Item 1. Financial Statements.

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Item 1. Financial Statements.

The Progressive Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(unaudited)


	Three Months				Nine Months
Periods Ended September 30,	2025		2024		2025		2024
(millions — except per share amounts)
Revenues
Net premiums earned	$	20,849	$	18,297	$	60,568	$	51,655
Investment income	924		739		2,609		2,042
Net realized gains (losses) on securities:
Net realized gains (losses) on security sales	12		68		32		(305)
Net holding period gains (losses) on securities	283		220		438		622
Total net realized gains (losses) on securities	295		288		470		317
Fees and other revenues	306		278		896		774
Service revenues	138		117		382		308
Total revenues	22,512		19,719		64,925		55,096
Expenses
Losses and loss adjustment expenses	13,445		12,510		39,854		36,077
Policy acquisition costs	1,555		1,390		4,522		3,930
Other underwriting expenses	3,015		2,670		8,423		6,781
Policyholder credit expense1	950		0		950		0
Investment expenses	10		7		26		20
Service expenses	144		126		400		333
Interest expense	70		70		209		209
Total expenses	19,189		16,773		54,384		47,350
Net Income
Income before income taxes	3,323		2,946		10,541		7,746
Provision for income taxes	708		612		2,184		1,622
Net income	2,615		2,334		8,357		6,124
Other Comprehensive Income (Loss)
Changes in:
Total net unrealized gains (losses) on fixed-maturity securities	284		1,561		1,611		1,461
Net unrealized losses on forecasted transactions	0		0		1		0
Other comprehensive income (loss)	284		1,561		1,612		1,461
Comprehensive income (loss)	$	2,899	$	3,895	$	9,969	$	7,585
Computation of Earnings Per Common Share
Net income	$	2,615	$	2,334	$	8,357	$	6,124
Less: Preferred share dividends and other2	0		0		0		17
Net income available to common shareholders	$	2,615	$	2,334	$	8,357	$	6,107
Average common shares outstanding - Basic	586.5		585.6		586.3		585.5
Net effect of dilutive stock-based compensation	1.7		2.0		1.8		2.2
Total average equivalent common shares - Diluted	588.2		587.6		588.1		587.7
Basic: Earnings per common share	$	4.46	$	3.98	$	14.25	$	10.43
Diluted: Earnings per common share	$	4.45	$	3.97	$	14.21	$	10.39

1 See Note 8 – Segment Information for further discussion.

2 All of our outstanding Serial Preferred Shares, Series B, were redeemed in February 2024.

See notes to consolidated financial statements.

The Progressive Corporation and Subsidiaries

Consolidated Balance Sheets

(unaudited)


	September 30,				December 31,
(millions)	2025		2024		2024
Assets
Available-for-sale securities, at fair value:
Fixed maturities (amortized cost: $88,247, $74,595, and $77,126)	$	88,509	$	74,411	$	75,332
Short-term investments (amortized cost: $1,515, $757, and $615)	1,515		757		615
Total available-for-sale securities	90,024		75,168		75,947
Equity securities, at fair value:
Nonredeemable preferred stocks (cost: $454, $760, and $756)	438		735		728
Common equities (cost: $808, $733, and $745)	4,047		3,497		3,575
Total equity securities	4,485		4,232		4,303
Total investments	94,509		79,400		80,250
Cash and cash equivalents	173		136		143
Restricted cash and cash equivalents	12		11		11
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	185		147		154
Accrued investment income	691		560		594
Premiums receivable, net of allowance for credit losses of $516, $388, and $460	16,519		15,135		14,369
Reinsurance recoverables	4,107		4,881		4,765
Prepaid reinsurance premiums	215		224		349
Deferred acquisition costs	2,164		2,032		1,961
Property and equipment, net of accumulated depreciation of $1,398, $1,590, and $1,461	790		689		790
Net federal deferred income taxes	662		598		954
Other assets	1,693		1,537		1,559
Total assets	$	121,535	$	105,203	$	105,745
Liabilities and Shareholders’ Equity
Unearned premiums	$	26,822	$	24,772	$	23,858
Loss and loss adjustment expense reserves	42,105		38,062		39,057
Accounts payable, accrued expenses, and other liabilities	10,267		8,318		10,346
Debt1	6,896		6,892		6,893
Total liabilities	86,090		78,044		80,154
Common shares, $1.00 par value (authorized 900; issued 798, including treasury shares of 212)	586		586		586
Paid-in capital	2,233		2,096		2,145
Retained earnings	32,437		24,632		24,283
Accumulated other comprehensive income (loss):
Net unrealized gains (losses) on fixed-maturity securities	203		(140)		(1,408)
Net unrealized losses on forecasted transactions	(13)		(14)		(14)
Foreign currency translation adjustment	(1)		(1)		(1)
Total accumulated other comprehensive income (loss)	189		(155)		(1,423)
Total shareholders’ equity	35,445		27,159		25,591
Total liabilities and shareholders’ equity	$	121,535	$	105,203	$	105,745

1 Consists solely 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				Nine Months
Periods Ended September 30,	2025		2024		2025		2024
(millions — except per share amounts)
Serial Preferred Shares, No Par Value
Balance, beginning of period	$	0	$	0	$	0	$	494
Redemption of Serial Preferred Shares, Series B1	0		0		0		(494)
Balance, end of period	0		0		0		0
Common Shares, $1.00 Par Value
Balance, beginning of period	586		586		586		585
Treasury shares purchased	(1)		(1)		(1)		(1)
Net restricted equity awards issued/vested	1		1		1		2
Balance, end of period	586		586		586		586
Paid-In Capital
Balance, beginning of period	2,192		2,060		2,145		2,013
Amortization of equity-based compensation	42		38		90		86
Treasury shares purchased	0		(1)		(1)		(2)
Net restricted equity awards issued/vested	(1)		(1)		(1)		(2)
Reinvested dividends on restricted stock units	0		0		0		1
Balance, end of period	2,233		2,096		2,233		2,096
Retained Earnings
Balance, beginning of period	29,921		22,410		24,283		18,801
Net income	2,615		2,334		8,357		6,124
Treasury shares purchased	(39)		(84)		(105)		(131)
Cash dividends declared on common shares ($0.10, $0.10, $0.30, and $0.30 per share)1	(59)		(59)		(176)		(176)
Cash dividends declared on Serial Preferred Shares, Series B ($0, $0, $0, and $15.688377 per share)1	0		0		0		(8)
Reinvested dividends on restricted stock units	0		0		0		(1)
Other, net	(1)		31		78		23
Balance, end of period	32,437		24,632		32,437		24,632
Accumulated Other Comprehensive Income (Loss)
Balance, beginning of period	(95)		(1,716)		(1,423)		(1,616)
Other comprehensive income (loss)	284		1,561		1,612		1,461
Balance, end of period	189		(155)		189		(155)
Total shareholders’ equity	$	35,445	$	27,159	$	35,445	$	27,159

