 2 - Investments and Note 3 - Fair Valu e tables, were reclassified to conform to the current year presentation.

The reclassification did not have an impact on our total fixed-maturity securities or our results of operations, financial condition, or cash flows.

At September 30, 2024, bonds and certificates of deposit in the principal amount of $ 712.0 million were on deposit to meet state insurance regulatory requirements.

1 At March 31, 2025 and 2024 and December 31, 2024, we had $ 297 million, $ 16 million, and $ 125 million, respectively, of net unsettled security transactions included in other liabilities.

The total fair value of the portfolio at March 31, 2025 and 2024 and December 31, 2024, included $ 3.5 billion, $ 3.2 billion, and $ 6.2 billion, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of unsettled security transactions.

A portion of the investments held at December 31, 2024 were sold and proceeds used to pay our common share dividends in January 2025;

see Note 9 – Dividends for additional information.

The March 31, 2024, corporate and other debt securities in our Note 2 – Investments and Note 3 – Fair Value tables include amounts that were previously reported as redeemable preferred stocks.

The reclassification was to reflect the accurate categorization based on the underlying features of these securities;

see Note 2 – Investments in our 2024 Annual Report to Shareholders for further discussion.

At March 31, 2025, bonds and certificates of deposit in the principal amount of $ 785 million were on deposit to meet state insurance regulatory requirements.

We did no t hold any securities of any one issuer, excluding U.S.

government obligations, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at September 30, 2024 or 2023, or December 31, 2023.

At September 30, 2024, we did no t hold any debt securities that were non-income producing during the preceding 12 months.

Short-Term Investments Our short-term investments may include commercial paper and other investments that are expected to mature, or are redeemable, within one year.

government obligations, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at March 31, 2025 or 2024, or December 31, 2024.

At March 31, 2025, we did no t hold any debt securities that were non-income producing during the preceding 12 months.

Hybrid Securities Certain securities in our fixed-maturity portfolio are accounted for as hybrid securities because they contain embedded derivatives that are not deemed to be clearly and closely related to the host investments.

These securities are reported at fair value:

September 30,

(millions) 2025 2024 December 31, 2024

5 unchanged sentences

Since the embedded derivatives (e.g., change-in-control put option, debt-to-equity conversion, or any other feature unrelated to the credit quality or risk of default of the issuer that could impact the amount or timing of our expected future cash flows) do not have observable intrinsic values, we use the fair value option to record the changes in fair value of these securities through income as a component of net realized gains (losses).

Fixed Maturities The composition of fixed maturities by maturity at September 30, 2024, was:

Fixed Maturities The composition of fixed maturities by maturity at March 31, 2025, was:

(millions) Cost Fair Value

10 unchanged sentences

($ in millions) No.

Value Unrealized

September 30, 2024

Value Gross Unrealized

March 31, 2025

government obligations 85 $ 16,851 $ ( 596 ) 18 $ 9,284 $ ( 69 ) 67 $ 7,567 $ ( 527 )

State and local government obligations 307 1,871 ( 90 ) 70 445 ( 2 ) 237 1,426 ( 88 )

Foreign government obligations 1 16.4 ( 0.5 ) 0 0 0 1 16.4 ( 0.5 )

Corporate and other debt securities 210 4,967 ( 156 ) 56 1,352 ( 12 ) 154 3,615 ( 144 )

5 unchanged sentences

($ in millions) No.

Value Unrealized

September 30, 2023

Value Gross Unrealized

March 31, 2024

government obligations 139 $ 32,968 $ ( 1,327 ) 37 $ 21,635 $ ( 295 ) 102 $ 11,333 $ ( 1,032 )

8 unchanged sentences

($ in millions) No.

Value Unrealized

Value Gross Unrealized

December 31, 2024

1 unchanged sentence

State and local government obligations 379 2,339 ( 117 ) 127 783 ( 6 ) 252 1,556 ( 111 )

Foreign government obligations 1 16.3 ( 1.0 ) 0 0 0 1 16.3 ( 1.0 )

Corporate and other debt securities 304 7,034 ( 215 ) 122 2,935 ( 33 ) 182 4,099 ( 182 )

4 unchanged sentences

A review of the securities in an unrealized loss position indicated that the issuers were current with respect to their interest obligations and that there was no evidence of deterioration of the current cash flow projections that would indicate we would not receive the remaining principal at maturity.

We had one security that had its credit ratings downgraded during the third quarter 2024, with a fair value of $ 39.3 million and an unrealized loss of $ 2.9 million as of September 30, 2024.

We had three securities that had their credit ratings downgraded, with a combined fair value of $ 90 million and an unrealized loss of $ 5 million as of March 31, 2025.

Based on our analysis of these securities, no credit loss allowance was required.

Allowance For Credit and Uncollectible Losses We are required to measure the amount of potential credit losses for all fixed-maturity securities in an unrealized loss position.

We did no t record any allowances for credit losses or any write-offs for amounts deemed to be uncollectible during the first nine months of 2024 or 2023, and did no t have a material credit loss allowance balance as of September 30, 2024 and 2023, or December 31, 2023.

We did no t record any allowances for credit losses or any write-offs for credit losses deemed to be uncollectible during the first three months of 2025 or 2024, and did no t have a material credit loss allowance balance as of March 31, 2025 and 2024, or December 31, 2024.

We considered several factors and inputs related to the individual securities as part of our analysis.

6 unchanged sentences

If we were likely to, or intended to, sell prior to a potential recovery, we would write off the unrealized loss.

For those securities that we determined we were not likely to, or did not intend to, sell prior to a potential recovery, we performed additional analysis to determine if the loss was

credit related.

We did not have an intention to sell any securities in a gross unrealized loss position at March 31, 2025 or March 31, 2024.

For those securities that we determined we were not likely to, or did not intend to, sell prior to a potential recovery,

we performed additional analysis to determine if the loss was credit related.

For securities subject to credit-related loss, we calculated the net present value (NPV) of the cash flows expected (i.e., expected recovery value) using the current book yield for each security.

1 unchanged sentence

In the event that the NPV was below the amortized value, and the amount was determined to be material on any specific security, or in the aggregate, a credit loss would be deemed to exist, and either an allowance for credit losses would be created, or if an allowance currently existed, either a recovery of the previous allowance, or an incremental loss, would be recorded to net realized gains (losses) on securities.

As of September 30, 2024 and 2023, and December 31, 2023, we believe that none of the unrealized losses on our fixed-maturity securities were related to material credit losses on any specific securities, or in the aggregate.

As of March 31, 2025 and 2024, and December 31, 2024, we believe that none of the unrealized losses on our fixed-maturity securities were related to material credit losses on any specific securities, or in the aggregate.

We continue to expect all the securities in our fixed-maturity portfolio to pay their principal and interest obligations.

