MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
−Removed: During the third quarter 2024, The Progressive Corporation’s insurance subsidiaries recognized strong growth in both premiums and policies in force, compared to the same period last year, and generated an underwriting profit of 11.0 points, which was 3.4 points better than the third quarter last year and better than our 4% companywide calendar-year underwriting profit target.
−Removed: Net premiums written and earned increased 25% and 23%, respectively, during the third quarter 2024, compared to the same period last year, on a companywide basis.
−Removed: For the quarter, we generated $19.5 billion of net premiums written, which was an increase of $3.9 billion, compared to the third quarter 2023.
−Removed: All operating segments grew on a quarter-over-prior-year quarter basis.
−Removed: The significant net premiums written growth of 29% in our Personal Lines business reflects new application growth generated from increased advertising spend and lifting the non-rate actions we put in place last year to slow growth to manage underwriting profitability, as discussed below, as well as rate increases taken during 2023.
−Removed: On a companywide basis, we ended the third quarter 2024 with 33.9 million policies in force, which was 14% greater than the same period last year.
−Removed: Policies in force grew by 1.6 million during the third quarter 2024 and by nearly 4.2 million since year end 2023, with our personal auto products contributing about 80% of the increase for both periods.
−Removed: The policies in force growth reflected significant personal auto new business application growth, compared to the third quarter last year.
−Removed: During the third quarter 2024, we continued to increase our advertising spend, unwind non-rate restrictions, and work closely with our independent agents to leverage our agent compensation program to reward writing profitable business as we remained focused on driving growth.
−Removed: We also continued to focus on delivering competitive rates to consumers.
−Removed: During the third quarter 2024, we increased personal auto rates less than 1% in the aggregate and had nine personal auto states with small rate decreases during the third quarter.
−Removed: We reported a companywide combined ratio of 89.0, which was 3.4 points better than the third quarter last year.
−Removed: All of our operating segments were profitable during the third quarter, with each reporting underwriting profitability of greater than 10%.
−Removed: Several factors contributed to the significant year-over-year improvement in our underwriting profit.
−Removed: First, the average earned premium per policy was higher in our vehicle businesses than the prior year third quarter, primarily due to the rate increases we took during 2023 to meet our companywide profitability target.
−Removed: In addition to rate increases, on a year-over-year basis for the third quarter, our incurred personal auto accident frequency decreased 5% and severity trends remained relatively stable, with a 1% increase over the prior year.
−Removed: Also contributing to the profitability improvement was favorable prior accident years reserve development of 0.7 points in the third quarter 2024, compared to unfavorable development in the third quarter last year of 0.2 points.
−Removed: Our companywide catastrophe losses were 4.0 points, compared to 3.2 points for the third quarter last year.
−Removed: Hurricane Helene, which made landfall as a category 4 storm late in the third quarter 2024, accounted for 3.1 loss ratio points on a companywide basis.
−Removed: During the third quarter 2024, companywide profitability benefited from favorable development of 1.2 points on current year storms that occurred during the first half of 2024.
−Removed: Subsequent to the end of the third quarter, on October 9, 2024, Hurricane Milton made landfall, as a category 3 hurricane, in Southwest Florida and continued its path through Central Florida, before exiting the state as a category 1 storm.
−Removed: As of October 31, 2024, we estimated that our Property business will incur losses and allocated loss adjustment expenses (ALAE), net of reinsurance, of about $140 million.
−Removed: For our vehicle business (including special lines), we estimate combined losses of about $600 million for Hurricanes Helene and Milton.
−Removed: We based these estimates on very early claims reporting information, our experience with severity and reporting patterns from many past storms, third-party models, and several assumptions, including mix of claims.
−Removed: Reporting patterns, mix, and other assumptions (including those related to salvage) will likely differ from our expectations.
−Removed: To assist our customers impacted by Hurricanes Helene and Milton, we deployed over 2,300 claim representatives and independent adjusters.
−Removed: We have responded, and plan to continue to respond, promptly to catastrophic events when they occur in order to provide high-quality claims service to our customers.
−Removed: Partially offsetting the impact the improved loss ratio had on profitability, was a 4.8 point increase in our expense ratio over the third quarter 2023, primarily driven by increased advertising expense.
−Removed: During the third quarter 2024, on a quarter-over-prior-year quarter basis, our advertising spend increased nearly 400%, bringing our year-to-date advertising costs to $2.8 billion.
−Removed: We will continue to advertise to maximize growth as long as the advertising spend is efficient and we remain on track to achieve our target profitability.
−Removed: For the third quarter 2024, the year-over-year increase in underwriting profitability was the primary contributor to the $1.2 billion increase in net income.
−Removed: The remainder of the increase reflected an increase in recurring investment income and net realized gains during the third quarter 2024, compared to net realized losses in the same period last year.
−Removed: During the third quarter 2024, pretax recurring investment income increased 45%, primarily due to investing new cash from operations and proceeds from maturing bonds in higher coupon rate securities.
−Removed: Comprehensive income increased $3.2 billion over the third quarter last year.
−Removed: In addition to the increase in net income, during the third quarter 2024, the net unrealized losses on our fixed-maturity securities decreased $1.6 billion, compared to an increase in net unrealized losses of $0.4 billion for the same period last year.
+Added: The Progressive Corporation’s insurance subsidiaries recognized substantial year-over-year growth in both premiums and policies in force during the first quarter 2025, compared to the same period last year, while maintaining an underwriting profit better than our 4% companywide calendar-year underwriting profit goal.
+Added: We wrote $22.2 billion of net premiums written during the first quarter 2025, which was $3.2 billion more than we generated during the same period last year, and reported an underwriting profit margin of 14.0%.
+Added: During the first three months of 2025, companywide net premiums written and earned increased 17% and 20%, respectively, compared to the same period last year, and policies in force increased 18%.
+Added: Companywide policies in force grew by 1.3 million policies since December 31, 2024, and by 5.5 million since March 31, 2024, to end the first quarter 2025 with 36.3 million policies in force.
+Added: Our Personal Lines segment experienced strong year-over-year growth for the first quarter 2025, with net premiums written increasing 20% and policies in force up 18%, compared to the same period in the prior year.
+Added: This growth was primarily in our personal auto products and reflects new application growth mainly attributable to increased advertising spend and our continued efforts to work closely with our independent agents and to leverage our agent compensation program to reward writing profitable business.
+Added: In Commercial Lines, we experienced solid growth with net premiums written up 5% and policies in force up 6%, during the first quarter 2025, compared to the same period last year.
+Added: The growth in Commercial Lines premiums written primarily reflected the renewal of certain transportation network company (TNC) business policies that have higher rates and projected mileage, which is the basis for computing premiums, than the policies that renewed in the first quarter 2024.
+Added: During the first quarter 2025, on a countrywide basis, we increased personal auto rates less than 1% and increased our personal property rates about 2%, in the aggregate.
+Added: In our core commercial auto businesses (which excludes our TNC business, our Progressive Fleet & Specialty Programs (Fleet & Specialty) products, and our business owners’ policy (BOP) product), we increased rates in the aggregate about 1% during the first quarter 2025.
+Added: We currently believe we are adequately priced in our personal auto products in most states and will continue to monitor the impact from tariffs and potential changes in the regulatory environment.
+Added: We expect both the personal property and core commercial auto products to have near double-digit rate increases through the remainder of 2025.
+Added: Starting in the first quarter 2025, the U.S.
+Added: government announced additional tariffs on goods imported into the U.S.
+Added: from numerous countries, which have, in response, resulted in additional tariffs against the U.S.
+Added: We regularly model the potential impact tariffs could have on vehicle loss costs, the supply chain, the availability of parts, and general inflation, among other factors, although the dynamic international trade environment currently prevents us from accurately predicting how tariffs will ultimately impact our business.
+Added: While our focus has been on trying to maintain stable rates for customers, tariffs and other retaliatory actions will likely result in higher loss costs, which could result in a reduction in profitability and higher than currently anticipated rate increases throughout 2025 and 2026.
+Added: For the first quarter 2025, the year-over-year increase in net income primarily reflected an increase in underwriting income.
+Added: The increase in recurring investment income, was offset by net realized losses during the first quarter 2025, compared to net realized gains in the same period last year.
+Added: Comprehensive income increased $1.3 billion over the first quarter last year, which was primarily driven by a $0.9 billion decrease in net unrealized losses on our fixed-maturity securities, compared to a $0.2 billion net unrealized loss increase in the same period last year.
The change in the unrealized losses we recognized during both periods were primarily driven by the then-current economic environment.
−Removed: At September 30, 2024, total capital (debt plus shareholders’ equity) was $34.1 billion, which was an increase of $6.9 billion from year-end 2023.
−Removed: During the first nine months of 2024, we earned $7.6 billion of comprehensive income, which was in part offset by the $0.5 billion redemption of all of our outstanding Serial Preferred Shares, Series B, during the first quarter, as discussed in further detail in Financial Condition below.
+Added: At March 31, 2025, total capital (debt plus shareholders’ equity) was $35.8 billion, which was an increase of $3.4 billion from year-end 2024, primarily due to the $3.5 billion of comprehensive income earned in the first quarter 2025.
Insurance Operations
−Removed: During the third quarter 2024, our Personal Lines, Commercial Lines, and Property businesses generated an underwriting profit margin of 10.4%, 11.3%, and 21.5%, respectively.
−Removed: During the third quarter 2024, we recognized 4.0 points of catastrophe losses on a companywide basis, with 3.1 points due to losses from Hurricane Helene.
−Removed: Our Property business incurred 21.2 points of catastrophe losses due to Helene.
−Removed: However, during the third quarter, we recognized 29.7 points of favorable development on current-year storms that occurred prior to the third quarter 2024, which substantially offset the catastrophe losses in our Property business during the quarter.
−Removed: Just over 75% of this favorable development related to May 2024 storms.
−Removed: Personal Lines is comprised of both our personal auto and special lines products, with the latter typically having higher losses during the warmer weather months, due to the seasonal nature of these products (e.g., motorcycles, boats, and RVs).
−Removed: Our special lines products experienced an underwriting loss during the third quarter 2024, primarily due to catastrophe losses impacting these products along with standard seasonality.
−Removed: In total, the special lines products contributed nearly 2 points of an unfavorable impact to our total Personal Lines combined ratio during the third quarter 2024.
−Removed: During the quarter, our vehicle businesses’ profitability benefited from higher average earned premium per policy, lower incurred loss frequency trends, and favorable prior
−Removed: accident years reserve development.
−Removed: As a result of the rate actions we took during 2023 to help achieve our target profit margin, we currently believe that, in most states, we are adequately priced in our personal auto and core commercial auto (which exclude our transportation network company (TNC) business, business owners’ policy (BOP), and Progressive Fleet & Specialty (previously referred to as Protective Insurance)) products.
−Removed: As a result of the rate increases previously taken, during the third quarter 2024, we continued to experience underwriting profitability in our TNC business.
−Removed: In our Property business, during the third quarter 2024, we increased rates about 6% countrywide, in the aggregate, which brings our year-to-date rate increases to about 16% and an aggregate increase of about 20% on a trailing 12-month basis.
−Removed: We will continue to monitor the factors that could impact our loss costs for both our vehicle and Property businesses, which may include new and used car prices, miles driven, driving patterns, loss severity, weather events, building materials, construction costs, inflation, and other components, on a state-by-state basis.
−Removed: Aggregate vehicle rate changes year to date have been modest, relative to the prior two years, and we expect rates to stay stable in the fourth quarter 2024.
−Removed: Throughout the third quarter 2024, we continued to lift the temporary non-rate actions implemented last year in our vehicle businesses, as our focus shifted from achieving our target profit margin to driving growth, delivering competitive rates to consumers, and providing an exceptional customer experience to our policyholders.
−Removed: For the third quarter 2024, all segments generated strong net premiums written growth.
−Removed: Personal Lines premiums written grew 29%, with the Agency and Direct distribution channels growing 26% and 31%, respectively.
+Added: Our underwriting profit margin was 14.0% during the first quarter 2025, compared to 13.9% during the first quarter 2024.
+Added: Our Personal Lines and Commercial Lines operating segments both generated strong profitability for the first three months of 2025.
+Added: While underwriting profitability was relatively flat on a year-over-year basis, for the first quarter 2025, our companywide loss and loss adjustment expense (LAE) ratio decreased 2.0 points, which was mostly offset by a 1.9 point increase in the expense ratio.
+Added: The decrease in the loss and LAE ratio was primarily driven by favorable prior accident years reserve development and decreased incurred personal and commercial auto accident frequency.
+Added: The increase in our companywide expense ratio during the first quarter 2025 primarily reflected increased advertising expense.
+Added: During the first quarter 2025, our advertising spend was $1.3 billion, which was 86%, or 2.3 points, greater than the first quarter last year.
+Added: We closely manage our expenses, monitoring both acquisition expenses and non-acquisition expenses, which we view as an important measure of operational efficiency as we seek to deliver our most competitive rates to consumers.
+Added: We will continue to advertise to maximize growth as long as the advertising spend is efficient and we remain on track to achieve our calendar-year profitability goal.
+Added: Our Personal Lines segment is comprised of our personal vehicle and property products.
+Added: Personal Lines vehicles include both personal auto and special lines products.
+Added: Our Personal Lines profitability for the first quarter 2025 was 14.3%, with personal vehicle and property products reporting 14.3% and 12.8%, respectively.
+Added: In total, our special lines products, which are generally used less in cold weather months, had about a 1 point favorable impact on our total personal vehicle combined ratio for the first quarter 2025.
+Added: Our Commercial Lines segment includes our core commercial auto products, TNC business, Fleet & Specialty products, and BOP product.
+Added: Our total Commercial Lines underwriting profitability for the first quarter 2025 was 12.5%.
+Added: During the first quarter 2025, our personal auto and core commercial auto businesses’ profitability benefited from higher average earned premium per policy, lower incurred loss frequency trends, and, in personal auto, favorable prior accident years reserve development.
+Added: For the first quarter 2025, both segments generated strong net premiums written growth.
+Added: Personal Lines net premiums written grew 20%, with the agency and direct personal vehicle businesses growing 17% and 25%, respectively, while personal property premium growth was flat.
Commercial Lines net premiums written grew 5%.
−Removed: In our Property business, net premiums written grew 9%.
Changes in net premiums written are a function of new business applications (i.e., policies sold), business mix, premium per policy, and retention.
−Removed: In the third quarter 2024, we experienced a significant increase in Personal Lines new business applications, primarily reflecting increased advertising spend, the reversal of the non-rate restrictions, and our efforts to get back into the independent agents’ quote flows.
−Removed: New personal auto applications increased 110% for the third quarter 2024, compared to a decrease of 20% in the third quarter last year.
