PROGRESSIVE CORP/OH/

Previous wording

The Progressive Corporation’s insurance subsidiaries continued to generate underwriting profitability above our 4% companywide calendar-year underwriting profit goal during the second quarter 2026, producing a companywide underwriting profit margin of 12.7%. Both our Personal Lines and Commercial Lines operating segments generated strong underwriting profitability during the second quarter 2026.

Current wording

The Progressive Corporation’s insurance subsidiaries continued to generate underwriting profitability above our 4% companywide calendar-year underwriting profit goal during the third quarter 2026, producing a companywide underwriting profit margin of 11.3%. Both our Personal Lines and Commercial Lines operating segments generated strong underwriting profitability during the third quarter 2026.

Previous wording

We also reported steady year-over-year growth in both premiums and policies in force despite increased competition in the marketplace. Companywide net premiums written were $21.1 billion, an increase of $1.0 billion, or 5%, compared to the second quarter last year, while net premiums earned increased 6%. We also surpassed the 40 million policies in force milestone by adding 0.5 million more policies during the quarter and ending the second quarter with 2.8 million more policies in force than at June 30, 2025.

Current wording

We also maintained growth in both premiums and policies in force, albeit at a more moderate pace than in the third quarter last year, despite the continued increase in competition in the marketplace. Companywide net premiums written were $22.3 billion, an increase of $0.9 billion, or 4%, compared to the third quarter last year, while net premiums earned increased 5%. Policies in force increased 6%, or by 2.4 million policies, compared to September 30, 2025; with policies in force increasing by 0.4 million in the third quarter 2026.

Previous wording

For the second quarter 2026, we experienced a $136 million year-over-year increase in net income, compared to the second quarter 2025, primarily reflecting an increase in total net investment income. Total comprehensive income decreased $669 million for the second quarter 2026, compared to the same period last year, driven by net unrealized losses on our fixed-maturity securities in the current period, compared to net unrealized gains during the second quarter last year.

Current wording

For the third quarter 2026, we experienced a $73 million year-over-year decrease in net income, compared to the third quarter 2025, with total comprehensive income decreasing $2,254 million. The decrease in total comprehensive income was primarily driven by net unrealized losses on our fixed-maturity securities in the current period, compared to net unrealized gains during the third quarter last year.

Previous wording

At June 30, 2026, total capital (debt plus shareholders’ equity) was $42.7 billion, an increase of $5.5 billion from year-end 2025. The increase was primarily driven by $5.2 billion of comprehensive income earned during the first six months of 2026 and the issuance of $1.5 billion of senior notes during the first quarter 2026. These increases were partially offset by the repurchase of 5.4 million of our common shares at a total cost of $1.1 billion.

Current wording

At September 30, 2026, total capital (debt plus shareholders’ equity) was $42.9 billion, an increase of $5.7 billion from year-end 2025. The increase was primarily driven by $5.8 billion of comprehensive income earned during the first nine months of 2026 and the issuance of $1.5 billion of senior notes during the first quarter 2026. These increases were partially offset by the repurchase of 7.7 million of our common shares at a total cost of $1.6 billion.

Previous wording

Personal Lines represented 88% of companywide net premiums written during the second quarter 2026 and is comprised of our personal vehicle and property products. Personal Lines vehicle products include both personal auto and special lines products, with special lines typically experiencing higher losses during warmer weather months, due to the seasonal nature of these products (e.g., recreational vehicles, such as motorcycles, RVs, and watercraft). In our personal property products, homeowners products are defined as our total personal property business excluding renters and umbrella products.

Current wording

Personal Lines represented 89% of companywide net premiums written during the third quarter 2026 and is comprised of our personal vehicle and property products. Personal vehicle products include personal auto and special lines products (e.g., recreational vehicles, such as motorcycles, RVs, and watercraft), and personal property products include homeowners, renters, and umbrella products.

