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				Six Months
Periods Ended June 30,	2026		2025		2026		2025
(millions — except per share amounts)
Revenues
Net premiums earned	$	21,573	$	20,310	$	42,541	$	39,719
Investment income	979		871		1,896		1,685
Net realized gains (losses) on securities:
Net realized gains (losses) on security sales	16		19		112		20
Net holding period gains (losses) on securities	588		368		372		155
Total net realized gains (losses) on securities	604		387		484		175
Fees and other revenues	305		303		602		590
Service revenues	148		133		274		244
Total revenues	23,609		22,004		45,797		42,413
Expenses
Losses and loss adjustment expenses	14,572		13,605		28,399		26,409
Policy acquisition costs	1,567		1,511		3,105		2,967
Other underwriting expenses	3,009		2,689		6,057		5,408
Investment expenses	10		9		18		16
Service expenses	154		139		285		256
Interest expense	88		69		158		139
Total expenses	19,400		18,022		38,022		35,195
Net Income
Income before income taxes	4,209		3,982		7,775		7,218
Provision for income taxes	898		807		1,646		1,476
Net income	3,311		3,175		6,129		5,742
Other Comprehensive Income (Loss)
Changes in:
Total net unrealized gains (losses) on fixed-maturity securities	(375)		428		(949)		1,327
Net unrealized losses on forecasted transactions	0		1		0		1
Foreign currency translation adjustment	(1)		0		(1)		0
Other comprehensive income (loss)	(376)		429		(950)		1,328
Comprehensive income (loss)	$	2,935	$	3,604	$	5,179	$	7,070
Computation of Earnings Per Common Share
Average common shares outstanding - Basic	583.0		586.2		584.3		586.1
Net effect of dilutive stock-based compensation	1.2		1.6		1.3		1.6
Total average equivalent common shares - Diluted	584.2		587.8		585.6		587.7
Basic: Earnings per common share	$	5.68	$	5.42	$	10.49	$	9.80
Diluted: Earnings per common share	$	5.67	$	5.40	$	10.47	$	9.77

See notes to consolidated financial statements.

The Progressive Corporation and Subsidiaries

Consolidated Balance Sheets

(unaudited)


	June 30,				December 31,
(millions)	2026		2025		2025
Assets
Available-for-sale securities, at fair value:
Fixed maturities (amortized cost: $91,485, $82,372, and $82,704)	$	90,435	$	82,272	$	82,866
Short-term investments (amortized cost: $1,978, $2,103, and $10,005)	1,978		2,103		10,005
Total available-for-sale securities	92,413		84,375		92,871
Equity securities, at fair value:
Nonredeemable preferred stocks (cost: $292, $517, and $419)	276		500		404
Common equities (cost: $870, $775, and $819)	4,532		3,735		4,098
Total equity securities	4,808		4,235		4,502
Total investments	97,221		88,610		97,373
Cash and cash equivalents	178		125		125
Restricted cash and cash equivalents	15		10		13
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	193		135		138
Accrued investment income	728		636		670
Premiums receivable, net of allowance for credit losses of $544, $501, and $552	17,106		16,406		15,362
Reinsurance recoverables	3,919		4,197		4,083
Prepaid reinsurance premiums	202		263		197
Deferred acquisition costs	2,211		2,110		2,044
Property and equipment, net of accumulated depreciation of $1,381, $1,369, and $1,460	922		820		783
Net federal deferred income taxes	681		633		748
Other assets	1,742		1,670		1,641
Total assets	$	124,925	$	115,480	$	123,039
Liabilities and Shareholders’ Equity
Unearned premiums	$	27,401	$	26,335	$	25,219
Loss and loss adjustment expense reserves	45,567		41,154		43,310
Dividends payable on common shares	58		58		7,972
Accounts payable, accrued expenses, and other liabilities	9,179		8,434		9,318
Debt1	8,387		6,895		6,897
Total liabilities	90,592		82,876		92,716
Common shares, $1.00 par value (authorized 900; issued 798, including treasury shares of 217, 212, and 212)	581		586		586
Paid-in capital	2,338		2,192		2,307
Retained earnings	32,261		29,921		27,327
Accumulated other comprehensive income (loss):
Net unrealized gains (losses) on fixed-maturity securities	(832)		(81)		117
Net unrealized losses on forecasted transactions	(13)		(13)		(13)
Foreign currency translation adjustment	(2)		(1)		(1)
Total accumulated other comprehensive income (loss)	(847)		(95)		103
Total shareholders’ equity	34,333		32,604		30,323
Total liabilities and shareholders’ equity	$	124,925	$	115,480	$	123,039

