PROGRESSIVE CORPOH
For the period ended Mar 31, 2025. Filed May 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 5, 2025
PGR$227.52-0.1%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-04.
0000080661-24-000045
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-05.
0000080661-25-000023
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 274 previous paragraphs and 269 current paragraphs.
118 unchanged; 94 reworded; 49 added; 59 removed; 3 previous and 8 current paragraphs rearranged.
Tables are not compared: 31 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
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%. 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%. 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.
Current report
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. 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.
Current report
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. 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.
Current report
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. 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. 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. We expect both the personal property and core commercial auto products to have near double-digit rate increases through the remainder of 2025.
Current report
Starting in the first quarter 2025, the U.S. government announced additional tariffs on goods imported into the U.S. from numerous countries, which have, in response, resulted in additional tariffs against the U.S. 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. 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.
Current report
Our underwriting profit margin was 14.0% during the first quarter 2025, compared to 13.9% during the first quarter 2024. Our Personal Lines and Commercial Lines operating segments both generated strong profitability for the first three months of 2025. 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. 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. The increase in our companywide expense ratio during the first quarter 2025 primarily reflected increased advertising expense. 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.
Current report
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. 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.
Current report
Our Personal Lines segment is comprised of our personal vehicle and property products. Personal Lines vehicles include both personal auto and special lines products. 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. 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.
Current report
Our Commercial Lines segment includes our core commercial auto products, TNC business, Fleet & Specialty products, and BOP product. Our total Commercial Lines underwriting profitability for the first quarter 2025 was 12.5%.
Current report
For the first quarter 2025, both segments generated strong net premiums written growth. 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%.
Current report
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. 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
Current report
weather-related markets (e.g., coastal and hail-prone states).
Current report
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. 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. In addition, we expanded our cost sharing through mandatory wind and hail deductibles and roof depreciation schedules in markets where permitted. 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.
Current report
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. 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.
Current report
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. In aggregate, we took minimal personal auto rate increases during the first quarter 2025 on a companywide basis.
Current report
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. 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.
Current report
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. 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.
Current report
quarter 2025, compared to the same period last year, which we believe is due to increased shopping and the competitiveness in the marketplace.
Current report
Our trailing 12-month policy life expectancy was down 17% for our personal property products. 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.
Current report
December 31, 2024. The increase from year-end 2024, primarily reflected the comprehensive income recognized during the first three months of 2025. 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. Our debt-to-total capital ratios were consistent with our financial policy of maintaining a ratio of less than 30%.
Current report
We report our underwriting operations in two segments: Personal Lines and Commercial Lines. 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. 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. 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.
Current report
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. 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. Therefore, much of the following discussion focuses only on our core commercial auto products.
Current report
Within our Personal Lines segment, we often categorize our personal auto product policyholders into four consumer segments:
Current report
Our special lines and personal property products are written for 12-month terms. 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.
Current report
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.
Current report
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. The increase in our companywide expense ratio during the first quarter 2025, primarily reflected increased advertising expense. 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.
Current report
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. Excluding the impact of these recoveries, the change in severity for collision would have been consistent with that of property damage.
Current report
severity increased 10%, compared to the same period last year, in part, due to prior years unfavorable development.
Current report
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. 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. Our personal auto business discussions are further separated between the agency and direct distribution channel. 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.
Current report
Personal Auto - Agency
Current report
The year-over-year changes our personal auto agency business were as follows:
Current report
•Dianes and Wrights experienced significant policies in force and new application growth during the first quarter 2025; and
Current report
sale) increase of 11%, compared to the same period last year. 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. 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. 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.
Current report
Our personal auto rates were relatively stable during the quarter. 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.
Current report
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.
Current report
Personal Auto - Direct
Current report
The year-over-year changes in our personal auto direct business were as follows:
Current report
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. 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.
Current report
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.
Current report
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.
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Removed paragraphs (59)
Previous report
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. 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. All operating segments grew on a quarter-over-prior-year quarter basis. 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.
Previous report
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. 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. The policies in force growth reflected significant personal auto new business application growth, compared to the third quarter last year. 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. We also continued to focus on delivering competitive rates to consumers. 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.
Previous report
We reported a companywide combined ratio of 89.0, which was 3.4 points better than the third quarter last year. All of our operating segments were profitable during the third quarter, with each reporting underwriting profitability of greater than 10%.
Previous report
Several factors contributed to the significant year-over-year improvement in our underwriting profit. 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.
Previous report
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. 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.
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Our companywide catastrophe losses were 4.0 points, compared to 3.2 points for the third quarter last year. 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. 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.
Previous report
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. 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. For our vehicle business (including special lines), we estimate combined losses of about $600 million for Hurricanes Helene and Milton. 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. Reporting patterns, mix, and other assumptions (including those related to salvage) will likely differ from our expectations.