In addition, we reviewed our accrued investment income outstanding on those securities in an unrealized loss position at September 30, 2024 and 2023, and December 31, 2023, to determine if the accrued interest amounts were uncollectible.

Based on our analysis, we believe the issuers have sufficient liquidity and capital reserves to meet their current interest, and future principal, obligations and, therefore, did no t write off any accrued income as uncollectible at September 30, 2024 and 2023, or December 31, 2023.

Realized Gains (Losses) The components of net realized gains (losses) for the three and nine months ended September 30, were:

Three Months Nine Months

In addition, we reviewed our accrued investment income outstanding on those securities in an unrealized loss position at March 31, 2025 and 2024, and December 31, 2024, to determine if the accrued interest amounts were uncollectible.

Based on our analysis, we believe the issuers have sufficient liquidity and capital reserves to meet their current interest, and future principal obligations and, therefore, did no t write off any accrued income as uncollectible at March 31, 2025 and 2024, or December 31, 2024.

Realized Gains (Losses) The components of net realized gains (losses) for the three months ended March 31, were:

(millions) 2025 2024

2 unchanged sentences

government obligations $ 53 $ 0

State and local government obligations 0 0 0.3 0

Corporate and other debt securities 1 3

Residential mortgage-backed securities 0 0 1.1 0

Other asset-backed securities 0 0 0.1 0

Total available-for-sale securities 54 3

10 unchanged sentences

Commercial mortgage-backed securities ( 4 ) ( 5 )

Other asset-backed securities 0 ( 5.2 ) ( 0.1 ) ( 5.6 )

Short-term investments 0 0 0 ( 0.4 )

Total available-for-sale securities ( 84 ) ( 155 )

9 unchanged sentences

Corporate and other debt securities 0 ( 12 )

Residential mortgage-backed securities 0 0 1.1 0

Commercial mortgage-backed securities ( 4 ) ( 5 )

Other asset-backed securities 0 ( 5.2 ) 0 ( 5.6 )

Short-term investments 0 0 0 ( 0.4 )

Total available-for-sale securities ( 30 ) ( 152 )

4 unchanged sentences

Subtotal net realized gains (losses) on security sales 1 ( 146 )

Gain 36.3 8.4 36.3 21.6

Impairment 0 ( 2.3 ) 0 ( 6.8 )

Subtotal net realized gains (losses) on other assets 36.3 6.1 36.3 14.8

Net holding period gains (losses)

4 unchanged sentences

Realized gains (losses) on securities sold are computed using the first-in-first-out method.

During the third quarter and first nine months of 2024, the majority of our security sales were U.S.

During the first three months of 2025 and 2024, the majority of our security sales were U.S.

Treasury Notes that were sold for duration management.

During the third quarter and first nine months of both 2024 and 2023, we selectively sold securities that we viewed as having less attractive risk/reward profiles.

During 2023, the gross gains in common equities reflected sales of securities, as part of our plan to incrementally reduce risk in the portfolio in response to our view of the potential of a more difficult economic environment.

gross loss incurred in our nonredeemable preferred stocks was primarily related to the sale of certain holdings in U.S.

bank preferred stocks.

The other asset gain for all periods presented is related to proceeds received as a result of litigation in conjunction with three renewable energy investments we made from 2016 through 2018 (the original investments were previously written down in full).

We also selectively sold securities that we viewed as having less attractive risk/reward profiles during the first three months of 2025 and 2024.

The following table reflects our holding period realized gains (losses) recognized on equity securities held at the respective quarter ends:

Three Months Nine Months

(millions) 2025 2024

2 unchanged sentences

Net holding period gains (losses) recognized during the period on equity securities held at period end $ ( 216 ) $ 294

Net Investment Income The components of net investment income for the three and nine months ended September 30, were:

Three Months Nine Months

Net Investment Income The components of net investment income for the three months ended March 31, were:

(millions) 2025 2024

3 unchanged sentences

State and local government obligations 19 13

Foreign government obligations 0.1 0.1 0.2 0.2

Corporate and other debt securities 171 125

12 unchanged sentences

Net investment income $ 807 $ 612

On a year-over-year basis, investment income (interest and dividends) increased 45 % and 48 % for the three and nine months ended September 30, 2024, respectively.

Growth in invested assets and an increase in recurring investment book yield contributed to the increase in investment income.

On a year-over-year basis, investment income (interest and dividends) increased 32 % for the three months ended March 31, 2025, compared to the same period last year .

The increase primarily reflects growth in invested assets and an increase in recurring investment book yield.

The book yield increase primarily reflected investing new cash from insurance operations, and proceeds from maturing bonds, in higher coupon rate securities.

14 unchanged sentences

(millions) Level 1 Level 2 Level 3 Total Cost

September 30, 2024

March 31, 2025

Fixed maturities:

3 unchanged sentences

Corporate and other debt securities 0 16,011 5 16,016 16,047

Subtotal 44,428.5 17,650.3 3.0 62,081.8 61,899.0

Asset-backed securities:

Residential mortgage-backed 0 1,423.9 0 1,423.9 1,403.5

Commercial mortgage-backed 0 4,291.6 0 4,291.6 4,664.4

Other asset-backed 0 6,613.9 0 6,613.9 6,628.3

Subtotal asset-backed securities 0 12,329.4 0 12,329.4 12,696.2

Residential mortgage-backed securities 0 2,183 0 2,183 2,172

Commercial mortgage-backed securities 0 4,825 0 4,825 5,144

Other asset-backed securities 0 7,139 0 7,139 7,164

Total fixed maturities 44,318 32,778 5 77,101 77,754

11 unchanged sentences

(millions) Level 1 Level 2 Level 3 Total Cost

September 30, 2023

March 31, 2024

Fixed maturities:

3 unchanged sentences

Corporate and other debt securities 0 12,692 3 12,695 13,003

Subtotal 34,293.8 12,491.0 0 46,784.8 49,736.5

Asset-backed securities:

Residential mortgage-backed 0 515.8 0 515.8 530.4

Commercial mortgage-backed 0 3,977.7 0 3,977.7 4,699.5

Other asset-backed 0 5,313.6 0 5,313.6 5,524.2

Subtotal asset-backed securities 0 9,807.1 0 9,807.1 10,754.1

Residential mortgage-backed securities 0 383 0 383 390

Commercial mortgage-backed securities 0 3,852 0 3,852 4,368

Other asset-backed securities 0 6,061 0 6,061 6,146

Total fixed maturities 38,563 25,064 3 63,630 65,949

17 unchanged sentences

Corporate and other debt securities 0 13,949 5 13,954 14,111

Subtotal 36,869.4 13,573.5 3.0 50,445.9 51,812.6

Asset-backed securities:

Residential mortgage-backed 0 417.2 0 417.2 426.9

Commercial mortgage-backed 0 3,939.7 0 3,939.7 4,535.2

Other asset-backed 0 5,575.4 0 5,575.4 5,667.2

Subtotal asset-backed securities 0 9,932.3 0 9,932.3 10,629.3

Residential mortgage-backed securities 0 1,601 0 1,601 1,600

Commercial mortgage-backed securities 0 4,352 0 4,352 4,721

Other asset-backed securities 0 6,643 0 6,643 6,682

Total fixed maturities 45,988 29,339 5 75,332 77,126

12 unchanged sentences

Our short-term investments classified as Level 1 are highly liquid, actively marketed, and have a very short duration, primarily 90 days or less to redemption.