−Removed: New applications in our core commercial auto business increased 11% during the third quarter 2024, compared to the same period last year, primarily due to an increase in quote volume in our business auto and contractor business market targets (BMT) and improved conversion in all of our BMTs, other than for-hire transportation, as discussed below.
−Removed: Excluding the impact of the for-hire transportation BMT, which had a year-over-year decrease in new
−Removed: applications, our core commercial auto new application growth would have been 17% during the third quarter 2024.
−Removed: The for-hire transportation BMT continues to be adversely impacted by challenging freight market conditions that have caused a decline in the active number of motor carriers in this BMT.
−Removed: New applications in the Property business were up 42% over the third quarter last year, driven by significant growth in our renters policies.
−Removed: In addition, we continued to focus on growing new business in less volatile weather states, home and auto bundles, and lower-risk properties, such as new construction or homes with newer roofs, in regions where our appetite to write new business is limited.
−Removed: Compared to the end of the third quarter last year, policies in force grew about 19% in the less volatile weather states and decreased about 9% in the coastal and hail-prone states.
−Removed: During the third quarter 2024, on a year-over-year basis, average written premium per policy grew 5% in personal auto and 2% in core commercial auto, and was down 9% in Property.
−Removed: The growth in personal auto and commercial auto primarily reflected rate increases taken throughout 2023.
−Removed: The rate increases taken in commercial auto were, in part, offset by a shift in the mix of business, primarily driven by decreased demand in our for-hire transportation BMT.
−Removed: The decrease in Property average written premium per policy reflected a shift in the mix of business as we continued to focus on growing in less volatile weather states.
−Removed: We are also seeing a mix shift towards more renters policies, which have lower average written premiums.
−Removed: These mix shifts in our Property business were partially offset by rate increases taken over the last 12 months and higher premium coverages reflecting increased property values.
−Removed: Given that our commercial auto and Property policies are predominately written for 12-month terms, rate actions take longer to earn in for these products.
−Removed: We believe a key element in improving the accuracy of our rating is Snapshot ® , our usage-based insurance offering for our personal auto product.
−Removed: During the third quarter 2024, compared to the same period last year, the adoption rates for consumers enrolling in the program increased slightly in Agency auto, following significant decreases in the first and second quarters of 2024, and increased 10% in Direct auto.
−Removed: The increase in the Agency auto adoption rate reflected a shift in the mix of agencies through which we wrote new business, as we continued to relax restrictions on new business and get back into the independent agents’ quote flows.
−Removed: The increase in the Direct auto adoption rate primarily reflected enhancements in the Direct quoting process, in addition to the continued rollout of our newest Snapshot model.
−Removed: Snapshot is available in all states, other than California, and our latest segmentation model was available in states that represented about 70% of our countrywide personal auto premium at September 30, 2024.
−Removed: We continue to invest in our mobile application, with
−Removed: mobile devices being chosen for Snapshot monitoring for the majority of new enrollments.
+Added: During the first quarter 2025, we experienced a significant increase in total Personal Lines new business applications, primarily driven by increases in our personal vehicle products, due to increased advertising spend, our efforts to get back into the independent agents’ quote flows, and our competitiveness in the marketplace.
+Added: New personal auto applications increased 32% during the first quarter 2025, compared to the same period in the prior year.
+Added: In our personal property business, significant growth in new applications in our renters policies was offset by declines in our homeowners, condo, and dwelling products.
+Added: The new application growth in our homeowners/condo products was down just over 55% on a year-over-year basis for the first quarter 2025, with decreases in both less volatile weather-related states and in the more volatile
+Added: weather-related markets (e.g., coastal and hail-prone states).
+Added: During the first quarter 2025, in our personal property business, we continued to focus on improving profitability and reducing exposure in more volatile weather-related markets, and, where permitted, on slowing growth and non-renewing policies.
+Added: We prioritized insuring lower-risk properties (e.g., new construction, existing homes with newer roofs), accepting new business for homeowners/condo products only when bundled with a Progressive personal auto policy, where permitted, and continued to exit the non-owner-occupied home market.
+Added: In addition, we expanded our cost sharing through mandatory wind and hail deductibles and roof depreciation schedules in markets where permitted.
+Added: We plan to continue these actions during the remainder of 2025 in the more volatile weather-related markets and will continue to assess rate adequacy, at the state level, to determine readiness for new business growth.
+Added: Total Commercial Lines net premiums written growth primarily reflected the renewal of certain of our TNC policies, due to rate increases and higher projected mileage for 2025, compared to 2024, which is the basis for computing premiums.
+Added: Net premiums written growth for our core commercial auto products, which excludes the impact of the TNC renewal, was flat on a year-over-year basis.
+Added: New applications in our core commercial auto business increased 8% during the first quarter 2025, compared to the same period last year, primarily due to an increase in quote volume and improved conversion in all of our business market targets (BMT), other than for-hire transportation and for-hire specialty, as discussed below.
+Added: Excluding the impact of the for-hire transportation and specialty BMTs, which had a year-over-year decrease in new applications, our core commercial auto new application growth would have been 15% during the first quarter 2025.
+Added: The for-hire transportation BMT continued to be adversely impacted by challenging freight market conditions that have caused a decline in the active number of motor carriers in this BMT.
+Added: During the first quarter 2025, on a year-over-year basis, average written premium per policy was flat in personal auto and decreased 10% and 6% in our personal property and core commercial auto products, respectively.
+Added: In aggregate, we took minimal personal auto rate increases during the first quarter 2025 on a companywide basis.
+Added: The decrease in personal property average written premium per policy was due to a shift in the mix of business to more renters policies, which have lower average written premiums, and our continued focus on slowing growth in more volatile weather-related markets, which generally have higher risk and, therefore, higher average premiums per policy.
+Added: These mix shifts in our personal property business were partially offset by aggregate rate increases of 15% taken over the last 12 months and higher premium coverages reflecting increased property values.
+Added: The decrease in average written premium per policy in our core commercial auto products was due to a shift in the mix of business, primarily driven by decreased demand in our for-hire transportation BMT and, to a lesser extent, the for-hire specialty BMT, partially offset by rate increases of about 6%, in the aggregate, over the trailing 12 months.
+Added: Given that our personal property and commercial auto policies are predominately written for 12-month terms, rate actions take longer to earn into premium for these products.
+Added: We will continue to monitor the factors that could impact our loss costs for both segments, which may include tariffs, as discussed above, new and used car prices, miles driven, driving patterns, loss severity, weather events, building materials, construction costs, inflation, and other factors, on a state-by-state basis.
+Added: We believe a key element in improving the accuracy of our personal auto rating is Snapshot ® , our usage-based insurance offering.
+Added: During the first quarter 2025, the personal auto adoption rates for consumers enrolling in the program decreased 1% in agency and increased 9% in direct, compared to the same period last year.
+Added: The increase in the direct adoption rate primarily reflected enhancements in the direct quoting process, in addition to the continued rollout of our newest Snapshot model.
+Added: Snapshot is available in all states, other than California, and our latest segmentation model was available in states that represented 78% of our countrywide personal auto net premiums written (excluding California) on a trailing 12-month basis at quarter end.
+Added: We continue to invest in our mobile application, with the majority of new enrollments choosing mobile devices for Snapshot monitoring.
We realize that to grow policies in force, it is critical that we retain our customers for longer periods.
Consequently, increasing retention continues to be one of our most important priorities.
−Removed: Our efforts to increase our share of Progressive auto and home bundled households (i.e., Robinsons) remains a key initiative and we plan to continue to make investments to improve the customer experience in order to support that goal.
−Removed: Policy life expectancy, which is our actuarial estimate of the average length of time that a policy will remain in force before cancellation or lapse in coverage, is our primary measure of customer retention in our Personal Lines, Commercial Lines, and Property businesses.
−Removed: We evaluate total personal auto retention using a trailing 12-month and a trailing 3-month policy life expectancy.
−Removed: Although the latter can reflect more volatility and is more sensitive to seasonality, this measure is more responsive to current experience and may be an indicator for the future trend of our 12-month measure.
−Removed: As of the end of the third quarter 2024, our trailing 12-month total personal auto policy life expectancy was flat, compared to last year.
−Removed: The Agency channel trailing 12-month measure was up 8%, while the Direct channel was down 6%.
−Removed: Our total personal auto trailing 3-month policy life expectancy was down 6% at the end of the third quarter 2024, due to rate and non-rate actions put in place throughout 2023, compared to the 35% increase experienced in the same period last year, which we believe reflected competitor rate increases in the prior year.
−Removed: At the end of the third quarter 2024, our trailing 12-month policy life expectancy increased 1% in special lines and decreased 20% in Commercial Lines and 6% in Property, compared to the same period last year.
−Removed: The decrease in Commercial Lines policy life expectancy was in all BMTs, and reflected rate and non-rate actions taken in 2023 to achieve our target profitability, as well as the continued decrease in demand in the for-hire transportation BMT.
−Removed: The fair value of our investment portfolio was $79.4 billion at September 30, 2024, compared to $66.0 billion at December 31, 2023.
−Removed: The increase from year-end 2023 primarily reflected cash flows from insurance operations and positive investment returns, partially offset by the redemption of all of our outstanding Serial Preferred Shares, Series B, and the payment of our annual variable common share dividend.
+Added: Our efforts to increase our share of Progressive auto and personal property bundled households (i.e., Robinsons) remains a key initiative, and we plan to continue to make investments to improve the customer experience in order to support that goal.
+Added: Policy life expectancy, which is our actuarial estimate of the average length of time that a policy will remain in force before cancellation or lapse in coverage, is our primary measure of customer retention in our Personal Lines and Commercial Lines businesses.
+Added: In personal auto, we evaluate personal auto retention using a trailing 12-month and a trailing 3-month policy life expectancy.
+Added: Although the latter can reflect more volatility and is more sensitive to seasonality, we believe this measure is more responsive to current experience and may be an indicator for the future trend of our 12-month measure.
+Added: Our trailing 12-month total personal auto policy life expectancy was down 5% year over year for the first quarter 2025.
+Added: On a trailing 3-month basis, our personal auto policy life expectancy was down 6% for the first
+Added: quarter 2025, compared to the same period last year, which we believe is due to increased shopping and the competitiveness in the marketplace.
+Added: Our trailing 12-month policy life expectancy was down 17% for our personal property products.
+Added: Our personal property retention decreased primarily as a result of a mix shift to more renters policies, which generally have a lower policy life expectancy, our actions to non-renew certain policies, and rate increases.
+Added: For our core commercial auto products, our trailing 12-month policy life expectancy decreased 6%, compared to the prior year.
+Added: While still below the prior year, the policy life expectancy has experienced sequential month-over-month improvement since the end of the third quarter 2024, which we believe is due to the moderation of our rate increases, compared to competitor rate increases, improving our competitiveness in the marketplace.
+Added: The decrease in the core commercial auto policy life expectancy was across all BMTs, except tow, which reflected rate actions taken in 2023 and 2024, as well as the continued decrease in demand in the for-hire transportation BMT.
+Added: The fair value of our investment portfolio was $83.7 billion at March 31, 2025, compared to $80.3 billion at December 31, 2024.
+Added: The increase from year-end 2024 reflected positive cash flows from insurance operations and investment returns, partially offset by the payment of our annual variable common share dividend.
Our asset allocation strategy is to maintain 0%-25% of our portfolio in Group I securities, with the balance (75%-100%) of our portfolio in Group II securities (the securities allocated to Group I and II are defined below under Results of Operations – Investments ).
−Removed: At September 30, 2024 and December 31, 2023, 6% and 7%,
−Removed: respectively, of our portfolio was allocated to Group I securities with the remainder to Group II securities.
−Removed: Our recurring investment income generated a pretax book yield of 4.0% for the third quarter 2024, compared to 3.3% for the same period in 2023.
−Removed: The increase from prior year primarily reflected investing new cash from operations, and proceeds from maturing bonds, in higher coupon rate securities.
−Removed: Our investment portfolio produced a fully taxable equivalent (FTE) total return of 4.0% and (0.2)% for the third quarter 2024 and 2023, respectively.
−Removed: Our fixed-income and common stock portfolios had FTE total returns of 3.9% and 5.8%, respectively, for the third quarter 2024, compared to (0.1)% and (3.1)%, respectively, last year.
−Removed: The increase in the fixed-income portfolio FTE total return, compared to last year, primarily reflected movements in Treasury yields year-over-year.
−Removed: The increase in the common stock portfolio total return reflected general market conditions in the respective periods.
−Removed: At September 30, 2024 and 2023, and December 31, 2023, the fixed-income portfolio had a weighted average credit quality of AA-.
−Removed: At September 30, 2024, the fixed-income portfolio duration was 3.3 years, compared to 2.9 years at September 30, 2023, and 3.0 years at December 31, 2023.
−Removed: During 2024, our duration was increased to take advantage of higher yields in the market.
−Removed: At September 30, 2024, we continued to maintain a relatively conservative investment portfolio with a greater allocation to cash and treasuries.
−Removed: We believe that this portfolio allocation, coupled with a lack of maturities of our outstanding debt until 2027, positions us well to benefit from the current interest rate environment.
−Removed: We also believe that we are in a very strong position to face the current dynamic investment marketplace as we move into the fourth quarter of 2024.
+Added: At March 31, 2025 and December 31, 2024, 5% and 6%, respectively, of our portfolio was allocated to Group I securities with the remainder to Group II securities.
+Added: Our recurring investment income generated a pretax book yield of 4.1% for the first quarter 2025, compared to 3.7% for the same period in 2024.
+Added: The increase from prior year primarily reflected investing new cash from insurance operations, and proceeds from maturing bonds, in higher coupon rate securities.
+Added: Our investment portfolio produced a fully taxable equivalent (FTE) total return of 2.2% and 0.8% for the first quarter 2025 and 2024, respectively.
+Added: Our fixed-income and common stock portfolios had FTE total returns of 2.5% and (5.0)%, respectively, for the first quarter 2025, compared to 0.3% and 9.9%, respectively, last year.
+Added: The increase in the fixed-income portfolio FTE total return primarily reflected movements in Treasury yields year-over-year.
+Added: The decrease in the common stock portfolio FTE total return reflected general market conditions.
+Added: At March 31, 2025 and 2024, and December 31, 2024, the fixed-income portfolio had a weighted average credit quality of AA-.
+Added: At March 31, 2025, the fixed-income portfolio duration was 3.4 years, compared to 3.2 years at March 31, 2024, and 3.3 years at December 31, 2024.
+Added: During 2025, we increased our duration to take advantage of higher yields in the market.
+Added: At March 31, 2025, we continued to maintain a relatively conservative investment portfolio with a greater allocation to cash and treasuries.
+Added: We believe that this portfolio allocation positions us well to benefit from the continuing dynamic market environment.
