Item 1. Financial Statements.

The Progressive Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(unaudited)

			Three Months												Six Months
Periods Ended June 30,			2024						2023						2024						2023
(millions — except per share amounts)
Revenues
Net premiums earned			$	17,209.5					$	14,464.4					$	33,358.1					$	27,997.5
Investment income			685.0						454.5						1,302.6						874.1
Net realized gains (losses) on securities:
Net realized gains (losses) on security sales			(226.4)						135.1						(372.9)						104.8
Net holding period gains (losses) on securities			100.1						(6.0)						402.2						98.4
Net impairment losses recognized in earnings			0						(2.2)						0						(4.5)
Total net realized gains (losses) on securities			(126.3)						126.9						29.3						198.7
Fees and other revenues			259.8						226.7						496.3						432.9
Service revenues			106.3						81.0						190.5						153.5
Total revenues			18,134.3						15,353.5						35,376.8						29,656.7
Expenses
Losses and loss adjustment expenses			12,595.3						12,170.1						23,566.9						22,794.1
Policy acquisition costs			1,307.6						1,153.6						2,539.8						2,269.4
Other underwriting expenses			2,179.8						1,431.7						4,111.2						3,289.6
Investment expenses			7.3						6.1						13.0						11.6
Service expenses			114.3						90.6						206.4						172.9
Interest expense			69.6						65.7						139.2						129.0
Total expenses			16,273.9						14,917.8						30,576.5						28,666.6
Net Income
Income before income taxes			1,860.4						435.7						4,800.3						990.1
Provision for income taxes			401.7						90.3						1,010.2						196.8
Net income			1,458.7						345.4						3,790.1						793.3
Other Comprehensive Income (Loss)
Changes in:
Total net unrealized gains (losses) on fixed-maturity securities			107.7						(455.6)						(100.1)						147.6
Net unrealized losses on forecasted transactions			0.1						0.1						0.2						0.2
Foreign currency translation adjustment			0						0.2						(0.2)						0.2
Other comprehensive income (loss)			107.8						(455.3)						(100.1)						148.0
Comprehensive income (loss)			$	1,566.5					$	(109.9)					$	3,690.0					$	941.3
Computation of Earnings Per Common Share
Net income			$	1,458.7					$	345.4					$	3,790.1					$	793.3
Less: Preferred share dividends and other1			0						9.5						17.0						16.8
Net income available to common shareholders			$	1,458.7					$	335.9					$	3,773.1					$	776.5
Average common shares outstanding - Basic			585.4						584.9						585.4						584.9
Net effect of dilutive stock-based compensation			2.0						2.1						2.0						2.1
Total average equivalent common shares - Diluted			587.4						587.0						587.4						587.0
Basic: Earnings per common share			$	2.49					$	0.57					$	6.45					$	1.33
Diluted: Earnings per common share			$	2.48					$	0.57					$	6.42					$	1.32

1 All of our outstanding Serial Preferred Shares, Series B, were redeemed in February 2024. See Note 9 – Dividends for further discussion.

See notes to consolidated financial statements.

The Progressive Corporation and Subsidiaries

Consolidated Balance Sheets

(unaudited)

			June 30,												December 31,
(millions — except per share amounts)			2024						2023						2023
Assets
Available-for-sale securities, at fair value:
Fixed maturities (amortized cost: $69,668.2, $57,484.7, and $62,441.9)			$	67,488.3					$	54,078.1					$	60,378.2
Short-term investments (amortized cost: $733.4, $1,494.3, and $1,789.9)			733.4						1,494.3						1,789.9
Total available-for-sale securities			68,221.7						55,572.4						62,168.1
Equity securities, at fair value:
Nonredeemable preferred stocks (cost: $886.9, $1,107.1, and $977.1)			838.2						985.1						902.1
Common equities (cost: $707.8, $662.0, and $706.0)			3,295.6						2,708.1						2,928.4
Total equity securities			4,133.8						3,693.2						3,830.5
Total investments			72,355.5						59,265.6						65,998.6
Cash and cash equivalents			90.2						163.9						84.9
Restricted cash and cash equivalents			11.5						15.6						14.7
Total cash, cash equivalents, restricted cash, and restricted cash equivalents			101.7						179.5						99.6
Accrued investment income			564.1						354.2						438.0
Premiums receivable, net of allowance for credit losses of $327.9, $343.9, and $369.1			14,544.5						12,273.3						11,958.2
Reinsurance recoverables			4,881.4						5,516.9						5,093.9
Prepaid reinsurance premiums			290.8						242.9						249.8
Deferred acquisition costs			1,938.3						1,685.6						1,687.4
Property and equipment, net of accumulated depreciation of $1,557.7, $1,580.1, and $1,655.1			713.5						989.0						880.8
Net federal deferred income taxes			1,001.0						1,198.5						936.0
Other assets			1,502.2						1,239.7						1,348.5
Total assets			$	97,893.0					$	82,945.2					$	88,690.8
Liabilities and Shareholders’ Equity
Unearned premiums			$	23,680.4					$	20,070.1					$	20,133.7
Loss and loss adjustment expense reserves			36,605.2						32,753.3						34,389.2
Accounts payable, accrued expenses, and other liabilities			7,376.3						6,524.0						7,002.2
Debt1			6,890.7						6,886.5						6,888.6
Total liabilities			74,552.6						66,233.9						68,413.7
Serial Preferred Shares (authorized 20.0)
Serial Preferred Shares, Series B, no par value (cumulative, liquidation preference $1,000 per share) (authorized, issued, and outstanding of 0, 0.5, and 0.5)			0						493.9						493.9
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 211.9, 212.3, and 212.3)			585.7						585.3						585.3
Paid-in capital			2,060.5						1,935.7						2,013.1
Retained earnings			22,410.0						16,350.4						18,800.5
Accumulated other comprehensive income (loss):
Net unrealized gains (losses) on fixed-maturity securities			(1,700.9)						(2,638.7)						(1,600.8)
Net unrealized losses on forecasted transactions			(13.8)						(14.3)						(14.0)
Foreign currency translation adjustment			(1.1)						(1.0)						(0.9)
Total accumulated other comprehensive income (loss)			(1,715.8)						(2,654.0)						(1,615.7)
Total shareholders’ equity			23,340.4						16,711.3						20,277.1
Total liabilities and shareholders’ equity			$	97,893.0					$	82,945.2					$	88,690.8

1 Consists of long-term debt. See Note 4 – Debt for further discussion.

See notes to consolidated financial statements.

The Progressive Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

(unaudited)

			Three Months												Six Months
Periods Ended June 30,			2024						2023						2024						2023
(millions — except per share amounts)
Serial Preferred Shares, No Par Value
Balance, beginning of period			$	0					$	493.9					$	493.9					$	493.9
Redemption of Serial Preferred Shares, Series B1			0						0						(493.9)						0
Balance, end of period			0						493.9						0						493.9
Common Shares, $1.00 Par Value
Balance, beginning of period			585.7						585.4						585.3						584.9
Treasury shares purchased			(0.1)						(0.1)						(0.3)						(0.3)
Net restricted equity awards issued/vested			0.1						0						0.7						0.7
Balance, end of period			585.7						585.3						585.7						585.3
Paid-In Capital
Balance, beginning of period			2,028.7						1,907.7						2,013.1						1,893.0
Amortization of equity-based compensation			31.7						27.9						48.5						43.8
Treasury shares purchased			(0.2)						(0.2)						(1.0)						(1.0)
Net restricted equity awards issued/vested			(0.1)						0						(0.7)						(0.7)
Reinvested dividends on restricted stock units			0.4						0.3						0.6						0.6
Balance, end of period			2,060.5						1,935.7						2,060.5						1,935.7
Retained Earnings
Balance, beginning of period			21,020.5						16,080.1						18,800.5						15,721.2
Net income			1,458.7						345.4						3,790.1						793.3
Treasury shares purchased			(10.6)						(7.1)						(46.7)						(38.8)
Cash dividends declared on common shares ($0.10, $0.10, $0.20, and $0.20 per share)1			(58.5)						(58.4)						(117.0)						(116.9)
Cash dividends declared on Serial Preferred Shares, Series B ($0, $18.92463, $15.688377, and $18.92463 per share)1			0						(9.5)						(7.8)						(9.5)
Reinvested dividends on restricted stock units			(0.4)						(0.3)						(0.6)						(0.6)
Other, net			0.3						0.2						(8.5)						1.7
Balance, end of period			22,410.0						16,350.4						22,410.0						16,350.4
Accumulated Other Comprehensive Income (Loss)
Balance, beginning of period			(1,823.6)						(2,198.7)						(1,615.7)						(2,802.0)
Other comprehensive income (loss)			107.8						(455.3)						(100.1)						148.0
Balance, end of period			(1,715.8)						(2,654.0)						(1,715.8)						(2,654.0)
Total shareholders’ equity			$	23,340.4					$	16,711.3					$	23,340.4					$	16,711.3

1 See Note 9 – Dividends for further discussion.

There are 5.0 million Voting Preference Shares authorized; no such shares have been issued.

See notes to consolidated financial statements.