1 Consists of both short-term and 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,	2026		2025		2026		2025
(millions — except per share amounts)
Common Shares, $1.00 Par Value
Balance, beginning of period	$	584	$	586	$	586	$	586
Treasury shares purchased	(3)		0		(5)		0

Balance, end of period	581		586		581		586
Paid-In Capital
Balance, beginning of period	2,314		2,160		2,307		2,145
Amortization of equity-based compensation	36		32		52		48
Treasury shares purchased	(12)		0		(21)		(1)


Balance, end of period	2,338		2,192		2,338		2,192
Retained Earnings
Balance, beginning of period	29,612		26,732		27,327		24,283
Net income	3,311		3,175		6,129		5,742
Treasury shares purchased	(599)		(13)		(1,066)		(66)
Cash dividends declared on common shares ($0.10, $0.10, $0.20, and $0.20 per share)	(58)		(58)		(116)		(117)

Other, net	(5)		85		(13)		79
Balance, end of period	32,261		29,921		32,261		29,921
Accumulated Other Comprehensive Income (Loss)
Balance, beginning of period	(471)		(524)		103		(1,423)
Other comprehensive income (loss)	(376)		429		(950)		1,328
Balance, end of period	(847)		(95)		(847)		(95)
Total shareholders’ equity	$	34,333	$	32,604	$	34,333	$	32,604

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)


Six Months Ended June 30,	2026		2025
(millions)
Cash Flows From Operating Activities
Net income	$	6,129	$	5,742
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	157		149
Net amortization (accretion) of fixed-income securities	(79)		(55)
Amortization of equity-based compensation	52		48
Net realized (gains) losses on securities	(484)		(175)
Net (gains) losses on disposition of property and equipment	2		1
Changes in:
Premiums receivable	(1,744)		(2,037)
Reinsurance recoverables	164		568
Prepaid reinsurance premiums	(5)		86
Deferred acquisition costs	(167)		(149)
Income taxes	241		(173)
Unearned premiums	2,182		2,477
Loss and loss adjustment expense reserves	2,257		2,097
Accounts payable, accrued expenses, and other liabilities	(572)		550
Other, net	(159)		54
Net cash provided by operating activities	7,974		9,183
Cash Flows From Investing Activities
Purchases:
Fixed maturities	(32,153)		(26,354)
Equity securities	(178)		(87)
Sales:
Fixed maturities	18,454		17,086
Equity securities	115		151
Maturities, paydowns, calls, and other:
Fixed maturities	5,032		4,006
Equity securities	164		177
Net (purchases) sales of short-term investments	8,080		(1,429)
Net change in unsettled security transactions	368		178
Purchases of property and equipment	(201)		(161)
Sales of property and equipment	35		52
Net cash used in investing activities	(284)		(6,381)
Cash Flows From Financing Activities
Dividends paid to common shareholders	(8,030)		(2,754)
Acquisition of treasury shares for equity award tax liabilities	(44)		(55)
Acquisition of treasury shares acquired in open market	(1,048)		(12)
Net proceeds from debt issuances	1,487		0
Net cash used in financing activities	(7,635)		(2,821)
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	55		(19)
Cash, cash equivalents, restricted cash, and restricted cash equivalents – January 1	138		154
Cash, cash equivalents, restricted cash, and restricted cash equivalents – June 30	$	193	$	135

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; collectively referred to as Progressive, we, us, or our.

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, 2026, 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, 2025 (2025 Annual Report to Shareholders).

Premiums Receivable

We perform analyses to evaluate our premiums receivable for expected credit losses. See our 2025 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)	2026		2025		2026		2025
Allowance for credit losses, beginning of period	$	528	$	473	$	552	$	460
Increase in allowance1	230		176		413		329
Write-offs2	(214)		(148)		(421)		(288)
Allowance for credit losses, end of period	$	544	$	501	$	544	$	501

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.

Supplemental Cash Flow Information

Cash and cash equivalents include bank demand deposits. 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)	2026		2025
Common share dividends1	$	58	$	58
Operating lease liabilities2	43		63

1 Declared but unpaid. See Note 10 – 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)	2026		2025
Income taxes, net of refunds	$	1,403	$	1,644
Interest	138		138
Operating lease liabilities	49		45

New Accounting Standards

We did not adopt any new accounting standards during the three and six months ended June 30, 2026.