Previous report
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. 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. 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.
Previous report
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. 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. Our Property business incurred 21.2 points of catastrophe losses due to Helene. 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. Just over 75% of this favorable development related to May 2024 storms.
Previous report
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). 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. 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.
Previous report
accident years reserve development. 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. As a result of the rate increases previously taken, during the third quarter 2024, we continued to experience underwriting profitability in our TNC business. 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.
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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.
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New applications in the Property business were up 42% over the third quarter last year, driven by significant growth in our renters policies. 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. 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.
Previous report
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. The growth in personal auto and commercial auto primarily reflected rate increases taken throughout 2023. 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. 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. We are also seeing a mix shift towards more renters policies, which have lower average written premiums. 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. 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.
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mobile devices being chosen for Snapshot monitoring for the majority of new enrollments.
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partially offset by the redemption of all of the outstanding Serial Preferred Shares, Series B. 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. 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.
Previous report
Our financial policies include a goal of maintaining debt below 30% of total capital at book value. 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. 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. We will continue to monitor this ratio, market conditions, and our capital needs going forward.
Previous report
We report our underwriting operations in three segments: Personal Lines, Commercial Lines, and Property. 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.
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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; our special lines products accounted for the balance.
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Our Personal Lines business writes insurance for personal autos and special lines products (e.g., motorcycles, RVs, watercraft, and snowmobiles). Within Personal Lines, we often refer to our four consumer segments:
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In addition to the core commercial auto business, Commercial Lines writes coverage for TNC businesses and large fleet motor carriers.
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Our Property business writes residential property insurance for homeowners, other property owners, and renters, and umbrella insurance. 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. All of our Property policies have 12-month terms.
Previous report
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. 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. 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. 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.
Previous report
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. 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. With personal auto severity trends stabilizing, our loss costs have been less volatile during 2024.
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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
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last year. 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.
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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. 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.
Previous report
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. 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. 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.
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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.
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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
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over 75% of this favorable development related to May 2024 catastrophic weather events.
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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. 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. 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.
Previous report
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. 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.
Previous report
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. 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.
Previous report
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.
Previous report
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. 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.
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The following table shows our year-over-year changes for our Personal Lines business:
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In our Personal Lines business, we experienced significant year-over-year new application growth in the third quarter 2024. 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. 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.
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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.
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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. 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. 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. We will continue to adjust rates as we deem necessary.
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Previous wording
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.
Current wording
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.
Previous wording
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. 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. 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.
Current wording
For the first quarter 2025, the year-over-year increase in net income primarily reflected an increase in underwriting income. 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.
Previous wording
Comprehensive income increased $3.2 billion over the third quarter last year. 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. The change in the unrealized losses we recognized during both periods were primarily driven by the then-current economic environment.
Current wording
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.
Previous wording
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. 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.
Current wording
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.
Previous wording
During the quarter, our vehicle businesses’ profitability benefited from higher average earned premium per policy, lower incurred loss frequency trends, and favorable prior
Current wording
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.
Previous wording
For the third quarter 2024, all segments generated strong net premiums written growth. Personal Lines premiums written grew 29%, with the Agency and Direct distribution channels growing 26% and 31%, respectively. Commercial Lines net premiums written grew 7%. 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.
Current wording
Changes in net premiums written are a function of new business applications (i.e., policies sold), business mix, premium per policy, and retention.
Previous wording
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. New personal auto applications increased 110% for the third quarter 2024, compared to a decrease of 20% in the third quarter last year.
Current wording
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. New personal auto applications increased 32% during the first quarter 2025, compared to the same period in the prior year.
Previous wording
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. Excluding the impact of the for-hire transportation BMT, which had a year-over-year decrease in new applications, our core commercial auto new application growth would have been 17% during the third quarter 2024. 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.
Current wording
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. 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. 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.
Previous wording
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. 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.
Current wording
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.
Previous wording
We believe a key element in improving the accuracy of our rating is Snapshot®, our usage-based insurance offering for our personal auto product. 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. 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. 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. 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. We continue to invest in our mobile application, with
Current wording
We believe a key element in improving the accuracy of our personal auto rating is Snapshot®, our usage-based insurance offering. 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. 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. 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. We continue to invest in our mobile application, with the majority of new enrollments choosing mobile devices for Snapshot monitoring.
Previous wording
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. 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. 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.
Current wording
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. 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. 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.
Previous wording
We evaluate total personal auto retention using a trailing 12-month and a trailing 3-month policy life expectancy. 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. 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. The Agency channel trailing 12-month measure was up 8%, while the Direct channel was down 6%. 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.