Previous wording

During the second quarter 2026, we continued to focus on selectively increasing the availability of our personal property products. Beginning late 2025, we took actions in certain markets to generate new business growth at the state level based on our concentration risks, product segmentation, rate adequacy, cost sharing, geographical diversification, and the 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 targeted underwriting restrictions on older roofs, medium- to high-value homes, and non-bundled homeowners products in certain markets. Certain of these restrictions remain in place in markets where we continue to focus on improving profitability and reducing exposure in more volatile weather-related markets. We believe these actions taken in 2025 continued to adversely impact new business application growth in 2026.

Current wording

During the third quarter 2026, we continued to focus on selectively increasing the availability of our personal property products. Beginning late in 2025, we took actions in certain markets to generate new business growth at the state level based on our concentration risks, product segmentation, rate adequacy, cost sharing, geographical diversification, and the 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 targeted underwriting restrictions on older roofs, medium- to high-value homes, and non-bundled homeowners products, where we intend to bundle in the future, in certain markets. Certain restrictions remain in place in markets where we continue to focus on improving profitability and reducing exposure in more volatile weather-related markets.

Previous wording

Personal Lines generated an underwriting profit margin of 12.4% for the second quarter 2026, with personal vehicle and personal property products reporting underwriting profit margins of 12.0% and 22.0%, respectively. Profitability in our special lines products had a minimal impact on the personal vehicle combined ratio during the second quarter 2026. The strong underwriting profit margin in our personal property products was primarily driven by a low level of incurred catastrophe losses, lower loss frequency during the period, and increased rates.

Current wording

Personal Lines generated an underwriting profit margin of 12.0% for the third quarter 2026, compared to 10.5% for the same period last year, with personal vehicle and personal property products reporting strong underwriting profit margins of 11.3% and 27.2%, respectively. Profitability in our special lines products, which typically experience higher losses during warmer weather months due to the seasonal nature of these products, had a 0.6 point unfavorable impact on the personal vehicle combined ratio during the third quarter 2026. The strong underwriting profit margin in personal property was primarily driven by a low level of incurred catastrophe losses, prior period rate increases, and lower loss frequency, and we believe was influenced by our sustained efforts to reduce exposure and improve profitability.

Previous wording

For the second quarter 2026, Personal Lines net premiums written increased 5%, with personal vehicle business increases of 2% in agency and 8% in direct, and a 1% increase in personal property, 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.

Current wording

For the third quarter 2026, Personal Lines net premiums written increased 4%, with personal vehicle business increases of 2% in agency and 5% in direct, and a 5% increase in personal property, each compared to the same period last year. The current period net premiums written growth was primarily driven by policies in force growth in our personal auto products, which were up 7%, compared to September 30, 2025. The effect of the growth in policies in force was, in part, offset by a decrease in average written premiums per policy, due to aggregate rate decreases taken over the last 12 months in response to increased competition in the marketplace. 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

Personal vehicles experienced an increase in new business applications of 1% and an increase in renewal business applications of 11% during the second quarter 2026, compared to the same period in the prior year. Our personal vehicle business continued to generate sustained net premiums written and application growth despite continued increased competition in the marketplace and in comparison to the double-digit application growth experienced during the same period last year.

Current wording

Personal vehicles experienced a decrease in new business applications of 1% and an increase in renewal business applications of 9% during the third quarter 2026, compared to the same period in the prior year. Despite continued increased competition in the marketplace, our personal vehicle business continued to generate total application growth, in relation to the double-digit growth during the same period last year.

Previous wording

Personal property experienced flat new business applications and an increase in renewal business applications of 1% during the second quarter 2026, compared to the same period last year. New business applications in our homeowners product increased 11%, compared to the prior-year period, while declining 2% in our renters product.

Current wording

Personal property experienced a 3% increase in both new and renewal business applications during the third quarter 2026, compared to the same period last year. New business applications in our homeowners product (which excludes our renters and umbrella products) increased 22%, compared to the prior-year period, and was flat in our renters product.