1 See Note 9 – Dividends for further discussion.

There are 20 million Serial Preferred Shares authorized. There are 5 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)


Nine Months Ended September 30,	2025		2024
(millions)
Cash Flows From Operating Activities
Net income	$	8,357	$	6,124
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	230		208
Net amortization (accretion) of fixed-income securities	(81)		(24)
Amortization of equity-based compensation	90		86
Net realized (gains) losses on securities	(470)		(317)
Net (gains) losses on disposition of property and equipment	2		(2)
Changes in:
Premiums receivable	(2,150)		(3,177)
Reinsurance recoverables	658		213
Prepaid reinsurance premiums	134		26
Deferred acquisition costs	(203)		(345)
Income taxes	(138)		(367)
Unearned premiums	2,964		4,638
Loss and loss adjustment expense reserves	3,048		3,673
Accounts payable, accrued expenses, and other liabilities	2,079		1,601
Other, net	(142)		(226)
Net cash provided by operating activities	14,378		12,111
Cash Flows From Investing Activities
Purchases:
Fixed maturities	(34,912)		(35,836)
Equity securities	(143)		(110)
Sales:
Fixed maturities	17,520		18,583
Equity securities	182		222
Maturities, paydowns, calls, and other:
Fixed maturities	6,269		4,750
Equity securities	240		110
Net (purchases) sales of short-term investments	(825)		1,070
Net change in unsettled security transactions	398		514
Purchases of property and equipment	(227)		(175)
Sales of property and equipment	70		65
Net cash used in investing activities	(11,428)		(10,807)
Cash Flows From Financing Activities
Dividends paid to common shareholders	(2,812)		(615)
Acquisition of treasury shares for equity award tax liabilities	(92)		(121)
Acquisition of treasury shares acquired in open market	(15)		(13)
Redemption of preferred shares	0		(500)
Dividends paid to preferred shareholders	0		(8)
Net cash used in financing activities	(2,919)		(1,257)
Increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	31		47
Cash, cash equivalents, restricted cash, and restricted cash equivalents – January 1	154		100
Cash, cash equivalents, restricted cash, and restricted cash equivalents – September 30	$	185	$	147

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 September 30, 2025, 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, 2024 (2024 Annual Report to Shareholders).

Premiums Receivable

We perform analyses to evaluate our premiums receivable for expected credit losses. See our 2024 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 September 30,				Nine Months Ended September 30,
(millions)	2025		2024		2025		2024
Allowance for credit losses, beginning of period	$	501	$	328	$	460	$	369
Increase in allowance1	211		167		540		402
Write-offs2	(196)		(107)		(484)		(383)
Allowance for credit losses, end of period	$	516	$	388	$	516	$	388

1 Represents the incremental increase in other underwriting expenses.

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

Property – Held for Sale

At September 30, 2025 and 2024, and December 31, 2024, we had held for sale properties of $112 million, $150 million, and $129 million, respectively, which are included in other assets on our consolidated balance sheets.

New Accounting Standards

We did not adopt any new accounting standards during the three and nine months ended September 30, 2025.

In September 2025, the Financial Accounting Standards Board issued an Accounting Standards Update (ASU), which amends the existing accounting guidance for capitalization of internal-use software costs and provides more detailed guidelines around the criteria for capitalization. This ASU will be effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2027 (2028 for calendar-year companies). This standard may be applied using a prospective, modified, or retrospective transition approach. We do not believe this ASU will have a material impact on our financial condition or results of operations.

2. INVESTMENTS

The following tables present the composition of our investment portfolio by major security type:


($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Net Holding Period Gains (Losses)		Fair Value		% of Total Fair Value
September 30, 2025
Available-for-sale securities:
Fixed maturities:
U.S. government obligations	$	51,021	$	731	$	(413)	$	0	$	51,339	54.3	%
State and local government obligations	3,320		20		(65)		0		3,275		3.5
Foreign government obligations	16		0		0		0		16		0
Corporate and other debt securities	18,621		270		(86)		12		18,817		19.9
Residential mortgage-backed securities	2,979		26		(6)		1		3,000		3.2
Commercial mortgage-backed securities	5,916		17		(247)		0		5,686		6.0
Other asset-backed securities	6,374		35		(33)		0		6,376		6.7

Total fixed maturities	88,247		1,099		(850)		13		88,509		93.6
Short-term investments	1,515		0		0		0		1,515		1.6
Total available-for-sale securities	89,762		1,099		(850)		13		90,024		95.2
Equity securities:
Nonredeemable preferred stocks	454		0		0		(16)		438		0.5
Common equities	808		0		0		3,239		4,047		4.3
Total equity securities	1,262		0		0		3,223		4,485		4.8
Total portfolio1	$	91,024	$	1,099	$	(850)	$	3,236	$	94,509	100.0	%


($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Net Holding Period Gains (Losses)		Fair Value		% of Total Fair Value
September 30, 2024
Available-for-sale securities:
Fixed maturities:
U.S. government obligations	$	44,231	$	772	$	(574)	$	0	$	44,429	56.0	%
State and local government obligations	2,681		10		(90)		0		2,601		3.3
Foreign government obligations	17		0		(1)		0		16		0
Corporate and other debt securities	14,970		222		(156)		0		15,036		18.9
Residential mortgage-backed securities	1,404		24		(6)		2		1,424		1.8
Commercial mortgage-backed securities	4,664		4		(377)		0		4,291		5.4
Other asset-backed securities	6,628		40		(54)		0		6,614		8.3