Current wording
In personal auto, we evaluate personal auto retention using a trailing 12-month and a trailing 3-month policy life expectancy. 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. Our trailing 12-month total personal auto policy life expectancy was down 5% year over year for the first quarter 2025. On a trailing 3-month basis, our personal auto policy life expectancy was down 6% for the first
Previous wording
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. 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.
Current wording
For our core commercial auto products, our trailing 12-month policy life expectancy decreased 6%, compared to the prior year. 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. 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.
Previous wording
The fair value of our investment portfolio was $79.4 billion at September 30, 2024, compared to $66.0 billion at December 31, 2023. 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.
Current wording
The fair value of our investment portfolio was $83.7 billion at March 31, 2025, compared to $80.3 billion at December 31, 2024. 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.
Previous wording
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). At September 30, 2024 and December 31, 2023, 6% and 7%, respectively, of our portfolio was allocated to Group I securities with the remainder to Group II securities.
Current wording
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). 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.
Previous wording
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. The increase from prior year primarily reflected investing new cash from operations, and proceeds from maturing bonds, in higher coupon rate securities. 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. 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. The increase in the fixed-income portfolio FTE total return, compared to last year, primarily reflected movements in Treasury yields year-over-year. The increase in the common stock portfolio total return reflected general market conditions in the respective periods.
Current wording
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. The increase from prior year primarily reflected investing new cash from insurance operations, and proceeds from maturing bonds, in higher coupon rate securities. 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. 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. The increase in the fixed-income portfolio FTE total return primarily reflected movements in Treasury yields year-over-year. The decrease in the common stock portfolio FTE total return reflected general market conditions.
Previous wording
At September 30, 2024 and 2023, and December 31, 2023, the fixed-income portfolio had a weighted average credit quality of AA-. 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. During 2024, our duration was increased to take advantage of higher yields in the market.
Current wording
At March 31, 2025 and 2024, and December 31, 2024, the fixed-income portfolio had a weighted average credit quality of AA-. 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. During 2025, we increased our duration to take advantage of higher yields in the market.
Previous wording
At September 30, 2024, we continued to maintain a relatively conservative investment portfolio with a greater allocation to cash and treasuries. 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. 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.
Current wording
At March 31, 2025, we continued to maintain a relatively conservative investment portfolio with a greater allocation to cash and treasuries. We believe that this portfolio allocation positions us well to benefit from the continuing dynamic market environment. We believe that we are in a very strong position as we move into the second quarter of 2025.
Previous wording
Progressive’s insurance operations create liquidity by collecting and investing premiums from new and renewal business in advance of paying claims. As primarily an auto insurer, our claims liabilities generally have a short-term duration.
Current wording
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.
Previous wording
Operations generated positive cash flows of $12.1 billion and $8.2 billion for the nine months ended September 30, 2024 and 2023, respectively. 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. 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.
Current wording
Operations generated positive cash flows of $5.1 billion and $4.2 billion for the three months ended March 31, 2025 and 2024, respectively. 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. 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.
Previous wording
As of September 30, 2024, we held $45.2 billion in short-term investments and U.S. Treasury securities, which represented nearly 60% of our total portfolio. 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. 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, 2023, for a discussion of certain matters that may affect our portfolio and capital position.
Current wording
As of March 31, 2025, we held $46.9 billion in short-term investments and U.S. Treasury securities, which represented 56% of our total portfolio at quarter end. 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. While U.S. Treasury securities are viewed as having lower risk than many other investment opportunities, the U.S. Treasury announced it had reached its authorized borrowing limit and defaults under government obligations, including payments related to U.S. Treasury securities, could occur as soon as this summer. Although not likely probable, it is possible that the federal government could fail to raise the federal debt ceiling to avoid default. 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.
Previous wording
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. The increase from year end 2023, primarily reflected the comprehensive income recognized during the first nine months of 2024,
Current wording
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
Previous wording
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. 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. 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.
Current wording
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. In April 2025, we renewed the unsecured discretionary line of credit with PNC Bank, National Association, in the maximum principal amount of $300 million. 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.
Previous wording
During the first nine months of 2024, we returned capital to shareholders primarily through common share dividends and common share repurchases. Our Board of Directors declared a $0.10 per common share dividend in each of the first three quarters of 2024. These dividends, which were each $58.6 million in the aggregate, were paid in April 2024, July 2024, and October 2024. 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).
Current wording
During the first three months of 2025, we returned capital to shareholders primarily through common share dividends and common share repurchases. 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. 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).
Previous wording
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. 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. 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.
Current wording
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. 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. 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.
Previous wording
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. As of September 30, 2024, our estimated consolidated statutory surplus was $27.2 billion.
Current wording
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. As of March 31, 2025, our estimated consolidated statutory surplus was $29.6 billion.