The Progressive Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

Six Months Ended June 30,			2024						2023
(millions)
Cash Flows From Operating Activities
Net income			$	3,790.1					$	793.3
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			137.5						140.6
Net amortization (accretion) of fixed-income securities			(20.1)						(5.5)
Amortization of equity-based compensation			48.5						43.8
Net realized (gains) losses on securities			(29.3)						(198.7)
Net (gains) losses on disposition of property and equipment			(1.1)						6.2
Changes in:
Premiums receivable			(2,586.3)						(1,856.4)
Reinsurance recoverables			212.5						315.2
Prepaid reinsurance premiums			(41.0)						52.6
Deferred acquisition costs			(250.9)						(141.2)
Income taxes			(341.2)						(161.1)
Unearned premiums			3,546.7						2,776.5
Loss and loss adjustment expense reserves			2,216.0						2,394.0
Accounts payable, accrued expenses, and other liabilities			1,057.7						760.0
Other, net			(237.9)						(132.8)
Net cash provided by operating activities			7,501.2						4,786.5
Cash Flows From Investing Activities
Purchases:
Fixed maturities			(24,532.4)						(12,370.9)
Equity securities			(32.6)						(21.1)
Sales:
Fixed maturities			13,687.2						2,815.8
Equity securities			98.4						661.4
Maturities, paydowns, calls, and other:
Fixed maturities			3,234.8						2,153.9
Equity securities			23.3						25.2
Net (purchases) sales of short-term investments			1,087.1						1,413.9
Net change in unsettled security transactions			119.7						282.4
Purchases of property and equipment			(118.1)						(133.6)
Sales of property and equipment			45.8						28.8
Net cash used in investing activities			(6,386.8)						(5,144.2)
Cash Flows From Financing Activities
Redemption of Serial Preferred Shares, Series B			(500.0)						0
Dividends paid to common shareholders			(556.5)						(117.0)
Dividends paid to preferred shareholders			(7.8)						(22.9)
Acquisition of treasury shares for equity award tax liabilities			(37.9)						(33.0)
Acquisition of treasury shares acquired in open market			(10.1)						(7.1)
Net proceeds from debt issuances			0						496.3
Net cash provided by (used in) financing activities			(1,112.3)						316.3
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents			2.1						(41.4)
Cash, cash equivalents, restricted cash, and restricted cash equivalents – January 1			99.6						220.9
Cash, cash equivalents, restricted cash, and restricted cash equivalents – June 30			$	101.7					$	179.5

See notes to consolidated financial statements.

The Progressive Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(unaudited)

1. BASIS OF REPORTING AND ACCOUNTING

The accompanying consolidated financial statements include the accounts of The Progressive Corporation and our wholly owned insurance subsidiaries and non-insurance subsidiaries and affiliates in which we have a controlling financial interest (Progressive).

The consolidated financial statements reflect all normal recurring adjustments that, in the opinion of management, were necessary for a fair statement of the results for the interim periods presented. The results of operations for the period ended June 30, 2024, are not necessarily indicative of the results expected for the full year. These consolidated financial statements and the notes thereto should be read in conjunction with Progressive’s audited financial statements and accompanying notes included in Exhibit 13 to our Annual Report on Form 10-K for the year ended December 31, 2023 (2023 Annual Report to Shareholders).

Premiums Receivable

We perform analyses to evaluate our premiums receivable for expected credit losses. See our 2023 Annual Report to Shareholders for a discussion on our premiums receivable allowance for credit loss policy. The following table summarizes changes in our allowance for credit loss exposure on our premiums receivable:

			Three Months Ended June 30,									Six Months Ended June 30,
(millions)			2024			2023						2024			2023
Allowance for credit losses, beginning of period			$	327.7		$	340.9					$	369.1		$	343.3
Increase in allowance1			128.0			125.3						234.8			242.2
Write-offs2			(127.8)			(122.3)						(276.0)			(241.6)
Allowance for credit losses, end of period			$	327.9		$	343.9					$	327.9		$	343.9

1 Represents the incremental increase in other underwriting expenses.

2 Represents the portion of allowance that is reversed when the premiums receivable is written off. Premiums receivable balances are written off once we have exhausted our collection efforts.

Property – Held for Sale

Included in other assets in our consolidated balance sheets are properties that are classified as held for sale (HFS). At June 30, 2024 and 2023, and December 31, 2023, we had HFS properties of $152.4 million, $59.5 million, and $77.2 million, respectively. When properties are determined to be HFS, the property is written down to its fair value less estimated costs to sell, as applicable. The increase in HFS properties since December 31, 2023, primarily reflects a decision in the first quarter 2024 to sell certain regional properties to optimize our real estate portfolio by consolidating employees into existing alternative properties.

Earnings Per Share

We redeemed all of our outstanding Serial Preferred Shares, Series B, in February 2024. See Note 9 – Dividends for further discussion. To determine net income available to common shareholders, which is used in the calculation of the per common share amounts, we reduced net income by preferred share dividends, and, for 2024,

• underwriting discounts and commissions on the preferred share issuance,

• initial issuance costs related to the preferred shares, and

• excise taxes related to the preferred share redemption.

New Accounting Standards

Adopted – On January 1, 2024, we began amortizing the remaining original cost of tax equity investments to the provision for income taxes, since certain conditions were met, on the modified retrospective basis, pursuant to an Accounting Standards Update (ASU) issued by the Financial Accounting Standards Board. Previously, these investments were accounted for under the equity method of accounting and the amortization was recognized as a net impairment loss on the consolidated statements of income. The adoption of the ASU had no cumulative effect on retained earnings and did not have a material impact on our financial condition or results of operations. The amount of income tax credits and investment amortization recognized for the three and six months ended June 30, 2024, and the carrying amount of the tax credit investments at June 30, 2024, were not material to our financial condition or results of operations and, therefore, no additional disclosure is provided.

Reclassification

Goodwill and intangible assets are included in other assets in our consolidated balance sheets and the amortization of intangible assets in other, net, in cash provided by operating activities in our consolidated statements of cash flows. The June 30, 2023 amounts, which were presented separately on the balance sheet and statement of cash flows in the prior year, were reclassified to conform to the current year presentation.

2. INVESTMENTS

The following tables present the composition of our investment portfolio by major security type. Our securities are reported in our consolidated balance sheets at fair value. The changes in fair value for our fixed-maturity securities (other than hybrid securities) are reported as a component of accumulated other comprehensive income (loss), net of deferred income taxes, in our consolidated

balance sheets. The net holding period gains (losses) reported below represent the inception-to-date changes in fair value for the hybrid and equity securities. The changes in the net holding period gains (losses) between periods are recorded as a component of net realized gains (losses) on securities in our consolidated statements of comprehensive income.

($ in millions)			Cost						Gross Unrealized Gains						Gross Unrealized Losses						Net Holding Period Gains (Losses)						Fair Value						% of Total Fair Value
June 30, 2024
Available-for-sale securities:
Fixed maturities:
U.S. government obligations			$	42,063.1					$	59.6					$	(1,228.7)					$	0					$	40,894.0					56.5		%
State and local government obligations			2,345.6						0.7						(144.3)						0						2,202.0						3.0
Foreign government obligations			16.7						0						(0.9)						0						15.8						0.1
Corporate debt securities			13,260.0						33.6						(303.8)						(15.2)						12,974.6						17.9
Residential mortgage-backed securities			980.4						2.6						(9.4)						2.1						975.7						1.3
Commercial mortgage-backed securities			4,457.2						1.9						(489.1)						0						3,970.0						5.5
Other asset-backed securities			6,366.4						7.7						(89.3)						(0.1)						6,284.7						8.7
Redeemable preferred stocks			178.8						0						(1.9)						(5.4)						171.5						0.2
Total fixed maturities			69,668.2						106.1						(2,267.4)						(18.6)						67,488.3						93.2
Short-term investments			733.4						0						0						0						733.4						1.0
Total available-for-sale securities			70,401.6						106.1						(2,267.4)						(18.6)						68,221.7						94.2
Equity securities:
Nonredeemable preferred stocks			886.9						0						0						(48.7)						838.2						1.2
Common equities			707.8						0						0						2,587.8						3,295.6						4.6
Total equity securities			1,594.7						0						0						2,539.1						4,133.8						5.8
Total portfolio1			$	71,996.3					$	106.1					$	(2,267.4)					$	2,520.5					$	72,355.5					100.0		%

($ in millions)			Cost						Gross Unrealized Gains						Gross Unrealized Losses						Net Holding Period Gains (Losses)						Fair Value						% of Total Fair Value
June 30, 2023
Available-for-sale securities:
Fixed maturities:
U.S. government obligations			$	33,277.1					$	0.1					$	(1,676.7)					$	0					$	31,600.5					53.3		%
State and local government obligations			2,336.5						0.1						(181.9)						0						2,154.7						3.6
Foreign government obligations			17.2						0						(1.4)						0						15.8						0.1
Corporate debt securities			10,866.4						14.4						(540.3)						(35.9)						10,304.6						17.4
Residential mortgage-backed securities			580.7						0.2						(13.0)						(5.2)						562.7						0.9
Commercial mortgage-backed securities			4,982.2						2.0						(718.7)						0						4,265.5						7.2
Other asset-backed securities			5,250.6						0						(232.0)						(1.0)						5,017.6						8.5
Redeemable preferred stocks			174.0						0						(3.6)						(13.7)						156.7						0.3
Total fixed maturities			57,484.7						16.8						(3,367.6)						(55.8)						54,078.1						91.3
Short-term investments			1,494.3						0						0						0						1,494.3						2.5
Total available-for-sale securities			58,979.0						16.8						(3,367.6)						(55.8)						55,572.4						93.8
Equity securities:
Nonredeemable preferred stocks			1,107.1						0						0						(122.0)						985.1						1.6
Common equities			662.0						0						0						2,046.1						2,708.1						4.6
Total equity securities			1,769.1						0						0						1,924.1						3,693.2						6.2
Total portfolio1			$	60,748.1					$	16.8					$	(3,367.6)					$	1,868.3					$	59,265.6					100.0		%

($ in millions)			Cost						Gross Unrealized Gains						Gross Unrealized Losses						Net Holding Period Gains (Losses)						Fair Value						% of Total Fair Value
December 31, 2023
Available-for-sale securities:
Fixed maturities:
U.S. government obligations			$	37,823.2					$	204.1					$	(1,157.9)					$	0					$	36,869.4					55.9		%
State and local government obligations			2,338.4						2.8						(138.4)						0						2,202.8						3.3
Foreign government obligations			17.3						0						(1.0)						0						16.3						0.1
Corporate debt securities			11,446.0						87.2						(332.3)						(17.2)						11,183.7						16.9
Residential mortgage-backed securities			426.9						0.2						(10.0)						0.1						417.2						0.6
Commercial mortgage-backed securities			4,535.2						2.2						(597.7)						0						3,939.7						6.0
Other asset-backed securities			5,667.2						15.7						(107.1)						(0.4)						5,575.4						8.4
Redeemable preferred stocks			187.7						0						(2.4)						(11.6)						173.7						0.3
Total fixed maturities			62,441.9						312.2						(2,346.8)						(29.1)						60,378.2						91.5
Short-term investments			1,789.9						0						0						0						1,789.9						2.7
Total available-for-sale securities			64,231.8						312.2						(2,346.8)						(29.1)						62,168.1						94.2
Equity securities:
Nonredeemable preferred stocks			977.1						0						0						(75.0)						902.1						1.4
Common equities			706.0						0						0						2,222.4						2,928.4						4.4
Total equity securities			1,683.1						0						0						2,147.4						3,830.5						5.8
Total portfolio1			$	65,914.9					$	312.2					$	(2,346.8)					$	2,118.3					$	65,998.6					100.0		%

1 At June 30, 2024 and 2023, we had $74.1 million and $248.0 million, respectively, of net unsettled security purchase transactions included in other liabilities, compared to $45.6 million included in other assets at December 31, 2023.