+Added: We believe that we are in a very strong position as we move into the second quarter of 2025.
FINANCIAL CONDITION
Liquidity and Capital Resources
−Removed: Progressive’s insurance operations create liquidity by collecting and investing premiums from new and renewal business in advance of paying claims.
+Added: Progressive’s insurance operations create liquidity by collecting and investing premiums from new and renewal business in advance of paying claims, as well as our insurance subsidiaries producing aggregate calendar-year underwriting profits and positive cash flows.
As primarily an auto insurer, our claims liabilities generally have a short-term duration.
−Removed: Operations generated positive cash flows of $12.1 billion and $8.2 billion for the nine months ended September 30, 2024 and 2023, respectively.
−Removed: The increase in operating cash flow for the first nine months of 2024, compared to 2023, was primarily driven by the growth in profit from our underwriting operations.
−Removed: We believe cash flows will remain positive in the reasonably foreseeable future and do not expect we will need to raise capital to support our operations in that timeframe, although changes in market or regulatory conditions affecting the insurance industry, or other unforeseen events, may necessitate otherwise.
−Removed: As of September 30, 2024, we held $45.2 billion in short-term investments and U.S.
−Removed: Treasury securities, which represented nearly 60% of our total portfolio.
−Removed: Based on our portfolio allocation and investment strategies, we believe that we have sufficient readily available marketable securities to cover our claims payments and short-term obligations in the event our cash flows from operations were to be negative.
+Added: Operations generated positive cash flows of $5.1 billion and $4.2 billion for the three months ended March 31, 2025 and 2024, respectively.
+Added: The increase in operating cash flow for the first three months of 2025, compared to the same period last year, was in part driven by the growth in profit from our underwriting operations.
+Added: We believe cash flows will remain positive in the foreseeable future and do not expect we will need to raise capital to support our operations in that timeframe, although changes in market or regulatory conditions affecting the insurance industry, or other unforeseen events, may necessitate otherwise.
+Added: As of March 31, 2025, we held $46.9 billion in short-term investments and U.S.
+Added: Treasury securities, which represented 56% of our total portfolio at quarter end.
+Added: Based on our portfolio allocation and investment strategies, we believe that we have sufficient readily available marketable securities to cover our claim payments and short-term obligations in the event our cash flows from operations were to be negative.
+Added: Treasury securities are viewed as having lower risk than many other investment opportunities, the U.S.
+Added: Treasury announced it had reached its authorized borrowing limit and defaults under government obligations, including payments related to U.S.
+Added: Treasury securities, could occur as soon as this summer.
+Added: Although not likely probable, it is possible that the federal government could fail to raise the federal debt ceiling to avoid default.
+Added: Any such default would likely have a material adverse impact on our cash flows and the value of our portfolio and our capital position.
See Item 1A, Risk Factors in our Form 10-K filed with the U.S.
Securities and Exchange Commission for the year ended December 31, 2024, for a discussion of certain matters that may affect our portfolio and capital position.
−Removed: Our total capital (debt plus shareholders’ equity) was $34.1 billion, based on book value, at September 30, 2024, compared to $24.3 billion at September 30, 2023, and $27.2 billion at December 31, 2023.
−Removed: The increase from year end 2023, primarily reflected the comprehensive income recognized during the first nine months of 2024,
−Removed: partially offset by the redemption of all of the outstanding Serial Preferred Shares, Series B.
−Removed: 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 to, but excluding, February 22, 2024, which was the redemption date.
−Removed: Our debt-to-total capital ratio was 20.2% at September 30, 2024, 28.4% at September 30, 2023, and 25.4% at December 31, 2023.
−Removed: Our financial policies include a goal of maintaining debt below 30% of total capital at book value.
−Removed: While we are well below that target at September 30, 2024, we recognize that various factors, including rising interest rates, widening credit spreads, declines in the equity markets, or erosion in operating results, may result in that ratio exceeding 30% at times.
−Removed: In such a situation, we may choose to remain above 30% for some time, dependent upon market conditions and the capital needs of our operating businesses.
−Removed: We will continue to monitor this ratio, market conditions, and our capital needs going forward.
−Removed: None of the covenants on our outstanding debt securities include rating or credit triggers that would require an adjustment of interest rates or an acceleration of principal payments in the event that our debt securities are downgraded by a rating agency.
−Removed: During the second quarter 2024, we renewed the unsecured discretionary line of credit (the Line of Credit) with PNC Bank, National Association, in the maximum principal amount of $300 million.
−Removed: We did not engage in short-term borrowings, including any borrowings under our Line of Credit, to fund our operations or for liquidity purposes during the reported periods.
−Removed: During the first nine months of 2024, we returned capital to shareholders primarily through common share dividends and common share repurchases.
−Removed: Our Board of Directors declared a $0.10 per common share dividend in each of the first three quarters of 2024.
−Removed: These dividends, which were each $58.6 million in the aggregate, were paid in April 2024, July 2024, and October 2024.
−Removed: In January 2024, we also paid a common share dividend declared in the fourth quarter 2023, in the aggregate amount of $497.9 million, or $0.85 per share (see Note 9 – Dividends for further discussion).
−Removed: Consistent with our financial policies, we repurchase common shares to neutralize dilution from equity-based compensation granted during the year and opportunistically when we believe our shares are trading below our determination of long-term fair value.
−Removed: During the first nine months of 2024, we repurchased 0.7 million common shares, at a total cost of $133.8 million, including 0.4 million shares in the third quarter 2024, both in the open market and to satisfy tax withholding obligations in connection with the vesting of equity awards under our equity compensation plans.
−Removed: We will continue to make decisions on returning capital to shareholders based on the strength of our overall capital position, the capital strength of our subsidiaries, and potential capital needs of our business.
−Removed: At September 30, 2024, we had $4.1 billion in a consolidated, non-insurance subsidiary of the holding company that can be used to fund corporate obligations and provide additional capital to the insurance subsidiaries to fund potential future growth and other opportunities.
−Removed: As of September 30, 2024, our estimated consolidated statutory surplus was $27.2 billion.
−Removed: During the first nine months of 2024, our contractual obligations and critical accounting policies have not changed materially from those discussed in our 2023 Annual Report to Shareholders.
−Removed: During the second quarter
−Removed: 2024, we increased our noncancellable purchase obligation commitments for reinsurance, primarily related to the renewal of our catastrophe excess of loss per occurrence reinsurance program.
−Removed: At September 30, 2024, our total commitments related to reinsurance contracts were $203.8 million, which is net of payments made during the third quarter.
−Removed: There have not been any other material changes in off-balance-sheet leverage, which includes purchase obligations, from those discussed in our 2023 Annual Report to Shareholders.
+Added: Our total capital (debt plus shareholders’ equity) was $35.8 billion, based on book value, at March 31, 2025, compared to $28.7 billion at March 31, 2024, and $32.5 billion at
+Added: December 31, 2024.
+Added: The increase from year-end 2024, primarily reflected the comprehensive income recognized during the first three months of 2025.
+Added: Our debt-to-total capital ratio was 19.2% at March 31, 2025, 24.0% at March 31, 2024, and 21.2% at December 31, 2024.
+Added: Our debt-to-total capital ratios were consistent with our financial policy of maintaining a ratio of less than 30%.
+Added: None of the covenants on our existing debt securities include rating or credit triggers that would require an adjustment of interest rate or an acceleration of principal payments in the event that our debt securities are downgraded by a rating agency.
+Added: In April 2025, we renewed the unsecured discretionary line of credit with PNC Bank, National Association, in the maximum principal amount of $300 million.
+Added: We did not engage in short-term borrowings, including any borrowings under the line of credit, to fund our operations or for liquidity purposes during the reported periods.
We seek to deploy capital in a prudent manner and use multiple data sources and modeling tools to estimate the frequency, severity, and correlation of identified exposures, including, but not limited to, catastrophic and other insured losses, natural disasters, and other significant business interruptions, to estimate our potential capital needs.
+Added: During the first three months of 2025, we returned capital to shareholders primarily through common share dividends and common share repurchases.
+Added: In March 2025, our Board of Directors declared a $0.10 per common share dividend, or $59 million in the aggregate, that was paid in April 2025.
+Added: In January 2025, we also paid common share dividends declared in the fourth quarter 2024, in the aggregate amount of $2.7 billion, or $4.60 per share (see Note 9 – Dividends for further discussion).
+Added: Pursuant to our financial policies, we repurchase common shares to neutralize dilution from equity-based compensation granted during the year and opportunistically when we believe our shares are trading below our determination of long-term fair value.
+Added: During the first three months of 2025, we repurchased 0.2 million common shares, at a total cost of $54 million, to satisfy tax withholding obligations in connection with the vesting of equity awards under our employee equity compensation plans.
+Added: We will continue to make decisions on returning
+Added: capital to shareholders based on the strength of our overall capital position, the capital strength of our subsidiaries, and potential capital needs of our business.
+Added: At March 31, 2025, we had $3.5 billion in a consolidated, non-insurance subsidiary of the holding company that can be used to fund corporate obligations and provide additional capital to the insurance subsidiaries to fund potential future growth and other opportunities.
+Added: As of March 31, 2025, our estimated consolidated statutory surplus was $29.6 billion.
+Added: During the first quarter 2025, our contractual obligations and critical accounting policies have not changed materially from those discussed in our 2024 Annual Report to Shareholders.
+Added: There have not been any material changes in off-balance-sheet leverage, which includes purchase obligations and catastrophe excess of loss reinsurance contracts, from those discussed in our 2024 Annual Report to Shareholders.
Based upon our capital planning and forecasting efforts, we believe we have sufficient capital resources and cash flows from operations to support our current business, scheduled principal and interest payments on our debt, anticipated quarterly dividends on our common shares, our contractual obligations, and other expected capital requirements for the foreseeable future.
2 unchanged sentences
Securities and Exchange Commission so that we may periodically offer and sell an indeterminate aggregate amount of senior or subordinated debt securities, preferred stock, depository shares, common stock, purchase contracts, warrants, and units.
−Removed: The shelf registration enables us to raise funds from the offering of any securities covered by the shelf registration as well as any combination thereof, subject to market conditions.
+Added: The shelf registration enables us to raise funds, subject to market conditions, from the offering of any securities covered by the shelf registration as well as any combination thereof.
RESULTS OF OPERATIONS – UNDERWRITING
Segment Overview
−Removed: We report our underwriting operations in three segments:
−Removed: Personal Lines, Commercial Lines, and Property.
−Removed: As a component of our Personal Lines segment, we report our Agency and Direct business results to provide further understanding of our products by distribution channel.
+Added: We report our underwriting operations in two segments:
+Added: Personal Lines and Commercial Lines.
+Added: Our Personal Lines segment writes insurance for personal vehicles, which include personal auto and 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.
+Added: Since our personal auto products represented about 90% of our Personal Lines segment net premiums written at quarter end, much of the following discussion will focus on our personal auto products, both in total and by distribution channel.
+Added: We will also discuss our personal property products as we continue to focus on improving profitability and reducing our concentration and exposure in more volatile weather-related markets.
+Added: Our Commercial Lines segment writes auto-related liability and physical damage insurance, business-related general liability and commercial property insurance predominantly for small businesses, and workers’ compensation insurance primarily for the transportation industry and includes our core commercial auto products, TNC business, Fleet & Specialty products, and BOP product.
+Added: Of our total Commercial Lines segment, our core commercial auto products represented about 80% of net premiums written and our TNC business represented about 15%, both on a trailing 12-month basis, as of the end of the first quarter 2025.
+Added: Therefore, much of the following discussion focuses only on our core commercial auto products.
The following table shows the composition of our companywide net premiums written, by segment, for the respective periods:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 2024 2023
+Added: Three Months Ended March 31,
Personal Lines
Agency 34 % 34 %
−Removed: Direct 47 45 45 42
Total Personal Lines 82 80
Commercial Lines 18 20
−Removed: Property 4 5 4 5
Total underwriting operations 100 % 100 %
−Removed: 1 Personal auto products accounted for 95% and 94% of the total Personal Lines segment net premiums written during the three and nine months ended September 30, 2024, and 94% during the three and nine months ended September 30, 2023;
−Removed: our special lines products accounted for the balance.
−Removed: Our Personal Lines business writes insurance for personal autos and special lines products (e.g., motorcycles, RVs, watercraft, and snowmobiles).
−Removed: Within Personal Lines, we often refer to our four consumer segments:
+Added: Within our Personal Lines segment, we often categorize our personal auto product policyholders into four consumer segments:
• Sam - inconsistently insured;
2 unchanged sentences
• Robinsons - homeowners who bundle auto and home.
−Removed: While our personal auto policies primarily have 6-month terms, we write 12-month auto policies in our Platinum agencies to promote bundled auto and home growth.
−Removed: At September 30, 2024 and 2023, 13% and 14%, respectively, of our Agency auto policies in force were 12-month policies.
−Removed: To the extent our Agency application mix of annual policies changes, the shift in policy term could impact our written premium mix in the Agency channel as
−Removed: 12-month policies have about twice the amount of net premiums written compared to 6-month policies.
−Removed: Our special lines products are written for 12-month terms.
−Removed: Our Commercial Lines business 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.
−Removed: Within our Commercial Lines business, our core commercial auto business operates in the following five traditional business market targets (BMT):
+Added: While our personal auto policies primarily have 6-month terms, to promote bundled personal auto and property growth, we write 12-month personal auto policies in our Platinum agencies.
+Added: At March 31, 2025 and 2024, 12% and 14%, respectively, of our agency personal auto policies in force were 12-month policies.
+Added: To the extent our agency application mix of annual personal auto policies changes, the shift in policy term could impact our average premiums in the agency channel, as 12-month policies have about twice the amount of net premiums written compared to 6-month policies.
+Added: Our special lines and personal property products are written for 12-month terms.
+Added: About 55% and 70%, respectively, of our special lines products and personal property business net premiums written was generated through the independent agency channel, with the balance through the direct channel.
+Added: Within our Commercial Lines segment, our core commercial auto business operates in the following five traditional business market targets (BMT):
• for-hire specialty;
2 unchanged sentences
• business auto.
−Removed: In addition to the core commercial auto business, Commercial Lines writes coverage for TNC businesses and large fleet motor carriers.
−Removed: At September 30, 2024, about 90% of Commercial Lines policies in force had 12-month terms.
−Removed: The majority of our Commercial Lines business is written through the independent agency channel although we continue to focus on growing our direct business.
−Removed: To serve our direct channel customers, we continue to expand our product offerings, including adding states where we can offer our BOP product, as well as adding these product offerings to our digital platform that allows direct small business consumers to obtain quotes for our products and products offered from a select group of unaffiliated carriers (BusinessQuote Explorer ® ).