These securities are held at their original cost, adjusted for any accretion of discount, since that value very closely approximates what an active market participant would be willing to pay for such securities.

These securities are held at their original cost, adjusted for any accretion of discount, since that value very closely approximates what

an active market participant would be willing to pay for such securities.

The remainder of our short-term investments are classified as Level 2 and are not priced externally since these securities continually trade at par value.

These securities are classified as Level 2 since they are primarily longer-dated securities issued by municipalities that contain either liquidity facilities or mandatory put features within one year.

At September 30, 2024 and 2023, and December 31, 2023, vendor-quoted prices represented 93 % of our Level 1 classifications (excluding short-term investments).

At both March 31, 2025 and December 31, 2024, vendor-quoted prices represented 93 % of our Level 1 classifications (excluding short-term investments), compared to 92 % at March 31, 2024.

The securities quoted by vendors in Level 1 primarily represent our holdings in U.S.

1 unchanged sentence

The balance of our Level 1 pricing comes from quotes obtained directly from trades made on active exchanges.

At both September 30, 2024 and 2023, vendor-quoted prices comprised 99 % of our Level 2 classifications (excluding short-term investments), compared to 100 % at December 31, 2023.

The remaining 1 % at both September 30, 2024 and 2023 were dealer-quoted prices.

At March 31, 2025 and 2024 and December 31, 2024, vendor-quoted prices comprised 100 % of our Level 2

classifications (excluding short-term investments).

In our process for selecting a source (e.g., dealer or pricing service) to provide pricing for securities in our portfolio, we reviewed documentation from the sources that detailed the pricing techniques and methodologies used by these sources and determined if their policies adequately considered market activity, either based on specific transactions for the particular security type or based on modeling of securities with similar credit quality, duration, yield, and structure that were recently transacted.

3 unchanged sentences

However, our internal pricing policy is to use a consistent source for individual securities in order to maintain the integrity of our valuation process.

Quotes obtained from the sources are not considered binding offers

Quotes obtained from the sources are not considered binding offers to transact.

Under our policy, when a review of the valuation received from our selected source appears to be outside of what is considered market level activity (which is defined as trading at spreads or yields significantly different than those of comparable securities or outside the general sector level movement without a reasonable explanation), we may use an alternate source’s price.

To the extent we determine that it may be prudent to substitute one source’s price for another, we will contact the initial source to obtain an understanding of the factors that may be contributing to the significant price variance.

the extent we determine that it may be prudent to substitute one source’s price for another, we will contact the initial source to obtain an understanding of the factors that may be contributing to the significant price variance.

To allow us to determine if our initial source is providing a price that is outside of a reasonable range, we review our portfolio pricing on a weekly basis.

5 unchanged sentences

For structured debt securities, including commercial, residential, and other asset-backed securities, we evaluate available market-related data for these and similar securities related to collateral, delinquencies, and defaults for historical trends and reasonably estimable projections, as well as historical prepayment rates and current prepayment assumptions and cash flow estimates.

We further stratify each class of our structured debt securities into more finite sectors (e.g., planned amortization class, first pay, second pay, senior, and subordinated) and use duration, credit quality, and coupon to determine if the fair value is appropriate.

We further stratify each class of structured debt securities into more finite sectors (e.g., planned amortization class, first pay, second pay, senior, and subordinated) and use duration, credit quality, and coupon to determine if the fair value is appropriate.

For corporate and other debt, nonredeemable preferred stock, and the notes issued by The Progressive Corporation (see Note 4 – Debt ), we review securities by duration, credit quality, and coupon, as well as changes in interest rate and credit spread movements within that stratification.

8 unchanged sentences

Since our short-term securities are typically 90 days or less to maturity, with the majority listed in Level 2 being 30 days or less to redemption, we believe that acquisition price is the best estimate of fair value.

We also review data assumptions as supplied by our sources to determine if that data is relevant to current market conditions.

We also review data assumptions as supplied by our sources to determine if that data is relevant to current

market conditions.

In addition, we independently review each sector for transaction volumes, new issuances, and changes in spreads, as well as the overall movement of interest rates along the yield curve to determine if sufficient activity and liquidity exists to provide a credible source for our market valuations.

16 unchanged sentences

Our Level 3 other risk investments include securities accounted for under the equity method of accounting and, therefore, are not subject to fair value reporting.

Since these securities represent less than 0.1% of our total portfolio, we will continue to include them in our Level 3 disclosures and report the activity from these investments as “other” changes in the summary of changes in fair value table and categorize these securities as “pricing exemption securities” in the quantitative information table.

At both September 30, 2024 and December 31, 2023, we held one privately held fixed-maturity security that is classified as a Level 3 investment.

At September 30, 2023, we did no t have any securities in our fixed-maturity portfolio listed as Level 3.

During the first nine months of 2024 and for the full year of 2023, there were no material assets or liabilities measured at fair value on a nonrecurring basis.

Since these securities represent less than 0.1% of our total portfolio, we include them in our Level 3 disclosures and report the activity from these investments as “other” changes in the summary of changes in fair value table and

categorize these securities as “pricing exemption securities” in the quantitative information table.

During the first three months of 2025 and for the full year of 2024, there were no material assets or liabilities measured at fair value on a nonrecurring basis.

Due to the relative size of the Level 3 securities’ fair values, compared to the total portfolio’s fair value, any changes in pricing methodology would not have a significant change in valuation that would materially impact net or comprehensive income.