The total fair value of the portfolio at June 30, 2024 and 2023, and December 31, 2023, included $4.1 billion, $4.3 billion, and $4.2 billion, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of unsettled security transactions.

At June 30, 2024, bonds and certificates of deposit in the principal amount of $713.2 million were on deposit to meet state insurance regulatory requirements. We did not hold any securities of any one issuer, excluding U.S. government obligations, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at June 30, 2024 or 2023, or December 31, 2023. At June 30, 2024, we did not hold any debt securities that were non-income producing during the preceding 12 months.

Short-Term Investments Our short-term investments may include commercial paper and other investments that are expected to mature, or are redeemable, within one year.

Hybrid Securities Certain securities in our fixed-maturity portfolio are accounted for as hybrid securities because they contain embedded derivatives that are not deemed to be clearly and closely related to the host investments. These securities are reported at fair value:

			June 30,
(millions)			2024						2023						Dec. 31, 2023
Fixed Maturities:
Corporate debt securities			$	475.5					$	520.1					$	531.3
Residential mortgage-backed securities			272.5						448.7						323.9
Other asset-backed securities			5.3						26.1						13.9
Redeemable preferred stocks			135.0						125.4						141.2
Total hybrid securities			$	888.3					$	1,120.3					$	1,010.3

Since the embedded derivatives (e.g., change-in-control put option, debt-to-equity conversion, or any other feature unrelated to the credit quality or risk of default of the issuer that could impact the amount or timing of our expected future cash flows) do not have observable intrinsic values, we use the fair value option to record the changes in fair value of these securities through income as a component of net realized gains (losses).

Fixed Maturities The composition of fixed maturities by maturity at June 30, 2024, was:

(millions)			Cost						Fair Value
Less than one year			$	7,654.0					$	7,529.6
One to five years			48,100.6						46,812.9
Five to ten years			13,731.4						12,966.0
Ten years or greater			182.2						179.8
Total			$	69,668.2					$	67,488.3

Asset-backed securities are classified in the maturity distribution table based upon their projected cash flows. All other securities that do not have a single maturity date are reported based upon expected average maturity. Contractual maturities may differ from expected maturities because the issuers of the securities may have the right to call or prepay obligations.

Gross Unrealized Losses The following tables show the composition of gross unrealized losses by major security type and by the length of time that individual securities have been in a continuous unrealized loss position:

			Total No. of Sec.			Total Fair Value			Gross Unrealized Losses			Less than 12 Months															12 Months or Greater
($ in millions)			No. of Sec.			Fair Value			Unrealized Losses									No. of Sec.			Fair Value			Unrealized Losses
June 30, 2024
U.S. government obligations			117			$	29,776.3		$	(1,228.7)		17			$	12,936.0		$	(109.4)								100			$	16,840.3		$	(1,119.3)
State and local government obligations			336			2,078.5			(144.3)			58			410.9			(2.0)									278			1,667.6			(142.3)
Foreign government obligations			1			15.8			(0.9)			0			0			0									1			15.8			(0.9)
Corporate debt securities			402			8,995.0			(303.8)			150			3,307.1			(18.4)									252			5,687.9			(285.4)
Residential mortgage-backed securities			39			308.0			(9.4)			7			244.1			(0.5)									32			63.9			(8.9)
Commercial mortgage-backed securities			183			3,883.2			(489.1)			7			314.4			(1.3)									176			3,568.8			(487.8)
Other asset-backed securities			176			3,133.3			(89.3)			62			1,447.0			(3.4)									114			1,686.3			(85.9)
Redeemable preferred stocks			3			36.6			(1.9)			0			0			0									3			36.6			(1.9)
Total fixed maturities			1,257			$	48,226.7		$	(2,267.4)		301			$	18,659.5		$	(135.0)								956			$	29,567.2		$	(2,132.4)

			Total No. of Sec.			Total Fair Value			Gross Unrealized Losses			Less than 12 Months												12 Months or Greater
($ in millions)			No. of Sec.			Fair Value			Unrealized Losses						No. of Sec.			Fair Value			Unrealized Losses
June 30, 2023
U.S. government obligations			171			$	31,496.1		$	(1,676.7)		51			$	17,704.6		$	(427.9)					120			$	13,791.5		$	(1,248.8)
State and local government obligations			346			1,998.2			(181.9)			57			346.8			(5.2)						289			1,651.4			(176.7)
Foreign government obligations			1			15.8			(1.4)			0			0			0						1			15.8			(1.4)
Corporate debt securities			414			8,565.9			(540.3)			109			2,397.4			(56.0)						305			6,168.5			(484.3)
Residential mortgage-backed securities			41			108.5			(13.0)			7			2.4			(0.1)						34			106.1			(12.9)
Commercial mortgage-backed securities			211			4,247.9			(718.7)			4			13.6			(0.1)						207			4,234.3			(718.6)
Other asset-backed securities			292			4,900.0			(232.0)			78			1,564.7			(7.6)						214			3,335.3			(224.4)
Redeemable preferred stocks			3			31.3			(3.6)			0			0			0						3			31.3			(3.6)
Total fixed maturities			1,479			$	51,363.7		$	(3,367.6)		306			$	22,029.5		$	(496.9)					1,173			$	29,334.2		$	(2,870.7)

			Total No. of Sec.			Total Fair Value			Gross Unrealized Losses			Less than 12 Months												12 Months or Greater
($ in millions)			No. of Sec.			Fair Value			Unrealized Losses						No. of Sec.			Fair Value			Unrealized Losses
December 31, 2023
U.S. government obligations			147			$	28,225.0		$	(1,157.9)		25			$	11,890.0		$	(100.0)					122			$	16,335.0		$	(1,057.9)
State and local government obligations			324			1,846.2			(138.4)			31			169.9			(0.9)						293			1,676.3			(137.5)
Foreign government obligations			1			16.3			(1.0)			0			0			0						1			16.3			(1.0)
Corporate debt securities			313			6,642.4			(332.3)			26			617.2			(14.7)						287			6,025.2			(317.6)
Residential mortgage-backed securities			39			88.4			(10.0)			2			0.4			0						37			88.0			(10.0)
Commercial mortgage-backed securities			189			3,912.2			(597.7)			1			30.7			(2.5)						188			3,881.5			(595.2)
Other asset-backed securities			207			3,299.1			(107.1)			41			639.4			(1.2)						166			2,659.7			(105.9)
Redeemable preferred stocks			3			32.5			(2.4)			0			0			0						3			32.5			(2.4)
Total fixed maturities			1,223			$	44,062.1		$	(2,346.8)		126			$	13,347.6		$	(119.3)					1,097			$	30,714.5		$	(2,227.5)

A review of the securities in an unrealized loss position indicated that the issuers were current with respect to their interest obligations and that there was no evidence of deterioration of the current cash flow projections that would indicate we would not receive the remaining principal at maturity.

We had ten securities, across five issuers, that had their credit ratings downgraded during the second quarter 2024, with a combined fair value of $203.0 million and an unrealized loss of $66.7 million as of June 30, 2024.

Allowance For Credit and Uncollectible Losses We are required to measure the amount of potential credit losses for all fixed-maturity securities in an unrealized loss position. We did not record any allowances for credit losses or any write-offs for amounts deemed to be uncollectible during the first six months of 2024 or 2023, and did not have a material credit loss allowance balance as of June 30, 2024 and 2023, or December 31, 2023. We considered several factors and inputs related to the individual securities as part of our analysis. The methodology and significant inputs used to measure the amount of credit losses in our portfolio included:

• current performance indicators on the business model or underlying assets (e.g., delinquency rates, foreclosure rates, and default rates);

• credit support (via current levels of subordination);

• historical credit ratings; and

• updated cash flow expectations based upon these performance indicators.

In order to determine the amount of credit loss, if any, we initially reviewed securities in a loss position to determine whether it was likely that we would be required, or intended, to sell any of the securities prior to the recovery of their respective cost bases (which could be maturity). If we were likely to, or intended to, sell prior to a potential recovery, we would write off the unrealized loss. For those securities that we determined we were not likely to, or did not intend to, sell prior to a potential recovery, we performed additional analysis to determine if the loss was

credit related. For securities subject to credit related loss, we calculated the net present value (NPV) of the cash flows expected (i.e., expected recovery value) using the current book yield for each security. The NPV was then compared to the security’s current amortized value to determine if a credit loss existed. In the event that the NPV was below the amortized value, and the amount was determined to be material on any specific security, or in the aggregate, a credit loss would be deemed to exist, and either an allowance for credit losses would be created, or if an allowance currently existed, either a recovery of the previous allowance, or an incremental loss, would be recorded to net realized gains (losses) on securities.

As of June 30, 2024 and 2023, and December 31, 2023, we believe that none of the unrealized losses on our fixed-maturity securities were related to material credit losses on any specific securities, or in the aggregate. We continue to expect all the securities in our fixed-maturity portfolio to pay their principal and interest obligations.

In addition, we reviewed our accrued investment income outstanding on those securities in an unrealized loss position at June 30, 2024 and 2023, and December 31, 2023, to determine if the accrued interest amounts were uncollectible. Based on our analysis, we believe the issuers have sufficient liquidity and capital reserves to meet their current interest, and future principal, obligations and, therefore, did not write off any accrued income as uncollectible at June 30, 2024 and 2023, or December 31, 2023.