Total fixed maturities	74,595		1,072		(1,258)		2		74,411		93.7
Short-term investments	757		0		0		0		757		1.0
Total available-for-sale securities	75,352		1,072		(1,258)		2		75,168		94.7
Equity securities:
Nonredeemable preferred stocks	760		0		0		(25)		735		0.9
Common equities	733		0		0		2,764		3,497		4.4
Total equity securities	1,493		0		0		2,739		4,232		5.3
Total portfolio1	$	76,845	$	1,072	$	(1,258)	$	2,741	$	79,400	100.0	%


($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Net Holding Period Gains (Losses)		Fair Value		% of Total Fair Value
December 31, 2024
Available-for-sale securities:
Fixed maturities:
U.S. government obligations	$	47,103	$	36	$	(1,151)	$	0	$	45,988	57.3	%
State and local government obligations	2,893		2		(117)		0		2,778		3.5
Foreign government obligations	16		0		0		0		16		0
Corporate and other debt securities	14,111		65		(215)		(7)		13,954		17.4
Residential mortgage-backed securities	1,600		9		(11)		3		1,601		2.0
Commercial mortgage-backed securities	4,721		7		(376)		0		4,352		5.4
Other asset-backed securities	6,682		26		(65)		0		6,643		8.3

Total fixed maturities	77,126		145		(1,935)		(4)		75,332		93.9
Short-term investments	615		0		0		0		615		0.7
Total available-for-sale securities	77,741		145		(1,935)		(4)		75,947		94.6
Equity securities:
Nonredeemable preferred stocks	756		0		0		(28)		728		0.9
Common equities	745		0		0		2,830		3,575		4.5
Total equity securities	1,501		0		0		2,802		4,303		5.4
Total portfolio1	$	79,242	$	145	$	(1,935)	$	2,798	$	80,250	100.0	%

1 At September 30, 2025 and 2024 and December 31, 2024, we had $523 million, $469 million, and $125 million, respectively, of net unsettled security transactions included in accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets.

The total fair value of the portfolio at September 30, 2025 and 2024 and December 31, 2024, included $4.9 billion, $4.1 billion, and $6.2 billion, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of unsettled security transactions. A portion of the investments held at December 31, 2024 were sold and proceeds were used to pay our common share dividends in January 2025; see Note 9 – Dividends for additional information.

At September 30, 2025, bonds and certificates of deposit in the principal amount of $788 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 September 30, 2025 or 2024, or December 31, 2024. At September 30, 2025, we did not hold any debt securities that were non-income producing during the preceding 12 months.

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:


	September 30,
(millions)	2025		2024		December 31, 2024
Fixed Maturities:
Corporate and other debt securities	$	696	$	637	$	608
Residential mortgage-backed securities	642		369		479
Other asset-backed securities	0		3		1

Total hybrid securities	$	1,338	$	1,009	$	1,088

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 September 30, 2025, was:


(millions)	Cost		Fair Value
Less than one year	$	8,676	$	8,668
One to five years	53,046		53,116
Five to ten years	26,249		26,446
Ten years or greater	276		279
Total	$	88,247	$	88,509

Asset-backed securities are classified in the maturity distribution table above 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		Gross Unrealized Losses					No. of Sec.		Fair Value	Gross Unrealized Losses
September 30, 2025
U.S. government obligations	71	$	11,145	$	(413)	7	$	1,777	$	(3)			64	$	9,368	$	(410)
State and local government obligations	251	1,557		(65)		40	188		(1)				211	1,369		(64)

Corporate and other debt securities	138	3,503		(86)		24	718		(4)				114	2,785		(82)
Residential mortgage-backed securities	28	283		(6)		9	186		(1)				19	97		(5)
Commercial mortgage-backed securities	138	2,879		(247)		16	375		(1)				122	2,504		(246)
Other asset-backed securities	50	1,128		(33)		13	228		(1)				37	900		(32)

Total fixed maturities	676	$	20,495	$	(850)	109	$	3,472	$	(11)			567	$	17,023	$	(839)


	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		Gross Unrealized Losses			No. of Sec.		Fair Value		Gross Unrealized Losses
September 30, 2024
U.S. government obligations	86	$	12,919	$	(574)	3	$	2,069	$	(3)		83	$	10,850	$	(571)
State and local government obligations	302	1,779		(90)		44	208		0			258	1,571		(90)
Foreign government obligations	1	16		(1)		0	0		0			1	16		(1)
Corporate and other debt securities	224	5,251		(156)		14	426		(3)			210	4,825		(153)
Residential mortgage-backed securities	33	244		(6)		4	185		0			29	59		(6)
Commercial mortgage-backed securities	177	3,750		(377)		5	170		0			172	3,580		(377)
Other asset-backed securities	80	1,531		(54)		16	353		0			64	1,178		(54)

Total fixed maturities	903	$	25,490	$	(1,258)	86	$	3,411	$	(6)		817	$	22,079	$	(1,252)


	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		Gross Unrealized Losses			No. of Sec.		Fair Value		Gross Unrealized Losses
December 31, 2024
U.S. government obligations	113	$	38,782	$	(1,151)	39	$	30,257	$	(418)		74	$	8,525	$	(733)
State and local government obligations	379	2,339		(117)		127	783		(6)			252	1,556		(111)

Corporate and other debt securities	304	7,034		(215)		122	2,935		(33)			182	4,099		(182)
Residential mortgage-backed securities	40	428		(11)		12	377		(4)			28	51		(7)
Commercial mortgage-backed securities	153	3,294		(376)		8	264		(16)			145	3,030		(360)
Other asset-backed securities	84	1,907		(65)		34	912		(8)			50	995		(57)

Total fixed maturities	1,073	$	53,784	$	(1,935)	342	$	35,528	$	(485)		731	$	18,256	$	(1,450)

A review of the securities in an unrealized loss position indicated, at the end of each period presented, 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.

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 credit losses deemed to be uncollectible during the first nine months of 2025 or 2024, and did not have a material credit loss allowance balance as of September 30, 2025 and 2024, or December 31, 2024. 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.

We initially reviewed securities in a loss position to determine whether we intended, or if it was more likely than not that we would be required, to sell any of the securities prior to the recovery of their respective cost bases (which could be maturity). If we were more likely than not, or intended, to sell prior to a potential recovery, we would write off the unrealized loss. No unrealized loss write offs were recorded during the nine months ended September 30, 2025 or 2024.

