PROGRESSIVE CORP/OH/

Previous wording

The Progressive Corporation’s insurance subsidiaries recognized substantial year-over-year growth in both premiums and policies in force during the second quarter 2025, compared to the same period last year, while maintaining an underwriting profit better than our 4% companywide calendar-year underwriting profit goal.

Current wording

The Progressive Corporation’s insurance subsidiaries recognized strong year-over-year growth in both premiums and policies in force during the third 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

During the second quarter 2025, we wrote $20.1 billion of net premiums written, which was $2.2 billion more than we generated during the same period last year. Companywide net premiums written and earned increased 12% and 18%, respectively, during the second quarter 2025, compared to the same period last year. Policies in force increased 15%, or by 5.0 million policies, compared to June 30, 2024; with policies in force increasing by 1.0 million in the second quarter 2025. We experienced profitable growth during the second quarter 2025, with a strong underwriting profit margin of 13.8%.

Current wording

During the third quarter 2025, we wrote $21.4 billion of companywide net premiums written, which was $1.9 billion, or 10%, more than we generated during the same period last year, with a 14% increase in net premiums earned. Policies in force increased 12%, or by 4.2 million policies, compared to September 30, 2024; with policies in force increasing by 0.8 million in the third quarter 2025. While experiencing this strong growth during the third quarter 2025, we also maintained strong profitability, with an underwriting profit margin of 10.5%.

Previous wording

Our Personal Lines segment experienced strong year-over-year growth for the second quarter 2025, with net premiums written increasing 15% and policies in force up 16%, over the significant growth we experienced in the second quarter 2024. This growth was primarily driven by our personal auto products and reflects new and renewal application growth, which we believe is mainly attributable to increased advertising spend, competitively priced products, and our agency incentive compensation programs.

Current wording

Our Personal Lines segment experienced year-over-year growth for the third quarter 2025, with net premiums written increasing 12% and policies in force up 13%, over the significant growth of 28% in net premiums written and 15% in policies in force we experienced in the third quarter last year. This growth was primarily driven by our personal auto products and reflects renewal application growth, driven by new applications gained over the last year renewing during the quarter.

Previous wording

During the second quarter 2025, on a countrywide basis, we decreased personal auto rates less than 1% and increased our personal property rates about 4%, 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

Current wording

During the third 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 business, we increased rates about 2% in the aggregate during the third quarter 2025.

Previous wording

While we currently believe we are adequately priced in our personal auto products in most states, 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 over time. While our focus has been on trying to maintain stable rates for customers, effective tariffs and other retaliatory actions will likely result in higher loss costs, which could result in a reduction in profitability and the possible need for higher than currently anticipated rate increases throughout 2025 and 2026. While we expect to continue increasing rates in our personal property and core commercial auto products through the remainder of 2025, we will continue to monitor the impact from tariffs and other potential changes in the regulatory environment as we evaluate the possible need for additional rate increases.

Current wording

While we currently continue to believe we are adequately priced in our personal auto products in most states, 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 over time. While our focus has been on trying to maintain stable rates for customers, effective tariffs and other retaliatory actions will likely result in higher loss costs, which could result in a reduction in profitability and the possible need for higher than currently anticipated rate increases throughout 2025 and 2026. While we expect to continue increasing rates in our personal property and core commercial auto products through the remainder of 2025, we will continue to monitor the impact from tariffs and other potential changes in the regulatory environment as we evaluate the possible need for additional rate increases.