The following tables provide a summary of changes in fair value associated with Level 3 assets for the three and nine months ended September 30, 2024 and 2023:

The following tables provide a summary of changes in fair value associated with Level 3 assets for the three months ended March 31, 2025 and 2024:

Level 3 Fair Value

(millions) Fair Value at June 30, 2024 Calls/

(millions) Fair Value at December 31, 2024 Calls/

Paydowns/Other Purchases Sales Net Realized

on Sales Change in

In (Out) Fair Value at September 30, 2024

In (Out) Fair Value at March 31, 2025

Fixed maturities:

6 unchanged sentences

Total Level 3 securities $ 105 $ 6 $ 8 $ 0 $ 0 $ ( 14 ) $ 0 $ 105

$ 101.3 $ ( 1.4 ) $ 0 $ 0 $ 0 $ 0 $ 0 $ 99.9

Level 3 Fair Value

(millions) Fair Value at June 30, 2023 Calls/

Paydowns/Other Purchases Sales Net Realized

on Sales Change in

In (Out) Fair Value at September 30, 2023

Equity securities:

Nonredeemable preferred stocks $ 71.8 $ ( 8.1 ) $ 0 $ 0 $ 0 $ 0 $ 0 $ 63.7

Common equities:

Common stocks 18.3 8.1 0 ( 10.0 ) 8.9 ( 7.0 ) 0 18.3

Other risk investments 21.9 0.7 0 0 0 0 0 22.6

Total Level 3 securities

$ 112.0 $ 0.7 $ 0 $ ( 10.0 ) $ 8.9 $ ( 7.0 ) $ 0 $ 104.6

Level 3 Fair Value

(millions) Fair Value at December 31, 2023 Calls/

1 unchanged sentence

on Sales Change in

In (Out) Fair Value at September 30, 2024

In (Out) Fair Value at March 31, 2024

Fixed maturities:

6 unchanged sentences

Total Level 3 securities

Level 3 Fair Value

(millions) Fair Value at December 31, 2022 Calls/

Paydowns/Other Purchases Sales Net Realized

on Sales Change in

In (Out) Fair Value at September 30, 2023

Equity securities:

Nonredeemable preferred stocks $ 83.8 $ ( 8.1 ) $ 0 $ 0 $ 0 $ ( 12.0 ) $ 0 $ 63.7

Common equities:

Common stocks 18.3 8.1 0 ( 10.0 ) 8.9 ( 7.0 ) 0 18.3

Other risk investments 19.8 2.8 0 0 0 0 0 22.6

Total Level 3 securities

$ 110 $ 4 $ 0 $ 0 $ 0 $ 0 $ 0 $ 114

1 For fixed maturities, amounts included are unrealized gains (losses) included in accumulated other comprehensive income (loss) on our consolidated balance sheets.

For equity securities, amounts included are net holding period gains (losses) on securities on our consolidated statements of comprehensive income.

The following tables provide a summary of the quantitative information about Level 3 fair value measurements for our applicable securities at September 30, 2024 and 2023, and December 31, 2023:

1 For fixed maturities, these amounts are included in accumulated other comprehensive income (loss) on our consolidated balance sheets.

For equity securities, these amounts are included in our consolidated statements of comprehensive income.

The following tables provide a summary of the quantitative information about Level 3 fair value measurements for our applicable securities at March 31, 2025 and 2024, and December 31, 2024:

Quantitative Information about Level 3 Fair Value Measurements

($ in millions) Fair Value at September 30, 2024 Valuation Technique Unobservable Input Range of Input Values Increase (Decrease) Weighted Average Increase (Decrease)

($ in millions) Fair Value at March 31, 2025 Valuation Technique Unobservable Input Range of Input Values Increase (Decrease) Weighted Average Increase (Decrease)

Fixed maturities:

7 unchanged sentences

Quantitative Information about Level 3 Fair Value Measurements

($ in millions) Fair Value at September 30, 2023 Valuation Technique Unobservable Input Range of Input Values Increase (Decrease) Weighted Average Increase (Decrease)

($ in millions) Fair Value at March 31, 2024 Valuation Technique Unobservable Input Range of Input Values Increase (Decrease) Weighted Average Increase (Decrease)

Fixed maturities:

Corporate and other debt securities $ 3 Market comparables Weighted average market capitalization price change % ( 2.3 )% to 1.2 %

Equity securities:

14 unchanged sentences

Total Level 3 securities $ 105

Debt at each of the balance sheet periods consisted of:

September 30, 2024 September 30, 2023 December 31, 2023

(millions) Carrying

Debt at each of the balance sheet periods consisted of the following Senior Notes:

($ in millions) March 31, 2025 March 31, 2024 December 31, 2024

Principal Amount Interest Rate Issuance Date Maturity Date Carrying

Value Carrying

2.45 % Senior Notes due 2027 (issued:

$ 500 2.45 % August 2016 2027 $ 499 $ 484 $ 499 $ 469 $ 499 $ 479

$ 498.9 $ 483.2 $ 498.5 $ 455.8 $ 498.6 $ 468.9

2.50 % Senior Notes due 2027 (issued:

500 2.50 March 2022 2027 499 483 498 468 499 479

498.5 482.1 497.9 454.0 498.1 469.1

6 5/8% Senior Notes due 2029 (issued:

300 6 5/8 March 1999 2029 298 322 298 324 298 320

298.1 330.1 297.7 320.8 297.8 328.7

4.00 % Senior Notes due 2029 (issued:

550 4.00 October 2018 2029 548 542 547 532 547 534

547.3 548.6 546.8 518.9 546.9 542.6

3.20 % Senior Notes due 2030 (issued:

500 3.20 March 2020 2030 498 470 497 456 498 462

497.6 476.1 497.2 435.1 497.3 462.2

3.00 % Senior Notes due 2032 (issued:

500 3.00 March 2022 2032 497 447 496 436 497 439

496.6 458.5 496.2 420.5 496.3 446.0

6.25 % Senior Notes due 2032 (issued:

400 6.25 November 2002 2032 397 434 397 434 397 430

396.9 449.9 396.6 414.3 396.7 445.6

4.95 % Senior Notes due 2033 (issued:

500 4.95 May 2023 2033 497 503 497 499 497 495

496.7 518.7 496.4 474.7 496.4 513.0

4.35 % Senior Notes due 2044 (issued:

350 4.35 April 2014 2044 347 300 347 313 347 298

347.0 318.9 347.0 280.9 347.0 314.2

3.70 % Senior Notes due 2045 (issued:

400 3.70 January 2015 2045 396 310 396 328 396 308

396.0 330.6 395.8 288.2 395.9 325.1

4.125 % Senior Notes due 2047 (issued:

850 4.125 April 2017 2047 842 695 842 719 842 684

842.4 749.8 842.2 666.3 842.3 756.2

4.20 % Senior Notes due 2048 (issued:

600 4.20 March 2018 2048 591 493 591 520 591 490

590.8 532.3 590.6 473.3 590.6 534.1

3.95 % Senior Notes due 2050 (issued:

500 3.95 March 2020 2050 491 393 491 410 491 386

491.3 420.0 491.1 373.5 491.1 422.3

3.70 % Senior Notes due 2052 (issued:

500 3.70 March 2022 2052 494 371 494 390 494 369

493.7 399.5 493.6 355.8 493.6 403.3

Total $ 6,894 $ 6,247 $ 6,890 $ 6,298 $ 6,893 $ 6,173

There was no short-term debt outstanding as of the end of all periods presented.