Previous wording

On a countrywide basis, during the second quarter 2026, we decreased personal auto rates by less than 1% and increased personal property rates about 1%, in the aggregate.

Current wording

On a countrywide basis, during the third quarter 2026, personal auto rates were flat and personal property rates decreased less than 1%, in the aggregate.

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 2026, Snapshot adoption rates among eligible new business personal auto consumers decreased 3% in direct and 8% in agency, compared to the same period last year. Approximately half of direct new business consumers elected Snapshot in both the second quarter 2025 and 2026. The decrease in the agency adoption rate was primarily due to the expansion of Snapshot eligibility in the second half of 2025, which increased the number of agents able to write Snapshot policies and broadened access to agents with historically lower adoption rates. Snapshot is available in all states, other than California, and our latest segmentation model was available in states representing 81% of countrywide personal auto net premiums written (excluding California) on a trailing 12-month basis at quarter end. We continue to invest in our mobile

Current wording

We believe a key element in improving the accuracy of our personal auto rating is Snapshot®, our usage-based insurance offering. During the third quarter 2026, Snapshot adoption rates relative to total new business personal auto customers increased 8% in agency and decreased 4% in direct, compared to the same period last year. Approximately half of direct new business customers elected Snapshot in both the third quarter 2025 and 2026. The increase in the agency adoption rate was primarily due to the expansion of Snapshot eligibility in the second half of 2025, which increased the number of agents able to write Snapshot policies. Snapshot is available in all states, other than California, and our latest segmentation model was available in states representing 85% of 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

The Commercial Lines segment includes our core commercial auto products, TNC business, FSP products, and BOP product. Total Commercial Lines generated an underwriting profit margin of 14.7% with a net premiums written increase of 4% and a policies in force increase of 3% for the second quarter 2026, compared to the same period last year. Increases in both net premiums written and policies in force were primarily driven by volume growth due to rate decreases in targeted state and BMT combinations, and increased advertising and agent incentive spend. Core commercial auto products experienced an increase in new business applications of 1% and an increase in renewal business applications of 8% during the second quarter 2026, compared to the same period last year. New and renewal business applications increased in all BMTs except for-hire transportation.

Current wording

The Commercial Lines segment includes our core commercial auto products, transportation network company (TNC) business, Progressive Fleet & Specialty Programs (FSP) products, and business owners’ policy (BOP) product. Total Commercial Lines generated an underwriting profit margin of 7.4%, compared to 10.8% in the same period last year, with a net premiums written increase of 9% and a policies in force increase of 5% for the third quarter 2026, compared to the third quarter 2025. This growth was driven by an increase in our core commercial auto products, due to an increase in both new and renewal applications, primarily resulting from targeted rate decreases in certain states and business market targets (BMT), and increased advertising and agent incentive

Previous wording

In aggregate, core commercial auto rates were relatively flat on a countrywide basis during the second quarter 2026.

Current wording

In aggregate, we increased core commercial auto rates 1% on a countrywide basis during the third quarter 2026.

Previous wording

We continue to closely monitor our expenses, including acquisition expenses and non-acquisition expenses, which we view as important measures of operational efficiency as we seek to deliver our most competitive rates to consumers. During the second quarter 2026, advertising expense was $1.4 billion, or 16% higher than the second quarter last year. The current period effect of the higher advertising spend on our expense ratio was partially offset by the increase in net premiums earned, resulting in an additional 0.5 points of contribution to the underwriting expense ratio in the second 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.

Current wording

We believe we are currently adequately priced in our personal auto, personal property, and core commercial auto products in most states through the remainder of the year. However, we regularly monitor the factors that could impact our loss costs, which may include loss severity and frequency, inflation, new and used car prices, miles driven, driving patterns, weather events, building materials, construction costs, tariffs, and other factors, on a state-by-state basis. We continue to closely monitor our expenses, including acquisition expenses and non-acquisition expenses, which we view as important measures of operational efficiency as we seek to offer consumers our most competitive rates. During the third quarter 2026, advertising expense was $1.6 billion, or 18% higher than the third quarter last year. The effect of the higher advertising spend on the current period expense ratio was partially offset by growth in net premiums earned, contributing an additional 0.8 points to the underwriting expense ratio in the third quarter 2026, compared to the same period last year. We will continue to invest in advertising to maximize growth as long as the spend remains efficient and we remain on track to achieve our calendar-year profitability goal.