−Removed: Our core commercial auto business written through the direct channel represented 11% and 10% of our total core commercial auto premiums written for the nine months ended September 30, 2024 and 2023, respectively.
−Removed: Our Property business writes residential property insurance for homeowners, other property owners, and renters, and umbrella insurance.
−Removed: About three-fourths of our Property business premiums written for the nine months ended September 30, 2024 and 2023, was generated through the independent agency channel, with the balance in the direct channel.
−Removed: All of our Property policies have 12-month terms.
+Added: At March 31, 2025, about 90% of Commercial Lines policies in force had 12-month terms.
+Added: The majority of our Commercial Lines business is written through the independent agency channel, although we continue to focus on growing our direct business, with about 10% of our core commercial auto premiums written through the direct channel.
Profitability
2 unchanged sentences
For the respective periods, our underwriting profitability results were as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 2024 2023
−Removed: Profit (Loss) Underwriting
−Removed: Profit (Loss) Underwriting
+Added: Three Months Ended March 31,
Profit (Loss) Underwriting
Profit (Loss)
−Removed: ($ in millions) $ Margin $ Margin $ Margin $ Margin
+Added: ($ in millions) $ Margin $ Margin
Personal Lines
1 unchanged sentence
Direct 1,013 11.4 1,043 14.9
+Added: Property 99 12.8 47 6.6
Total Personal Lines 2,383 14.3 2,041 15.0
Commercial Lines 338 12.5 209 8.2
−Removed: Property 163.7 21.5 74.6 11.8 (277.2) (12.5) (164.9) (8.9)
Other indemnity 1
−Removed: (2.3) NM (3.3) NM (3.2) NM (6.7) NM
Total underwriting operations $ 2,717 14.0 % $ 2,250 13.9 %
1 Underwriting margins for our other indemnity businesses are not meaningful (NM) due to the low level of premiums earned by, and the variability of loss costs in, such businesses.
−Removed: Several factors contributed to the significant increase in underwriting profit for the three and nine months ended September 30, 2024, compared to the same periods in 2023.
−Removed: As a result of the rate increases we took throughout 2023, our personal and core commercial auto average written premium per policy were up 5% and 2%, respectively, for the third quarter 2024, and up 10% and 7% for the first nine months of 2024.
−Removed: Despite taking a countrywide aggregate rate increase of about 20% on a trailing 12-month basis in our Property business, average written premium per policy decreased 9% and 4%, for the third quarter and first nine months of 2024, respectively.
−Removed: The decreases in our Property average written premium were primarily attributable to the decline in homeowner policies in force in volatile states, which have higher average premiums, and a shift in the mix to more renters policies, which have lower average premiums.
−Removed: On a year-over-year basis for the third quarter and first nine months of 2024, our incurred personal auto accident frequency was down 5% and 7%, respectively, compared to the same periods last year.
−Removed: Severity was relatively flat for the third quarter and first nine months of 2024, compared to the prior year periods when personal auto incurred severity was up 5% and 9%, respectively.
−Removed: With personal auto severity trends stabilizing, our loss costs have been less volatile during 2024.
−Removed: In addition, we experienced favorable prior accident year reserve development year to date in 2024, compared to unfavorable prior year development for the same period
−Removed: During the third quarter and first nine months of 2024, we recognized 0.7 points and 0.4 points, respectively, of favorable prior accident years development, compared to unfavorable development of 0.2 points and 2.7 points during the same periods last year.
−Removed: In our Property business, during the third quarter 2024, we had catastrophe losses of 7.5 points, compared to 17.5 points in the same period last year.
−Removed: During the quarter, our Property business incurred 21.2 loss ratio points from Hurricane Helene, which was more than offset by favorable development of 29.7 loss ratio points on current year catastrophe losses that occurred prior to the third quarter, with just over three-fourths related to development on storms occurring in May 2024.
−Removed: During the third quarter 2024, our companywide expense ratio increased 4.8 points, compared to the same period last year, primarily due to a nearly 400% increase in advertising spend during the quarter, bringing our year-to-date advertising spend to $2.8 billion.
−Removed: We increased our media spend to maximize growth and will continue to do so as long as we remain on track to achieve our target profitability and can acquire customers at or below our target acquisition cost.
−Removed: See the Losses and Loss Adjustment Expenses (LAE) section below for further discussion of our frequency and severity trends, reserve development, and catastrophe losses incurred during the periods.
−Removed: Further underwriting results for our Personal Lines business, including results by distribution channel, the Commercial Lines business, the Property business, and our underwriting operations in total, were as follows:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: While our underwriting profit margin was relatively flat on a year-over-year basis for the first quarter 2025, our companywide loss and loss adjustment expense (LAE) ratio decreased 2.0 points, which was mostly offset by a 1.9 point increase in the expense ratio.
+Added: The decrease in the loss and LAE ratio was primarily driven by favorable prior accident years reserve development and decreased incurred personal and commercial auto accident frequency.
+Added: The increase in our companywide expense ratio during the first quarter 2025, primarily reflected increased advertising expense.
+Added: During the first quarter 2025, our advertising spend was $1.3 billion, which was 86%, or 2.3 points, greater than the first quarter last year.
+Added: See the Losses and Loss Adjustment Expenses (LAE) section below for further discussion of our catastrophe losses, frequency and severity trends, and reserve development recognized during the periods and the Underwriting Expense section for further discussion of our advertising and non-acquisition expenses.
+Added: Further underwriting results for our Personal Lines business, Commercial Lines business, and our underwriting operations in total, were as follows:
+Added: Three Months Ended March 31,
Underwriting Performance 1
−Removed: 2024 2023 Change 2024 2023 Change
−Removed: Personal Lines – Agency
+Added: 2025 2024 Change
+Added: Personal Lines
Loss & loss adjustment expense ratio 63.9 65.9 (2.0)
1 unchanged sentence
Combined ratio 81.9 83.8 (1.9)
−Removed: Personal Lines – Direct
Loss & loss adjustment expense ratio 67.3 67.9 (0.6)
1 unchanged sentence
Combined ratio 88.6 85.1 3.5
−Removed: Total Personal Lines
Loss & loss adjustment expense ratio 58.4 64.8 (6.4)
1 unchanged sentence
Combined ratio 87.2 93.4 (6.2)
−Removed: Commercial Lines
+Added: Total Personal Lines
Loss & loss adjustment expense ratio 65.4 66.9 (1.5)
1 unchanged sentence
Combined ratio 85.7 85.0 0.7
+Added: Commercial Lines
Loss & loss adjustment expense ratio 67.8 72.4 (4.6)
12 unchanged sentences
Losses and Loss Adjustment Expenses (LAE)
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: Three Months Ended March 31,
(millions) 2025 2024
3 unchanged sentences
Claims costs, our most significant expense, represent payments made, and estimated future payments to be made, to or on behalf of our policyholders, including expenses needed to adjust or settle claims.
−Removed: Claims costs are a function of loss severity and frequency and, for our vehicle businesses, are influenced by inflation and driving patterns, among other factors, some of which are discussed below.
−Removed: In our Property business, severity is primarily a function of construction costs and the age and complexity of the structure, among other factors.
+Added: Claims costs are a function of loss severity and frequency and, for our personal auto and core commercial auto businesses, are influenced by inflation and driving patterns, among other
+Added: factors, some of which are discussed below.
+Added: In our personal property business, severity is primarily a function of construction costs and the age and complexity of the structure, among other factors.
Accordingly, anticipated changes in these factors are taken into account when we establish premium rates and loss reserves.
Loss reserves are estimates of future costs and our reserves are adjusted as underlying assumptions change and information develops.
−Removed: Our total loss and LAE ratio decreased 8.2 points for the third quarter 2024, compared to the same period last year, and 9.8 points on a year-to-date basis, primarily due to a decrease in loss frequency, relatively flat personal auto severity, higher vehicle premium per policy, and favorable prior accident years reserve development in 2024, compared to unfavorable development for the same periods last year.
−Removed: On an accident year basis, our loss and LAE ratio was 7.3 points and 6.7 points lower for the three and nine months ended September 30, 2024, respectively, compared to the same periods last year.
+Added: Our total loss and LAE ratio decreased 2.0 points for the first quarter 2025, compared to the same period last year, primarily due to increased favorable prior accident years reserve development and a decrease in loss frequency in the first quarter 2025, compared to the same period last year.
+Added: On an accident year basis, our loss and LAE ratio was 0.7 points lower than the first quarter 2024.
The following table shows our consolidated catastrophe losses and related combined ratio point impact, excluding loss adjustment expenses, incurred during the periods:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: 2024 2023 2024 2023
+Added: Three Months Ended March 31,
($ in millions) $ Point 1
Personal Lines
−Removed: Commercial Lines 33.8 1.2 12.5 0.5 68.6 0.9 34.9 0.5
+Added: Vehicles $ 300 1.9 $ 200 1.6
Property 154 19.8 138 19.3
+Added: Total Personal Lines 454 2.7 338 2.5
+Added: Commercial Lines 5 0.2 9 0.3
Total net catastrophe losses incurred $ 459 2.4 $ 347 2.1
1 Represents catastrophe losses incurred during the period, including the impact of reinsurance, as a percent of net premiums earned for each segment.
−Removed: In the third quarter 2024, we incurred $563 million of catastrophe losses, or 3.1 loss ratio points, on a companywide basis, as a result of Hurricane Helene, which primarily impacted the Southeastern United States.
−Removed: About half of the losses from Helene were in our auto businesses, with the remaining losses split almost equally between our Property business and our special lines products.
−Removed: In our boat product, which accounted for about 60% of the special lines losses, we continue to mitigate our hurricane/coastal exposure with underwriting restrictions limiting the insured value and length of boats compared to non-hurricane exposed areas, and increased deductibles for named storms.
−Removed: No amounts were ceded related to Hurricane Helene, as our incurred Property losses and allocated loss adjustment expenses (ALAE) did not exceed our retention threshold under either the Florida Hurricane Catastrophe Fund or our occurrence excess of loss reinsurance program.
−Removed: During the third quarter 2024, our Property business recognized $226.5 million, or 29.7 points on our Property loss ratio, of favorable loss development on current-year storms that occurred prior to the third quarter, with just
−Removed: over 75% of this favorable development related to May 2024 catastrophic weather events.
−Removed: On October 9, 2024, Hurricane Milton made landfall, as a category 3 hurricane, in Southwest Florida and continued its path through Central Florida, before exiting the state as a category 1 storm.
−Removed: As of October 31, 2024, we estimated that our Property business will incur losses and ALAE of about $140 million, net of Florida Hurricane Catastrophe Fund reinsurance.
−Removed: On a gross basis, prior to giving effect to reinsurance, we estimate our Property catastrophe losses and ALAE from Hurricane Milton will be about $200 million.
−Removed: Since Hurricanes Helene and Milton happened within two weeks of each other and damaged many of the same vehicles (including our special lines products), we decided to report our estimate of losses in total for both storms.
−Removed: As of October 31, 2024, we estimated that our vehicle businesses will incur combined losses of approximately $600 million from Hurricanes Helene and Milton, which includes the $401 million incurred in the third quarter 2024.
+Added: In the three months ended March 31, 2025, our catastrophe losses reflected severe weather events throughout the United States, with Texas accounting for nearly 40% of the losses.
+Added: We have responded, and plan to continue to respond, promptly to catastrophic events when they occur in order to provide high-quality claims service to our customers.
Changes in our estimate of our ultimate losses on catastrophes currently reserved, along with potential future catastrophes, could have a material impact on our financial condition, cash flows, or results of operations.
We reinsure various risks including, but not limited to, catastrophic losses.
−Removed: We do not have catastrophe-specific reinsurance for our Personal Lines or commercial auto businesses, but we reinsure portions of our Property business.
−Removed: The Property business reinsurance programs include catastrophe per occurrence excess of loss contracts and aggregate excess of loss contracts.
−Removed: We also purchase excess of loss reinsurance on our workers’ compensation insurance and our higher-limit commercial auto liability product offered by our Progressive Fleet & Specialty business.
+Added: We do not have catastrophe-specific reinsurance for our personal auto, special lines, or core commercial auto businesses.
+Added: The personal property business reinsurance programs include catastrophe per occurrence excess of loss contracts and aggregate excess of loss contracts.
+Added: We also purchase excess of loss reinsurance on our workers’ compensation insurance and our higher-limit commercial auto liability product offered by our Fleet & Specialty business, and on certain BOP product coverages.
We evaluate our reinsurance programs during the renewal process, if not more frequently, to ensure our programs continue to effectively address the company’s risk tolerance.
−Removed: During the second quarter 2024, we entered into new reinsurance contracts under our per occurrence excess of loss program for our Property business.
−Removed: The reinsurance program has a retention threshold for losses and ALAE from a single catastrophic event of $200 million.
−Removed: In general, our program includes coverage for $2.0 billion in losses and ALAE with additional substantial coverage for a second or third hurricane.
−Removed: When including the Florida Hurricane Catastrophe Fund that is specific to Florida, this coverage reaches an estimated $2.3 billion.
−Removed: For 2024, we also entered into a new catastrophe aggregate excess of loss reinsurance contract that has multiple layers of coverage, with the first retention layer threshold ranging from $450 million to $475 million, excluding named tropical storms and hurricanes, and the second retention layer threshold of $525 million, including named tropical storms and hurricanes.
+Added: With respect to our personal property business, in the first quarter 2025, we entered into a new catastrophe
+Added: aggregate excess of loss reinsurance contract for claims occurring in 2025 that has multiple layers of coverage.
+Added: The first retention layer threshold ranges from $450 million to $475 million, excluding named tropical storms and hurricanes, and the second retention layer threshold is $525 million, including named tropical storms and hurricanes.
The first and second layers provide coverage up to $75 million and $100 million, respectively.
−Removed: As of the end of the third quarter 2024, we estimate that, based on the particular contract, we were about $100 million to $145 million below the annual retention thresholds under the first coverage layer of our 2024 catastrophe aggregate excess of loss program.
−Removed: Once the retention thresholds are exceeded, we have reinsurance coverage up to $85 million for non-named storm property catastrophe losses, under our first layer of coverage, with $100 million of additional coverage available under a second layer that also covers named storms to a certain extent.
+Added: As part of the 2025 aggregate excess of loss program, we also entered into a severe convective storm parametric loss aggregate coverage, which covers a type of thunderstorm characterized by strong winds, heavy rain, large hail, thunder, lightning, and sometimes tornadoes.
+Added: This parametric loss coverage provides $15 million of coverage, net of a retention of $665 million.
While the total coverage limit and per-event retention will evolve to fit the growth of our business, we expect to remain a consistent purchaser of reinsurance coverage.
While the availability of reinsurance is subject to many forces outside of our control, the types of reinsurance that
−Removed: we elected to purchase during 2024 were readily available and competitively priced.