During the second quarter 2024, The Progressive Corporation renewed its line of credit with PNC Bank, National Association (PNC), in the maximum principal amount of $ 300 million, which expires April 2025 and has the same terms as the previous line of credit with PNC.

The Progressive Corporation has a line of credit with PNC Bank, National Association (PNC), in the maximum principal amount of $ 300 million.

See the 2024 Annual Report to Shareholders for a discussion of the terms of this line of credit.

We had no borrowings under the line of credit that was available during the periods presented.

The effective tax rate for the three and nine months ended September 30, 2024, was 20.8 % and 20.9 %, respectively , compared to 20.5 % and 20.2 % for the same periods last year.

Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates.

We review our deferred tax assets regularly for recoverability.

At September 30, 2024 and 2023, and December 31, 2023, we determined that we did no t need a valuation allowance on our gross deferred tax assets.

Although realization of the deferred tax assets is not assured, management believes that it is more likely than not the deferred tax assets will be realized based on our expectation that we will be able to fully utilize the deductions that are ultimately recognized for tax purposes.

At September 30, 2024 and 2023, and December 31, 2023, the net deferred tax asset includes a gross deferred tax asset of $ 38.9 million , $ 807.0 million,

and $ 427.3 million, respectively, related to unrealized losses on fixed-maturity securities.

The decrease in the net deferred tax asset from year end 2023 and September 30, 2023, primarily reflected changes in these net unrealized losses.

We believe this deferred tax asset will be realized based on the existence of current temporary differences related to unrealized gains in our equity portfolio and prior year capital gains.

We had net current income taxes recoverable of $ 4.6 million at September 30, 2024, which were reported in other assets, compared to net current income taxes payable of $ 246.1 million and $ 311.8 million at September 30, 2023 and December 31, 2023, respectively, which were reported in accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets.

The balance may fluctuate between an asset and a liability from period to period due to normal timing differences.

At September 30, 2024 and 2023, and December 31, 2023, we had no reserves for uncertain tax positions.

The effective tax rate for the three months ended March 31, 2025 and 2024, was 20.7 % .

Deferred income taxes reflect the tax effects of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities.

Although realization of the deferred tax assets is not assured, management believes that it is more likely than not that the deferred tax assets will be realized based on our expectation that we will be able to fully utilize the deductions that are ultimately recognized for tax purposes and, therefore, no valuation allowance was needed at March 31, 2025 and 2024, and December 31, 2024.

We had net current income taxes payable of $ 838 million , $ 962 million, and $ 26 million at March 31, 2025 and 2024, and December 31, 2024, respectively, which were reported in accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets.

The balance may fluctuate from period to period due to normal timing differences.

At March 31, 2025 and 2024, and December 31, 2024, we have not recorded any unrecognized tax benefits or related interest and penalties.

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

Activity in the loss and loss adjustment expense reserves is summarized as follows:

September 30,

(millions) 2025 2024

10 unchanged sentences

Total paid 11,685 10,393

Net balance at September 30

Net balance at March 31

35,689 30,179

Plus reinsurance recoverables on unpaid losses 4,133 4,652

Balance at September 30

Balance at March 31

$ 39,822 $ 34,831

We experienced favorable reserve development of $ 199.4 million during the first nine months of 2024, compared to unfavorable development of $ 1,147.0 million for the same period last year, which is reflected as “incurred related to prior years ” in the table above.

Year-to-date September 30, 2024

We experienced favorable reserve development of $ 278 million and $ 11 million during the first three months of 2025 and 2024, respectively, which is reflected as “incurred related to prior years ” in the table above.

First Quarter 2025

• The favorable prior year reserve development included approximately $ 180 million attributable to accident year 2024, $ 90 million to accident year 2023, and the remainder to accident years 2022 and prior.

• Our perso nal auto products incurred about $ 375 million of favorable loss and loss adjustment expense (LAE) reserve development, with about 60 % attributable to the Agency auto business and the balance in the Direct auto business.

The favorable development was, in part, due to lower than anticipated severity and frequency in Florida and lower than anticipated property damage severity across the majority of states.

• Our Commercial Lines business experienced about $ 100 million of unfavorable development primarily driven by higher than anticipated severity in our commercial auto business for California, New York, and Texas.

• Our Property business experienced about $ 75 million of unfavorable development primarily due to higher LAE costs than anticipated.

Year-to-date September 30, 2023

• The unfavorable prior year reserve development included approximately $ 929 million attributable to accident year 2022, $ 108 million to accident year 2021, and the remainder to accident years 2020 and prior.

• Our personal auto products incurred about $ 866 million of unfavorable loss and LAE reserve development, with the Agency and Direct auto businesses each contributing about half.

Over half of the unfavorable development was attributable to higher than anticipated severity in auto property and physical damage coverages, while the remaining unfavorable development was primarily due to increased loss costs in Florida injury and medical coverages and, to a lesser extent, higher than anticipated late reported injury claims;

partially offset by lower than expected LAE.

• Our Commercial Lines business experienced about $ 277 million of unfavorable development, primarily driven by higher than anticipated severity and frequency of late reported injury claims, with about half of the unfavorable development attributable to our transportation network company business.

• Our perso nal auto products incurred about $ 260 million of favorable loss and loss adjustment expense (LAE) reserve development, with the agency and direct auto businesses each contributing about half.

The favorable development was primarily due to lower than anticipated loss severity and frequency in Florida.

• Our personal property products experienced about $ 30 million of favorable development, primarily attributable to favorable development on 2024 catastrophe events.

First Quarter 2024

• The favorable prior year reserve development included approximately $ 50 million of favorable development attributable to accident year 2023 and $ 15 million to accident year 2022;

partially offset by unfavorable development attributable to accident years 2021 and prior.

• Our personal auto products incurred about $ 100 million of favorable loss and LAE reserve development, in part due to lower than anticipated frequency in Florida following tort reform that passed in the first quarter 2023, with about 60 % attributable to the agency auto business and the balance in the direct auto business.

• Our Commercial Lines business experienced about $ 70 million of unfavorable development, primarily driven by higher than anticipated severity in our commercial auto business for California and New York.

SUPPLEMENTAL CASH FLOW INFORMATION

Cash and cash equivalents include bank demand deposits and daily overnight reverse repurchase commitments of funds held in bank demand deposit accounts by certain subsidiaries.

The amount of overnight reverse repurchase commitments, which are not considered part of the investment portfolio, held by these subsidiaries at September 30, 2024 and 2023, and December 31, 2023, were $ 89.4 million, $ 79.7 million, and $ 68.2 million, respectively.

The amount of overnight reverse repurchase commitments, which are not considered part of the investment portfolio, held by these subsidiaries at March 31, 2025 and 2024, and December 31, 2024, were $ 78 million, $ 108 million, and $ 127 million, respectively.