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 with a potential 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 applicable security’s current amortized cost basis to determine if a credit loss existed. If the NPV was below the amortized cost basis, and deemed material for any specific security, or in the aggregate, a credit loss would be recognized and either a new allowance for credit losses would be recorded, or adjustments would be made to a previous allowance. All changes to new or existing allowances for credit losses are recorded to net realized gains (losses) on securities.

As of September 30, 2025 and 2024, and December 31, 2024, 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 will pay their principal and interest obligations.

In addition, we reviewed our accrued investment income outstanding on those securities in an unrealized loss position at September 30, 2025 and 2024, and December 31, 2024, 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 September 30, 2025 and 2024, or December 31, 2024.

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


	Three Months				Nine Months
(millions)	2025		2024		2025		2024
Gross realized gains on security sales
Available-for-sale securities:
U.S. government obligations	$	1	$	43	$	78	$	44

Corporate and other debt securities	6		2		9		6
Residential mortgage-backed securities	0		0		1		1




Total available-for-sale securities	7		45		88		51
Equity securities:
Nonredeemable preferred stocks	1		0		3		0
Common equities	11		14		50		26
Total equity securities	12		14		53		26

Subtotal gross realized gains on security sales	19		59		141		77
Gross realized losses on security sales
Available-for-sale securities:
U.S. government obligations	0		(2)		(78)		(329)
State and local government obligations	0		(1)		(2)		(1)
Corporate and other debt securities	(4)		(5)		(7)		(43)

Commercial mortgage-backed securities	0		0		(10)		(15)



Total available-for-sale securities	(4)		(8)		(97)		(388)
Equity securities:
Nonredeemable preferred stocks	(1)		(7)		(6)		(18)
Common equities	(2)		(12)		(6)		(12)
Total equity securities	(3)		(19)		(12)		(30)
Subtotal gross realized losses on security sales	(7)		(27)		(109)		(418)
Net realized gains (losses) on security sales
Available-for-sale securities:
U.S. government obligations	1		41		0		(285)
State and local government obligations	0		(1)		(2)		(1)
Corporate and other debt securities	2		(3)		2		(37)
Residential mortgage-backed securities	0		0		1		1
Commercial mortgage-backed securities	0		0		(10)		(15)



Total available-for-sale securities	3		37		(9)		(337)
Equity securities:
Nonredeemable preferred stocks	0		(7)		(3)		(18)
Common equities	9		2		44		14
Total equity securities	9		(5)		41		(4)

Subtotal net realized gains (losses) on security sales	12		32		32		(341)
Other assets
Gain	0		36		0		36


Net holding period gains (losses)
Hybrid securities	3		20		17		31
Equity securities	280		200		421		591

Subtotal net holding period gains (losses)	283		220		438		622





Total net realized gains (losses) on securities	$	295	$	288	$	470	$	317

Realized gains (losses) on securities sold are computed using the first-in, first-out method. We had minimal sales activity during the third quarter of 2025. During the first nine months of 2025 and the third quarter and first nine months of 2024, the majority of our security sales were U.S. Treasury Notes that were sold for duration management. We also selectively sold securities that we viewed as having less attractive risk/reward profiles during the first nine months of 2025 and 2024.

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


	Three Months				Nine Months
(millions)	2025		2024		2025		2024
Total net gains (losses) recognized during the period on equity securities	$	289	$	195	$	462	$	587
Less: Net gains (losses) recognized on equity securities sold during the period	9		(5)		41		(4)
Net holding period gains (losses) recognized during the period on equity securities held at period end	$	280	$	200	$	421	$	591

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


	Three Months				Nine Months
(millions)	2025		2024		2025		2024
Available-for-sale securities:
Fixed maturities:
U.S. government obligations	$	470	$	396	$	1,314	$	1,064
State and local government obligations	24		16		64		42

Corporate and other debt securities	214		155		593		417
Residential mortgage-backed securities	38		14		95		27
Commercial mortgage-backed securities	63		49		175		142
Other asset-backed securities	78		83		246		243

Total fixed maturities	887		713		2,487		1,935
Short-term investments	20		9		66		45
Total available-for-sale securities	907		722		2,553		1,980
Equity securities:
Nonredeemable preferred stocks	6		9		19		30
Common equities	11		8		37		32
Total equity securities	17		17		56		62
Investment income	924		739		2,609		2,042
Investment expenses	(10)		(7)		(26)		(20)
Net investment income	$	914	$	732	$	2,583	$	2,022

On a year-over-year basis, investment income (interest and dividends) increased 25% and 28% for the three and nine months ended September 30, 2025, respectively, compared to the same periods last year. The increases primarily reflect growth in invested assets and an increase in recurring investment book yield. The book yield increase primarily reflects investing new cash from insurance 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 investments).
Level 2: Inputs that are observable for the instrument either directly (other than quoted prices included within Level 1) or indirectly. 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 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 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
September 30, 2025
Fixed maturities:
U.S. government obligations	$	51,339	$	0	$	0	$	51,339	$	51,021
State and local government obligations	0		3,275		0		3,275		3,320
Foreign government obligations	0		16		0		16		16
Corporate and other debt securities	0		18,812		5		18,817		18,621
Residential mortgage-backed securities	0		3,000		0		3,000		2,979
Commercial mortgage-backed securities	0		5,686		0		5,686		5,916
Other asset-backed securities	0		6,376		0		6,376		6,374





Total fixed maturities	51,339		37,165		5		88,509		88,247
Short-term investments	1,414		101		0		1,515		1,515
Total available-for-sale securities	52,753		37,266		5		90,024		89,762
Equity securities:

Nonredeemable preferred stocks	0		378		60		438		454



Common equities:
Common stocks	4,004		0		9		4,013		774
Other risk investments	0		0		34		34		34
Subtotal common equities	4,004		0		43		4,047		808
Total equity securities	4,004		378		103		4,485		1,262
Total portfolio	$	56,757	$	37,644	$	108	$	94,509	$	91,024
Debt	$	0	$	6,398	$	0	$	6,398	$	6,896


	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
September 30, 2024
Fixed maturities:
U.S. government obligations	$	44,429	$	0	$	0	$	44,429	$	44,231
State and local government obligations	0		2,601		0		2,601		2,681
Foreign government obligations	0		16		0		16		17
Corporate and other debt securities	0		15,033		3		15,036		14,970
Residential mortgage-backed securities	0		1,424		0		1,424		1,404
Commercial mortgage-backed securities	0		4,291		0		4,291		4,664
Other asset-backed securities	0		6,614		0		6,614		6,628