+Added: we elected to purchase during the first quarter 2025 were readily available and competitively priced.
On a year-over-year basis, we did not incur a material change in the aggregate costs of our reinsurance programs.
See Item 1A, Risk Factors in our 2024 Form 10-K filed with the U.S.
−Removed: Securities and Exchange Commission, for the year ended December 31, 2023, for a discussion of certain risks related to catastrophe events and the potential impact of climate change.
+Added: Securities and Exchange Commission, for the year ended December 31, 2024, for a discussion of certain risks related
+Added: to catastrophe events.
See Item 1, Business – Reinsurance on Form 10-K for a discussion of our various reinsurance programs.
The following discussion of our severity and frequency trends in our personal auto business excludes comprehensive coverage because of its inherent volatility, as it is typically linked to catastrophic losses generally resulting from adverse weather.
−Removed: For our core commercial auto products, the reported frequency and severity trends include comprehensive coverage.
+Added: For our core commercial auto business, the reported frequency and severity trends include comprehensive coverage.
Comprehensive coverage insures against damage to a customer’s vehicle due to various causes other than collision, such as windstorm, hail, theft, falling objects, and glass breakage.
On a calendar-year basis, the change in total personal auto incurred severity (i.e., average cost per claim, including both paid losses and the change in case reserves) over the prior-year period, was as follows:
−Removed: Quarter Year-to-date
Coverage Type 2025
Bodily injury 9 %
−Removed: Collision (2) (2)
Personal injury protection (10)
Property damage 2
+Added: The year-over-year increase in total severity, in part, reflects the impact of lower salvage and subrogation recoveries on total loss claims during the first quarter of 2025, compared to higher recoveries in the first quarter last year.
+Added: Excluding the impact of these recoveries, the change in severity for collision would have been consistent with that of property damage.
To address inherent seasonality trends and lessen the effects of month-to-month variability in the commercial auto products, we use a trailing 12-month period in assessing severity.
−Removed: Through the third quarter 2024, our core commercial auto products’ incurred severity increased 7%, compared to the same period last year.
−Removed: Since the loss patterns in the non-core commercial auto businesses are not indicative of our other commercial auto products, disclosing severity and frequency trends excluding those businesses is more representative of our overall experience for the majority of our commercial products.
−Removed: It is a challenge to estimate future severity, but we continue to monitor changes in the underlying costs, such as general inflation, used car prices, vehicle repair costs, medical costs, health care reform, court decisions, and jury verdicts, along with regulatory changes and other factors that may affect severity.
+Added: Since the loss patterns in the core commercial auto products are not indicative of our other commercial auto products (i.e., TNC and Fleet & Specialty businesses), disclosing severity and frequency trends excluding those businesses is more representative of our overall experience for the majority of our commercial products.
+Added: As of the end of the first quarter 2025, our core commercial auto products’ trailing 12-month incurred
+Added: severity increased 10%, compared to the same period last year, in part, due to prior years unfavorable development.
+Added: It is a challenge to estimate future severity, but we continue to monitor changes in the underlying costs, such as tariffs, general inflation, used car prices, vehicle repair costs, medical costs, health care reform, court decisions, and jury verdicts, along with regulatory changes and other factors that may affect severity.
The change in total personal auto incurred frequency, on a calendar-year basis, over the prior-year period, was as follows:
−Removed: Quarter Year-to-date
Coverage Type 2025
3 unchanged sentences
Property damage (1)
−Removed: Total (5) (7)
−Removed: The year-over-year decrease in frequency, in part, reflects a shift in the mix of business to a more preferred tier of customers, in part driven by the underwriting actions taken to reduce new business during 2023.
−Removed: On a trailing 12-month basis, our core commercial auto products’ incurred frequency decreased 7% during the third quarter 2024, compared to the same period last year.
+Added: The year-over-year decrease in frequency, in part, reflects a shift in the mix of business to a more preferred tier of customers (i.e., Wrights and Robinsons) and lower vehicle miles traveled during the first quarter 2025, compared to the same period last year.
+Added: On a trailing 12-month basis, our core commercial auto products’ incurred frequency decreased 8% during the first quarter 2025, in part, due to a shift in the mix of business compared to the same period last year.
We closely monitor changes in frequency, but the degree or direction of near-term frequency change is not something that we are able to predict with any certainty.
−Removed: We will continue to analyze trends to distinguish changes in our experience from other external factors, such as changes in the number of vehicles per household, miles driven, vehicle usage, gasoline prices, advances in vehicle safety, and unemployment rates, versus those resulting from shifts in the mix of our business or changes in driving patterns, to allow us to react quickly to price for these trends and to reserve more accurately for our loss exposures.
+Added: We will continue to analyze trends to distinguish changes in our experience from other external factors, such as changes in the number of vehicles per household, miles driven, vehicle usage, gasoline prices, advances in vehicle safety, and unemployment rates, versus those resulting from shifts in the mix of our business or changes in driving patterns, and the ridesharing economy to allow us to react quickly to price for these trends and to reserve more accurately for our loss exposures.
The table below presents the actuarial adjustments implemented and the loss reserve development experienced on a companywide basis in the following periods:
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
+Added: Three Months Ended March 31,
($ in millions) 2025 2024
14 unchanged sentences
Through these reviews, our actuaries identify and measure variances in the projected frequency and severity trends, which allow them to adjust the reserves to reflect current cost trends.
−Removed: For our Property business, 100% of catastrophe losses are reviewed monthly, and any development on catastrophe reserves are included as part of the actuarial adjustments.
−Removed: For the Personal Lines and Commercial Lines businesses, development for catastrophe losses in the vehicle businesses would be reflected in “all other development,” discussed below, to the extent they relate to prior year reserves.
+Added: For the Personal Lines vehicle products and the Commercial Lines business, development for catastrophe losses would be reflected in “all other development,” discussed below, to the extent they relate to prior year reserves.
+Added: For our Personal Lines property business, 100% of catastrophe losses are reviewed monthly, and any development on catastrophe reserves are included as part of the actuarial adjustments.
We report these actuarial adjustments separately for the current and prior accident years to reflect these adjustments as part of the total prior accident years development.
2 unchanged sentences
Our objective is to establish case and IBNR reserves that are adequate to cover all loss costs, while incurring minimal variation from the date the reserves are initially established until losses are fully developed.
−Removed: Our ability to meet this objective is impacted by many factors, such as changes in case law and storms occurring close to quarter end.
−Removed: As reflected in the table above, we experienced slightly favorable prior accident years development during the first nine months of 2024, compared to unfavorable prior accident years development for the same period last year.
−Removed: The favorable development during the first nine months of 2024 was, in part, due to lower than anticipated personal auto frequency and severity in Florida and lower than anticipated property damage severity across the majority of states.
−Removed: This was partially offset by higher than anticipated severity in core commercial auto for California, New York, and Texas.
−Removed: As included in the catastrophe discussion above, during the third quarter 2024, our Property business recognized $226.5 million of favorable loss development on current-year catastrophe events, which is reflected as part of the current accident year actuarial adjustments in the table above.
−Removed: About 75% of the $1.1 billion of unfavorable development for the first nine months of 2023 was in our personal auto products, primarily driven by higher than anticipated severity on auto property and physical damage coverages, and anticipated increased loss costs related to the impact of the legislation enacted in March 2023 in Florida that resulted in a significant number of lawsuits being filed prior to its effective date.
−Removed: See Note 6 – Loss and Loss Adjustment Expense Reserve s, for a more detailed discussion of our prior accident years reserve development and Critical Accounting Policies in our 2023 Annual Report to Shareholders for discussion of the application of estimates and assumptions in the establishment of our loss reserves.
+Added: Our ability to meet this objective is impacted by many factors, such as the factors impacting severity estimates described above and storms occurring close to quarter end.
+Added: As reflected in the table above, we experienced favorable prior accident years development during the first three months of 2025, compared to relatively flat prior accident years development for the same period last year.
+Added: The favorable development during the first three months of 2025 was, in part, due to lower than anticipated severity and frequency in Florida personal auto and, for personal property, favorable development on 2024 catastrophe events.
+Added: See Note 6 – Loss and Loss Adjustment Expense Reserve s to the consolidated financial statements for a more detailed discussion of our prior accident years reserve development and Critical Accounting Policies in our 2024 Annual Report to Shareholders for discussion of the application of estimates and assumptions in the establishment of our loss reserves.
Underwriting Expenses
Underwriting expenses include policy acquisition costs and other underwriting expenses.
−Removed: The underwriting expense ratio is our underwriting expenses, net of certain fees and other revenues, expressed as a percentage of net premiums
−Removed: For the third quarter 2024, our underwriting expense ratio was up 4.8 points, compared to the same period last year, and up 1.7 points on a year-to-date basis.
−Removed: Both increases were primarily driven by increases in our advertising spend, partially offset by growth in net premiums earned.
−Removed: In total, our companywide advertising spend increased 394%, or 5.0 points, in the third quarter 2024, and 109%, or 2.3 points, for the first nine months of 2024, compared to the same periods last year.
−Removed: For the first nine months of 2024, our total companywide advertising costs were $2.8 billion, which exceeded the amount of advertising spend for any previous full annual period.
−Removed: As previously discussed, we increased our media spend to maximize growth and will continue to do so as long as the advertising spend is efficient and we remain on track to achieve our target profitability.
+Added: The underwriting expense ratio is our underwriting expenses, net of certain fees and other revenues, expressed as a percentage of net premiums earned.
+Added: For the first quarter 2025, our underwriting expense ratio was up 1.9 points, compared to the same period last year.
+Added: The increase was primarily attributable to the increase in our advertising spend, partially offset by growth in net premiums earned.
+Added: In total, our companywide advertising spend increased 86%, or 2.3 points, in the first quarter 2025, compared to the same period last year.
+Added: Our total advertising spend for the first quarter 2025, was $1.3 billion, compared to $0.7 billion in the first quarter 2024.
+Added: Our advertising spend in the first quarter 2025 exceeded the amount of advertising spend for any previous quarterly period.
+Added: We invested heavily during the first quarter of the year to capture consumer shopping, and will continue to advertise to maximize growth, as long as we remain on track to achieve our profitability goal and can acquire customers at or below our target acquisition cost.
To analyze underwriting expenses, we also review our non-acquisition expense ratio (NAER), which excludes costs related to policy acquisition (e.g., advertising and agency commissions) from our underwriting expense ratio.
By excluding acquisition costs from our underwriting expense ratio, we are able to understand costs other than those necessary to acquire new policies and grow the business.
−Removed: During the third quarter 2024, our NAER decreased 0.3 points in both Personal Lines and Commercial Lines, and increased 1.1 points in Property, compared to the same period last year.
−Removed: The increase in our Property NAER, in part, reflected additional investments we made during the quarter in underwriting and pricing functions as we continue to focus on rebalancing our Property product offerings.
−Removed: On a year-to-date basis, our NAER decreased 0.4 points and 0.6 points in our Personal Lines and Commercial Lines businesses, respectively, and increased 0.6 points in our Property business, compared to the same period last year.
+Added: During the first quarter 2025, our NAER decreased 0.3
+Added: points in our personal vehicle business and increased 1.2 points and 0.1 points in our personal property and core commercial auto businesses, respectively, compared to the same period last year.
We remain committed to efficiently managing operational non-acquisition expenses.
3 unchanged sentences
Policies in force, our preferred measure of growth since it removes the variability due to rate changes or mix shifts, represents all policies for which coverage was in effect as of the end of the period specified.
−Removed: Three Months Ended September 30, Nine Months Ended September 30,
−Removed: ($ in millions) 2024 2023 % Growth 2024 2023 % Growth
+Added: Three Months Ended March 31,
+Added: ($ in millions) 2025 2024 % Growth
Net Premiums Written
2 unchanged sentences
Direct 10,067 8,082 25
+Added: Property 733 733 0
Total Personal Lines 18,273 15,214 20
Commercial Lines 3,933 3,748 5
−Removed: Property 787.6 725.2 9 2,351.9 2,104.9 12
−Removed: Other indemnity 1
−Removed: 0.1 0.1 0 0.5 0.4 25
Total underwriting operations $ 22,206 $ 18,962 17 %
3 unchanged sentences
Direct 8,908 7,020 27
+Added: Property 776 713 9
Total Personal Lines 16,710 13,591 23
Commercial Lines 2,699 2,558 6
−Removed: Property 761.8 631.8 21 2,210.5 1,852.8 19
−Removed: Other indemnity 1
−Removed: 0.2 0.1 100 0.6 0.9 (33)
Total underwriting operations $ 19,409 $ 16,149 20 %
−Removed: 1 Includes other underwriting business and run-off operations.
−Removed: September 30,
−Removed: (thousands) 2024 2023 % Growth
+Added: (# in thousands) 2025 2024 % Growth
Policies in Force
2 unchanged sentences
Direct - auto 14,771 11,855 25
−Removed: Total auto 22,803.5 19,517.6 17
Special lines 6,637 6,076 9
−Removed: 6,475.0 5,956.2 9
−Removed: Personal Lines – total 29,278.5 25,473.8 15
−Removed: Commercial Lines 1,130.5 1,110.3 2
Property 3,576 3,209 11
+Added: Total Personal Lines 35,130 29,733 18
+Added: Commercial Lines 1,162 1,101 6
Companywide total 36,292 30,834 18 %
−Removed: 1 Includes insurance for motorcycles, RVs, watercraft, snowmobiles, and similar items.
To analyze growth, we review new policies, rate levels, and the retention characteristics of our segments.
1 unchanged sentence
Personal Lines
−Removed: The following table shows our year-over-year changes for our Personal Lines business:
−Removed: Growth Over Prior Year
−Removed: Quarter Year-to-date
−Removed: 2024 2023 2024 2023
−Removed: New 90 % (15) % 30 % 25 %
−Removed: Renewal 9 15 9 8
−Removed: Total 22 8 14 11
−Removed: Written premium per policy - Auto 5 12 10 9
−Removed: Policy life expectancy - Auto
−Removed: Trailing 3 months (6) 35
−Removed: Trailing 12 months 0 19
−Removed: In our Personal Lines business, we experienced significant year-over-year new application growth in the third quarter 2024.
−Removed: The increase in new applications during the third quarter and first nine months of 2024, was driven by both our personal auto and special lines products, with increases in each of our four consumer segments.
−Removed: We believe the increase in new applications was driven by the continued lifting of non-rate underwriting restrictions that were put in place to slow new business growth in 2023 to achieve our calendar-year underwriting profitability goal, price competitiveness in the marketplace, a significant increase in our media spend in the Direct business, and working closely with our independent agents to leverage our agent compensation program to reward growing profitable business.