Restricted cash and restricted cash equivalents include collateral held against unpaid deductibles and cash that is restricted to pay flood claims under the National Flood Insurance Program’s “Write Your Own” program, for which certain subsidiaries are participants.

Non-cash activity included the following in the respective periods:

Nine Months Ended September 30,

Three Months Ended March 31,

(millions) 2025 2024

Common share dividends 1

$ 58.6 $ 58.5

Operating lease liabilities 2

3 unchanged sentences

In the respective periods, we paid the following:

Nine Months Ended September 30,

Three Months Ended March 31,

(millions) 2025 2024

Income taxes 1

$ 1,985.3 $ 413.0

Interest $ 88 $ 88

Operating lease liabilities 22 22

1 The increase in income taxes paid was primarily driven by higher profitability during the first nine months of 2024, compared to the same period in the prior year.

SEGMENT INFORMATION

Our Personal Lines segment writes insurance for personal auto and special lines products (e.g., motorcycles, RVs, watercraft, and snowmobiles).

Our Commercial Lines segment writes auto-related liability and physical damage insurance, business-related general liability and property insurance predominately for small businesses, and workers’ compensation insurance primarily for the transportation industry.

Our Property segment writes residential property insurance for homeowners, other

property owners, and renters, and umbrella insurance.

Our Personal Lines segment writes insurance for personal autos, special lines products (e.g., recreational vehicles, such as motorcycles, RVs, and watercraft), personal residential property insurance for homeowners and renters, umbrella insurance, and flood insurance through the “Write Your Own” program for the National Flood Insurance Program.

Property information for the three months ended March 31, 2024, was recast to conform to the current year presentation;

see Note 10 – Segment Information in our 2024 Annual Report to Shareholders for further discussion.

Our Commercial Lines segment writes auto-related liability and physical damage insurance, business-related

general liability and commercial property insurance predominately for small businesses, and workers’ compensation insurance primarily for the transportation industry.

Our service businesses provide insurance-related services, including serving as an agent for homeowners, general liability, and workers’ compensation insurance, among other products, through programs in our direct Personal Lines and Commercial Lines businesses.

2 unchanged sentences

Following are the operating results for the respective periods:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

(millions) Revenues Pretax

Profit (Loss) Revenues Pretax

Profit (Loss)

Personal Lines

Agency $ 6,627.8 $ 870.1 $ 5,414.0 $ 335.7 $ 18,698.9 $ 2,609.3 $ 15,481.4 $ 427.1

Direct 8,180.2 664.5 6,361.8 706.2 22,796.2 2,490.8 18,259.9 810.6

Total Personal Lines 1

(millions) Personal Lines Commercial Lines Other 1

Three Months Ended March 31, 2025

Net premiums earned $ 16,710 $ 2,699 $ 0 $ 19,409

Fees and other revenues 249 38 0 287

Total underwriting revenue 16,959 2,737 0 19,696

Losses and loss adjustment expenses:

Losses (excluding catastrophe losses) 9,109 1,559 0 10,668

Catastrophe losses 454 5 0 459

Loss adjustment expenses 1,390 287 0 1,677

Total losses and loss adjustment expenses 10,953 1,851 0 12,804

Underwriting expenses:

Distribution expenses 2

2,348 286 0 2,634

Commercial Lines 2,726.7 308.4 2,486.6 23.0 7,948.6 821.2 7,296.8 147.4

Property 761.8 163.7 631.8 74.6 2,210.5 ( 277.2 ) 1,852.8 ( 164.9 )

Other indemnity 2

Other underwriting expenses 3

1,275 262 4 1,541

Total underwriting operations 18,296.7 2,004.4 14,894.3 1,136.2 51,654.8 5,640.9 42,891.8 1,213.5

Total underwriting expenses 3,623 548 4 4,175

Pretax underwriting profit (loss) $ 2,383 $ 338 $ ( 4 ) 2,717

Investment profit (loss) 4

Service businesses profit (loss) ( 6 )

Interest expense ( 70 )

Total pretax profit (loss) $ 3,236

(millions) Personal Lines Commercial Lines Other 1

Three Months Ended March 31, 2024

Net premiums earned $ 13,591 $ 2,558 $ 0 $ 16,149

Fees and other revenues 196 40 0 236

278.1 NA 223.7 NA 774.4 NA 656.6 NA

Service businesses 117.3 ( 9.4 ) 81.4 ( 10.3 ) 307.8 ( 25.3 ) 234.9 ( 29.7 )

Investments 4

Total underwriting revenue 13,787 2,598 0 16,385

Losses and loss adjustment expenses:

Losses (excluding catastrophe losses) 7,563 1,593 ( 2 ) 9,154

Catastrophe losses 338 9 0 347

Loss adjustment expenses 1,197 274 0 1,471

Total losses and loss adjustment expenses 9,098 1,876 ( 2 ) 10,972

Underwriting expenses:

Distribution expenses 2

1,560 274 0 1,834

Interest expense NA ( 69.9 ) NA ( 69.7 ) NA ( 209.1 ) NA ( 198.7 )

Consolidated total $ 19,719.0 $ 2,944.8 $ 15,560.6 $ 1,410.2 $ 55,095.8 $ 7,745.1 $ 45,217.3 $ 2,400.3

NA = Not applicable

1 Personal auto insurance accounted for 95 % of the total Personal Lines segment net premiums earned during the three and nine months ended September 30, 2024, and 94 % for the same periods in 2023;

insurance for our special lines products accounted for the balance of the Personal Lines net premiums earned.

2 Includes other underwriting business and run-off operations.

3 Pretax profit (loss) for fees and other revenues is allocated to operating segments based on revenue.

4 Revenues represent recurring investment income and total net realized gains (losses) on securities;

pretax profit (loss) is net of investment expenses.

Other underwriting expenses 3

1,088 239 2 1,329

Total underwriting expenses 2,648 513 2 3,163

Pretax underwriting profit (loss) $ 2,041 $ 209 $ 0 2,250

Investment profit (loss) 4

Service businesses profit (loss) ( 8 )

Interest expense ( 70 )

Total pretax profit (loss) $ 2,940

1 Includes other underwriting businesses and run-off operations.

2 Includes policy acquisition costs, agents’ contingent commissions, and advertising costs attributable to our operating segments.

A portion of our companywide advertising costs are also related to our service businesses.

3 Primarily consists of employee compensation and benefit costs, and the increase in the allowance for credit loss exposure on our premiums receivable.

4 Calculated as recurring investment income plus total net realized gains (losses) on securities, less investment expenses.

Our management uses underwriting margin and combined ratio as primary measures of underwriting profitability.

The underwriting margin is the pretax underwriting profit (loss) expressed as a percentage of net premiums earned (i.e., revenues from underwriting operations).

The underwriting margin is the pretax underwriting profit (loss) expressed as a percentage of net premiums earned.