Total fixed maturities	44,429		29,979		3		74,411		74,595
Short-term investments	755		2		0		757		757
Total available-for-sale securities	45,184		29,981		3		75,168		75,352
Equity securities:

Nonredeemable preferred stocks	0		683		52		735		760



Common equities:
Common stocks	3,452		0		22		3,474		710
Other risk investments	0		0		23		23		23
Subtotal common equities	3,452		0		45		3,497		733
Total equity securities	3,452		683		97		4,232		1,493
Total portfolio	$	48,636	$	30,664	$	100	$	79,400	$	76,845
Debt	$	0	$	6,498	$	0	$	6,498	$	6,892


	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2024
Fixed maturities:
U.S. government obligations	$	45,988	$	0	$	0	$	45,988	$	47,103
State and local government obligations	0		2,778		0		2,778		2,893
Foreign government obligations	0		16		0		16		16
Corporate and other debt securities	0		13,949		5		13,954		14,111
Residential mortgage-backed securities	0		1,601		0		1,601		1,600
Commercial mortgage-backed securities	0		4,352		0		4,352		4,721
Other asset-backed securities	0		6,643		0		6,643		6,682





Total fixed maturities	45,988		29,339		5		75,332		77,126
Short-term investments	613		2		0		615		615
Total available-for-sale securities	46,601		29,341		5		75,947		77,741
Equity securities:

Nonredeemable preferred stocks	0		676		52		728		756



Common equities:
Common stocks	3,527		0		23		3,550		720
Other risk investments	0		0		25		25		25
Subtotal common equities	3,527		0		48		3,575		745
Total equity securities	3,527		676		100		4,303		1,501
Total portfolio	$	50,128	$	30,017	$	105	$	80,250	$	79,242
Debt	$	0	$	6,173	$	0	$	6,173	$	6,893

Our portfolio valuations, excluding short-term investments valued at original cost, 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 include commercial paper, treasury bills, and money market funds, which are highly liquid, actively marketed, and have short durations. These securities are valued at their original cost, adjusted for any accretion of discount, which approximates fair value because of the relatively short period of time until maturity. The remainder of our short-term investments with a trade date to maturity of less than a year are classified as Level 2. These securities are classified as Level 2 since they are valued using external pricing vendor prices or are securities that continually trade at par value because they contain either liquidity facilities or mandatory put features within one year and as a result are valued at their original cost.

At September 30, 2025 and 2024 and December 31, 2024, vendor-quoted prices represented 93% of our Level 1 classifications (excluding short-term investments valued at original cost). 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.

At September 30, 2025 and 2024, vendor-quoted prices comprised 99% of our Level 2 classifications (excluding short-term investments valued at original cost), with the

balance from dealer quotes, compared to 100% at December 31, 2024. 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 structured debt securities into more finite sectors (e.g., planned amortization class, first pay, second pay, senior, and subordinated) and use duration and credit quality to determine if the fair value is appropriate.

For corporate and other debt, nonredeemable preferred stock, and 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 investments valued at original cost, we look at acquisition price relative to the coupon or yield. Since most of these securities are 60 days or less to maturity, we believe that original cost is the best estimate of fair value. For short-term investments valued with external vendor prices, we review securities by duration, credit quality, and coupon, as well as changes in interest rate and credit spread movements within that stratification, and recent trade information.

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 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 our external sales transactions and compare the actual final market sales prices to previous market valuation prices on a monthly basis. This review provides us further validation that our pricing sources are providing market level prices, and gives us 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 and 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 during the first nine months of 2025 and for the full year of 2024, 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 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.

During the first nine months of 2025 and for the full year of 2024, 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 nine months ended September 30, 2025 and 2024:



(millions)	Fair Value at June 30, 2025		Calls/ Maturities/ Paydowns/Other		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation1		Net Transfers In (Out)		Fair Value at September 30, 2025
Fixed maturities:
Corporate and other debt securities	$	5	$	0	$	0	$	0	$	0	$	0	$	0	$	5
Equity securities:

Nonredeemable preferred stocks	60		0		0		0		0		0		0		60

Common equities:
Common stocks	9		0		0		0		0		0		0		9
Other risk investments	32		2		0		0		0		0		0		34
Total Level 3 securities	$	106	$	2	$	0	$	0	$	0	$	0	$	0	$	108






(millions)	Fair Value at June 30, 2024		Calls/ Maturities/ Paydowns/Other		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation1		Net Transfers In (Out)		Fair Value at September 30, 2024
Fixed maturities:
Corporate and other debt securities	$	3	$	0	$	0	$	0	$	0	$	0	$	0	$	3
Equity securities:

Nonredeemable preferred stocks	52		0		0		0		0		0		0		52

Common equities:
Common stocks	22		0		0		0		0		0		0		22
Other risk investments	24		(1)		0		0		0		0		0		23
Total Level 3 securities	$	101	$	(1)	$	0	$	0	$	0	$	0	$	0	$	100



(millions)	Fair Value at December 31, 2024		Calls/ Maturities/ Paydowns/Other		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation1		Net Transfers In (Out)		Fair Value at September 30, 2025
Fixed maturities:
Corporate and other debt securities	$	5	$	0	$	0	$	0	$	0	$	0	$	0	$	5
Equity securities:

Nonredeemable preferred stocks	52		0		8		0		0		0		0		60

Common equities:
Common stocks	23		0		0		0		0		(14)		0		9
Other risk investments	25		9		0		0		0		0		0		34
Total Level 3 securities	$	105	$	9	$	8	$	0	$	0	$	(14)	$	0	$	108









(millions)	Fair Value at December 31, 2023		Calls/ Maturities/ Paydowns/Other		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation1		Net Transfers In (Out)		Fair Value at September 30, 2024
Fixed maturities:
Corporate and other debt securities	$	3	$	0	$	0	$	0	$	0	$	0	$	0	$	3
Equity securities:
Nonredeemable preferred stocks	64		0		0		0		0		(12)		0		52

Common equities:
Common stocks	22		0		0		0		0		0		0		22
Other risk investments	21		2		0		0		0		0		0		23
Total Level 3 securities	$	110	$	2	$	0	$	0	$	0	$	(12)	$	0	$	100