Previous wording

For the second quarter 2026, on a year-over-year basis, average written premium per policy decreased 2% in both personal auto and personal property products, and decreased 3% in core commercial auto products. In aggregate, we took minimal personal auto rate decreases on a countrywide basis over the previous 12 months. The decrease in personal property average written premium per policy was primarily due to a shift in the mix of business to more renters policies, which have lower average written premiums, partially offset by aggregate rate increases of 9% taken over the last 12 months and higher premium coverages reflecting increased property values. The decrease in core commercial auto average written premium per policy was primarily due to a shift in the mix of business, including a shift to a higher percentage of 6-month policies, which have about half of the amount of net premiums written as 12-month term policies. Given that our personal property and commercial auto policies are predominately written for 12-month terms, rate and non-rate actions take longer to earn into premium for these products.

Current wording

For the third quarter 2026, on a year-over-year basis, average written premium per policy decreased 2% in personal auto, 1% in personal property products, and 3% in core commercial auto products. In aggregate, personal auto rate decreases on a countrywide basis over the previous 12 months contributed to the decrease in average written premium per policy. The decrease in core commercial auto average written premium per policy was primarily due to a shift in the mix of business, including a shift to a higher percentage of 6-month policies, which have about half of the amount of net premiums written as 12-month term policies. Given that our personal property and commercial auto policies are predominantly written for 12-month terms, rate and non-rate actions take longer to earn into premium for these products.

Previous wording

In personal auto, we evaluate 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. For the second quarter 2026, trailing 12-month total personal auto policy life expectancy decreased 8% year over year, while trailing 3-month policy life expectancy decreased 9%, compared to the same period last year. We believe these decreases were primarily due to increased shopping and competition in the marketplace and, to a lesser extent, changes in billing plans offered to customers and a shift in our mix of business.

Current wording

In personal auto, we evaluate 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. For the third quarter 2026, both the trailing 3-month and 12-month total personal auto policy life expectancy decreased 9% year over year. We believe these decreases were primarily due to an increase in shopping and competition in the marketplace and, to a lesser extent, a shift in our mix of business.

Previous wording

Our trailing 12-month policy life expectancy was down 8% for our personal property products year over year for the second quarter 2026. We believe the retention decrease was primarily driven by a continued shift in the mix of business to more renters policies and, to a lesser extent, rate increases in previous years and increased competition in the marketplace.

Current wording

Our trailing 12-month policy life expectancy was down 7% for our personal property products year over year for the third quarter 2026. We believe the retention decrease was primarily driven by rate increases in previous years, increased competition in the marketplace, and, to a lesser extent, a continued shift in the mix of business to more renters policies.

Previous wording

For core commercial auto products, trailing 12-month policy life expectancy increased 2%, compared to the same period in the prior year. We believe the increase reflected a shift to the business auto and contractor BMTs, which historically have higher policy life expectancies, moderation in our rate increases, and various initiatives, including payment and renewal reminders.

Current wording

For core commercial auto products, trailing 12-month policy life expectancy increased 3%, compared to the same period in the prior year. We believe the increase reflected a shift to the business auto and contractor BMTs, which historically have higher policy life expectancies, moderation in our rate increases, and various initiatives, including payment and renewal reminders.

Previous wording

The fair value of our investment portfolio was $97.2 billion at June 30, 2026, compared to $97.4 billion at December 31, 2025. The modest decrease from year-end 2025 primarily reflected valuation declines across fixed-maturity sectors, the $7.9 billion payment of our annual variable common share dividend, and the $1.1 billion of repurchases of our common shares, mostly offset by significant positive cash flows from insurance operations and proceeds from the $1.5 billion senior note issuances in March 2026.