Realized Gains (Losses) The components of net realized gains (losses) for the three and six months ended June 30, were:

			Three Months												Six Months
(millions)			2024						2023						2024						2023
Gross realized gains on security sales
Available-for-sale securities:
U.S. government obligations			$	1.3					$	0.2					$	1.3					$	4.0
State and local government obligations			0						0						0.3						0
Corporate debt securities			0.7						0						3.6						0.1
Residential mortgage-backed securities			1.1						0						1.1						0
Other asset-backed securities			0.1						0						0.1						0
Total available-for-sale securities			3.2						0.2						6.4						4.1
Equity securities:
Nonredeemable preferred stocks			0						0.2						0						0.3
Common equities			0						221.9						11.2						353.9
Total equity securities			0						222.1						11.2						354.2
Subtotal gross realized gains on security sales			3.2						222.3						17.6						358.3
Gross realized losses on security sales
Available-for-sale securities:
U.S. government obligations			(191.9)						(1.1)						(327.2)						(12.6)
State and local government obligations			0						0						(0.1)						0
Corporate debt securities			(21.6)						(29.8)						(36.4)						(50.2)
Commercial mortgage-backed securities			(10.7)						(45.5)						(15.0)						(80.0)
Other asset-backed securities			0						(0.2)						(0.1)						(0.4)
Redeemable preferred stocks			(0.8)						0						(1.1)						0
Short-term investments			0						(0.3)						0						(0.4)
Total available-for-sale securities			(225.0)						(76.9)						(379.9)						(143.6)
Equity securities:
Nonredeemable preferred stocks			(4.6)						(9.2)						(10.5)						(110.2)
Common equities			0						(1.1)						(0.1)						(12.9)
Total equity securities			(4.6)						(10.3)						(10.6)						(123.1)
Subtotal gross realized losses on security sales			(229.6)						(87.2)						(390.5)						(266.7)
Net realized gains (losses) on security sales
Available-for-sale securities:
U.S. government obligations			(190.6)						(0.9)						(325.9)						(8.6)
State and local government obligations			0						0						0.2						0
Corporate debt securities			(20.9)						(29.8)						(32.8)						(50.1)
Residential mortgage-backed securities			1.1						0						1.1						0
Commercial mortgage-backed securities			(10.7)						(45.5)						(15.0)						(80.0)
Other asset-backed securities			0.1						(0.2)						0						(0.4)
Redeemable preferred stocks			(0.8)						0						(1.1)						0
Short-term investments			0						(0.3)						0						(0.4)
Total available-for-sale securities			(221.8)						(76.7)						(373.5)						(139.5)
Equity securities:
Nonredeemable preferred stocks			(4.6)						(9.0)						(10.5)						(109.9)
Common equities			0						220.8						11.1						341.0
Total equity securities			(4.6)						211.8						0.6						231.1
Subtotal net realized gains (losses) on security sales			(226.4)						135.1						(372.9)						91.6
Other assets
Gain			0						0						0						13.2
Impairment			0						(2.2)						0						(4.5)
Subtotal net realized gains (losses) on other assets			0						(2.2)						0						8.7
Net holding period gains (losses)
Hybrid securities			3.3						4.8						10.5						18.7
Equity securities			96.8						(10.8)						391.7						79.7
Subtotal net holding period gains (losses)			100.1						(6.0)						402.2						98.4
Total net realized gains (losses) on securities			$	(126.3)					$	126.9					$	29.3					$	198.7

Realized gains (losses) on securities sold are computed using the first-in-first-out method. During the second quarter and first six months of 2024, the majority of our gross realized losses on security sales were U.S. Treasury Notes that were sold for duration management. During the second quarter and first six months of both 2024 and 2023, we sold corporate debt securities and select commercial mortgage-backed securities, which we viewed as having less attractive risk/reward profiles. During 2023, the gross gains in common equities reflected sales of securities, as part of our plan to incrementally reduce risk in the

portfolio in response to our view of the potential of a more difficult economic environment. The gross loss incurred in our nonredeemable preferred stocks was primarily related to the sale of certain holdings in U.S. bank preferred stocks.

The other asset gain in 2023 is related to proceeds received as a result of litigation in conjunction with three renewable energy investments we made from 2016 through 2018 (the original investments were previously written down in full).

The following table reflects our holding period realized gains (losses) recognized on equity securities held at the respective quarter ends:

			Three Months									Six Months
(millions)			2024			2023						2024			2023
Total net gains (losses) recognized during the period on equity securities			$	92.2		$	201.0					$	392.3		$	310.8
Less: Net gains (losses) recognized on equity securities sold during the period			(4.6)			211.8						0.6			231.1
Net holding period gains (losses) recognized during the period on equity securities held at period end			$	96.8		$	(10.8)					$	391.7		$	79.7

Net Investment Income The components of net investment income for the three and six months ended June 30, were:

			Three Months									Six Months
(millions)			2024			2023						2024			2023
Available-for-sale securities:
Fixed maturities:
U.S. government obligations			$	361.3		$	191.5					$	668.2		$	354.7
State and local government obligations			13.4			11.6						25.8			22.2
Foreign government obligations			0			0						0.1			0.1
Corporate debt securities			134.8			83.5						256.3			167.1
Residential mortgage-backed securities			8.0			5.8						13.4			15.0
Commercial mortgage-backed securities			46.1			49.2						92.5			99.2
Other asset-backed securities			81.3			61.6						159.5			110.1
Redeemable preferred stocks			2.7			2.7						5.6			5.6
Total fixed maturities			647.6			405.9						1,221.4			774.0
Short-term investments			17.2			24.8						36.1			49.5
Total available-for-sale securities			664.8			430.7						1,257.5			823.5
Equity securities:
Nonredeemable preferred stocks			10.4			13.3						21.4			28.4
Common equities			9.8			10.5						23.7			22.2
Total equity securities			20.2			23.8						45.1			50.6
Investment income			685.0			454.5						1,302.6			874.1
Investment expenses			(7.3)			(6.1)						(13.0)			(11.6)
Net investment income			$	677.7		$	448.4					$	1,289.6		$	862.5

On a year-over-year basis, investment income (interest and dividends) increased 51% and 49% for the first three and six months of 2024, respectively, and recurring investment book yield increased 26% for each of the three and six months ended June 30, 2024, compared to the same periods last year. The increases primarily reflected investing new cash from operations and proceeds from maturing bonds in higher coupon rate securities.

3. FAIR VALUE

We have categorized our financial instruments, based on the degree of subjectivity inherent in the method by which they are valued, into a fair value hierarchy of three levels, as follows:

• Level 1: Inputs are unadjusted, quoted prices in active markets for identical instruments at the measurement date (e.g., U.S. government obligations, which are continually priced on a daily basis, active exchange-traded equity securities, and certain short-term securities).

• Level 2: Inputs (other than quoted prices included within Level 1) that are observable for the instrument either directly or indirectly (e.g., certain corporate and municipal bonds and certain preferred stocks). This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are

observable for the instruments, and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3: Inputs that are unobservable. Unobservable inputs reflect our subjective evaluation about the assumptions market participants would use in pricing the financial instrument (e.g., certain structured securities and privately held investments).

Determining the fair value of the investment portfolio is the responsibility of management. As part of that responsibility, we evaluate whether a market is distressed or inactive in determining the fair value for our portfolio. We review certain market level inputs to evaluate whether sufficient activity, volume, and new issuances exist to create an active market. Based on this evaluation, we concluded that there was sufficient activity related to the sectors and securities for which we obtained valuations.

The composition of the investment portfolio by major security type and our outstanding debt was:

			Fair Value
(millions)			Level 1						Level 2						Level 3						Total						Cost
June 30, 2024
Fixed maturities:
U.S. government obligations			$	40,894.0					$	0					$	0					$	40,894.0					$	42,063.1
State and local government obligations			0						2,202.0						0						2,202.0						2,345.6
Foreign government obligations			0						15.8						0						15.8						16.7
Corporate debt securities			0						12,971.6						3.0						12,974.6						13,260.0
Subtotal			40,894.0						15,189.4						3.0						56,086.4						57,685.4
Asset-backed securities:
Residential mortgage-backed			0						975.7						0						975.7						980.4
Commercial mortgage-backed			0						3,970.0						0						3,970.0						4,457.2
Other asset-backed			0						6,284.7						0						6,284.7						6,366.4
Subtotal asset-backed securities			0						11,230.4						0						11,230.4						11,804.0
Redeemable preferred stocks:
Financials			0						23.1						0						23.1						24.5
Utilities			0						13.4						0						13.4						13.9
Industrials			0						135.0						0						135.0						140.4
Subtotal redeemable preferred stocks			0						171.5						0						171.5						178.8
Total fixed maturities			40,894.0						26,591.3						3.0						67,488.3						69,668.2
Short-term investments			733.4						0						0						733.4						733.4
Total available-for-sale securities			41,627.4						26,591.3						3.0						68,221.7						70,401.6
Equity securities:
Nonredeemable preferred stocks:
Financials			0						748.8						36.7						785.5						831.9
Utilities			0						37.5						0						37.5						40.0
Industrials			0						0						15.2						15.2						15.0
Subtotal nonredeemable preferred stocks			0						786.3						51.9						838.2						886.9
Common equities:
Common stocks			3,249.2						0						22.5						3,271.7						683.9
Other risk investments			0						0						23.9						23.9						23.9
Subtotal common equities			3,249.2						0						46.4						3,295.6						707.8
Total equity securities			3,249.2						786.3						98.3						4,133.8						1,594.7
Total portfolio			$	44,876.6					$	27,377.6					$	101.3					$	72,355.5					$	71,996.3
Debt			$	0					$	6,165.5					$	0					$	6,165.5					$	6,890.7