1 For fixed maturities, these amounts are included in accumulated other comprehensive income (loss) on our consolidated balance sheets. For equity securities, these amounts are included in 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 September 30, 2025 and 2024, and December 31, 2024:



($ in millions)	Fair Value at September 30, 2025		Valuation Technique	Unobservable Input	Range of Input Values Increase (Decrease)	Weighted Average Increase (Decrease)
Fixed maturities:
Corporate and other debt securities	$	5	Market comparables	Weighted average market capitalization price change %	(1.0)% to (0.9)%	(1.0)	%
Equity securities:
Nonredeemable preferred stocks	60		Market comparables	Weighted average market capitalization price change %	(6.6)% to 11.3%	3.8	%








Common stocks	9		Market comparables	Weighted average market capitalization price change %	(21.5)% to 74.6%	11.3	%
Subtotal Level 3 securities	74
Pricing exemption securities	34
Total Level 3 securities	$	108



($ in millions)	Fair Value at September 30, 2024		Valuation Technique	Unobservable Input	Range of Input Values Increase (Decrease)	Weighted Average Increase (Decrease)
Fixed maturities:
Corporate and other debt securities	$	3	Market comparables	Weighted average market capitalization price change %	(3.1)% to 10.9%	2.6	%
Equity securities:
Nonredeemable preferred stocks	52		Market comparables	Weighted average market capitalization price change %	4.0% to 25.0%	18.1	%




Common stocks	22		Market comparables	Weighted average market capitalization price change %	(19.1)% to 69.6%	19.0	%
Subtotal Level 3 securities	77
Pricing exemption securities	23
Total Level 3 securities	$	100



($ in millions)	Fair Value at December 31, 2024		Valuation Technique	Unobservable Input	Range of Input Values Increase (Decrease)	Weighted Average Increase (Decrease)
Fixed maturities:
Corporate and other debt securities	$	5	Market comparables	Weighted average market capitalization price change %	(1.4)% to (1.3)%	(1.4)	%
Equity securities:
Nonredeemable preferred stocks	52		Market comparables	Weighted average market capitalization price change %	(14.1)% to 6.0%	(2.7)	%


Common stocks	23		Market comparables	Weighted average market capitalization price change %	(41.3)% to 95.9%	6.0	%
Subtotal Level 3 securities	80
Pricing exemption securities	25
Total Level 3 securities	$	105

4. DEBT

Debt at each of the balance sheet periods consisted of the following Senior Notes:


($ in millions)						September 30, 2025				September 30, 2024			December 31, 2024
Principal Amount		Interest Rate		Issuance Date	Maturity Date	Carrying Value		Fair Value			Carrying Value		Fair Value		Carrying Value		Fair Value
$	500	2.45	%	August 2016	2027	$	499	$	491		$	499	$	483	$	499	$	479
500		2.50		March 2022	2027	499		490			498		482		499		479
300		6 5/8		March 1999	2029	298		323			298		330		298		320
550		4.00		October 2018	2029	548		550			547		549		547		534
500		3.20		March 2020	2030	498		481			498		476		498		462
500		3.00		March 2022	2032	497		461			497		458		497		439
400		6.25		November 2002	2032	397		445			397		450		397		430
500		4.95		May 2023	2033	497		514			497		519		497		495
350		4.35		April 2014	2044	347		308			347		319		347		298
400		3.70		January 2015	2045	396		320			396		331		396		308
850		4.125		April 2017	2047	843		716			842		750		842		684
600		4.20		March 2018	2048	591		510			591		532		591		490
500		3.95		March 2020	2050	492		404			491		420		491		386
500		3.70		March 2022	2052	494		385			494		399		494		369
Total						$	6,896	$	6,398		$	6,892	$	6,498	$	6,893	$	6,173

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

During the second quarter 2025, 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 2026 and has the same terms as the previous line of credit with PNC. See the 2024 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 nine months ended September 30, 2025, was 21.3% and 20.7%, respectively, compared to 20.8% and 20.9% for the same periods last year.

Deferred income taxes reflect the tax effects of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. Although realization of the deferred tax assets is not assured, management believes that it is more likely than not that 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 and, therefore, no valuation allowance was needed at September 30, 2025 and 2024, and December 31, 2024.

We had net current income taxes payable of $24 million and $26 million at September 30, 2025 and December 31, 2024, respectively, which were reported in accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets, compared to net current income taxes recoverable of $5 million at September 30, 2024, which was reported in other assets. The balance may fluctuate from period to period due to normal timing differences.

At September 30, 2025 and 2024, and December 31, 2024, we have not recorded any unrecognized tax benefits or related interest and penalties.

6. LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

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


	September 30,
(millions)	2025		2024
Balance at January 1	$	39,057	$	34,389
Less reinsurance recoverables on unpaid losses	4,487		4,789
Net balance at January 1	34,570		29,600
Incurred related to:
Current year	40,922		36,276
Prior years	(1,068)		(199)
Total incurred	39,854		36,077
Paid related to:
Current year	21,904		19,669
Prior years	14,228		12,492
Total paid	36,132		32,161
Net balance at September 30	38,292		33,516
Plus reinsurance recoverables on unpaid losses	3,813		4,546
Balance at September 30	$	42,105	$	38,062

We experienced favorable reserve development of $1,068 million and $199 million during the first nine months of 2025 and 2024, respectively, which is reflected as “incurred related to prior years” in the table above.

Year-to-date September 30, 2025

The favorable prior year reserve development included approximately $660 million attributable to accident year 2024, $190 million to accident year 2023, and the remainder to accident years 2022 and prior.
Our personal auto products incurred about $910 million of favorable loss and loss adjustment expense (LAE) reserve development, with the agency and direct auto businesses each contributing about half. The favorable development was primarily due to lower than anticipated loss severity and frequency in Florida and, to a lesser extent, lower than anticipated litigation defense costs across most states and lower than anticipated payments on reopened property damage claims that were previously closed.
Our personal property products experienced about $75 million of favorable development, primarily attributable to favorable development on 2024 catastrophe events.
Our Commercial Lines business experienced about $80 million of favorable development, primarily attributable to lower than anticipated severity in our transportation network company business, partially offset by higher than anticipated severity and litigation defense costs in our core commercial auto bodily injury coverages.