Current wording

The fair value of our investment portfolio was $99.2 billion at September 30, 2026, compared to $97.4 billion at December 31, 2025. The increase from year-end 2025 primarily reflected significant positive cash flows from insurance operations and proceeds from the senior note issuances in March 2026, partially offset by the payment of our annual variable common share dividend, valuation declines across fixed-maturity sectors, repurchases of our common shares, and the Florida policyholder credits paid in the first quarter 2026.

Previous wording

Our recurring investment income generated a pretax book yield of 4.2% in both second quarter 2026 and 2025. The investment portfolio produced a fully taxable equivalent (FTE) total return of 1.2% in the second quarter 2026, compared to 2.1% in the same period last year. For the second quarter 2026, the fixed-income and common stock portfolios generated FTE total returns of 0.6% and 15.3%, respectively, compared to 1.7% and 10.9%, in the same period last year. The decrease in the fixed-income portfolio’s FTE total return primarily reflected year-over-year movements in U.S. Treasury yields.

Current wording

Our recurring investment income generated a pretax book yield of 4.3% in the third quarter 2026, compared to 4.2% in the same period last year. The investment portfolio produced a fully taxable equivalent (FTE) total return of -1.5% in the third quarter 2026, compared to 1.7% in the same period last year. For the third quarter 2026, the fixed-income and common stock portfolios generated FTE total returns of -1.7% and 2.2%, respectively, compared to 1.5% and 8.1%, in the same period last year. The decrease in the fixed-income portfolio’s FTE total return primarily reflected year-over-year movements in U.S. Treasury yields.

Previous wording

The fixed-income portfolio maintained a weighted average credit quality of AA- at June 30, 2026 and 2025, and December 31, 2025. The fixed-income portfolio duration was 3.5 years at June 30, 2026, compared to 3.4 years at both June 30, 2025 and December 31, 2025. During 2026, we modestly increased our duration to take advantage of higher yields available in the market.

Current wording

The fixed-income portfolio maintained a weighted average credit quality of AA- at September 30, 2026 and 2025, and December 31, 2025. The fixed-income portfolio duration was 3.6 years at September 30, 2026, compared to 3.4 years at both September 30, 2025, and December 31, 2025. During 2026, we modestly increased our duration to take advantage of higher yields available in the market.

Previous wording

Operations generated positive cash flows of $8.0 billion and $9.2 billion for the six months ended June 30, 2026 and 2025, respectively. The decrease in operating cash flows during the first six months of 2026, compared to the same period last year, was primarily due to the $1.2 billion Florida policyholder credits paid in the first quarter 2026. These policyholder credits represented the estimated profit we earned for the three-accident-year period ended 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 our 2025 Annual Report to Shareholders for further discussion of the Florida policyholder credit expense. We believe cash flows will remain positive for the foreseeable future and do not anticipate the need to raise capital to support our operations during 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 $12.5 billion and $14.4 billion for the nine months ended September 30, 2026 and 2025, respectively. The decrease in operating cash flows during the first nine months of 2026, compared to the same period last year, was primarily due to the $1.2 billion Florida policyholder credits paid in the first quarter 2026. We believe cash flows will remain positive for the foreseeable future and do not anticipate the need to raise capital to support our operations during that timeframe, although changes in market or regulatory conditions affecting the insurance industry, or other unforeseen events, may necessitate otherwise.

Previous wording

At June 30, 2026, we held $45.8 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 we have sufficient readily available marketable securities to cover claims payments and short-term obligations in the event our cash flows from operations were to become 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.