−Removed: Personal auto policies in force across all consumer segments grew in the third quarter 2024 between 12% and 20%, compared to the same period last year.
−Removed: During the first nine months of 2024, on a countrywide basis, we had aggregate personal auto rate increases of 3%, following the 19% rate increases taken during 2023.
−Removed: We continue to see the 2023 rate increases contribute to our growth in written premium per policy for the third quarter and nine months ended September 30, 2024.
−Removed: Aggregate vehicle rate changes year to date have been modest, relative to the prior two years, and we expect rates to stay stable in the fourth quarter 2024.
−Removed: We will continue to adjust rates as we deem necessary.
−Removed: We will continue to manage growth and profitability in accordance with our long-standing goal of growing as fast as we can, at or below a companywide 96 combined ratio on a calendar-year basis, as long as we can provide high-quality customer service.
−Removed: Given the solid underwriting profitability we generated during the first nine months of 2024, we plan to continue to take measures that we believe will position us to achieve profitable growth during the remainder of the year, including increasing our media spend.
−Removed: We report our Agency and Direct business results separately as components of our Personal Lines segment to provide further understanding of our products by distribution channel.
−Removed: The channel discussions below are focused on personal auto insurance since this product accounted for 95% and 94% of the Personal Lines segment net premiums written during the third quarter and first nine months of 2024, respectively.
−Removed: The Agency Business
−Removed: Growth Over Prior Year
−Removed: Quarter Year-to-date
−Removed: 2024 2023 2024 2023
−Removed: Applications - Auto
+Added: Our Personal Lines business offers vehicle (personal auto and special lines) and residential property insurance products to personal consumers, with the operating goal of optimizing the number of insured products within our policyholders’ households.
+Added: In our discussion below, we report our personal auto and personal property business results separately as components of our Personal Lines segment to provide a further understanding of our products.
+Added: Our personal auto business discussions are further separated between the agency and direct distribution channel.
+Added: For the three months ended March 31, 2025, 42% of our personal auto business was written through the agency channel and 58% was written through the direct channel.
+Added: Personal Auto - Agency
+Added: The year-over-year changes our personal auto agency business were as follows:
+Added: Change Over Prior Year Quarter
New 30 % (13) %
+Added: Written premium per policy
Renewal (1) 17
−Removed: Total 20 5 11 8
−Removed: Written premium per policy - Auto 5 13 11 10
−Removed: Policy life expectancy - Auto
+Added: Policy life expectancy
Trailing 3 months (5) 7
Trailing 12 months (1) 28
−Removed: The Agency business includes business written by more than 40,000 independent insurance agencies that represent Progressive, as well as brokerages in New York and California.
−Removed: During the third quarter 2024, we generated new auto application growth in 49 states, including nine of our top 10 largest Agency states.
+Added: The personal auto agency business includes business written by more than 40,000 independent insurance agencies that represent Progressive, as well as brokerages in New York and California.
+Added: During the first quarter 2025, we generated new agency personal auto application growth in 47 states and the District of Columbia, including nine of our top 10 largest agency states.
Compared to the same period in the prior year, new application and policy in force growth varied by consumer segment:
−Removed: • Sams experienced a low single digit increase in policies in force, with a significant increase in new application growth during the third quarter 2024 and a low single digit increase for the first nine months;
−Removed: • Dianes experienced moderate policies in force growth, with significant growth in new applications during the third quarter and first nine months of 2024;
−Removed: • Wrights and Robinsons had strong policies in force growth and experienced significant new application growth during the third quarter and first nine months of 2024.
−Removed: During the third quarter and first nine months of 2024, on a year-over-year basis, we experienced an increase in Agency auto quote volume of 40% and 12%, respectively, with a rate of conversion (i.e., converting a quote to a sale) increase of 43% and 9%, compared to the same periods last year.
−Removed: Compared to the same period in the prior year:
−Removed: • Sams experienced an increase in quote volume and conversion for the third quarter, while experiencing an increase in quote volume and a decrease in conversion during the first nine months of 2024;
−Removed: • Dianes and Wrights experienced an increase in both quote volume and conversion for the third quarter and first nine months of 2024;
−Removed: • Robinsons experienced an increase in both quote volume and conversion during the third quarter 2024, and flat quote volume, with an increase in conversion, during the first nine months of 2024.
−Removed: Written premium per policy for new and renewal Agency auto business increased 10% and 6%, respectively, compared to the third quarter 2023, and 6% and 12%, respectively, for the first nine months of 2024 on a year-over-year basis, primarily attributable to the rate increases previously discussed.
−Removed: At the end of the third quarter 2024, on a year-over-year basis, we experienced a lengthening in our trailing 12-month policy life expectancy.
−Removed: We believe this increase was driven by competitor rate increases in 2023, as well as a shift in the mix of business.
−Removed: During 2023, as part of our efforts to slow growth to achieve our target profitability, we focused our efforts to attract a more preferred tier of customers, including more Robinsons, who tend to stay with us longer.
−Removed: The trailing 3-month measure is flat primarily due to the competitiveness in the marketplace.
−Removed: The Direct Business
−Removed: Growth Over Prior Year
−Removed: Quarter Year-to-date
−Removed: 2024 2023 2024 2023
−Removed: Applications - Auto
+Added: • Sams experienced a low double-digit increase in policies in force, with a significant increase in new applications during the first quarter 2025;
+Added: • Dianes and Wrights experienced significant policies in force and new application growth during the first quarter 2025;
+Added: • Robinsons had a high single-digit increase in policies in force, with a significant decline in new applications during the first quarter 2025.
+Added: During the first quarter 2025, on a year-over-year basis, we experienced an increase in agency auto quote volume of 16%, with a rate of conversion (i.e., converting a quote to a
+Added: sale) increase of 11%, compared to the same period last year.
+Added: All four of our consumer segments experienced an increase in both quote volume and conversion during the first quarter 2025, compared to the same period in the prior year, except Robinsons who had a single-digit decline in quotes and a significant decline in conversion.
+Added: New applications, quotes, and conversion declined in Robinsons year over year due to several initiatives implemented in our personal property business that were focused on improving profitability, as discussed in the Personal Property section below.
+Added: These initiatives, which began during the last half of 2024, focused primarily on home and condo coverages and impacted growth in bundled auto and homeowner policies.
+Added: Our personal auto rates were relatively stable during the quarter.
+Added: The decrease in written premium per policy for new and renewal personal auto agency business during the first quarter 2025, compared to the same period last year, was in part, attributable to a shift in the mix of business, including a shift to a higher percentage of 6-month policies, which have about half of the amount of net premiums written as policies with 12-month terms.
+Added: Our trailing 3- and 12-month policy life expectancy in the agency auto business experienced a decrease at the end of the first quarter 2025, on a year-over-year basis, which we believe is primarily driven by a shift in the mix of business and increased consumer shopping.
+Added: Personal Auto - Direct
+Added: The year-over-year changes in our personal auto direct business were as follows:
+Added: Change Over Prior Year Quarter
New 33 % (6) %
Renewal 21 11
−Removed: Total 27 11 17 15
−Removed: Written premium per policy - Auto 5 12 9 8
−Removed: Policy life expectancy - Auto
+Added: Written premium per policy
+Added: Policy life expectancy
Trailing 3 months (5) (6)
Trailing 12 months (7) 13
−Removed: The Direct business includes business written directly by Progressive online, through our Progressive mobile app, or by phone.
−Removed: As we increased advertising spend and continued to lift certain non-rate restrictions during the third quarter 2024, we saw significant Direct auto new application growth.
−Removed: During the third quarter 2024, we generated new auto application growth in all states and the District of Columbia.
−Removed: During the third quarter and first nine months of 2024, each of our consumer segments experienced a significant increase in new applications year over year.
+Added: The personal auto direct business includes business written directly by Progressive online or by phone.
+Added: During the first quarter 2025, we generated new direct personal auto application growth in 48 states and the District of Columbia, including nine of our top 10 largest direct states.
+Added: During the first quarter 2025, each of our consumer segments experienced a significant increase in new applications year over year.
Policies in force grew between 19% and 27% in each consumer segment, compared to the same period last year.
−Removed: During the third quarter and first nine months of 2024, Direct auto quote volume increased 138% and 57%, respectively, compared to the same periods last year, primarily driven by increased advertising spend.
−Removed: Conversion decreased 9% and 10%, respectively, which we believe is primarily due to a greater number of casual shoppers obtaining quotes, who are less committed to purchasing a new insurance policy.
−Removed: All consumer segments saw an increase in quotes and a decrease in the rate of conversion during the third quarter and first nine months of 2024.
−Removed: Written premium per policy for new and renewal Direct auto business increased 13% and 5%, respectively, in the third quarter 2024, compared to the third quarter last year, and 11% and 10%, respectively, for the first nine months of 2024 on a year-over-year basis, primarily attributable to the rate increases previously discussed.
−Removed: Our trailing 12-month policy life expectancy in the Direct auto business experienced a decrease in retention at the end of the third quarter 2024, on a year-over-year basis.
−Removed: We believe the drivers of the change were due to the competitiveness in the marketplace and increased shopping.
−Removed: We believe the decrease in the trailing 3-month policy life expectancy at the end of the third quarter 2024 was primarily driven by the previously discussed rate increases taken during 2023.
−Removed: Commercial Lines
−Removed: The following table and discussion focuses on our core commercial auto products.
−Removed: Year-over-year changes in our core commercial auto products were as follows:
−Removed: Growth Over Prior Year
−Removed: Quarter Year-to-date
−Removed: 2024 2023 2024 2023
−Removed: New 11 % 3 % 6 % 4 %
−Removed: Renewal 2 2 1 5
−Removed: Total 5 3 3 5
+Added: During the first quarter 2025, direct personal auto quote volume increased 22%, with a rate of conversion increase of 8%, compared to the same period last year, primarily driven by increased advertising spend and our competitiveness in the marketplace.
+Added: All consumer segments saw a significant increase in quotes and a modest increase in the rate of conversion during the first quarter 2025, except for Robinsons where conversion was flat.
+Added: The personal property profitability initiatives that negatively affected Robinsons new application, quote, and conversion growth in the agency channel were not as impactful to the direct channel as the majority of the property business bundles with personal auto in the direct channel is written through unaffiliated third-party carriers, which remain available even when we restrict writing our personal property products.
+Added: Written premium per policy increased for new and renewal personal auto direct business during the first quarter 2025, compared to the same period last year, primarily driven by the rate increases made during the last 12 months.
+Added: Our trailing 3- and 12-month policy life expectancy in the direct auto business experienced a decrease at the end of the first quarter 2025, on a year-over-year basis, which we believe is primarily driven by a shift in the mix of business and increased consumer shopping.
+Added: Personal Property
+Added: The year-over-year changes in our personal property business were as follows:
+Added: Change Over Prior Year Quarter
Written premium per policy
+Added: Renewal (3) 6
Policy life expectancy
Trailing 12 months
−Removed: The increases in net premiums written in our Commercial Lines business for the third quarter 2024 reflected growth in all of our BMTs, except our for-hire transportation and, to a lesser extent, for-hire specialty BMTs, which continued to be adversely impacted by challenging freight market conditions that have continued to cause a decline in the active number of motor carriers in the for-hire transportation BMT.
−Removed: The most significant growth was in our contractor and business auto BMTs, primarily driven by the aggregate core commercial auto rate increases of 17% taken during 2023.
−Removed: During the third quarter and first nine months of 2024, core commercial auto new application growth was positive in each of our BMTs, except for the for-hire transportation and for-hire specialty BMTs.
−Removed: During the third quarter and first nine months of 2024, quote volume increased about 5% and 6%, respectively, while conversion increased 5% for the quarter and was flat on a year-to-date basis, compared to the same periods last year.
−Removed: During the third quarter 2024, we increased rates, in aggregate, about 2% in our core commercial auto products.
−Removed: While we currently do not anticipate significant rate changes for these products for the remainder of 2024, we still have about 3 points of rate to earn in during the rest of 2024, primarily from rate revisions taken during 2023.
−Removed: We will continue to evaluate our rate need and adjust rates as we deem necessary.
−Removed: Written premium per policy for new and renewal core commercial auto business decreased 3% and increased 5%, respectively, for the third quarter 2024, and increased 1% and 11%, respectively, for the first nine months of 2024, compared to the same periods last year, primarily reflecting the previously discussed rate increases.
−Removed: Our policy life expectancy decreased in all BMTs, which we believe is due to rate and non-rate actions.
−Removed: The following table shows our year-over-year changes for our Property business:
−Removed: Growth Over Prior Year
−Removed: Quarter Year-to-date
−Removed: 2024 2023 2024 2023
−Removed: New 42 % 9 % 36 % 11 %
−Removed: Renewal 3 4 5 5
−Removed: Total 15 6 15 7
+Added: Our personal property business writes residential property insurance for homeowners and renters, umbrella, and flood insurance through the “Write Your Own” program for the National Flood Insurance Program.
+Added: Our personal property business insurance is written in the agency and direct channels.
+Added: In addition to reducing our geographic footprint in more volatile weather-related markets (e.g., coastal and hail-
+Added: prone states), we continued to focus on achieving profitability goals in markets that are less susceptible to
+Added: catastrophes for our homeowners products, which we define as our total personal property business excluding renters and umbrella products.
+Added: In the growth-oriented states, policies in force increased 14% on a year-over-year basis as of March 31, 2025.
+Added: Policies in force decreased 12% in the volatile weather states as of the end of the first quarter 2025, compared to the same period in the prior year.
+Added: During the first quarter 2025, we continued several initiatives, including:
+Added: (i) prioritizing insuring lower-risk properties (e.g., new construction, existing homes with newer roofs);
+Added: (ii) having underwriting restrictions in place in most states, to only accept new personal property business (e.g., home or condo) when the property policy is bundled with a Progressive personal auto policy, where permitted;
+Added: (iii) restricting new business and non-renewing policies that provide coverage for non-owner-occupied properties (e.g., short-term vacation rental, secondary residence, etc.) in the majority of states;
+Added: and, (iv) expanding our cost sharing with policyholders through mandatory wind and hail deductibles and roof depreciation schedules in markets where permitted.
+Added: In addition, beginning in the second quarter 2024, following the required filings and notices, we began our efforts to non-renew up to 115,000 Property policies in Florida.
+Added: This effort slowed while the moratoriums were in place in response to Hurricanes Helene and Milton, which temporarily limited an insurer’s ability to non-renew policies, but resumed once the moratoriums expired in December 2024.
+Added: We currently expect this effort to be substantially completed by the end of the second quarter 2025.
+Added: To try to ease the disruption of the non-renewals to our customers and agents, we reached an agreement with an unaffiliated Florida insurer to offer replacement policies to many of these policyholders, subject to the insurer’s underwriting and financial guidelines and agent appointments where applicable.