Year-to-date September 30, 2024

The favorable prior year reserve development included approximately $160 million attributable to accident year 2023, $5 million to accident year 2022, and the remainder to accident years 2021 and prior.
Our personal auto products incurred about $375 million of favorable loss and 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 severity and frequency in Florida and lower than anticipated property damage severity across the majority of states.
Our personal property business experienced about $75 million of unfavorable development primarily due to higher LAE costs than anticipated.
Our Commercial Lines business experienced about $100 million of unfavorable development primarily driven by higher than anticipated severity in our commercial auto business for California, New York, and Texas.

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 September 30, 2025 and 2024, and December 31, 2024, were $58 million, $89 million, and $127 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:


	Nine Months Ended September 30,
(millions)	2025		2024
Common share dividends1	$	59	$	59
Operating lease liabilities2	83		74

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:


	Nine Months Ended September 30,
(millions)	2025		2024
Income taxes	$	2,313	$	1,985
Interest	226		226
Operating lease liabilities	68		63

8. SEGMENT INFORMATION

Our Personal Lines segment writes insurance for personal autos, special lines products (e.g., recreational vehicles, such as motorcycles, RVs, and watercraft), personal residential property insurance for homeowners and renters, umbrella insurance, and flood insurance through the “Write Your Own” program for the National Flood Insurance Program. Property information for the three and nine months ended September 30, 2024, was recast to conform to the current year presentation; see Note 10 – Segment Information in our 2024 Annual Report to Shareholders for further discussion.

Our Commercial Lines segment writes auto-related liability and physical damage insurance, business-related

general liability and commercial property insurance predominately for small businesses, and workers’ compensation insurance primarily for the transportation industry.

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 and all intercompany transactions are eliminated in consolidation.

Following are the operating results for the respective periods:


(millions)	Personal Lines		Commercial Lines		Other1		Companywide
Three Months Ended September 30, 2025
Net premiums earned	$	18,089	$	2,760	$	0	$	20,849
Fees and other revenues	272		34		0		306
Total underwriting revenue	18,361		2,794		0		21,155
Losses and loss adjustment expenses:
Losses (excluding catastrophe losses)	9,801		1,575		1		11,377
Catastrophe losses	207		12		0		219
Loss adjustment expenses	1,554		296		(1)		1,849
Total losses and loss adjustment expenses	11,562		1,883		0		13,445
Underwriting expenses:
Distribution expenses2	2,507		313		1		2,821
Other underwriting expenses3	2,394		300		5		2,699
Total underwriting expenses	4,901		613		6		5,520
Pretax underwriting profit (loss)	$	1,898	$	298	$	(6)	2,190
Investment profit (loss)4							1,209
Service businesses profit (loss)							(6)
Interest expense							(70)
Total pretax profit (loss)							$	3,323


(millions)	Personal Lines		Commercial Lines		Other1		Companywide
Three Months Ended September 30, 2024
Net premiums earned	$	15,570	$	2,727	$	0	$	18,297
Fees and other revenues	235		43		0		278
Total underwriting revenue	15,805		2,770		0		18,575
Losses and loss adjustment expenses:
Losses (excluding catastrophe losses)	8,514		1,607		(1)		10,120
Catastrophe losses	698		34		0		732
Loss adjustment expenses	1,382		276		0		1,658
Total losses and loss adjustment expenses	10,594		1,917		(1)		12,510
Underwriting expenses:
Distribution expenses2	2,267		297		0		2,564
Other underwriting expenses3	1,245		248		3		1,496
Total underwriting expenses	3,512		545		3		4,060
Pretax underwriting profit (loss)	$	1,699	$	308	$	(2)	2,005
Investment profit (loss)4							1,020
Service businesses profit (loss)							(9)
Interest expense							(70)
Total pretax profit (loss)							$	2,946


(millions)	Personal Lines		Commercial Lines		Other1		Companywide
Nine Months Ended September 30, 2025
Net premiums earned	$	52,343	$	8,224	$	1	$	60,568
Fees and other revenues	784		112		0		896
Total underwriting revenue	53,127		8,336		1		61,464
Losses and loss adjustment expenses:
Losses (excluding catastrophe losses)	28,484		4,695		0		33,179
Catastrophe losses	1,349		36		0		1,385
Loss adjustment expenses	4,415		875		0		5,290
Total losses and loss adjustment expenses	34,248		5,606		0		39,854
Underwriting expenses:
Distribution expenses2	7,183		907		2		8,092
Other underwriting expenses3	4,967		823		13		5,803
Total underwriting expenses	12,150		1,730		15		13,895
Pretax underwriting profit (loss)	$	6,729	$	1,000	$	(14)	7,715
Investment profit (loss)4							3,053
Service businesses profit (loss)							(18)
Interest expense							(209)
Total pretax profit (loss)							$	10,541


(millions)	Personal Lines		Commercial Lines		Other1		Companywide
Nine Months Ended September 30, 2024
Net premiums earned	$	43,706	$	7,949	$	0	$	51,655
Fees and other revenues	647		127		0		774
Total underwriting revenue	44,353		8,076		0		52,429
Losses and loss adjustment expenses:
Losses (excluding catastrophe losses)	24,225		4,781		(4)		29,002
Catastrophe losses	2,279		69		0		2,348
Loss adjustment expenses	3,903		824		0		4,727
Total losses and loss adjustment expenses	30,407		5,674		(4)		36,077
Underwriting expenses:
Distribution expenses2	5,655		855		0		6,510
Other underwriting expenses3	3,468		726		7		4,201
Total underwriting expenses	9,123		1,581		7		10,711
Pretax underwriting profit (loss)	$	4,823	$	821	$	(3)	5,641
Investment profit (loss)4							2,339
Service businesses profit (loss)							(25)
Interest expense							(209)
Total pretax profit (loss)							$	7,746

1 Includes other underwriting business and run-off operations.

2 Includes policy acquisition costs, agents’ contingent commissions, and advertising costs attributable to our operating segments. A portion of our companywide advertising costs are also attributed to our service businesses.

3 Primarily consists of employee compensation and benefit costs, policyholder credits, and the increase in the allowance for credit loss exposure on our premiums receivable.

4 Calculated as recurring investment income plus total net realized gains (losses) on securities, less investment expenses.