			Fair Value
(millions)			Level 1						Level 2						Level 3						Total						Cost
June 30, 2023
Fixed maturities:
U.S. government obligations			$	31,600.5					$	0					$	0					$	31,600.5					$	33,277.1
State and local government obligations			0						2,154.7						0						2,154.7						2,336.5
Foreign government obligations			0						15.8						0						15.8						17.2
Corporate debt securities			0						10,304.6						0						10,304.6						10,866.4
Subtotal			31,600.5						12,475.1						0						44,075.6						46,497.2
Asset-backed securities:
Residential mortgage-backed			0						562.7						0						562.7						580.7
Commercial mortgage-backed			0						4,265.5						0						4,265.5						4,982.2
Other asset-backed			0						5,017.6						0						5,017.6						5,250.6
Subtotal asset-backed securities			0						9,845.8						0						9,845.8						10,813.5
Redeemable preferred stocks:
Financials			0						22.0						0						22.0						24.5
Utilities			0						9.3						0						9.3						10.4
Industrials			0						125.4						0						125.4						139.1
Subtotal redeemable preferred stocks			0						156.7						0						156.7						174.0
Total fixed maturities			31,600.5						22,477.6						0						54,078.1						57,484.7
Short-term investments			1,462.2						32.1						0						1,494.3						1,494.3
Total available-for-sale securities			33,062.7						22,509.7						0						55,572.4						58,979.0
Equity securities:
Nonredeemable preferred stocks:
Financials			15.8						824.8						56.0						896.6						1,012.1
Utilities			0						72.7						0						72.7						80.0
Industrials			0						0						15.8						15.8						15.0
Subtotal nonredeemable preferred stocks			15.8						897.5						71.8						985.1						1,107.1
Common equities:
Common stocks			2,667.9						0						18.3						2,686.2						640.1
Other risk investments			0						0						21.9						21.9						21.9
Subtotal common equities			2,667.9						0						40.2						2,708.1						662.0
Total equity securities			2,683.7						897.5						112.0						3,693.2						1,769.1
Total portfolio			$	35,746.4					$	23,407.2					$	112.0					$	59,265.6					$	60,748.1
Debt			$	0					$	6,224.0					$	0					$	6,224.0					$	6,886.5

			Fair Value
(millions)			Level 1						Level 2						Level 3						Total						Cost
December 31, 2023
Fixed maturities:
U.S. government obligations			$	36,869.4					$	0					$	0					$	36,869.4					$	37,823.2
State and local government obligations			0						2,202.8						0						2,202.8						2,338.4
Foreign government obligations			0						16.3						0						16.3						17.3
Corporate debt securities			0						11,180.7						3.0						11,183.7						11,446.0
Subtotal			36,869.4						13,399.8						3.0						50,272.2						51,624.9
Asset-backed securities:
Residential mortgage-backed			0						417.2						0						417.2						426.9
Commercial mortgage-backed			0						3,939.7						0						3,939.7						4,535.2
Other asset-backed			0						5,575.4						0						5,575.4						5,667.2
Subtotal asset-backed securities			0						9,932.3						0						9,932.3						10,629.3
Redeemable preferred stocks:
Financials			0						23.1						0						23.1						24.5
Utilities			0						9.4						0						9.4						10.4
Industrials			0						141.2						0						141.2						152.8
Subtotal redeemable preferred stocks			0						173.7						0						173.7						187.7
Total fixed maturities			36,869.4						23,505.8						3.0						60,378.2						62,441.9
Short-term investments			1,757.0						32.9						0						1,789.9						1,789.9
Total available-for-sale securities			38,626.4						23,538.7						3.0						62,168.1						64,231.8
Equity securities:
Nonredeemable preferred stocks:
Financials			0						802.7						49.2						851.9						922.1
Utilities			0						35.4						0						35.4						40.0
Industrials			0						0						14.8						14.8						15.0
Subtotal nonredeemable preferred stocks			0						838.1						64.0						902.1						977.1
Common equities:
Common stocks			2,885.3						0						22.5						2,907.8						685.4
Other risk investments			0						0						20.6						20.6						20.6
Subtotal common equities			2,885.3						0						43.1						2,928.4						706.0
Total equity securities			2,885.3						838.1						107.1						3,830.5						1,683.1
Total portfolio			$	41,511.7					$	24,376.8					$	110.1					$	65,998.6					$	65,914.9
Debt			$	0					$	6,431.3					$	0					$	6,431.3					$	6,888.6

Our portfolio valuations, excluding short-term investments, classified as either Level 1 or Level 2 in the above tables are priced exclusively by external sources, including pricing vendors, dealers/market makers, and exchange-quoted prices.

Our short-term investments classified as Level 1 are highly liquid, actively marketed, and have a very short duration, primarily 90 days or less to redemption. These securities are held at their original cost, adjusted for any accretion of discount, since that value very closely approximates what an active market participant would be willing to pay for such securities. The remainder of our short-term investments are classified as Level 2 and are not priced externally since these securities continually trade at par value. These securities are classified as Level 2 since they are primarily longer-dated securities issued by municipalities that contain either liquidity facilities or mandatory put features within one year.

At both June 30, 2024 and December 31, 2023, vendor-quoted prices represented 93% of our Level 1 classifications (excluding short-term investments), compared to 92% at June 30, 2023. The securities quoted by vendors in Level 1 primarily represent our holdings in U.S. Treasury Notes, which are frequently traded, and the quotes are considered similar to exchange-traded quotes. The balance of our Level 1 pricing comes from quotes obtained directly from trades made on active exchanges. All Level 1 preferred stocks with active exchange quotes were sold during 2023.

At both June 30, 2024 and December 31, 2023, vendor-quoted prices comprised 100% of our Level 2 classifications (excluding short-term investments), compared to 98% at June 30, 2023; the remaining 2% at June 30, 2023 were dealer-quoted prices. In our process for selecting a source (e.g., dealer or pricing service) to provide pricing for securities in our portfolio, we reviewed documentation from the sources that detailed the pricing

techniques and methodologies used by these sources and determined if their policies adequately considered market activity, either based on specific transactions for the particular security type or based on modeling of securities with similar credit quality, duration, yield, and structure that were recently transacted. Once a source is chosen, we continue to monitor any changes or modifications to their processes by reviewing their documentation on internal controls for pricing and market reviews. We review quality control measures of our sources as they become available to determine if any significant changes have occurred from period to period that might indicate issues or concerns regarding their evaluation or market coverage.

As part of our pricing procedures, we obtain quotes from more than one source to help us fully evaluate the market price of securities. However, our internal pricing policy is to use a consistent source for individual securities in order to maintain the integrity of our valuation process. Quotes obtained from the sources are not considered binding offers to transact. Under our policy, when a review of the valuation received from our selected source appears to be outside of what is considered market level activity (which is defined as trading at spreads or yields significantly different than those of comparable securities or outside the general sector level movement without a reasonable explanation), we may use an alternate source’s price. To the extent we determine that it may be prudent to substitute one source’s price for another, we will contact the initial source to obtain an understanding of the factors that may be contributing to the significant price variance.

To allow us to determine if our initial source is providing a price that is outside of a reasonable range, we review our portfolio pricing on a weekly basis. When necessary, we challenge prices from our sources when a price provided does not match our expectations based on our evaluation of market trends and activity. Initially, we perform a review of our portfolio by sector to identify securities whose prices appear outside of a reasonable range. We then perform a more detailed review of fair values for securities disclosed as Level 2. We review dealer bids and quotes for these and/or similar securities to determine the market level context for our valuations. We then evaluate inputs relevant for each class of securities disclosed in the preceding hierarchy tables.

For structured debt securities, including commercial, residential, and other asset-backed securities, we evaluate available market-related data for these and similar securities related to collateral, delinquencies, and defaults for historical trends and reasonably estimable projections, as well as historical prepayment rates and current prepayment assumptions and cash flow estimates. We further stratify each class of our structured debt securities into more finite sectors (e.g., planned amortization class, first pay, second pay, senior, subordinated, etc.) and use duration, credit quality, and coupon to determine if the fair value is appropriate.

For corporate debt and preferred stock (redeemable and nonredeemable) portfolios, as well as the notes issued by The Progressive Corporation (see Note 4 – Debt), we review securities by duration, credit quality, and coupon, as well as changes in interest rate and credit spread movements within that stratification. The review also includes recent trades, including: volume traded at various levels that establish a market; issuer specific fundamentals; and industry-specific economic news as it comes to light.

For municipal securities (e.g., general obligations, revenue, and housing), we stratify the portfolio to evaluate securities by type, duration, credit quality, and coupon to review price changes relative to credit spread and interest rate changes. Additionally, we look to economic data as it relates to geographic location as an indication of price-to-call or maturity predictors. For municipal housing securities, we look to changes in cash flow projections, both historical and reasonably estimable projections, to understand yield changes and their effect on valuation.

For short-term securities, we look at acquisition price relative to the coupon or yield. Since our short-term securities are typically 90 days or less to maturity, with the majority listed in Level 2 being 30 days or less to redemption, we believe that acquisition price is the best estimate of fair value.

We also review data assumptions as supplied by our sources to determine if that data is relevant to current market conditions. In addition, we independently review each sector for transaction volumes, new issuances, and changes in spreads, as well as the overall movement of interest rates along the yield curve to determine if sufficient activity and liquidity exists to provide a credible source for our market valuations.

During each valuation period, we create internal estimations of portfolio valuation (performance returns), based on current market-related activity (i.e., interest rate and credit spread movements and other credit-related factors) within each major sector of our portfolio. We compare our internally generated portfolio results with those generated based on quotes we receive externally and research material valuation differences. We compare our results to index returns for each major sector adjusting for duration and credit quality differences to better understand our portfolio’s results. Additionally, we review on a monthly basis our external sales transactions and compare the actual final market sales prices to previous market valuation prices. This review provides us further validation that our pricing sources are providing market level prices, since we are able to explain significant price changes (i.e., greater than 2%) as known events occur in the marketplace and affect a particular security’s price at sale.

This analysis provides us with additional comfort regarding the source’s process, the quality of its review, and its willingness to improve its analysis based on feedback from clients. We believe this effort helps ensure that we are reporting the most representative fair values for our securities.

After all the valuations are received and our review of Level 2 securities is complete, if the inputs used by vendors are determined to not contain sufficient observable market information, we will reclassify the affected securities to Level 3.

Except as described below, our Level 3 securities are priced externally; however, due to several factors (e.g., nature of the securities, level of activity, and lack of similar securities trading to obtain observable market level inputs), these valuations are more subjective in nature.