In May 2026, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) that establishes accounting guidance for the recognition of environmental credits and environmental credit obligations. This ASU will be effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2027 (fiscal 2028 for calendar-year companies). We do not believe this ASU will have a material impact on our financial condition or results of operations.

In September 2025, the FASB issued an ASU that 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 (fiscal 2028 for calendar-year companies). 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
June 30, 2026
Available-for-sale securities:
Fixed maturities:
U.S. government	$	44,463	$	52	$	(734)	$	0	$	43,781	45.0	%
State and local government	3,904		10		(62)		0		3,852		4.0
Foreign government	16		0		0		0		16		0
Corporate and other debt	21,641		86		(139)		3		21,591		22.2
Residential mortgage-backed	4,291		14		(23)		0		4,282		4.4
Commercial mortgage-backed	7,674		8		(229)		0		7,453		7.7
Other asset-backed	9,496		7		(43)		0		9,460		9.7

Total fixed maturities	91,485		177		(1,230)		3		90,435		93.0
Short-term investments	1,978		0		0		0		1,978		2.0
Total available-for-sale securities	93,463		177		(1,230)		3		92,413		95.0
Equity securities:
Nonredeemable preferred stocks	292		0		0		(16)		276		0.3
Common equities	870		0		0		3,662		4,532		4.7
Total equity securities	1,162		0		0		3,646		4,808		5.0
Total portfolio1	$	94,625	$	177	$	(1,230)	$	3,649	$	97,221	100.0	%


($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Net Holding Period Gains (Losses)		Fair Value		% of Total Fair Value
June 30, 2025
Available-for-sale securities:
Fixed maturities:
U.S. government	$	46,684	$	598	$	(472)	$	0	$	46,810	52.8	%
State and local government	3,030		12		(78)		0		2,964		3.3
Foreign government	17		0		0		0		17		0
Corporate and other debt	18,004		222		(112)		8		18,122		20.5
Residential mortgage-backed	2,644		21		(7)		2		2,660		3.0
Commercial mortgage-backed	5,325		10		(286)		0		5,049		5.7
Other asset-backed	6,668		26		(44)		0		6,650		7.5

Total fixed maturities	82,372		889		(999)		10		82,272		92.8
Short-term investments	2,103		0		0		0		2,103		2.4
Total available-for-sale securities	84,475		889		(999)		10		84,375		95.2
Equity securities:
Nonredeemable preferred stocks	517		0		0		(17)		500		0.6
Common equities	775		0		0		2,960		3,735		4.2
Total equity securities	1,292		0		0		2,943		4,235		4.8
Total portfolio1	$	85,767	$	889	$	(999)	$	2,953	$	88,610	100.0	%


($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Net Holding Period Gains (Losses)		Fair Value		% of Total Fair Value
December 31, 2025
Available-for-sale securities:
Fixed maturities:
U.S. government	$	43,114	$	541	$	(357)	$	0	$	43,298	44.5	%
State and local government	3,342		19		(58)		0		3,303		3.4
Foreign government	17		0		0		0		17		0
Corporate and other debt	19,773		273		(68)		13		19,991		20.5
Residential mortgage-backed	3,152		28		(6)		1		3,175		3.3
Commercial mortgage-backed	6,194		12		(233)		0		5,973		6.1
Other asset-backed	7,112		28		(31)		0		7,109		7.3

Total fixed maturities	82,704		901		(753)		14		82,866		85.1
Short-term investments	10,005		0		0		0		10,005		10.3
Total available-for-sale securities	92,709		901		(753)		14		92,871		95.4
Equity securities:
Nonredeemable preferred stocks	419		0		0		(15)		404		0.4
Common equities	819		0		0		3,279		4,098		4.2
Total equity securities	1,238		0		0		3,264		4,502		4.6
Total portfolio1	$	93,947	$	901	$	(753)	$	3,278	$	97,373	100.0	%

1 At June 30, 2026 and 2025, and December 31, 2025, we had $568 million, $303 million, and $200 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 June 30, 2026 and 2025, and December 31, 2025, included $6.7 billion, $5.0 billion, and $13.0 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, 2025, were sold and proceeds were used to pay our common share dividends in January 2026; see Note 10 – Dividends for additional information.