Previous wording

Since Florida insurance reform was enacted in early 2023, we have seen lower loss costs on certain types of personal auto accident claims and favorable reserve development, and we have experienced strong profitability in our Florida personal auto business. In response to these trends, we have lowered Florida personal auto rates twice in the last year. Despite these actions, it is possible that our profit for personal auto in Florida for the 2023 to 2025 period will exceed the statutory profit limit that a Florida statute imposes on the profit that any insurance group can earn on personal auto insurance over any three-calendar-year period and that we will need to pay any profit above

Current wording

Since Florida insurance reform was enacted in early 2023, we have seen lower loss costs on certain types of personal auto accident claims and favorable reserve development, and we have experienced strong profitability in our Florida personal auto business. Despite actions to lower rates in the last year, it is probable that our personal auto profit in Florida for the 2023 to 2025 period will exceed the statutory profit limit that a Florida statute imposes on the profit that any insurance group can earn on personal auto insurance over any three-calendar-year period. In such event, we would need to credit any profit above the limit to all Florida personal auto policyholders active at December 31, 2025. As a result, in September 2025, we recorded a $950 million policyholder credit expense, which represents our current estimate of the profit we will earn on the three-calendar-year period ending December 31, 2025, in excess of the permitted profit limit. This liability will continue to be refined through the fourth quarter 2025. See Financial Condition for further information.

Previous wording

At June 30, 2025, total capital (debt plus shareholders’ equity) was $39.5 billion, which was an increase of $7.0 billion from year-end 2024, primarily driven by the $7.1 billion of comprehensive income earned in the first half of 2025.

Current wording

At September 30, 2025, total capital (debt plus shareholders’ equity) was $42.3 billion, which was an increase of $9.9 billion from year-end 2024, primarily driven by the $10.0 billion of comprehensive income earned in the first nine months of 2025.

Previous wording

Our underwriting profit margin was 13.8% during the second quarter 2025, compared to 8.1% during the second quarter 2024. Our Personal Lines and Commercial Lines operating segments both generated strong profitability for the second quarter 2025, with margins of 14.0% and 13.2%, respectively. Underwriting profit was up significantly on a year-over-year basis, for the second quarter 2025, with our companywide loss and loss adjustment expense (LAE) ratio decreasing 6.1 points. The decrease in the loss and LAE ratio was primarily driven by a decrease in catastrophe losses in Personal Lines and by favorable prior accident years reserve development in both Personal Lines and Commercial Lines.

Current wording

Our companywide underwriting profit margin was 10.5% during the third quarter 2025, compared to 11.0% during the third quarter 2024. For the third quarter 2025, our loss and loss adjustment expense (LAE) ratio decreased 3.7 points, and our underwriting expense ratio increased 4.2 points, compared to the same period last year. The decrease in the loss and LAE ratio was primarily driven by a decrease in catastrophe losses and by favorable prior accident years reserve development in both Personal Lines and Commercial Lines. The increase in the underwriting expense ratio was primarily driven by the Florida personal auto excess profit policyholder credit, previously discussed, adding 4.6 points to the companywide ratio. Our Personal Lines and Commercial Lines operating segments both generated strong profitability for the third quarter 2025, with margins of 10.5% and 10.8%, respectively. Excluding the Florida personal auto excess profit policyholder credit, the Personal Lines underwriting margin would have been 15.8%.

Previous wording

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. During the second quarter 2025, our advertising spend was $1.2 billion, which was 35%, or 0.7 points, greater than the second quarter last year. The expense ratio impact from increased advertising spend was partially offset by a decrease in certain general expenses.

Current wording

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. During the third quarter 2025, our advertising spend was $1.3 billion, which was 10% greater than the third quarter last year, although, due to the growth in net premiums earned, advertising spend contributed 0.2 less points to the underwriting expense ratio in the third quarter 2025, compared to the same period last year.

Previous wording

Our Personal Lines segment is comprised of our personal vehicle and property products. Personal Lines vehicles include both 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., recreational vehicles, such as motorcycles, RVs, and watercraft). Our Personal Lines underwriting margin for the second quarter 2025 was 14.0%, with personal vehicle and property products reporting 13.8% and 16.4%, respectively. The special lines profitability had minimal impact to our personal vehicle combined ratio during the second quarter 2025.

