PROGRESSIVE CORP/OH/

Previous 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%.

Current wording

The Progressive Corporation’s insurance subsidiaries maintained an underwriting profit better than our 4% companywide calendar-year underwriting profit goal during the first quarter 2026 and reported strong growth year over year in both premiums and policies in force. During the first quarter 2026, we maintained strong profitability, with a companywide underwriting profit margin of 13.6%. We wrote $23.6 billion of companywide net premiums written in the first quarter 2026, which was $1.4 billion, or 6%, more than we generated during the same period last year, with an 8% increase in net premiums earned. We ended the first quarter 2026 with 3.3 million, or 9%, more policies in force than at March 31, 2025; adding nearly one million policies in force in the first quarter 2026 alone.

Previous 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.

Current wording

Our Personal Lines segment experienced year-over-year growth for the first quarter 2026, with net premiums written increasing 7% and policies in force up 9%, over the significant growth of 20% in net premiums written and 18% in policies in force we experienced in the first quarter last year. The current period growth was primarily driven by policies in force growth in our personal auto products, which were up 11% compared to March 2025.

Previous wording

In Commercial Lines, we experienced a decrease in net premiums written of 6% for the third quarter 2025, compared to the same period last year, despite experiencing policies in force growth of 6%. The decline in net premiums written was primarily driven by a decrease in transportation network company (TNC) premiums, due to 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. To a lesser extent, the net premiums written decline was due to a shift to a greater mix of policies with 6-month terms in our contractor and business auto business market targets (BMT), which have about half the amount of net premiums written as 12-month policies, and to a mix shift to lower average written premium BMTs in our core commercial auto business (which excludes our TNC business, our Progressive Fleet & Specialty Programs (Fleet & Specialty) products, and our business owners’ policy (BOP) product). On a year-to-date basis for the period ended September 30, 2025, net premiums written in our TNC business were flat compared to the same period last year. Excluding TNC, Commercial Lines net premiums written would have decreased 2% for the third quarter 2025, compared to the same period last year.

Current wording

In Commercial Lines, we experienced an increase in both net premiums written and policies in force of 3% for the first quarter 2026, compared to the same period last year. The increase in net premiums written was primarily driven by an increase in transportation network company (TNC) premiums, due to the renewal of certain TNC policies that have higher projected mileage, which is the basis for computing premiums, and an increase in the percentage of premiums retained, compared to the TNC policies renewed in the first quarter 2025. Excluding TNC, Commercial Lines net premiums written would have decreased 1% for the first quarter 2026, compared to the same period last year. In our core commercial auto business (which excludes our TNC business, our Progressive Fleet & Specialty Programs (Fleet & Specialty) products, and our business owners’ policy (BOP) product) we continued to experience a shift to a greater mix of policies with 6-month terms in our contractor and business auto business market targets (BMT), which have about half the amount of net premiums written as 12-month policies, and a shift to a greater mix of BMTs with lower average written premium.

Previous wording

For the third quarter 2025, the $281 million year-over-year increase in net income primarily reflected an almost even increase in both underwriting income and total net investment income, while total comprehensive income decreased $996 million, primarily related to lower net unrealized gains on our fixed-maturity securities in the third quarter 2025. Included in underwriting income for the third quarter 2025 was a $950 million policyholder credit expense related to excess profits earned in Florida.

Current wording

For the first quarter 2026, the $251 million year-over-year increase in net income, compared to the first quarter 2025, reflected an increase in both underwriting profit and total net investment income. Total comprehensive income decreased $1.2 billion for the first quarter 2026, compared to the same period last year, driven by net unrealized losses on our fixed-maturity securities, compared to net unrealized gains during the same period last year.

Previous 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.

Current wording

At March 31, 2026, total capital (debt plus shareholders’ equity) was $40.4 billion, which was an increase of $3.2 billion from year-end 2025. This increase was primarily driven by the $2.2 billion of comprehensive income earned in the first three months of 2026 and the March 2026 issuances of $500 million of 4.60% Senior Notes due 2031, and $1.0 billion of 5.15% Senior Notes due 2036, partially offset by the repurchase of 2.3 million of our common shares, at a total cost of $478 million.

Previous 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%.

Current wording

Our companywide underwriting profit margin was 13.6% during the first quarter 2026, compared to 14.0% during the first quarter 2025. For the first quarter 2026, our loss and loss adjustment expense (LAE) ratio and our underwriting expense ratio were relatively stable, compared to the same period last year.

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 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.

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. During the first quarter 2026, our advertising spend was $1.5 billion, or 20% greater than the first quarter last year. The current period impact of the increase in advertising spend on our expense ratio was partially offset by the increase in net premiums earned, contributing 0.7 more points to the underwriting expense ratio in the first quarter 2026, compared to the same period last year. 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.