Current wording

At September 30, 2026, we held $43.7 billion in short-term investments and U.S. Treasury securities, which represented just under 45% of our total portfolio’s fair value at quarter end. Based on our portfolio allocation and investment strategies, we believe we have sufficient readily available marketable securities to cover claims payments and short-term obligations in the event our cash flows from operations were to become 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 $42.7 billion at June 30, 2026, compared to $39.5 billion at June 30, 2025, and $37.2 billion at December 31, 2025. The increase from year-end 2025 primarily reflected the $5.2 billion of comprehensive income recognized during the first six months of 2026 and the issuance of $1.5 billion of senior notes in the first quarter 2026. These increases were partially offset by the repurchase of our common shares, as discussed below. Our debt-to-total capital ratio was 19.6% at June 30, 2026, compared to 17.5% at June 30, 2025, and 18.5% at December 31, 2025. These ratios were consistent with our financial policy of maintaining a debt-to-total capital ratio of less than 30%.

Current wording

Our total capital (debt plus shareholders’ equity) was $42.9 billion at September 30, 2026, compared to $42.3 billion at September 30, 2025, and $37.2 billion at December 31, 2025. The increase from year-end 2025 primarily reflected the $5.8 billion of comprehensive income recognized during the first nine months of 2026 and the issuance of $1.5 billion of senior notes in the first quarter 2026. These increases were partially offset by the repurchase of our common shares, as discussed below. Our debt-to-total capital ratio was 19.6% at September 30, 2026, compared to 16.3% at September 30, 2025, and 18.5% at December 31, 2025. These ratios were consistent with our financial policy of maintaining a debt-to-total capital 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 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 a 1-month term Secured Overnight Financing Rate (SOFR) plus 1.0%. 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 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 the 1-month term Secured Overnight Financing Rate (SOFR) plus 1.0%. 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 six months of 2026, 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 2026. These dividends, which were both $58 million, in the aggregate, were paid in April 2026 and July 2026. In January 2026, we also 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).

Current wording

During the first nine months of 2026, 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 2026. These dividends, which were each $58 million, in the aggregate, were paid in April 2026, July 2026, and October 2026. In January 2026, we also 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 opportunistically when we believe our shares are trading below our determination of long-term fair value and to neutralize dilution from equity-based compensation granted during the year. During the first six months of 2026, we repurchased 5.4 million common shares, at a total cost of $1.1 billion, 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 opportunistically when we believe our shares are trading below our determination of long-term fair value and to neutralize dilution from equity-based compensation granted during the year. During the first nine months of 2026, we repurchased 7.7 million common shares, at a total cost of $1.6 billion, 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, 2026, we had $6.7 billion in a consolidated, non-insurance subsidiary of the holding company that can be used to fund corporate obligations and provide additional capital to our insurance subsidiaries to support potential future growth and other opportunities. As of June 30, 2026, our estimated consolidated statutory surplus was $32.9 billion.

Current wording

At September 30, 2026, we had $5.8 billion of investments in a consolidated, non-insurance subsidiary of the holding company that can be used to fund corporate obligations and provide additional capital to our insurance subsidiaries to support potential future growth and other opportunities. As of September 30, 2026, our estimated consolidated statutory surplus was $35.6 billion.

Previous wording

During the first six 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 also were no material changes in off-balance-sheet leverage, including purchase obligations, from those discussed in our 2025 Annual Report to Shareholders.

Current wording

During the first nine 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 also were no material changes in off-balance-sheet leverage, including purchase obligations, from those discussed in our 2025 Annual Report to Shareholders.

Previous wording

Based on 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, contractual obligations, and other expected capital requirements for the foreseeable future.

Current wording

Based on 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

Previous wording

We report our underwriting operations in two segments: Personal Lines and Commercial Lines. Our Personal Lines segment includes 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 personal auto products represented about 90% of the Personal Lines net premiums written as of the end of the quarter, much of the following Personal Lines discussion will focus on our personal auto products, both in total and by distribution channel.