Current wording

Our Personal Lines segment is comprised of our personal vehicle and property products. Personal Lines vehicles include both 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., recreational vehicles, such as motorcycles, RVs, and watercraft). Our Personal Lines underwriting margin for the third quarter 2025 was 10.5%, with personal vehicle and property products reporting 9.3% and 36.5%, respectively, with Florida excess profit credits reducing the personal vehicles margin by 5.5%. Profitability in our special lines products had minimal impact to our personal vehicle combined ratio during the third quarter 2025. The substantially high underwriting profit margin in our personal property products was primarily driven by

Previous wording

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 second quarter 2025 was 13.2%.

Current wording

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 third quarter 2025 was 10.8%.

Previous wording

For the second quarter 2025, Personal Lines generated strong net premiums written growth of 15%, with the agency and direct personal vehicle businesses and property business growing 11%, 20%, and 2%, respectively, compared to the same period last year. Commercial Lines net premiums written decreased 6%.

Current wording

For the third quarter 2025, Personal Lines generated strong net premiums written growth of 12%, with the agency and direct personal vehicle businesses and property business growing 9%, 15%, and 5%, respectively, compared to the same period last year. Commercial Lines net premiums written decreased 6% year over year.

Previous wording

During the second quarter 2025, we experienced an increase in both total Personal Lines new and renewal business applications, primarily driven by significant increases in our personal vehicle products, due to continued increased advertising spend, our continued efforts to get back into independent agents’ quote flows, and our competitiveness in the marketplace. New and renewal personal auto applications increased 8% and 22%, respectively, during the second quarter 2025, on top of the significant growth we experienced in the same period last year.

Current wording

Relative to the significant growth we experienced in our personal vehicle products during the third quarter 2024, we experienced a small decrease in total Personal Lines new business applications during the third quarter 2025. Total Personal Lines renewal business applications increased substantially, primarily driven by the significant new business application growth experienced in our personal vehicle products in prior periods. New and renewal personal auto applications decreased 2% and increased 20%, respectively, for the third quarter 2025, compared to the same period in the prior year.

Previous wording

In our personal property business, significant growth in new applications in our renters policies was offset by declines in our homeowners product, which we define as our total personal property business excluding renters and umbrella products. For the second quarter 2025, the new

Current wording

In our personal property business, the strong growth in new applications in our renters policies was offset by declines in our homeowners product, which we define as our total personal property business excluding renters and umbrella products. For the third quarter 2025, the new business applications in our homeowners product decreased just over 35%, compared to the same period last year, with a significant decrease in both the less volatile and more volatile (e.g., coastal and hail-prone states) weather-related states.

Previous wording

During the second 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 our homeowners product only when bundled with a Progressive personal auto policy, where permitted, and continued to exit the non-owner-occupied home market. In addition, we maintained our cost sharing through mandatory wind and hail deductibles and roof depreciation schedules in most markets. We believe these actions adversely impacted new business application growth. We plan to continue these actions during the remainder of 2025 in the more volatile weather-related markets and will determine readiness for new business growth at the state level based on our concentration risks, product segmentation, rate adequacy, and cost sharing execution.

Current wording

During the third 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 our homeowners product only when bundled with a Progressive personal auto policy, where permitted, and continued to exit the non-owner-occupied home market. In addition, we maintained our cost sharing through mandatory wind and hail deductibles and roof depreciation schedules in most markets. We believe these actions adversely impacted new business application growth. We plan to continue certain actions during the remainder of 2025. During the third quarter 2025, we began to take actions in several markets to generate new business growth at the state level based on our concentration risks, product segmentation, rate adequacy, cost sharing execution, and regulatory and market conditions. Some of these actions include expanding agency relationships, lifting certain agency restrictions put in place in 2024, and reopening new business in our direct channel.