Previous wording
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. 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. 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.
Current wording
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. 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.
Previous wording
Nevertheless, we may decide to raise additional capital to take advantage of attractive terms in the market and provide additional financial flexibility. We currently have an effective shelf registration with the U.S. 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. 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.
Current wording
Nevertheless, we may decide to raise additional capital to take advantage of attractive terms in the market and provide additional financial flexibility. We currently have an effective shelf registration with the U.S. 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. 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.
Previous wording
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. At September 30, 2024 and 2023, 13% and 14%, respectively, of our Agency auto policies in force were 12-month policies. 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
Current wording
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. At March 31, 2025 and 2024, 12% and 14%, respectively, of our agency personal auto policies in force were 12-month policies. 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.
Previous wording
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. Within our Commercial Lines business, our core commercial auto business operates in the following five traditional business market targets (BMT):
Current wording
Within our Commercial Lines segment, our core commercial auto business operates in the following five traditional business market targets (BMT):
Previous wording
At September 30, 2024, about 90% of Commercial Lines policies in force had 12-month terms. The majority of our Commercial Lines business is written through the independent agency channel although we continue to focus on growing our direct business. 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®). 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.
Current wording
At March 31, 2025, about 90% of Commercial Lines policies in force had 12-month terms. 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.
Previous wording
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.
Current wording
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.
Previous wording
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:
Current wording
Further underwriting results for our Personal Lines business, Commercial Lines business, and our underwriting operations in total, were as follows:
Previous wording
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. 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. In our 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.
Current wording
factors, some of which are discussed below. 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.
Previous wording
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. 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.
Current wording
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. On an accident year basis, our loss and LAE ratio was 0.7 points lower than the first quarter 2024.
Previous wording
To assist our customers impacted by Hurricanes Helene and Milton, we deployed over 2,300 claim representatives and independent adjusters. 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.
Current wording
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. 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.
Previous wording
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. We do not have catastrophe-specific reinsurance for our Personal Lines or commercial auto businesses, but we reinsure portions of our Property business. The Property business reinsurance programs include catastrophe per occurrence excess of loss contracts and aggregate excess of loss contracts. 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.
Current wording
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. We do not have catastrophe-specific reinsurance for our personal auto, special lines, or core commercial auto businesses. The personal property business reinsurance programs include catastrophe per occurrence excess of loss contracts and aggregate excess of loss contracts. 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.
Previous wording
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. During the second quarter 2024, we entered into new reinsurance contracts under our per occurrence excess of loss program for our Property business. The reinsurance program has a retention threshold for losses and ALAE from a single catastrophic event of $200 million. In general, our program includes coverage for $2.0 billion in losses and ALAE with additional substantial coverage for a second or third hurricane. When including the Florida Hurricane Catastrophe Fund that is specific to Florida, this coverage reaches an estimated $2.3 billion.
Current wording
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. With respect to our personal property business, in the first quarter 2025, we entered into a new catastrophe
Previous wording
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. The first and second layers provide coverage up to $85 million and $100 million, respectively.
Current wording
aggregate excess of loss reinsurance contract for claims occurring in 2025 that has multiple layers of coverage. 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. 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. This parametric loss coverage provides $15 million of coverage, net of a retention of $665 million.
Previous wording
we elected to purchase during 2024 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 2023 Form 10-K filed with the U.S. 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. See Item 1, Business – Reinsurance on Form 10-K for a discussion of our various reinsurance programs.
Current wording
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. Securities and Exchange Commission, for the year ended December 31, 2024, for a discussion of certain risks related to catastrophe events. See Item 1, Business – Reinsurance on Form 10-K for a discussion of our various reinsurance programs.
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Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
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. 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
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
•Robinsons had a high single-digit increase in policies in force, with a significant decline in new applications during the first quarter 2025.
Current report — wording carried from elsewhere
reflected movement in Treasury yields year-over-year. The common stock FTE total return reflected general market conditions.
Current report — wording carried from elsewhere
1 The credit quality ratings are assigned by NRSROs.
Current report — wording carried from elsewhere
individual mortgages held by the state housing finance
Current report — wording carried from elsewhere
agencies and $326 million were supported by mortgage-backed securities.
Current report — wording carried from elsewhere
December 31, 2024, corporate and other debt securities made up approximately 20% and 18%, respectively, of our fixed-income portfolio. 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.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
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. During the second quarter
Previous report — wording carried elsewhere
12-month policies have about twice the amount of net premiums written compared to 6-month policies. Our special lines products are written for 12-month terms.
Previous report — wording carried elsewhere
Underwriting expenses include policy acquisition costs and other underwriting expenses. The underwriting expense ratio is our underwriting expenses, net of certain fees and other revenues, expressed as a percentage of net premiums