Current wording

We report our underwriting operations in two segments: Personal Lines and Commercial Lines. Our Personal Lines segment includes 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 personal auto products represented about 90% of the Personal Lines net premiums written as of the end of the quarter, the following personal vehicles discussion focuses primarily 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. Commercial Lines includes our core commercial auto products, TNC business, FSP products, and BOP product. Since core commercial auto products represented about 80% of the Commercial Lines net premiums written on a trailing 12-month basis as of the end of the quarter, much of the following Commercial Lines 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. Commercial Lines includes our core commercial auto products, TNC business, FSP products, and BOP product. Since core commercial auto products represented about 80% of the Commercial Lines net premiums written on a trailing 12-month basis as of the end of the quarter, the following Commercial Lines discussion focuses primarily on our core commercial auto products.

Previous wording

Our special lines and personal property products are written for 12-month terms. During the second quarter 2026, 55% of special lines net premiums written and 70% of personal property net premiums written were generated through the independent agency channel, with the balance generated through the direct channel.

Current wording

Our special lines and personal property products are written for 12-month terms. During the third quarter 2026, 55% of special lines net premiums written and 69% of personal property net premiums written were generated through the independent agency channel, with the balance generated through the direct channel.

Previous wording

At June 30, 2026, 83% of Commercial Lines policies in force had 12-month terms. The majority of our Commercial Lines business is written through the independent agency channel, although we continue to focus on growing our direct business, with about 11% of core commercial auto premiums written through the direct channel.

Current wording

At September 30, 2026, 82% of Commercial Lines policies in force had 12-month terms. The majority of our Commercial Lines business is written through the independent agency channel, although we continue to focus on growing our direct business, with about 11% of core commercial auto premiums written through the direct channel.

Previous wording

Profitability for our underwriting operations is defined by pretax underwriting profit or loss, which is calculated as net premiums earned plus fees and other revenues less losses and loss adjustment expenses, policy acquisition costs, and other underwriting expenses. We also use underwriting margin, which is underwriting profit or loss expressed as a percentage of net premiums earned, to analyze our results. For the respective periods, our underwriting profitability results were as follows:

Current wording

Profitability for our underwriting operations is defined by pretax underwriting profit or loss, which is calculated as net premiums earned plus fees and other revenues less losses and loss adjustment expenses, policy acquisition costs, other underwriting expenses, and policyholder credit expense. We also use underwriting margin, which is underwriting profit or loss expressed as a percentage of net premiums earned, to analyze our results. For the respective periods, our underwriting profitability results were as follows:

Previous wording

1 Underwriting margins for our other indemnity businesses are not meaningful (NM) due to the low level of premiums earned by, and the variability of loss costs in, such businesses.

Current wording

2 Underwriting margins for our other indemnity businesses are not meaningful (NM) due to the low level of premiums earned by, and the variability of expenses in, such businesses.

Previous wording

2 The accident year ratios include only the losses that occurred during the period noted. As a result, accident period results will change over time, either favorably or unfavorably, as we revise our estimates of loss costs when payments are made or reserves for that accident period are reviewed.

Current wording

3 The accident year ratios include only the losses that occurred during the period noted. As a result, accident period results will change over time, either favorably or unfavorably, as we revise our estimates of loss costs when payments are made or reserves for that accident period are reviewed.

Previous wording

Our total loss and LAE ratio increased 0.6 points and 0.4 points, for the three and six months ended June 30, 2026, respectively, compared to the same periods last year, primarily due to higher severity, partially offset by greater favorable prior accident years reserve development. On an accident year basis, our loss and LAE ratio was 1.6 points and 1.3 points higher for the second quarter and first half of 2026, respectively, compared to the same periods last year.

Current wording

Our total loss and LAE ratio increased 3.7 points and 1.5 points, for the three and nine months ended September 30, 2026, respectively, compared to the same periods last year, primarily due to higher severity and, for the quarter, higher catastrophe losses, partially offset by greater favorable prior accident years reserve development. On an accident year basis, our loss and LAE ratio was 3.9 points and 2.1 points higher for the third quarter and first nine months of 2026, respectively, compared to the same periods last year.

Previous wording

•excess of loss reinsurance for our workers’ compensation insurance.

Current wording

•per occurrence excess of loss reinsurance for our workers’ compensation insurance.