+Added: Our written premium per policy decreased on a year-over-year basis for the first quarter 2025, primarily attributable to a shift in the mix of business to more renters policies, which have lower average written premiums, and a decline in homeowners policies in force in both volatile weather-related markets and non-owner-occupied properties, which both have higher average premiums.
+Added: The effect of these declines were partially offset by rate increases taken during 2024 and higher premium coverages reflecting increased property values.
+Added: During the first quarter 2025, we increased rates, in aggregate, about 2% in our personal property business.
+Added: We intend to continue to make targeted rate increases in states where we are not achieving our profitability goals.
+Added: The policy life expectancy in our personal property business shortened during the first quarter 2025, compared to the same period last year, which we believe is primarily driven by a shift in the mix of business to more renters policies, the non-renewals for certain policies in volatile weather states, and rate increases made during the last 12 months.
+Added: Commercial Lines
+Added: The following table and discussion focuses on our core commercial auto products, which accounted for about 80% of our Commercial Lines segment net premiums written on a trailing 12-month basis, as of the end of the first quarter 2025.
+Added: Year-over-year changes in our core commercial auto products were as follows:
+Added: Change Over Prior Year Quarter
Written premium per policy
+Added: Renewal (5) 14
Policy life expectancy
Trailing 12 months
−Removed: Our Property business writes residential property insurance for homeowners, other property owners, and renters, and umbrella insurance in the agency and direct channels.
−Removed: Improving profitability and reducing our concentration and catastrophe exposure continued to be the top priority for our Property business during the third quarter 2024.
−Removed: We continued to concentrate our growth in markets that are less susceptible to catastrophes and lower our exposure to coastal and hail-prone states for our homeowners products, which we define as our total Property business excluding renters and umbrella products.
−Removed: Homeowners policies in force in the growth-oriented states increased about 19% as of the end of the period, compared to the same period last year.
−Removed: In regions where our appetite to write new business is limited, we are continuing to prioritize Progressive auto bundles, as well as lower-risk properties, such as new construction or homes with newer roofs.
−Removed: Homeowners policies in force were down about 9% in the volatile weather states at the end of the period, compared to the same period last year.
−Removed: In addition, as part of our focus to rebalance our business, late in 2023 we began a non-renewal effort of up to 115,000 Property policies in Florida.
−Removed: Following the required filings and notices, the first of these non-renewals went into effect in the second quarter of 2024 and was expected to continue over the following 12 months.
−Removed: We believe the moratoriums put in place in response to Hurricanes Helene and Milton, which temporarily limit an insurer's ability to non-renew policies, will slow this progress;
−Removed: however, we intend to resume the planned non-renewals when the moratoriums expire.
−Removed: To try to ease this disruption to our customers and agents, we reached an agreement with an unaffiliated Florida insurer to offer replacement policies to these policyholders, subject to the insurer’s underwriting and financial guidelines and agent appointments where applicable.
−Removed: The decrease in our written premium per policy, during the third quarter and first nine months of 2024, compared to the same periods last year, was primarily attributable to a decline in homeowners policies in force in volatile states, which have higher average premiums, and a shift in the mix to more renters policies which have lower average premiums.
−Removed: This was partially offset by rate increases taken over the last 12 months and higher premium coverages reflecting increased property values.
−Removed: During the third quarter 2024, we increased rates, in aggregate, about 6% in our Property segment, bringing the year-to-date aggregate rate increase to 16%.
−Removed: We intend to continue to make targeted rate increases in states where we believe it is necessary to achieve our profitability targets.
−Removed: The policy life expectancy in our Property business shortened during the first nine months of 2024, compared to the prior year, which we believe is primarily driven by a shift in the mix of business to more renters policies, our previously discussed rate increases, and the non-renewals for certain Florida policies.
+Added: During the first quarter 2025, core commercial auto new application growth was positive in each of our BMTs, except for the for-hire transportation and for-hire specialty
+Added: The for-hire transportation BMT continued to be adversely impacted by challenging freight market conditions that have continued to cause a decline in the active number of motor carriers in this BMT.
+Added: During the first quarter 2025, quote volume and conversion increased about 3% and 5%, respectively, in our core commercial auto products, compared to the same period last year.
+Added: The effect of the previously discussed rate increases had on written premium per policy for our core commercial auto business was offset by the change in the mix of business written, compared to the first quarter 2024.
+Added: During the first quarter 2025, we increased rates, in aggregate, about 1% in our core commercial auto products.
+Added: We will continue to evaluate our rate need and adjust rates as we deem necessary.
+Added: Our policy life expectancy decreased in all BMTs, except for tow, which we believe is due to rate and non-rate actions, as well as the continued decrease in demand in the for-hire transportation BMT.
+Added: As of the end of the first quarter 2025, policy life expectancy has experienced sequential month-over-month improvement since the end of the third quarter 2024, which we believe is due to the moderation of our rate increases, compared to competitor rate increases, improving our competitiveness in the marketplace.
RESULTS OF OPERATIONS – INVESTMENTS
2 unchanged sentences
The fully taxable equivalent (FTE) total return includes recurring investment income, adjusted to a fully taxable amount for certain securities that receive preferential tax treatment (e.g., municipal securities), and total net realized, and changes in total net unrealized, gains (losses) on securities.
−Removed: The following table summarizes investment results for the periods ended September 30:
−Removed: Three Months Nine Months
−Removed: 2024 2023 2024 2023
+Added: The following table summarizes investment results for the periods ended March 31:
Pretax recurring investment book yield (annualized) 4.1 % 3.7 %
3 unchanged sentences
Total portfolio 2.2 0.8
−Removed: The increase in the book yield for both periods, compared to last year, primarily reflected investing new cash from insurance operations, and proceeds from maturing bonds, in higher coupon rate securities.
−Removed: The increase in the fixed-income portfolio FTE total return for both periods, compared to last year, primarily reflected movement in Treasury yields year-over-year.
−Removed: The common stock return reflected general market conditions.
−Removed: A further break-down of our FTE total returns for our fixed-income portfolio for the periods ended September 30, follows:
−Removed: Three Months Nine Months
−Removed: 2024 2023 2024 2023
+Added: The increase in the book yield, compared to last year, primarily reflected investing new cash from insurance operations, and proceeds from maturing bonds, in higher coupon rate securities.
+Added: The increase in the fixed-income portfolio FTE total return, compared to last year, primarily
+Added: reflected movement in Treasury yields year-over-year.
+Added: The common stock FTE total return reflected general market conditions.
+Added: A further break-down of our FTE total returns for our fixed-income portfolio for the periods ended March 31, follows:
Fixed-income securities:
−Removed: Treasury Notes 4.2 % (0.6) % 4.5 % 0.7 %
−Removed: Municipal bonds 3.5 (0.4) 4.4 1.9
+Added: government obligations 2.9 % (0.4) %
+Added: State and local government obligations 2.0 0.4
+Added: Foreign government obligations 1.6 (2.4)
Corporate and other debt securities 2.0 0.6
10 unchanged sentences
(years) Average Rating 1
−Removed: September 30, 2024
+Added: March 31, 2025
government obligations $ 44,318 53.0 % 4.5 AA+
6 unchanged sentences
Nonredeemable preferred stocks 584 0.7 1.2 BBB-
−Removed: Short-term investments 756.5 1.0 <0.1 AA-
+Added: Short-term investments 2,595 3.1 <0.1 A+
Total fixed-income securities 80,280 96.0 3.4 AA-
2 unchanged sentences
$ 83,664 100.0 % 3.4 AA-
−Removed: September 30, 2023
+Added: March 31, 2024
government obligations $ 38,563 55.8 % 3.9 AA+
6 unchanged sentences
Nonredeemable preferred stocks 886 1.3 2.0 BBB-
−Removed: Short-term investments 1,795.2 2.9 <0.1 A+
+Added: Short-term investments 1,327 1.9 <0.1 AA-
Total fixed-income securities 65,843 95.4 3.2 AA-
7 unchanged sentences
Corporate and other debt securities 13,954 17.4 2.6 BBB+
−Removed: Residential mortgage-backed securities 417.2 0.6 0.5 A+
+Added: Residential mortgage-backed securities 1,601 2.0 2.6 AA
Commercial mortgage-backed securities 4,352 5.4 1.9 A+
11 unchanged sentences
To the extent the weighted average of the ratings falls between AAA and AA+, we assign an internal rating of AAA-.
−Removed: 2 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.
−Removed: 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.
+Added: 2 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.
+Added: 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 $6.2 billion, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of unsettled security transactions.
+Added: A portion of the investments held at December 31, 2024 were sold and proceeds used to pay our common share dividends in January 2025;
+Added: see Note 9 – Dividends for additional information.
Our asset allocation strategy is to maintain 0%-25% of our portfolio in Group I securities, with the balance (75%-100%) of our portfolio in Group II securities.
9 unchanged sentences
The following table shows the composition of our Group I and Group II securities:
−Removed: September 30, 2024 September 30, 2023 December 31, 2023
+Added: March 31, 2025 March 31, 2024 December 31, 2024
($ in millions) Fair
19 unchanged sentences
Unrealized Gains (Losses)
−Removed: As of September 30, 2024, our fixed-maturity portfolio had total after-tax net unrealized losses, which are recorded as part of accumulated other comprehensive income (loss) on our consolidated balance sheets, of $0.1 billion, compared to $3.0 billion and $1.6 billion at September 30, 2023 and December 31, 2023, respectively.
−Removed: The decrease in net unrealized losses from September 30, 2023 and December 31, 2023, was primarily due to higher valuations across all fixed-maturity sectors, most prominently in our U.S.
−Removed: Treasury, corporate and other debt, and commercial mortgage-backed portfolios as lower interest rates and tighter credit spreads drove improved performance.
+Added: As of March 31, 2025, our fixed-maturity portfolio had total after-tax net unrealized losses, which are recorded as part of accumulated other comprehensive income (loss) on our consolidated balance sheets, of $0.5 billion, compared to $1.8 billion and $1.4 billion at March 31, 2024 and December 31, 2024, respectively.
+Added: The decrease in total unrealized losses from March 31, 2024 and December 31, 2024, was due to valuation increases across all fixed-maturity sectors, most prominently in our U.S.
+Added: Treasury, corporate and other debt, and commercial mortgage-backed portfolios as lower interest rates and, in some cases, tighter credit spreads drove strong portfolio performance.
See Note 2 – Investments for a further break-out of our gross unrealized gains (losses).
Holding Period Gains (Losses)
−Removed: The following table provides the balance and activity for both the gross and net holding period gains (losses) for the nine months ended September 30, 2024:
+Added: The following table provides the balance and activity for both the gross and net holding period gains (losses) for the three months ended March 31, 2025:
(millions) Gross Holding
11 unchanged sentences
Total changes in holding period securities (206) (7) (213)
−Removed: Balance at September 30, 2024
+Added: Balance at March 31, 2025
Hybrid fixed-maturity securities 9 (10) (1)
7 unchanged sentences
Following are the primary exposures for our fixed-income portfolio.
−Removed: Interest Rate Risk Our duration of 3.3 years at September 30, 2024, 2.9 years at September 30, 2023, and 3.0 years at December 31, 2023 fell within our acceptable range of 1.5 to 5 years.
+Added: Interest Rate Risk Our duration of 3.4 years at March 31, 2025, 3.2 years at March 31, 2024, and 3.3 years at December 31, 2024 fell within our acceptable range of 1.5 to 5.0 years.
The duration distribution of our fixed-income portfolio, excluding short-term investments, represented by the interest rate sensitivity of the comparable benchmark U.S.
Treasury Notes, was:
−Removed: Duration Distribution (excluding short-term securities) September 30, 2024 September 30, 2023 December 31, 2023
+Added: Duration Distribution March 31, 2025 March 31, 2024 December 31, 2024
1 year 11.1 % 11.0 % 9.6 %
5 unchanged sentences
Total fixed-income portfolio 100.0 % 100.0 % 100.0 %
−Removed: Credit Risk This exposure is managed by maintaining an A+ minimum average portfolio credit quality rating, as defined by NRSROs.
−Removed: At September 30, 2024 and 2023, and December 31, 2023, our credit quality rating was AA- .
+Added: Credit Risk This exposure is managed by maintaining an A minimum weighted average portfolio credit quality rating, as defined by NRSROs.
+Added: At March 31, 2025 and 2024, and December 31, 2024, our weighted average credit quality rating was AA-.
The credit quality distribution of the fixed-income portfolio was:
Average Rating 1
−Removed: September 30, 2024 September 30, 2023 December 31, 2023
+Added: March 31, 2025 March 31, 2024 December 31, 2024
AAA 13.6 % 11.0 % 12.6 %
7 unchanged sentences
Total fixed-income portfolio 100.0 % 100.0 % 100.0 %
−Removed: 1 The ratings in the table above are assigned by NRSROs.
−Removed: Concentration Risk We did not have any investments in a single issuer, either overall or in the context of individual asset classes and sectors, that exceeded our thresholds during the third quarter 2024.
−Removed: Prepayment and Extension Risk We did not experience significant adverse prepayment or extension of principal relative to our cash flow expectations in the portfolio during the third quarter 2024.
+Added: 1 The credit quality ratings are assigned by NRSROs.
+Added: Concentration Risk We did not have any investments in a single issuer, either overall or in the context of individual asset classes and sectors, that exceeded our thresholds during the first quarter 2025.
+Added: Prepayment and Extension Risk We did not experience significant adverse prepayment or extension of principal relative to our cash flow expectations in the portfolio during the first quarter 2025.
Liquidity Risk Our overall portfolio remains very liquid and we believe that it is sufficient to meet expected near-term liquidity requirements.
The short-to-intermediate duration of our portfolio provides a source of liquidity.
−Removed: During the remainder of 2024 and all of 2025, we expect approximately $9.1 billion, or 30%, of principal repayment from our fixed-income portfolio, excluding U.S.
+Added: During the remainder of 2025, we expect approximately $5.7 billion, or 17%, of principal repayment from our fixed-income portfolio, excluding U.S.
Treasury Notes and short-term investments.
−Removed: Cash from interest and
−Removed: dividend payments and our short-term portfolio provide additional sources of recurring liquidity.
+Added: Cash from interest and dividend
+Added: payments provides an additional source of recurring liquidity.
The duration of our U.S.