To the extent we receive prices from external sources (e.g., broker, valuation firm) for the Level 3 securities, we review those prices for reasonableness using internally developed assumptions and then compare our derived prices to the prices received from the external sources. Based on our review, all prices received from external sources remained unadjusted.

If we do not receive prices from an external source, we perform an internal fair value comparison, which includes a review and analysis of market-comparable securities, to determine if fair value changes are needed. Based on this analysis, certain private equity investments included in the

Level 3 category remain valued at cost or were priced using a recent transaction as the basis for fair value. At least annually, these private equity investments are priced by an external source.

Our Level 3 other risk investments include securities accounted for under the equity method of accounting and, therefore, are not subject to fair value reporting. Since these securities represent less than 0.1% of our total portfolio, we will continue to include them in our Level 3 disclosures and report the activity from these investments as “other” changes in the summary of changes in fair value table and categorize these securities as “pricing exemption securities” in the quantitative information table.

At both June 30, 2024 and December 31, 2023, we held one privately held fixed-maturity security that is classified as a Level 3 investment. At June 30, 2023, we did not have any securities in our fixed-maturity portfolio listed as Level 3.

During the first six months of 2024 and for the full year of 2023, there were no material assets or liabilities measured at fair value on a nonrecurring basis.

Due to the relative size of the Level 3 securities’ fair values, compared to the total portfolio’s fair value, any changes in pricing methodology would not have a significant change in valuation that would materially impact net or comprehensive income.

The following tables provide a summary of changes in fair value associated with Level 3 assets for the three and six months ended June 30, 2024 and 2023:

			Level 3 Fair Value
(millions)			Fair Value at March 31, 2024			Calls/ Maturities/ Paydowns/Other			Purchases			Sales			Net Realized (Gain)/Loss on Sales			Change in Valuation****1			Net Transfers In (Out)			Fair Value at June 30, 2024
Fixed maturities:
Corporate debt securities			$	3.0		$	0		$	0		$	0		$	0		$	0		$	0		$	3.0
Equity securities:
Nonredeemable preferred stocks:
Financials			49.2			0			0			0			0			(12.5)			0			36.7
Industrials			14.8			0			0			0			0			0.4			0			15.2
Common equities:
Common stocks			22.5			0			0			0			0			0			0			22.5
Other risk investments			24.3			(0.4)			0			0			0			0			0			23.9
Total Level 3 securities			$	113.8		$	(0.4)		$	0		$	0		$	0		$	(12.1)		$	0		$	101.3
			Level 3 Fair Value
(millions)			Fair Value at March 31, 2023			Calls/ Maturities/ Paydowns/Other			Purchases			Sales			Net Realized (Gain)/Loss on Sales			Change in Valuation****1			Net Transfers In (Out)			Fair Value at June 30, 2023
Equity securities:
Nonredeemable preferred stocks:
Financials			$	67.4		$	0		$	0		$	0		$	0		$	(11.4)		$	0		$	56.0
Industrials			16.4			0			0			0			0			(0.6)			0			15.8
Common equities:
Common stocks			18.3			0			0			0			0			0			0			18.3
Other risk investments			20.3			1.6			0			0			0			0			0			21.9
Total Level 3 securities			$	122.4		$	1.6		$	0		$	0		$	0		$	(12.0)		$	0		$	112.0
			Level 3 Fair Value
(millions)			Fair Value at December 31, 2023			Calls/ Maturities/ Paydowns/Other			Purchases			Sales			Net Realized (Gain)/Loss on Sales			Change in Valuation****1			Net Transfers In (Out)			Fair Value at June 30, 2024
Fixed maturities:
Corporate debt securities			$	3.0		$	0		$	0		$	0		$	0		$	0		$	0		$	3.0
Equity securities:
Nonredeemable preferred stocks:
Financials			49.2			0			0			0			0			(12.5)			0			36.7
Industrials			14.8			0			0			0			0			0.4			0			15.2
Common equities:
Common stocks			22.5			0			0			0			0			0			0			22.5
Other risk investments			20.6			3.3			0			0			0			0			0			23.9
Total Level 3 securities			$	110.1		$	3.3		$	0		$	0		$	0		$	(12.1)		$	0		$	101.3

			Level 3 Fair Value
(millions)			Fair Value at December 31, 2022			Calls/ Maturities/ Paydowns/Other			Purchases			Sales			Net Realized (Gain)/Loss on Sales			Change in Valuation****1			Net Transfers In (Out)			Fair Value at June 30, 2023
Equity securities:
Nonredeemable preferred stocks:
Financials			$	67.4		$	0		$	0		$	0		$	0		$	(11.4)		$	0		$	56.0
Industrials			16.4			0			0			0			0			(0.6)			0			15.8
Common equities:
Common stocks			18.3			0			0			0			0			0			0			18.3
Other risk investments			19.8			2.1			0			0			0			0			0			21.9
Total Level 3 securities			$	121.9		$	2.1		$	0		$	0		$	0		$	(12.0)		$	0		$	112.0

1 For fixed maturities, amounts included are unrealized gains (losses) included in accumulated other comprehensive income (loss) on our consolidated balance sheets. For equity securities, amounts included are net holding period gains (losses) on securities on our consolidated statements of comprehensive income.

The following tables provide a summary of the quantitative information about Level 3 fair value measurements for our applicable securities at June 30, 2024 and 2023, and December 31, 2023:

			Quantitative Information about Level 3 Fair Value Measurements
($ in millions)			Fair Value at June 30, 2024			Valuation Technique			Unobservable Input			Range of Input Values Increase (Decrease)			Weighted Average Increase (Decrease)
Fixed maturities:
Corporate debt securities			$	3.0		Market comparables			Weighted average market capitalization price change %			(1.2)% to 1.2%			0.2		%
Equity securities:
Nonredeemable preferred stocks			51.9			Market comparables			Weighted average market capitalization price change %			(7.6)% to (1.5)%			(2.9)		%
Common stocks			22.5			Market comparables			Weighted average market capitalization price change %			(26.5)% to 19.3%			(4.4)		%
Subtotal Level 3 securities			77.4
Pricing exemption securities			23.9
Total Level 3 securities			$	101.3

			Quantitative Information about Level 3 Fair Value Measurements
($ in millions)			Fair Value at June 30, 2023			Valuation Technique			Unobservable Input			Range of Input Values Increase (Decrease)			Weighted Average Increase (Decrease)
Equity securities:
Nonredeemable preferred stocks			$	71.8		Market comparables			Weighted average market capitalization price change %			(6.1)% to 27.6%			4.4		%
Common stocks			18.3			Market comparables			Weighted average market capitalization price change %			(22.0)% to 125.4%			18.0		%
Subtotal Level 3 securities			90.1
Pricing exemption securities			21.9
Total Level 3 securities			$	112.0

			Quantitative Information about Level 3 Fair Value Measurements
($ in millions)			Fair Value at December 31, 2023			Valuation Technique			Unobservable Input			Range of Input Values Increase (Decrease)			Weighted Average Increase (Decrease)
Fixed maturities:
Corporate debt securities			$	3.0		Market comparables			Weighted average market capitalization price change %			0.3% to 7.7%			2.6		%
Equity securities:
Nonredeemable preferred stocks			64.0			Market comparables			Weighted average market capitalization price change %			17.2% to 39.7%			21.7		%
Common stocks			22.5			Market comparables			Weighted average market capitalization price change %			(45.8)% to 95.6%			39.7		%
Subtotal Level 3 securities			89.5
Pricing exemption securities			20.6
Total Level 3 securities			$	110.1

4. DEBT

Debt at each of the balance sheet periods consisted of:

			June 30, 2024									June 30, 2023									December 31, 2023
(millions)			Carrying Value						Fair Value						Carrying Value						Fair Value						Carrying Value						Fair Value
2.45% Senior Notes due 2027 (issued: $500.0, August 2016)			$	498.8					$	468.8					$	498.4					$	459.4					$	498.6					$	468.9
2.50% Senior Notes due 2027 (issued: $500.0, March 2022)			498.4						468.0						497.8						458.4						498.1						469.1
6 5/8% Senior Notes due 2029 (issued: $300.0, March 1999)			298.0						320.9						297.6						324.2						297.8						328.7
4.00% Senior Notes due 2029 (issued: $550.0, October 2018)			547.2						526.7						546.7						526.4						546.9						542.6
3.20% Senior Notes due 2030 (issued: $500.0, March 2020)			497.5						455.4						497.1						449.2						497.3						462.2
3.00% Senior Notes due 2032 (issued: $500.0, March 2022)			496.5						433.7						496.1						434.5						496.3						446.0
6.25% Senior Notes due 2032 (issued: $400.0, November 2002)			396.8						428.1						396.6						432.0						396.7						445.6
4.95% Senior Notes due 2033 (issued: $500.0, May 2023)			496.6						494.6						496.3						489.9						496.4						513.0
4.35% Senior Notes due 2044 (issued: $350.0, April 2014)			347.0						301.1						346.9						304.0						347.0						314.2
3.70% Senior Notes due 2045 (issued: $400.0, January 2015)			395.9						309.8						395.8						313.6						395.9						325.1
4.125% Senior Notes due 2047 (issued: $850.0, April 2017)			842.4						698.7						842.2						727.0						842.3						756.2
4.20% Senior Notes due 2048 (issued: $600.0, March 2018)			590.7						493.9						590.5						510.3						590.6						534.1
3.95% Senior Notes due 2050 (issued: $500.0, March 2020)			491.2						392.4						491.0						408.4						491.1						422.3
3.70% Senior Notes due 2052 (issued: $500.0, March 2022)			493.7						373.4						493.5						386.7						493.6						403.3
Total			$	6,890.7					$	6,165.5					$	6,886.5					$	6,224.0					$	6,888.6					$	6,431.3

There was no short-term debt outstanding as of the end of all periods presented.

During the second quarter 2024, The Progressive Corporation renewed its line of credit with PNC Bank, National Association (PNC), in the maximum principal amount of $300 million, which expires April 2025 and has the same terms as the previous line of credit with PNC. See the 2023 Annual Report to Shareholders for a discussion of the terms of this line of credit. We had no borrowings under the line of credit that was available during the periods presented.