Previous wording

In Commercial Lines, we experienced a decrease in net premiums written of 6% during the second quarter 2025, compared to the same period last year, despite experiencing policies in force growth of 6%. The decline in net premiums written during the quarter was primarily driven by changes in the length of policy terms and related renewal timing for certain transportation network company (TNC) business policies. These policies were renewed for a 6-month term in the second quarter 2024 and subsequently renewed for a 12-month term in the fourth quarter 2024. In addition, our contractor and business auto business market targets (BMT) experienced a shift to a greater mix of policies with 6-month terms, compared to the second quarter 2024. As 12-month policies have about twice the amount of net premiums written compared to 6-month policies, the shift negatively impacted average premiums.

Current wording

The total Commercial Lines net premiums written decreased 6% for the third quarter 2025, compared to the same period in the prior year, primarily driven by our TNC business, reflecting decreases in projected mileage, which is the basis for computing premiums, during the third quarter 2025, compared to increases in projected mileage during the third quarter 2024. In addition, our contractor and business auto BMTs experienced a shift to a greater mix of policies with 6-month terms, compared to the third quarter 2024. As 12-month policies have about twice the amount of net premiums written compared to 6-month policies, the shift negatively impacted average premiums. A mix shift to lower average written premium BMTs also contributed to the decline. Excluding the TNC business, total Commercial Lines net premiums written was down 2% for the third quarter 2025, on a year-over-year basis.

Previous wording

New and renewal business applications in our core commercial auto products increased 3% and 5%, respectively, during the second quarter 2025, compared to the same period last year. The new business application growth was primarily due to an increase in quote volume in all BMTs and improved conversion in all BMTs, other than for-hire transportation and for-hire specialty. 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 8% during the second 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.

Current wording

New and renewal business applications in our core commercial auto products decreased 1% and increased 6%, respectively, for the third quarter 2025, compared to the same period last year. The new business application decline was predominately driven by the for-hire transportation BMT, primarily attributable to rate and non-rate actions taken to address profitability challenges and, to a lesser extent, the continued decline in the number of active motor carriers in this BMT. Excluding the impact of this BMT, our core commercial auto new application growth would have been 3% for the third quarter 2025.

Previous wording

During the second quarter 2025, on a year-over-year basis, average written premium per policy decreased 1% in personal auto and 6% in both our personal property and core commercial auto products. In aggregate, we took minimal personal auto rate decreases during the second quarter 2025. 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 14% taken over the last 12 months and higher premium coverages reflecting increased property values.

Current wording

For the third quarter 2025, on a year-over-year basis, average written premium per policy decreased 1%, 5%, and 7% in the personal auto, personal property, and core commercial auto products, respectively. In aggregate, we took minimal personal auto rate increases during the third quarter 2025. 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 11% taken over the last 12 months and higher premium coverages reflecting increased property values.

Previous wording

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, as well as a shift in policy term towards more 6-month policies in our contractor and business auto BMTs. This decrease was partially offset by rate increases of about 7%, 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 wording

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, as well as a shift in policy term towards more 6-month policies in our contractor and business auto BMTs. This decrease was partially offset by

Previous wording

We believe a key element in improving the accuracy of our personal auto rating is Snapshot®, our usage-based insurance offering. During the second quarter 2025, the personal auto adoption rates for consumers enrolling in the program decreased 2% in agency and increased 6% in direct, compared to the same period last year. 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.

Current wording

We believe a key element in improving the accuracy of our personal auto rating is Snapshot®, our usage-based insurance offering. For the third quarter 2025, the personal auto adoption rates for consumers enrolling in the program decreased 1% in agency and increased 6% in direct, compared to the same period last year. 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

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

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 6% year over year for the third quarter 2025. On a trailing 3-month basis, our personal auto policy life expectancy was down 7% for the third quarter 2025, compared to the same period last year, which we believe is primarily due to increased shopping and competition in the marketplace, and due to a shift in our mix of business. Due, in part, to the efforts of our customer preservation team, during the period we saw an increase in existing customers who went through our new customer quote process to either modify existing coverage or to find a lower rate. As a result, some of these customers replaced their existing policies with new Progressive policies, which negatively impacted policy life expectancy but retained the customer.