Pretax underwriting profit (loss) is calculated as net premiums earned plus fees and other revenues, less:

3 unchanged sentences

Combined ratio is the complement of the underwriting margin.

Fees and other revenues are netted against either loss adjustment expenses or underwriting expenses in the ratio calculations, based on the underlying activity that generated the revenue.

Following are the underwriting margins and combined ratios for our underwriting operations for the respective periods:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Under-writing

Margin Combined

Ratio Under-writing

Margin Combined

Ratio Under-writing

Three Months Ended March 31,

Margin Combined

Ratio Under-writing

Ratio Underwriting

Margin Combined

Personal Lines 14.3 % 85.7 15.0 % 85.0

Agency 13.1 % 86.9 6.2 % 93.8 14.0 % 86.0 2.8 % 97.2

Direct 8.1 91.9 11.1 88.9 10.9 89.1 4.4 95.6

Total Personal Lines 10.4 89.6 8.8 91.2 12.3 87.7 3.7 96.3

Commercial Lines 12.5 87.5 8.2 91.8

Property 21.5 78.5 11.8 88.2 ( 12.5 ) 112.5 ( 8.9 ) 108.9

Total underwriting operations 14.0 86.0 13.9 86.1

Following is a summary of our common and preferred share dividends that were declared and/or paid during the nine months ended September 30, 2024 and 2023:

Following is a summary of our common and preferred share dividends that were declared and/or paid during the three months ended March 31, 2025 and 2024:

(millions — except per share amounts) Amount

2 unchanged sentences

December 2024 January 2025 $ 4.50 $ 2,637

December 2023 January 2024 0.75 439

Common – Quarterly Dividends:

August 2024 October 2024 0.10 58.6

May 2024 July 2024 0.10 58.6

March 2025 April 2025 0.10 59

December 2024 January 2025 0.10 58

August 2023 October 2023 0.10 58.5

May 2023 July 2023 0.10 58.5

March 2024 April 2024 0.10 59

3 unchanged sentences

February 2024 15.688377 8

August 2023 September 2023 20.67700 10.3

May 2023 June 2023 18.92463 9.5

December 2022 March 2023 26.875 13.4

1 The accrual is based on an estimate of shares outstanding as of the record date and recorded as a component of accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets until paid.

2 During the first quarter 2024, we redeemed all of the outstanding Serial Preferred Shares, Series B, at the stated amount of $ 1,000 per share, for an aggregate payout of $ 507.8 million, including accrued and unpaid dividends of $ 7.8 million to, but excluding, February 22, 2024, which was the redemption date.

See Note 14 – Dividends in our 2023 Annual Report to Shareholders for a discussion of the dividend policies related to our common shares and our preferred shares, prior to redemption.

2 In February 2024, we redeemed all of our outstanding Serial Preferred Shares, Series B.

OTHER COMPREHENSIVE INCOME (LOSS)

8 unchanged sentences

comprehensive

income (loss) Total net unrealized gains (losses) on securities Net unrealized losses on forecasted transactions Foreign

Balance at June 30, 2024 $ ( 2,179.6 ) $ 463.8 $ ( 1,715.8 ) $ ( 1,700.9 ) $ ( 13.8 ) $ ( 1.1 )

Other comprehensive income (loss) before reclassifications:

Investment securities 2,012.9 ( 422.7 ) 1,590.2 1,590.2 0 0

Foreign currency translation adjustment 0.1 0 0.1 0 0 0.1

Total other comprehensive income (loss) before reclassifications 2,013.0 ( 422.7 ) 1,590.3 1,590.2 0 0.1

Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities 36.7 ( 7.7 ) 29.0 29.0 0 0

Interest expense ( 0.1 ) 0 ( 0.1 ) 0 ( 0.1 ) 0

Total reclassification adjustment for amounts realized in net income 36.6 ( 7.7 ) 28.9 29.0 ( 0.1 ) 0

Total other comprehensive income (loss) 1,976.4 ( 415.0 ) 1,561.4 1,561.2 0.1 0.1

Balance at September 30, 2024 $ ( 203.2 ) $ 48.8 $ ( 154.4 ) $ ( 139.7 ) $ ( 13.7 ) $ ( 1.0 )

Components of Changes in

Accumulated Other

Comprehensive Income (after tax)

(millions) Pretax total

comprehensive

income (loss) Total tax

benefit After tax total

comprehensive

income (loss) Total net unrealized gains (losses) on securities Net unrealized losses on forecasted transactions Foreign

Balance at June 30, 2023 $ ( 3,369.6 ) $ 715.6 $ ( 2,654.0 ) $ ( 2,638.7 ) $ ( 14.3 ) $ ( 1.0 )

Other comprehensive income (loss) before reclassifications:

Investment securities ( 547.4 ) 114.9 ( 432.5 ) ( 432.5 ) 0 0

Foreign currency translation adjustment 0 0 0 0 0 0

Total other comprehensive income (loss) before reclassifications ( 547.4 ) 114.9 ( 432.5 ) ( 432.5 ) 0 0

Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities ( 55.6 ) 11.7 ( 43.9 ) ( 43.9 ) 0 0

Interest expense ( 0.2 ) 0 ( 0.2 ) 0 ( 0.2 ) 0

Total reclassification adjustment for amounts realized in net income ( 55.8 ) 11.7 ( 44.1 ) ( 43.9 ) ( 0.2 ) 0

Total other comprehensive income (loss) ( 491.6 ) 103.2 ( 388.4 ) ( 388.6 ) 0.2 0

Balance at September 30, 2023 $ ( 3,861.2 ) $ 818.8 $ ( 3,042.4 ) $ ( 3,027.3 ) $ ( 14.1 ) $ ( 1.0 )

Components of Changes in

Accumulated Other

Comprehensive Income (after tax)

(millions) Pretax total

comprehensive

income (loss) Total tax

benefit After tax total

comprehensive

income (loss) Total net

3 unchanged sentences

Investment securities 1,108 ( 233 ) 875 875 0 0

Foreign currency translation adjustment ( 0.2 ) 0.1 ( 0.1 ) 0 0 ( 0.1 )

Total other comprehensive income (loss) before reclassifications 1,108 ( 233 ) 875 875 0 0

1 unchanged sentence

Net realized gains (losses) on securities ( 30 ) 6 ( 24 ) ( 24 ) 0 0

Interest expense ( 0.4 ) 0.1 ( 0.3 ) 0 ( 0.3 ) 0

Total reclassification adjustment for amounts realized in net income ( 30 ) 6 ( 24 ) ( 24 ) 0 0

Total other comprehensive income (loss) 1,138 ( 239 ) 899 899 0 0

Balance at September 30, 2024 $ ( 203.2 ) $ 48.8 $ ( 154.4 ) $ ( 139.7 ) $ ( 13.7 ) $ ( 1.0 )