5. INCOME TAXES

The effective tax rate for the three and six months ended June 30, 2024, was 21.6% and 21.0%, respectively, compared to 20.7% and 19.9% for the same periods last year, with the change primarily due to our permanent tax differences having a lower impact on our effective rate due to increased profitability in the current year.

Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. We review our deferred tax assets regularly for recoverability. At June 30, 2024 and 2023, and December 31, 2023, we determined that we did not need a valuation allowance on our gross deferred tax assets. Although realization of the deferred tax assets is not assured, management believes that it is more likely than not the deferred tax assets will be realized based on our expectation that we will be able to fully utilize the deductions that are ultimately recognized for tax purposes. At June 30, 2024 and 2023, and December 31, 2023, the

net deferred tax asset includes a gross deferred tax asset of $453.9 million, $703.7 million, and $427.3 million, respectively, related to unrealized losses on fixed-maturity securities. We believe this deferred tax asset will be realized based on the existence of current temporary differences related to unrealized gains in our equity portfolio, and prior year capital gains.

We had net current income taxes payable of $9.0 million and $311.8 million at June 30, 2024 and December 31, 2023, respectively, which were reported in accounts payable, accrued expenses, and other liabilities, compared to recoverable income taxes of $44.0 million at June 30, 2023, which were reported in other assets on our consolidated balance sheets. The balance may fluctuate between an asset and a liability from period to period due to normal timing differences.

At June 30, 2024 and 2023, and December 31, 2023, we had no reserves for uncertain tax positions.

6. LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

Activity in the loss and loss adjustment expense reserves is summarized as follows:

			June 30,
(millions)			2024						2023
Balance at January 1			$	34,389.2					$	30,359.3
Less reinsurance recoverables on unpaid losses			4,789.0						5,559.2
Net balance at January 1			29,600.2						24,800.1
Incurred related to:
Current year			23,629.4						21,683.6
Prior years			(62.5)						1,110.5
Total incurred			23,566.9						22,794.1
Paid related to:
Current year			11,470.3						10,789.5
Prior years			9,606.6						9,115.8
Total paid			21,076.9						19,905.3
Net balance at June 30			32,090.2						27,688.9
Plus reinsurance recoverables on unpaid losses			4,515.0						5,064.4
Balance at June 30			$	36,605.2					$	32,753.3

We experienced favorable reserve development of $62.5 million during the first six months of 2024, compared to unfavorable development of $1,110.5 million for the same period last year, which is reflected as “incurred related to prior years” in the table above.

Year-to-date June 30, 2024

• The favorable prior year reserve development included approximately $60 million of favorable development attributable to accident year 2023 and $20 million to accident year 2022; partially offset by unfavorable development attributable to accident years 2021 and prior.

• Our personal auto products incurred about $235 million of favorable loss and loss adjustment expense (LAE) reserve development, with about 60% attributable to the Agency auto business and the balance in the Direct auto business. The favorable development was, in part, due to lower than anticipated frequency in Florida following tort reform that passed in the first quarter 2023 and lower than anticipated property damage severity across the majority of states.

• Our Commercial Lines and Property businesses experienced about $140 million and $30 million, respectively, of unfavorable development, with the Commercial Lines development primarily driven by higher than anticipated severity in our commercial auto business for California and New York.

Year-to-date June 30, 2023

• The unfavorable prior year reserve development included approximately $910 million attributable to accident year 2022, $81 million to accident year 2021, and the remainder to accident years 2020 and prior.

• Our personal auto products incurred about $870 million of unfavorable loss and LAE reserve development, with the Agency and Direct auto businesses each contributing about half. About half of the unfavorable development was attributable to higher than anticipated severity in auto property and physical damage coverages, while the remaining unfavorable development was primarily due to increased loss costs in Florida injury and medical coverages and, to a lesser extent, higher than anticipated late reported injury claims.

• Our Commercial Lines business experienced about $224 million of unfavorable development, primarily due to higher than anticipated severity and frequency of late reported injury claims.

7. SUPPLEMENTAL CASH FLOW INFORMATION

Cash and cash equivalents include bank demand deposits and daily overnight reverse repurchase commitments of funds held in bank demand deposit accounts by certain subsidiaries. The amount of overnight reverse repurchase commitments, which are not considered part of the investment portfolio, held by these subsidiaries at June 30, 2024 and 2023, and December 31, 2023, were $81.3 million, $68.0 million, and $68.2 million, respectively. Restricted cash and restricted cash equivalents include collateral held against unpaid deductibles and cash that is restricted to pay flood claims under the National Flood Insurance Program’s “Write Your Own” program, for which certain subsidiaries are participants.

Non-cash activity included the following in the respective periods:

			Six Months Ended June 30,
(millions)			2024						2023
Common share dividends1			$	58.6					$	58.5
Operating lease liabilities2			46.9						30.4

1 Declared but unpaid. See Note 9 – Dividends for further discussion.

2 From obtaining right-of-use assets.

In the respective periods, we paid the following:

			Six Months Ended June 30,
(millions)			2024						2023
Income taxes1			$	1,350.5					$	358.8
Interest			138.0						125.6
Operating lease liabilities			42.7						42.5

1 The increase in income taxes paid was primarily driven by higher profitability during the first six months of 2024, compared to the same period last year.

8. SEGMENT INFORMATION

Our Personal Lines segment writes insurance for personal auto and special lines products (e.g., motorcycles, RVs, watercraft, and snowmobiles). Our Commercial Lines segment writes auto-related liability and physical damage insurance, business-related general liability and property insurance predominately for small businesses, and workers’ compensation insurance primarily for the transportation industry. Our Property segment writes residential property insurance for homeowners, other

property owners, and renters, and umbrella insurance. Our service businesses provide insurance-related services, including serving as an agent for homeowners, general liability, and workers’ compensation insurance, among other products, through programs in our direct Personal Lines and Commercial Lines businesses. All segment revenues are generated from external customers; all intercompany transactions are eliminated in consolidation.

Following are the operating results for the respective periods:

			Three Months Ended June 30,																		Six Months Ended June 30,
			2024									2023									2024									2023
(millions)			Revenues			Pretax Profit (Loss)						Revenues			Pretax Profit (Loss)						Revenues						Pretax Profit (Loss)						Revenues						Pretax Profit (Loss)
Personal Lines
Agency			$	6,213.4		$	788.5					$	5,207.2		$	(71.2)					$	12,071.1					$	1,739.2					$	10,067.4					$	91.4
Direct			7,595.5			782.7						6,180.7			126.5						14,616.0						1,826.3						11,898.1						104.4
Total Personal Lines1			13,808.9			1,571.2						11,387.9			55.3						26,687.1						3,565.5						21,965.5						195.8
Commercial Lines			2,664.5			303.8						2,454.1			87.2						5,221.9						512.8						4,810.2						124.4
Property			735.9			(487.8)						622.3			(206.8)						1,448.7						(440.9)						1,221.0						(239.5)
Other indemnity2			0.2			(0.6)						0.1			0						0.4						(0.9)						0.8						(3.4)
Total underwriting operations			17,209.5			1,386.6						14,464.4			(64.3)						33,358.1						3,636.5						27,997.5						77.3
Fees and other revenues3			259.8			NA						226.7			NA						496.3						NA						432.9						NA
Service businesses			106.3			(8.0)						81.0			(9.6)						190.5						(15.9)						153.5						(19.4)
Investments4			558.7			551.4						581.4			575.3						1,331.9						1,318.9						1,072.8						1,061.2
Interest expense			NA			(69.6)						NA			(65.7)						NA						(139.2)						NA						(129.0)
Consolidated total			$	18,134.3		$	1,860.4					$	15,353.5		$	435.7					$	35,376.8					$	4,800.3					$	29,656.7					$	990.1

NA = Not applicable

1 Personal auto insurance accounted for 95% of the total Personal Lines segment net premiums earned during the three and six months ended June 30, 2024, and 94% for the same periods in 2023; insurance for our special lines products accounted for the balance of the Personal Lines net premiums earned.

2 Includes other underwriting business and run-off operations.

3 Pretax profit (loss) for fees and other revenues is allocated to operating segments based on revenue.

4 Revenues represent recurring investment income and total net realized gains (losses) on securities; pretax profit (loss) is net of investment expenses.

Our management uses underwriting margin and combined ratio as primary measures of underwriting profitability. The underwriting margin is the pretax underwriting profit (loss) expressed as a percentage of net premiums earned (i.e., revenues from underwriting operations). Pretax underwriting profit (loss) is calculated as net premiums earned plus fees and other revenues, less: (i) losses and loss adjustment expenses; (ii) policy acquisition costs; and (iii) other underwriting expenses. Combined ratio is the complement of the underwriting margin. Following are the underwriting margins and combined ratios for our underwriting operations for the respective periods:

			Three Months Ended June 30,																		Six Months Ended June 30,
			2024									2023									2024									2023
			Under-writing Margin			Combined Ratio						Under-writing Margin			Combined Ratio						Under-writing Margin			Combined Ratio						Under-writing Margin			Combined Ratio
Personal Lines
Agency			12.7		%	87.3						(1.4)		%	101.4						14.4		%	85.6						0.9		%	99.1
Direct			10.3			89.7						2.0			98.0						12.5			87.5						0.9			99.1
Total Personal Lines			11.4			88.6						0.5			99.5						13.4			86.6						0.9			99.1
Commercial Lines			11.4			88.6						3.6			96.4						9.8			90.2						2.6			97.4
Property			(66.3)			166.3						(33.2)			133.2						(30.4)			130.4						(19.6)			119.6
Total underwriting operations			8.1			91.9						(0.4)			100.4						10.9			89.1						0.3			99.7

9. DIVIDENDS

Following is a summary of our common and preferred share dividends that were declared and/or paid during the six months ended June 30, 2024 and 2023:

(millions, except per share amounts)						Amount
Declared			Payable			Per Share			Accrued/Paid****1
Common – Annual-Variable Dividends:
December 2023			January 2024			$	0.75		$	439.3
Common – Quarterly Dividends:
May 2024			July 2024			0.10			58.6
March 2024			April 2024			0.10			58.6
December 2023			January 2024			0.10			58.6
May 2023			July 2023			0.10			58.5
March 2023			April 2023			0.10			58.5
December 2022			January 2023			0.10			58.5
Preferred Dividends:
January 20242			February 2024			15.688377			7.8
May 2023			June 2023			18.92463			9.5
December 2022			March 2023			26.875			13.4

1 The accrual is based on an estimate of shares outstanding as of the record date and recorded as a component of accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets until paid.