Previous wording

Our trailing 12-month policy life expectancy was down 17% for our personal property products year over year for the second quarter 2025. We believe our personal property retention decreased primarily as a result of a mix shift to more renters policies, rate increases, and the non-renewal of certain policies.

Current wording

Our trailing 12-month policy life expectancy was down 15% for our personal property products year over year for the third quarter 2025. We believe our personal property retention decreased primarily as a result of a mix shift to more renters policies.

Previous wording

For our core commercial auto products, our trailing 12-month policy life expectancy increased 5%, compared to the prior year, which we believe is due to the moderation of our rate increases, compared to competitor rate increases, and our improving competitiveness in the marketplace. The increase in the core commercial auto policy life expectancy was across all BMTs, except in for-hire specialty and for-hire transportation, which we believe is due to various initiatives to help with improving policy life expectancy such as payment and renewal reminders.

Current wording

For our core commercial auto products, our trailing 12-month policy life expectancy increased 11%, compared to the prior year, which we believe is due to the moderation of our rate increases, compared to competitor rate increases, our improving competitiveness in the marketplace, and various initiatives to help with improving policy life expectancy such as payment and renewal reminders. The increase in the core commercial auto policy life expectancy was across all BMTs, except in for-hire specialty.

Previous wording

The fair value of our investment portfolio was $88.6 billion at June 30, 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.

Current wording

The fair value of our investment portfolio was $94.5 billion at September 30, 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 recurring investment income generated a pretax book yield of 4.2% for the second quarter 2025, compared to 3.9% for the same period in 2024. The increase from the 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 2.1% and 0.9% for the second quarter 2025 and 2024, respectively. Our fixed-income and common stock portfolios had FTE total returns of 1.7% and 10.9%, respectively, for the second quarter 2025, compared to 0.8% and 3.6%, respectively, last year. The increase in the fixed-income portfolio FTE total return primarily reflected movements in U.S. Treasury yields year-over-year. The increase in the common stock portfolio FTE total return reflected general market conditions.

Current wording

Our recurring investment income generated a pretax book yield of 4.2% for the third quarter 2025, compared to 4.0% for the same period in 2024. The increase from the 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 1.7% and 4.0% for the third quarter 2025 and 2024, respectively. Our fixed-income and common stock portfolios had FTE total returns of 1.5% and 8.1%, respectively, for the third quarter 2025, compared to 3.9% and 5.8%, respectively, last year. The decrease in the fixed-income portfolio FTE total return primarily reflected movements in U.S. Treasury yields year-over-year. The increase in the common stock portfolio FTE total return reflected general market conditions.

Previous wording

At June 30, 2025 and 2024, and December 31, 2024, the fixed-income portfolio had a weighted average credit quality of AA-. At June 30, 2025, the fixed-income portfolio duration was 3.4 years, compared to 3.2 years at June 30, 2024, and 3.3 years at December 31, 2024. During 2025, we increased our duration to take advantage of higher yields in the market.

Current wording

At September 30, 2025 and 2024, and December 31, 2024, the fixed-income portfolio had a weighted average credit quality of AA-. At September 30, 2025, the fixed-income portfolio duration was 3.4 years, compared to 3.3 years at September 30, 2024 and December 31, 2024. During 2025, we increased our duration to take advantage of higher yields in the market.

Previous wording

At June 30, 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 the investment portfolio is in a very strong position as we move into the third quarter of 2025.

Current wording

At September 30, 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 the investment portfolio is in a very strong position as we move into the fourth quarter of 2025.

Previous wording

Operations generated positive cash flows of $9.2 billion and $7.5 billion for the six months ended June 30, 2025 and 2024, respectively. The increase in operating cash flow for the first six 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.