Balance at March 31, 2025 $ ( 671 ) $ 147 $ ( 524 ) $ ( 509 ) $ ( 14 ) $ ( 1 )

Components of Changes in

10 unchanged sentences

Investment securities ( 414 ) 87 ( 327 ) ( 327 ) 0 0

Foreign currency translation adjustment 0.3 ( 0.1 ) 0.2 0 0 0.2

Total other comprehensive income (loss) before reclassifications ( 414 ) 87 ( 327 ) ( 327 ) 0 0

1 unchanged sentence

Net realized gains (losses) on securities ( 151 ) 32 ( 119 ) ( 119 ) 0 0

Interest expense ( 0.4 ) 0 ( 0.4 ) 0 ( 0.4 ) 0

Total reclassification adjustment for amounts realized in net income ( 151 ) 32 ( 119 ) ( 119 ) 0 0

Total other comprehensive income (loss) ( 263 ) 55 ( 208 ) ( 208 ) 0 0

Balance at September 30, 2023 $ ( 3,861.2 ) $ 818.8 $ ( 3,042.4 ) $ ( 3,027.3 ) $ ( 14.1 ) $ ( 1.0 )

Balance at March 31, 2024 $ ( 2,316 ) $ 492 $ ( 1,824 ) $ ( 1,809 ) $ ( 14 ) $ ( 1 )

In an effort to manage interest rate risk, we entered into forecasted transactions on certain of Progressive’s debt issuances.

We expect to reclassify $ 0.6 million (pretax) into interest expense during the next 12 months, related to net unrealized losses on these forecasted transactions (see Note 4 – Debt in our 2023 Annual Report to Shareholders for further discussion).

During the next 12 months, we expect to reclassify $ 1 million (pretax) into interest expense, related to net unrealized losses on forecasted transactions (see Note 4 – Debt in our 2024 Annual Report to Shareholders for further discussion).

The Progressive Corporation and/or its insurance subsidiaries are named as defendants in various lawsuits arising out of claims made under insurance policies written by our insurance subsidiaries in the ordinary course of business.

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The nature and volume of litigation pending against The Progressive Corporation and/or its insurance subsidiaries is similar to that which was disclosed in Note 12 – Litigation in our 2024 Annual Report to Shareholders.

As of September 30, 2024, lawsuits have been certified or conditionally certified as class/collective actions in cases alleging:

we improperly value total loss claims in Alabama, Colorado, Georgia, Indiana, New York, Ohio, Pennsylvania, and South Carolina;

As of March 31, 2025, lawsuits have been certified or conditionally certified as class/collective actions in cases alleging that:

we improperly value total loss claims by applying a negotiation adjustment in Alabama, Arkansas, Colorado, Georgia, Indiana, New York, Ohio, Pennsylvania, and South Carolina;

we improperly fail to pay fees and taxes associated with total losses in Michigan;

we improperly calculate basic economic loss as it relates to wage loss coverage in New York;

we improperly fail to timely process and pay personal injury protection claims in Texas;

we improperly reduce or deny first-party medical benefits in Arkansas;

we failed, based on a vendor data security incident, to properly secure and safeguard personally identifiable information;

and that certain of our compensation practices are improper.

we improperly reduce or deny personal injury protection benefits when medical expenses are paid initially by health insurance in Arkansas;

and we sell illusory underinsured motorist coverage in New Mexico.

Other insurance companies face many of these same issues.

We plan to contest the pending lawsuits vigorously, but may pursue settlement negotiations in some cases, as we deem appropriate.

Although outcomes of pending cases are uncertain until final disposition, we establish accruals for these lawsuits when it is probable that a loss has been or will be incurred and we can reasonably estimate potential loss exposure, which may include a range of loss.

As to lawsuits for which the loss is considered neither probable nor estimable, or is considered probable but not estimable, we do not establish an accrual.

Nevertheless, we continue to evaluate pending litigation to determine if any losses not deemed probable and estimable become so, at which point we would establish an accrual at either our best estimate of the loss or the lower end of the range of loss.

Lawsuits arising from insurance policies and operations, including but not limited to allegations involving claims adjustment and vehicle valuation, may be filed contemporaneously in multiple states.

As of September 30, 2024, we are named as defendants in class action lawsuits pending in multiple states alleging that we improperly value total loss vehicle physical damage claims through the application of a negotiation adjustment in calculating such valuations, which includes eight states in which classes have been certified, as noted above, and lawsuits styled as putative class actions pending in additional states.

Lawsuits arising from insurance policies and operations, including but not limited to allegations involving claims adjustment and vehicle valuation, may be filed

contemporaneously in multiple states.

As of March 31,

2025, we are named as defendants in class action lawsuits

pending in multiple states alleging that we improperly value total loss vehicle physical damage claims through the application of a negotiation adjustment in calculating such valuations, which includes nine states in which classes have been certified, as noted above, and lawsuits styled as putative class actions pending in additional states.

These lawsuits, which were filed at different times by different plaintiffs, feature certain similar claims and also include different allegations and are subject to various state laws.

While we believe we have meritorious defenses and we are vigorously contesting these lawsuits, an unfavorable result in, or a settlement of, a significant number of these lawsuits could, in aggregation, have a material adverse effect on our financial condition, cash flows, and/or results of operations.

Based on information known at September 30, 2024, and except as to any settlements and accruals as described below, we determined that losses from these lawsuits are reasonably possible but neither probable nor reasonably estimable.

With respect to our pending lawsuits that are not related to claims under insurance policies, the accruals that we have established were not material at September 30, 2024 and 2023, or December 31, 2023, and there were no material settlements during 2023 or the first nine months of 2024.

Based on information available to us, we determined that losses from these lawsuits are reasonably possible but neither probable nor reasonably estimable, other than for suits for which accruals have been established and are not material, as of March 31, 2025.

With respect to our pending lawsuits that are not related to claims under insurance policies, the accruals that we have established were not material at March 31, 2025 and 2024, or December 31, 2024, and there were no material settlements during 2024 or the first three months of 2025.

For most of these lawsuits, we do not consider any losses to be both probable and estimable, and we are unable to estimate a meaningful range of loss, if any, at this time, due to the factors discussed in Note 12 – Litigation in our 2024 Annual Report to Shareholders.

In the event that any one or more of these lawsuits results in a substantial judgment against us, or settlement by us, or if our accruals (if any) prove to be inadequate, the resulting liability could have a material adverse effect on our consolidated financial condition, cash flows, and/or results of operations.

For a further discussion on our pending litigation and related reserving policies, see Note 12 – Litigation in our 2023 Annual Report to Shareholders.

For a further discussion on our pending litigation and related reserving policies, see Note 1 – Reporting and Accounting Policies and Note 12 – Litigation in our 2024 Annual Report to Shareholders.

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What changed 10-Q

Item 1. Financial Statements