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 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

Current wording

Our Personal Lines segment represented 83% of our companywide net premiums written at period end and 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 first quarter 2026 was 14.0%, with personal vehicle and personal property products reporting 13.7% and 21.7%, respectively. Profitability in our special lines products had about a one point favorable impact to our personal vehicle combined ratio during the first quarter 2026. The strong underwriting profit margin in our personal property products was primarily driven by the low level of incurred catastrophe losses and frequency of loss during the period and increased rates.

Previous 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.

Current wording

For the first quarter 2026, Personal Lines generated net premiums written growth of 7%, with our agency and direct personal vehicle businesses growing 5% and 10%, respectively, while our personal property business decreased 5%, each compared to the same period last year. Changes in net premiums written are a function of new business applications (i.e., policies sold), retention, business mix, and premium per policy.

Previous 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.

Current wording

Relative to the significant growth we experienced in our personal vehicle products during the first quarter 2025, we experienced a 2% increase in total personal vehicle new business applications during the first quarter 2026. Total personal vehicle renewal business applications increased 14% during the first quarter, primarily driven by the renewal of new business applications gained over the past twelve months. Our personal vehicle business continued to demonstrate sustained net premiums written and application growth despite increased competition in the marketplace during the first quarter 2026.

Previous 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.

Current wording

Homeowners products are defined as our total personal property business excluding renters and umbrella products. For the first quarter 2026, the new business applications in our homeowners product were flat, compared to the same period last year, with the decrease in the less volatile weather-related markets, offset by an increase in the more volatile (e.g., coastal, wildfire, and hail-prone states) weather-related markets. In our renters product, new business applications experienced a 2% decline.

Previous 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.

Current wording

During the first quarter 2026, 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 continued to prioritize 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 restrict new business in 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. During late 2025, we began to take actions in certain 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 independent agency relationships, reopening new business in certain agency and direct channel markets, and lifting underwriting restrictions on older roofs, medium- to high-value homes, and non-

Previous 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.

Current wording

During the first quarter 2026, on a countrywide basis, in the aggregate, we decreased personal auto rates less than 1% and increased our personal property rates about 1%.

Previous 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.

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 first quarter 2026, the personal auto adoption rates for consumers enrolling in the program decreased 5% in agency and 1% in direct, compared to the same period last year. The decrease in the agency adoption rate is due to lifting certain agent restrictions during the second half of 2025, expanding Snapshot access to a broader agent base with lower adoption rates. Snapshot is available in all states, other than California, and our latest segmentation model was available in states that represented 80% 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

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%.

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 first quarter 2026 was 11.0%. The total Commercial Lines net premiums written increased 3% for the first quarter 2026, compared to the same period in the prior year, primarily attributable to the renewal of certain TNC policies, as previously discussed.

Previous 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.

Current wording

We continue to believe we are currently adequately priced in our personal auto and core commercial auto products in most states and expect to continue increasing rates modestly in our personal property products through the remainder of the year. However, 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 adds uncertainty in predicting how tariffs will ultimately impact our business over time. While our focus has been on trying to maintain stable rates for customers, increases in tariffs and other retaliatory actions may 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 2026.

Previous 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.

Current wording

For the first quarter 2026, on a year-over-year basis, average written premium per policy decreased 2%, 7%, and 4% in the personal auto, personal property, and core commercial auto products, respectively. 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 10% 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, 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

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 to BMTs with lower average premiums, 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 9%, 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.

Previous wording

We will continue to monitor the factors that could impact our loss costs for both segments, which may include tariffs, as previously discussed, 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.

Current wording

We will continue to monitor the factors that could impact our loss costs for both segments, which may include tariffs, as previously discussed, new and used car prices, miles driven, driving patterns, loss severity, weather events, building material and construction costs, inflation, and other factors, on a state-by-state basis.

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 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.

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 8% year over year for the first

Previous 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.

Current wording

Our trailing 12-month policy life expectancy was down 8% for our personal property products year over year for the first quarter 2026. We believe 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.

Previous 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.

Current 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 a shift in the mix of business to BMTs with historically higher policy life expectancies, the moderation of our rate increases, and various initiatives, 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, which was flat.

Previous 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.

Current wording

The fair value of our investment portfolio was $94.1 billion at March 31, 2026, compared to $97.4 billion at December 31, 2025. The decrease from year-end 2025 reflected the $7.9 billion payment of our annual variable common share dividend, partially offset by positive cash flows from insurance operations and proceeds from the $1.5 billion senior note issuances in March 2026.