Current wording

Operations generated positive cash flows of $14.4 billion and $12.1 billion for the nine months ended September 30, 2025 and 2024, respectively. The increase in operating cash flow for the first nine months of 2025, compared to the same period last year, was primarily 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

Previous wording

As of June 30, 2025, we held $48.9 billion in short-term investments and U.S. Treasury securities, which represented about 55% 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. See Item 1A, Risk Factors in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission for the year ended December 31, 2024 (our 2024 Form 10-K), for a discussion of certain matters that may affect our portfolio and capital position.

Current wording

As of September 30, 2025, we held $52.9 billion in short-term investments and U.S. Treasury securities, which represented about 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. See Item 1A, Risk Factors in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission for the year ended December 31, 2024 (our 2024 Form 10-K), for a discussion of certain matters that may affect our portfolio and capital position.

Previous wording

Our total capital (debt plus shareholders’ equity) was $39.5 billion, based on book value, at June 30, 2025, compared to $30.2 billion at June 30, 2024, and $32.5 billion at December 31, 2024. The increase from year-end 2024, primarily reflected the comprehensive income recognized during the first six months of 2025. Our debt-to-total capital ratio was 17.5% at June 30, 2025, 22.8% at June 30, 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 wording

Our total capital (debt plus shareholders’ equity) was $42.3 billion, based on book value, at September 30, 2025, compared to $34.1 billion at September 30, 2024, and $32.5 billion at December 31, 2024. The increase from year-end 2024, primarily reflects the comprehensive income recognized during the first nine months of 2025. Our debt-to-total capital ratio was 16.3% at September 30, 2025, 20.2% at September 30, 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%.

Previous 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.

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. During the second quarter 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

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.

Current wording

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, investment losses, catastrophic and other insured losses, natural disasters, and other significant business interruptions, to estimate our potential capital needs.

Previous wording

During the first six months of 2025, 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 both the first and second quarters of 2025. These dividends, which were $59 million and $58 million, respectively, in the aggregate, were paid in April 2025 and July 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).

Current wording

During the first nine months of 2025, 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 2025. These quarterly common share dividends, which were $59 million, $58 million, and $59 million, in the aggregate, were paid in April 2025, July 2025, and October 2025, respectively. In January 2025, we also paid a common share dividend 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

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 six months of 2025, we repurchased 0.3 million common shares, at a total cost of $67 million, including 0.1 million shares in the second quarter 2025, both in the open market and 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 the 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 nine months of 2025, we repurchased 0.4 million common shares, at a total cost of $107 million, including 0.1 million shares in the third quarter 2025, both in the open market and 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 the potential capital needs of our business.

Previous wording

At June 30, 2025, we had $5.0 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 June 30, 2025, our estimated consolidated statutory surplus was $31.1 billion.

Current wording

provide additional capital to the insurance subsidiaries to fund potential future growth and other opportunities. As of September 30, 2025, our estimated consolidated statutory surplus was $33.7 billion.

Previous wording

During the first six months of 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, from those discussed in our 2024 Annual Report to Shareholders.

Current wording

During the first nine months of 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, from those discussed in our 2024 Annual Report to Shareholders.

Previous wording

On July 4, 2025, H.R. 1, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14” (the Act) was signed into law by the President of the United

Current wording

On July 4, 2025, H.R. 1, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14” (the Act) was signed into law by the President of the United States. The Act contains numerous tax provisions applicable to corporations. These provisions will not have a material adverse effect on our financial condition or results of operations.

Previous wording

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 second quarter 2025. Therefore, much of the following discussion focuses only on our core commercial auto products.

Current wording

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 third quarter 2025. Therefore, much of the following discussion focuses only on our core commercial auto products.

Previous wording

13%, 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.

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 September 30, 2025 and 2024, 11% and 13%, 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 written 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 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 during the second quarter 2025 was generated through the independent agency channel, with the balance through the direct channel.

Current wording

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 during the third quarter 2025 was generated through the independent agency channel, with the balance through the direct channel.