−Removed: government obligations, which are included in the fixed-income portfolio, was comprised of the following at September 30, 2024:
+Added: government obligations, which are included in the fixed-income portfolio, was comprised of the following at March 31, 2025:
($ in millions) Fair
16 unchanged sentences
(at period end) 1
−Removed: September 30, 2024
+Added: March 31, 2025
Residential mortgage-backed securities $ 2,183 $ 10 15.4 % 2.5 AA+
2 unchanged sentences
Total asset-backed securities $ 14,147 $ (334) 100.0 % 1.5 AA
−Removed: September 30, 2023
+Added: March 31, 2024
Residential mortgage-backed securities $ 383 $ (9) 3.7 % 0.5 A+
3 unchanged sentences
December 31, 2024
−Removed: Residential mortgage-backed securities $ 417.2 $ (9.8) 4.2 % 0.5 A+
+Added: Residential mortgage-backed securities $ 1,601 $ (2) 12.7 % 2.6 AA
Commercial mortgage-backed securities 4,352 (369) 34.6 1.9 A+
1 unchanged sentence
Total asset-backed securities $ 12,596 $ (410) 100.0 % 1.6 AA
−Removed: 1 The credit quality ratings in the table above are assigned by NRSROs.
−Removed: Residential Mortgage-Backed Securities (RMBS) The following table details the credit quality rating and fair value of our RMBS, along with the loan classification and a comparison of the fair value at September 30, 2024, to our original investment value (adjusted for returns of principal, amortization, and write-downs):
−Removed: Residential Mortgage-Backed Securities (at September 30, 2024)
+Added: 1 The credit quality ratings are assigned by NRSROs.
+Added: Residential Mortgage-Backed Securities (RMBS) The following table details the credit quality rating and fair value of our RMBS, along with the loan classification and a comparison of the fair value at March 31, 2025, to our original investment value (adjusted for returns of principal, amortization, and write-downs):
+Added: Residential Mortgage-Backed Securities (at March 31, 2025)
($ in millions)
7 unchanged sentences
Non-investment grade/non-rated:
−Removed: BB 0.3 0 0.3 0
CCC and lower 1 0 1 0.1
7 unchanged sentences
Our RMBS portfolio consists of deals that are backed by high-credit quality borrowers and/or those that have strong structural protections through underlying loan collateralization.
−Removed: During the third quarter of 2024, we continued to increase our exposure in this portfolio.
−Removed: Our additions were primarily concentrated in investment-grade securities with most purchases in qualified mortgage securitizations.
−Removed: Commercial Mortgage-Backed Securities (CMBS) The following table details the credit quality rating and fair value of our CMBS, along with a comparison of the fair value at September 30, 2024, to our original investment value (adjusted for returns of principal, amortization, and write-downs):
−Removed: Commercial Mortgage-Backed Securities (at September 30, 2024)
+Added: During the first quarter of 2025, we continued to increase our exposure in this portfolio through purchases in both the primary and secondary markets with securities that had shorter spread durations.
+Added: Our additions were concentrated in investment-grade securities, while also increasing our allocation to Fannie Mae and Freddie Mac credit risk transfer securities.
+Added: Commercial Mortgage-Backed Securities (CMBS) The following table details the credit quality rating and fair value of our CMBS, along with a comparison of the fair value at March 31, 2025, to our original investment value (adjusted for returns of principal, amortization, and write-downs):
+Added: Commercial Mortgage-Backed Securities (at March 31, 2025)
($ in millions)
12 unchanged sentences
when we assigned the NAIC ratings for our CMBS, 87% of our non-investment-grade securities were rated investment grade and reported as Group II securities, with the remainder classified as Group I.
−Removed: The CMBS portfolio maintained strong performance in the third quarter 2024.
−Removed: New issuance activity remained elevated, and spreads tightened due to lower interest rates and increased financing opportunities for borrowers.
−Removed: We added several AAA securities to the portfolio in the multi-family and industrial sectors.
−Removed: One security matured during the third quarter 2024, and it paid off in full and on time.
−Removed: As of September 30, 2024, our CMBS portfolio had no delinquencies.
+Added: During the first quarter 2025, there was strong new issuance activity in the CMBS market and deals backed by office properties were the largest source of new issuances in the single-borrower market.
+Added: Growth in the portfolio was largely driven by additions of investment-grade-rated securities backed by industrial logistics, grocery-anchored retail, and self-storage properties.
+Added: As of March 31, 2025, we had no delinquencies in our CMBS portfolio.
The following table shows the composition of our CMBS portfolio by maturity year and sector:
−Removed: Commercial Mortgage-Backed Securities Sector Details (at September 30, 2024)
+Added: Commercial Mortgage-Backed Securities Sector Details (at March 31, 2025)
($ in millions)
7 unchanged sentences
2031 245 94 0 0 0 0 0 0 339 66.5 2.0
−Removed: 2031 238.5 95.0 0 0 0 0 0 0 333.5 66.5 2.0
Total fair value $ 1,885 $ 409 $ 739 $ 135 $ 148 $ 677 $ 550 $ 282 $ 4,825
12 unchanged sentences
A number above 1.0 generally indicates that there would not be an incentive for the borrower to default in light of the borrower ’ s excess income.
−Removed: The DSCR reported in the table is calculated based on the most currently available net operating income and mortgage payments for the borrower, which, for many securities, is data as of December 31, 2023.
−Removed: Other Asset-Backed Securities (OABS) The following table details the credit quality rating and fair value of our OABS, along with a comparison of the fair value at September 30, 2024, to our original investment value (adjusted for returns of principal, amortization, and write-downs):
−Removed: Other Asset-Backed Securities (at September 30, 2024)
+Added: The DSCR reported in the table is calculated based on the most currently available net operating income and mortgage payments for the borrower.
+Added: Other Asset-Backed Securities (OABS) The following table details the credit quality rating and fair value of our OABS, along with a comparison of the fair value at March 31, 2025, to our original investment value (adjusted for returns of principal, amortization, and write-downs):
+Added: Other Asset-Backed Securities (at March 31, 2025)
($ in millions)
8 unchanged sentences
Increase (decrease) in value 0.3 % 0 % (4.8) % (2.6) % 0.3 % (1.0) % (0.3) %
−Removed: During the third quarter 2024, we selectively added securities to the OABS portfolio that we viewed as having attractive spreads and potential returns.
−Removed: Investments were predominately made in whole business securitization assets, in both new issue and secondary markets.
−Removed: Additionally, we increased our holdings in the automobile and equipment categories in highly-rated, senior, and short-tenor debt tranches in the new issue markets.
−Removed: The investments were partially offset by a decrease in our collateralized loan obligation assets due to elevated call redemptions.
+Added: During the first quarter 2025, we selectively added securities to the OABS portfolio that we viewed as having attractive spreads and potential returns.
+Added: The securities we acquired were predominantly in the automobile and equipment categories in highly rated, senior, and short-tenor debt tranches.
+Added: Additions were primarily made in new issue markets with some selective secondary purchases.
STATE AND LOCAL GOVERNMENT OBLIGATIONS
−Removed: The following table details the credit quality rating of our state and local government obligations (municipal securities) at September 30, 2024, without the benefit of credit or bond insurance:
−Removed: Municipal Securities (at September 30, 2024)
+Added: The following table details the credit quality rating of our state and local government obligations (municipal securities) at March 31, 2025, without the benefit of credit or bond insurance:
+Added: Municipal Securities (at March 31, 2025)
Average Rating General
2 unchanged sentences
AA 561 750 1,311
−Removed: A 0 55.8 55.8
−Removed: BBB 0 30.1 30.1
Non-rated 0 0 0
Total $ 1,195 $ 1,409 $ 2,604
−Removed: Included in revenue bonds were $589.8 million of single-family housing revenue bonds issued by state housing finance agencies, of which $289.6 million were supported by individual mortgages held by the state housing finance agencies and $300.2 million were supported by mortgage-backed securities.
+Added: Included in revenue bonds were $608 million of single-family housing revenue bonds issued by state housing finance agencies, of which $282 million were supported by
+Added: individual mortgages held by the state housing finance
+Added: agencies and $326 million were supported by mortgage-backed securities.
Of the revenue bonds supported by individual mortgages held by the state housing finance agencies, the overall credit quality rating was AA+.
3 unchanged sentences
the remaining 17% were collateralized by Fannie Mae and Freddie Mac mortgages.
−Removed: Although credit spreads of municipal bonds continued to widen during the third quarter of 2024, we still view most of the market as relatively unattractive.
−Removed: However, we selectively added to this portfolio, with a focus on high-quality securities with shorter maturities, which we viewed as having more favorable risk/reward profiles.
+Added: Although credit spreads of municipal bonds widened, we still viewed most of the market as relatively unattractive.
+Added: We selectively added to the municipal portfolio during the first quarter 2025, with a focus on high-quality securities with shorter maturities, which we viewed as having more favorable risk/reward profiles.
CORPORATE AND OTHER DEBT SECURITIES
−Removed: The following table details the credit quality rating of our corporate and other debt securities at September 30, 2024:
−Removed: Corporate and Other Debt Securities (at September 30, 2024)
+Added: The following table details the credit quality rating of our corporate and other debt securities at March 31, 2025:
+Added: Corporate and Other Debt Securities (at March 31, 2025)
Average Rating Consumer Industrial Communication Financial Services Technology Basic Materials Energy Total
8 unchanged sentences
Total fair value $ 4,694 $ 1,915 $ 530 $ 5,428 $ 1,346 $ 180 $ 1,923 $ 16,016
−Removed: The size of our corporate and other debt portfolio increased during the third quarter to $15.0 billion at September 30, 2024, from $13.2 billion at June 30, 2024.
−Removed: We selectively increased exposure to investment-grade securities but continued to predominately focus on shorter maturities, which we viewed as having more favorable risk/reward profiles.
−Removed: At September 30, 2024 and June 30, 2024, corporate and other debt securities made up approximately 20% and 19%, respectively, of our fixed-income securities portfolio.
−Removed: The duration of the corporate and other debt portfolio increased to 2.7 years at September 30, 2024 from 2.6 years at June 30, 2024.
+Added: The size of our corporate and other debt portfolio increased to $16.0 billion at March 31, 2025, from $14.0 billion at
+Added: December 31, 2024.
+Added: Credit spreads provided more reward for the risks during the quarter.
+Added: At March 31, 2025 and
+Added: December 31, 2024, corporate and other debt securities made up approximately 20% and 18%, respectively, of our fixed-income portfolio.
+Added: The duration of the corporate and other debt portfolio increased slightly to 2.7 years at March 31, 2025, from 2.6 years at December 31, 2024.
NONREDEEMABLE PREFERRED STOCKS
−Removed: The table below shows the exposure break-down by sector and rating at September 30, 2024:
−Removed: Nonredeemable Preferred Stocks (at September 30, 2024)
+Added: The table below shows the exposure break-down of our nonredeemable preferred stocks by sector and rating at March 31, 2025:
+Added: Nonredeemable Preferred Stocks (at March 31, 2025)
Financial Services
7 unchanged sentences
Total fair value $ 377 $ 14 $ 86 $ 53 $ 15 $ 39 $ 584
−Removed: The majority of these securities have fixed-rate dividends until a call date and then, if not called, generally convert to floating-rate dividends.
+Added: The majority of our nonredeemable preferred securities have fixed-rate dividends until a call date and then, if not called, generally convert to floating-rate dividends.
The interest rate duration is calculated to reflect the call, floor, and floating-rate features.
Although a nonredeemable preferred stock will remain outstanding if not called, its interest rate duration will reflect the variable nature of the dividend.
−Removed: As of September 30, 2024, our non-investment-grade nonredeemable preferred stocks were all with issuers that maintain investment-grade senior debt ratings.
+Added: At March 31, 2025, our non-investment-grade nonredeemable preferred stocks were with issuers that maintain investment-grade senior debt ratings.
We also face the risk that dividend payments could be deferred for one or more periods or skipped entirely.
−Removed: As of September 30, 2024, we expect all of these securities to pay their dividends in full and on time.
+Added: As of March 31, 2025, we expect all of these securities to pay their dividends in full and on time.
Approximately 97% of our nonredeemable preferred stocks pay dividends that have tax preferential characteristics, while the balance pay dividends that are fully taxable.
−Removed: At September 30, 2024, the nonredeemable preferred stock portfolio fair value was $0.7 billion, which is a slight decrease from $0.8 billion at June 30, 2024.
+Added: At March 31, 2025, the nonredeemable preferred stock portfolio fair value was $0.6 billion, which is a slight decrease from $0.7 billion at December 31, 2024.
This decline was primarily due to nonredeemable preferred stocks that were called or sold because they had less attractive risk/reward profiles.
Common Equities
−Removed: Common equities, as reported on the balance sheets, were comprised of the following:
−Removed: ($ in millions) September 30, 2024 September 30, 2023 December 31, 2023
+Added: Common equities, as reported on our consolidated balance sheets, were comprised of the following:
+Added: ($ in millions) March 31, 2025 March 31, 2024 December 31, 2024
Common stocks $ 3,353 99.1 % $ 3,170 99.2 % $ 3,550 99.3 %
4 unchanged sentences
The majority of our common stock portfolio consists of individual holdings selected based on their contribution to the correlation with the Russell 1000 Index.
−Removed: We held 786 out of 1,009, or 78%, of the common stocks comprising the index at September 30, 2024, which made up 95% of the total market capitalization of the index.
−Removed: At September 30, 2024 the year-to-date GAAP income total return did not meet our targeted tracking error of +/- 50 basis points.
−Removed: We expect to be within our targeted tracking error over the longer term.
−Removed: At September 30, 2023 and December 31, 2023, the year-to-date GAAP income total return was within our targeted tracking error.
+Added: We held 702 out of 1,008, or 70%, of the common stocks comprising the index at March 31, 2025, which made up 94% of the total market capitalization of the index.
+Added: At both March 31, 2025 and 2024, the year-to-date GAAP income total return was within our targeted tracking error of +/- 50 basis points.
+Added: At December 31, 2024, the full year GAAP income total return did not meet our targeted tracking error.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995:
12 unchanged sentences
• whether we effectively manage complexity as we develop and deliver products and customer experiences;
−Removed: • our ability to attract, develop, and retain talent and maintain appropriate staffing levels;
−Removed: • the impact of misconduct or fraudulent acts by employees, agents, and third parties to our business and/or exposure to regulatory assessments;
• the highly competitive nature of property-casualty insurance markets;
1 unchanged sentence
• compliance with complex and changing laws and regulations;
+Added: • the impact of misconduct or fraudulent acts by employees, agents, and third parties to our business and/or exposure to regulatory assessments;
+Added: • our ability to attract, develop, and retain talent and maintain appropriate staffing levels;
• litigation challenging our business practices, and those of our competitors and other companies;
7 unchanged sentences
• legal restrictions on our insurance subsidiaries’ ability to pay dividends to The Progressive Corporation;
−Removed: • our ability to obtain capital when necessary to support our business and potential growth;
+Added: • our ability to obtain capital when necessary to support our business, our financial condition, and potential growth;
• evaluations and ratings by credit rating and other rating agencies;
11 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.