2 During the first quarter 2024, we redeemed all of the outstanding Serial Preferred Shares, Series B, at the stated amount of $1,000 per share, for an aggregate payout of $507.8 million, including accrued and unpaid dividends of $7.8 million to, but excluding, February 22, 2024, which was the redemption date.

See Note 14 – Dividends in our 2023 Annual Report to Shareholders for a discussion of the dividend policies related to our common shares and our preferred shares, prior to redemption.

10. OTHER COMPREHENSIVE INCOME (LOSS)

The components of other comprehensive income (loss), including reclassification adjustments by income statement line item, were as follows:

																					Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)			Pretax total accumulated other comprehensive income (loss)						Total tax (provision) benefit						After tax total accumulated other comprehensive income (loss)						Total net unrealized gains (losses) on securities						Net unrealized losses on forecasted transactions						Foreign currency translation adjustment
Balance at March 31, 2024			$	(2,316.2)					$	492.6					$	(1,823.6)					$	(1,808.6)					$	(13.9)					$	(1.1)
Other comprehensive income (loss) before reclassifications:
Investment securities			(85.1)						18.0						(67.1)						(67.1)						0						0
Total other comprehensive income (loss) before reclassifications			(85.1)						18.0						(67.1)						(67.1)						0						0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net realized gains (losses) on securities			(221.5)						46.7						(174.8)						(174.8)						0						0
Interest expense			(0.2)						0.1						(0.1)						0						(0.1)						0
Total reclassification adjustment for amounts realized in net income			(221.7)						46.8						(174.9)						(174.8)						(0.1)						0
Total other comprehensive income (loss)			136.6						(28.8)						107.8						107.7						0.1						0
Balance at June 30, 2024			$	(2,179.6)					$	463.8					$	(1,715.8)					$	(1,700.9)					$	(13.8)					$	(1.1)
																					Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)			Pretax total accumulated other comprehensive income (loss)						Total tax (provision) benefit						After tax total accumulated other comprehensive income (loss)						Total net unrealized gains (losses) on securities						Net unrealized losses on forecasted transactions						Foreign currency translation adjustment
Balance at March 31, 2023			$	(2,793.3)					$	594.6					$	(2,198.7)					$	(2,183.1)					$	(14.4)					$	(1.2)
Other comprehensive income (loss) before reclassifications:
Investment securities			(651.5)						136.8						(514.7)						(514.7)						0						0
Foreign currency translation adjustment			0.3						(0.1)						0.2						0						0						0.2
Total other comprehensive income (loss) before reclassifications			(651.2)						136.7						(514.5)						(514.7)						0						0.2
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net realized gains (losses) on securities			(74.8)						15.7						(59.1)						(59.1)						0						0
Interest expense			(0.1)						0						(0.1)						0						(0.1)						0
Total reclassification adjustment for amounts realized in net income			(74.9)						15.7						(59.2)						(59.1)						(0.1)						0
Total other comprehensive income (loss)			(576.3)						121.0						(455.3)						(455.6)						0.1						0.2
Balance at June 30, 2023			$	(3,369.6)					$	715.6					$	(2,654.0)					$	(2,638.7)					$	(14.3)					$	(1.0)

(millions)			Pretax total accumulated other comprehensive income (loss)						Total tax (provision) benefit						After tax total accumulated other comprehensive income (loss)						Total net unrealized gains (losses) on securities						Net unrealized losses on forecasted transactions						Foreign currency translation adjustment
Balance at December 31, 2023			$	(2,052.9)					$	437.2					$	(1,615.7)					$	(1,600.8)					$	(14.0)					$	(0.9)
Other comprehensive income (loss) before reclassifications:
Investment securities			(498.7)						104.9						(393.8)						(393.8)						0						0
Foreign currency translation adjustment			(0.3)						0.1						(0.2)						0						0						(0.2)
Total other comprehensive income (loss) before reclassifications			(499.0)						105.0						(394.0)						(393.8)						0						(0.2)
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net realized gains (losses) on securities			(372.0)						78.3						(293.7)						(293.7)						0						0
Interest expense			(0.3)						0.1						(0.2)						0						(0.2)						0
Total reclassification adjustment for amounts realized in net income			(372.3)						78.4						(293.9)						(293.7)						(0.2)						0
Total other comprehensive income (loss)			(126.7)						26.6						(100.1)						(100.1)						0.2						(0.2)
Balance at June 30, 2024			$	(2,179.6)					$	463.8					$	(1,715.8)					$	(1,700.9)					$	(13.8)					$	(1.1)
																					Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)			Pretax total accumulated other comprehensive income (loss)						Total tax (provision) benefit						After tax total accumulated other comprehensive income (loss)						Total net unrealized gains (losses) on securities						Net unrealized losses on forecasted transactions						Foreign currency translation adjustment
Balance at December 31, 2022			$	(3,556.9)					$	754.9					$	(2,802.0)					$	(2,786.3)					$	(14.5)					$	(1.2)
Other comprehensive income (loss) before reclassifications:
Investment securities			54.1						(11.4)						42.7						42.7						0						0
Foreign currency translation adjustment			0.3						(0.1)						0.2						0						0						0.2
Total other comprehensive income (loss) before reclassifications			54.4						(11.5)						42.9						42.7						0						0.2
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net realized gains (losses) on securities			(132.7)						27.8						(104.9)						(104.9)						0						0
Interest expense			(0.2)						0						(0.2)						0						(0.2)						0
Total reclassification adjustment for amounts realized in net income			(132.9)						27.8						(105.1)						(104.9)						(0.2)						0
Total other comprehensive income (loss)			187.3						(39.3)						148.0						147.6						0.2						0.2
Balance at June 30, 2023			$	(3,369.6)					$	715.6					$	(2,654.0)					$	(2,638.7)					$	(14.3)					$	(1.0)

In an effort to manage interest rate risk, we entered into forecasted transactions on certain of Progressive’s debt issuances. We expect to reclassify $0.6 million (pretax) into interest expense during the next 12 months, related to net unrealized losses on these forecasted transactions (see Note 4 – Debt in our 2023 Annual Report to Shareholders for further discussion).

11. LITIGATION

The Progressive Corporation and/or its insurance subsidiaries are named as defendants in various lawsuits arising out of claims made under insurance policies written by our insurance subsidiaries in the ordinary course of business. We consider all legal actions relating to such claims in establishing our loss and loss adjustment expense reserves.

In addition, The Progressive Corporation and/or its insurance subsidiaries are named as defendants in a number of class action or individual lawsuits that challenge certain of the operations of the subsidiaries. The nature and volume of litigation pending against The Progressive Corporation and/or its insurance subsidiaries is similar to that which was disclosed in Note 12 – Litigation in our 2023 Annual Report to Shareholders.

As of June 30, 2024, lawsuits have been certified or conditionally certified as class/collective actions in cases alleging: we improperly value total loss claims in Alabama, Colorado, Georgia, Indiana, New York, Pennsylvania, and South Carolina; we improperly fail to pay fees and taxes associated with total losses in Michigan and New York; we improperly calculate basic economic loss as it relates to wage loss coverage in New York; we improperly fail to timely process and pay personal injury protection claims in Texas; we improperly reduce or deny first-party medical benefits in Arkansas; and that certain of our compensation practices are improper. Other insurance companies face many of these same issues.

We plan to contest the pending lawsuits vigorously, but may pursue settlement negotiations in some cases, as we deem appropriate. Although outcomes of pending cases are uncertain until final disposition, we establish accruals for these lawsuits when it is probable that a loss has been or will be incurred and we can reasonably estimate potential loss exposure, which may include a range of loss. As to lawsuits for which the loss is considered neither probable nor estimable, or is considered probable but not estimable, we do not establish an accrual. Nevertheless, we continue to evaluate pending litigation to determine if any losses not deemed probable and estimable become so, at which point we would establish an accrual at either our best estimate of the loss or the lower end of the range of loss.

Lawsuits arising from insurance policies and operations, including but not limited to allegations involving claims adjustment and vehicle valuation, may be filed contemporaneously in multiple states. As of June 30, 2024, we are named as defendants in class action lawsuits pending in multiple states alleging that we improperly value total loss vehicle physical damage claims through the application of a negotiation adjustment in calculating such valuations, which includes seven states in which classes have been certified, as noted above, and lawsuits styled as putative class actions pending in additional states. These lawsuits, which were filed at different times by different plaintiffs, feature certain similar claims and also include different allegations and are subject to various state laws. While we believe we have meritorious defenses and we are vigorously contesting these lawsuits, an unfavorable result in, or a settlement of, a significant number of these lawsuits could, in aggregation, have a material adverse effect on our financial condition, cash flows, and/or results of operations. Based on information known at June 30, 2024, and except as to any settlements and accruals as described below, we determined that losses from these lawsuits are reasonably possible but neither probable nor reasonably estimable.

With respect to our pending lawsuits that are not related to claims under insurance policies, the accruals that we have established were not material at June 30, 2024 and 2023, or December 31, 2023, and there were no material settlements during 2023 or the first six months of 2024. For most of these lawsuits, we do not consider any losses to be both probable and estimable, and we are unable to estimate a meaningful range of loss, if any, at this time, due to the factors discussed in Note 12 – Litigation in our 2023 Annual Report to Shareholders. In the event that any one or more of these lawsuits results in a substantial judgment against us, or settlement by us, or if our accruals (if any) prove to be inadequate, the resulting liability could have a material adverse effect on our consolidated financial condition, cash flows, and/or results of operations. For a further discussion on our pending litigation and related reserving policies, see Note 12 – Litigation in our 2023 Annual Report to Shareholders.