In the tables above, the results for the Personal Lines segment for both the three and nine months ended September 30, 2025, included $950 million of policyholder credit expense, included within other underwriting expenses. During the third quarter 2025, we determined it was probable that our personal auto profit in Florida for the 2023 to 2025 period will exceed the statutory profit limit that a Florida statute imposes on the profit that any insurance group can earn on personal auto insurance over any three-calendar-year period. In such event, we would need to credit any profit, above the limit, to all Florida personal auto policyholders active at December 31, 2025. Further, the accrual represents our current estimate of the profit we will earn on the three-calendar-year period ending December 31, 2025, in excess of the permitted profit limit. The expense is reported in policyholder credit expense on the consolidated statements of comprehensive income and the accrual is included in accounts payable, accrued expenses, and other liabilities on our consolidated balance sheets.

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. 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; (iii) other underwriting expenses; and (iv) policyholder credit expense. Combined ratio is the complement of the underwriting margin. Fees and other revenues are netted against either loss adjustment expenses or underwriting expenses in the ratio calculations, based on the underlying activity that generated the revenue. Following are the underwriting margins and combined ratios for our underwriting operations for the respective periods:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
	Under- writing Margin		Combined Ratio	Under- writing Margin		Combined Ratio	Under- writing Margin		Combined Ratio	Under- writing Margin		Combined Ratio
Personal Lines	10.5	%	89.5	10.9	%	89.1	12.9	%	87.1	11.0	%	89.0
Commercial Lines	10.8		89.2	11.3		88.7	12.2		87.8	10.3		89.7
Total underwriting operations	10.5		89.5	11.0		89.0	12.7		87.3	10.9		89.1

9. DIVIDENDS

Following is a summary of our common and preferred share dividends that were declared and/or paid during the nine months ended September 30, 2025 and 2024:


(millions — except per share amounts)		Amount
Declared	Payable	Per Share		Accrued/Paid1
Common – Annual-Variable Dividends:
December 2024	January 2025	$	4.50	$	2,637
December 2023	January 2024	0.75		439

Common – Quarterly Dividends:
August 2025	October 2025	0.10		59
May 2025	July 2025	0.10		58
March 2025	April 2025	0.10		59
December 2024	January 2025	0.10		58
August 2024	October 2024	0.10		59
May 2024	July 2024	0.10		58
March 2024	April 2024	0.10		59
December 2023	January 2024	0.10		59

Preferred Dividends:
January 20242	February 2024	15.688377		8

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 In February 2024, we redeemed all of our outstanding Serial Preferred Shares, Series B.

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 June 30, 2025	$	(128)	$	33	$	(95)	$	(81)	$	(13)	$	(1)
Other comprehensive income (loss) before reclassifications:
Investment securities	362		(76)		286		286		0		0




Total other comprehensive income (loss) before reclassifications	362		(76)		286		286		0		0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities	3		(1)		2		2		0		0

Total reclassification adjustment for amounts realized in net income	3		(1)		2		2		0		0
Total other comprehensive income (loss)	359		(75)		284		284		0		0
Balance at September 30, 2025	$	231	$	(42)	$	189	$	203	$	(13)	$	(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 June 30, 2024	$	(2,180)	$	464	$	(1,716)	$	(1,701)	$	(14)	$	(1)


Other comprehensive income (loss) before reclassifications:
Investment securities	2,013		(423)		1,590		1,590		0		0




Total other comprehensive income (loss) before reclassifications	2,013		(423)		1,590		1,590		0		0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities	36		(7)		29		29		0		0

Total reclassification adjustment for amounts realized in net income	36		(7)		29		29		0		0
Total other comprehensive income (loss)	1,977		(416)		1,561		1,561		0		0
Balance at September 30, 2024	$	(203)	$	48	$	(155)	$	(140)	$	(14)	$	(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, 2024	$	(1,809)	$	386	$	(1,423)	$	(1,408)	$	(14)	$	(1)
Other comprehensive income (loss) before reclassifications:
Investment securities	2,028		(426)		1,602		1,602		0		0




Total other comprehensive income (loss) before reclassifications	2,028		(426)		1,602		1,602		0		0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities	(11)		2		(9)		(9)		0		0
Interest expense	(1)		0		(1)		0		(1)		0
Total reclassification adjustment for amounts realized in net income	(12)		2		(10)		(9)		(1)		0
Total other comprehensive income (loss)	2,040		(428)		1,612		1,611		1		0
Balance at September 30, 2025	$	231	$	(42)	$	189	$	203	$	(13)	$	(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, 2023	$	(2,053)	$	437	$	(1,616)	$	(1,601)	$	(14)	$	(1)


Other comprehensive income (loss) before reclassifications:
Investment securities	1,514		(318)		1,196		1,196		0		0




Total other comprehensive income (loss) before reclassifications	1,514		(318)		1,196		1,196		0		0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities	(336)		71		(265)		(265)		0		0

Total reclassification adjustment for amounts realized in net income	(336)		71		(265)		(265)		0		0
Total other comprehensive income (loss)	1,850		(389)		1,461		1,461		0		0
Balance at September 30, 2024	$	(203)	$	48	$	(155)	$	(140)	$	(14)	$	(1)

In an effort to manage interest rate risk, we entered into forecasted transactions on certain of Progressive’s debt issuances. During the next 12 months, we expect to reclassify $1 million (pretax) into interest expense, related to net unrealized losses on forecasted transactions (see Note 4 – Debt in our 2024 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 2024 Annual Report to Shareholders.

As of September 30, 2025, lawsuits have been certified or conditionally certified as class/collective actions in cases alleging that: we improperly value total loss claims by applying a negotiation adjustment in Alabama, Arkansas, Colorado, North Carolina, Ohio, and South Carolina; we improperly calculate basic economic loss as it relates to wage loss coverage in New York; and we improperly reduce or deny personal injury protection benefits when medical expenses are paid initially by health insurance in Arkansas. 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.

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 September 30,

2025, 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 six 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 available to us, we determined that losses from these lawsuits are reasonably possible but neither probable nor reasonably estimable, other than for suits for which accruals have been established and are not material, as of September 30, 2025.

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 September 30, 2025 and 2024, or December 31, 2024, and there were no material settlements during 2024 or the first nine months of 2025. 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 2024 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 1 – Reporting and Accounting Policies and Note 12 – Litigation in our 2024 Annual Report to Shareholders.

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