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, 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.

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, 2026 and December 31, 2025, 6% 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 4.2% 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.

Current wording

Our recurring investment income generated a pretax book yield of 4.2% for the first quarter 2026, compared to 4.1% for the same period in 2025. Our investment portfolio produced a fully taxable equivalent (FTE) total return of 0.1% and 2.2% for the first quarter 2026 and 2025, respectively. Our fixed-income and common stock portfolios had FTE total returns of 0.3% and (4.1)%, respectively, for the first quarter 2026, compared to 2.5% and (5.0)%, last year. The decrease in the fixed-income portfolio FTE total return primarily reflected movements in U.S. Treasury yields year-over-year.

Previous 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.

Current wording

At March 31, 2026 and 2025, and December 31, 2025, the fixed-income portfolio had a weighted average credit quality of AA-. At March 31, 2026, the fixed-income portfolio duration was 3.5 years, compared to 3.4 years at March 31, 2025 and December 31, 2025. During 2026, we increased our duration to take advantage of higher yields in the market.

Previous 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.

Current wording

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 second quarter of 2026.

Previous 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

Current wording

Operations generated positive cash flows of $4.4 billion and $5.1 billion for the three months ended March 31, 2026 and 2025, respectively. The decrease in operating cash flows for the first three months of 2026, compared to the same period last year, was primarily driven by the $1.2 billion Florida policyholder credits that were paid out during the first quarter 2026. These policyholder credits represented the estimated profit we earned on the three-accident-year period ending December 31, 2025, in excess of the statutory profit limit that a Florida statute imposes on the profit that any insurance group can earn on personal auto insurance over any contiguous three-accident-year period (see the 2025 Annual Report to Shareholders for further discussion of the Florida policyholder credit expense). We believe cash flows will remain positive in the foreseeable future and do not anticipate the 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, 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.

Current wording

As of March 31, 2026, we held $46.5 billion in short-term investments and U.S. Treasury securities, which represented about half of our total portfolio’s fair value at quarter end. 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 Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission for the year ended December 31, 2025 (our 2025 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 $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%.

Current wording

Our total capital (debt plus shareholders’ equity) was $40.4 billion at March 31, 2026, compared to $35.8 billion at March 31, 2025, and $37.2 billion at December 31, 2025. The increase from year-end 2025, primarily reflects the comprehensive income recognized during the first three months of 2026 and the March 2026 debt issuances of $1.5 billion of senior notes, for which the funds are intended to

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. 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.

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 2026, we renewed the unsecured discretionary line of credit with PNC Bank, National Association, in the maximum principal amount of $300 million and amended the interest rate to 1-month term Secured Overnight Financing Rate (SOFR) plus 1.00%. 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 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).

Current wording

During the first three months of 2026, we returned capital to shareholders primarily through common share dividends and common share repurchases. In March 2026, our Board of Directors declared a $0.10 per common share dividend, or $58 million in the aggregate, that was paid in April 2026. In January 2026, we paid common share dividends declared in the fourth quarter 2025, in the aggregate amount of $8.0 billion, or $13.60 per share (see Note 10 – 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 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.

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 2026, we repurchased 2.3 million common shares, at a total cost of $478 million, 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

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.

Current wording

At March 31, 2026, we had $6.2 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, 2026, our estimated consolidated statutory surplus was $31.1 billion.

Previous 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.

Current wording

During the first three months of 2026, our contractual obligations and critical accounting policies have not changed materially from those discussed in our 2025 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 2025 Annual Report to Shareholders.

Previous wording

Based upon our capital planning and forecasting efforts, we believe we have sufficient capital resources and cash flows from operations to support our current business, scheduled principal and interest payments on our debt, anticipated quarterly dividends on our common shares, our contractual obligations, and other expected capital requirements for the foreseeable future.

Current wording

from operations to support our current business, scheduled principal and interest payments on our debt, anticipated quarterly dividends on our common shares, our contractual obligations, and other expected capital requirements for the foreseeable future.

Previous wording

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 wording

We report our underwriting operations in two segments: Personal Lines and Commercial Lines. Our Personal Lines segment includes our personal vehicles (auto and special lines products) and personal property products (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.

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 third 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 on a trailing 12-month basis, as of the end of the first quarter 2026. Therefore, much of the following discussion focuses only on our core commercial auto products.

Previous 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.

Current wording

Platinum agencies. At March 31, 2026 and 2025, 10% and 12%, 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 written 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 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.

Current wording

Our special lines and personal property products are written for 12-month terms. In our special lines products and personal property business 57% and 69%, respectively, of net premiums written during the first quarter 2026 were generated through the independent agency channel, with the balance through the direct channel.