At June 30, 2026, securities in the principal amount of $881 million were on deposit to meet state insurance and other regulatory requirements. We did not hold any securities of any one issuer, excluding U.S. government securities, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at June 30, 2026 or 2025, or December 31, 2025. At June 30, 2026, 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:


	June 30,
(millions)	2026		2025		December 31, 2025
Fixed Maturities:
Corporate and other debt	$	693	$	731	$	733
Residential mortgage-backed	827		615		792


Total hybrid securities	$	1,520	$	1,346	$	1,525

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 following table details the composition of fixed maturities by maturity at June 30, 2026:


(millions)	Cost		Fair Value
Less than one year	$	11,419	$	11,396
One to five years	47,762		47,152
Five to ten years	31,885		31,468
Ten years or greater	419		419
Total	$	91,485	$	90,435

Securities are classified in the maturity distribution table based upon their projected cash flows. Contractual maturities may differ from expected cash flows 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
June 30, 2026
U.S. government	91	$	37,839	$	(734)	51	$	32,644	$	(400)			40	$	5,195	$	(334)
State and local government	351	2,239		(62)		188	1,174		(9)				163	1,065		(53)

Corporate and other debt	379	10,640		(139)		305	8,825		(83)				74	1,815		(56)
Residential mortgage-backed	79	1,997		(23)		61	1,946		(17)				18	51		(6)
Commercial mortgage-backed	160	4,222		(229)		51	1,831		(7)				109	2,391		(222)
Other asset-backed	164	5,222		(43)		132	4,471		(18)				32	751		(25)

Total fixed maturities	1,224	$	62,159	$	(1,230)	788	$	50,891	$	(534)			436	$	11,268	$	(696)


	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
June 30, 2025
U.S. government	73	$	10,463	$	(472)	9	$	2,878	$	(20)		64	$	7,585	$	(452)
State and local government	275	1,677		(78)		53	289		(1)			222	1,388		(77)

Corporate and other debt	159	3,737		(112)		28	610		(6)			131	3,127		(106)
Residential mortgage-backed	29	385		(7)		11	342		(2)			18	43		(5)
Commercial mortgage-backed	153	3,331		(286)		16	448		(2)			137	2,883		(284)
Other asset-backed	79	1,797		(44)		40	880		(2)			39	917		(42)

Total fixed maturities	768	$	21,390	$	(999)	157	$	5,447	$	(33)		611	$	15,943	$	(966)


	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, 2025
U.S. government	62	$	17,402	$	(357)	8	$	11,327	$	(54)		54	$	6,075	$	(303)
State and local government	252	1,589		(58)		60	318		(1)			192	1,271		(57)

Corporate and other debt	141	3,821		(68)		36	1,177		(5)			105	2,644		(63)
Residential mortgage-backed	30	293		(6)		12	233		(1)			18	60		(5)
Commercial mortgage-backed	147	3,551		(233)		34	1,210		(3)			113	2,341		(230)
Other asset-backed	64	1,924		(31)		32	1,148		(3)			32	776		(28)

Total fixed maturities	696	$	28,580	$	(753)	182	$	15,413	$	(67)		514	$	13,167	$	(686)

A review of the securities in an unrealized loss position indicated that, at the end of each period presented, 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 six months of 2026 or 2025, and did not have a material credit loss allowance balance as of June 30, 2026 and 2025, or December 31, 2025. No unrealized loss write offs were recorded during the six months ended June 30, 2026 or 2025.

As of June 30, 2026 and 2025, and December 31, 2025, 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 the accrued investment income on securities in an unrealized loss position at June 30, 2026 and 2025, and December 31, 2025, 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, 2026 and 2025, or December 31, 2025.

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


	Three Months				Six Months
(millions)	2026		2025		2026		2025
Gross realized gains on security sales
Available-for-sale securities:
U.S. government	$	51	$	24	$	150	$	77
State and local government	0		0		1		0
Corporate and other debt	9		2		35		3
Residential mortgage-backed	0		1		1		1




Total available-for-sale securities	60		27		187		81
Equity securities:
Nonredeemable preferred stocks	2		0		10		2
Common equities	23		4		36		39
Total equity securities	25		4		46		41

Subtotal gross realized gains on security sales	85		31		233		122
Gross realized losses on security sales
Available-for-sale securities:
U.S. government	(49)		(1)		(85)		(78)
State and local government	(4)		0		(4)		(2)
Corporate and other debt	(6)		(2)		(11)		(3)

Commercial mortgage-backed	0		(6)		0		(10)



Total available-for-sale securities	(59)		(9)		(100)		(93)
Equity securities:
Nonredeemable preferred stocks	(3)		(3)		(8)		(5)
Common equities	(7)		0		(13)		(4)
Total equity securities	(10)		(3)		(21)		(9)
Subtotal gross realized losses on security sales	(69)		(12)		(121)		(102)
Net realized gains (losses) on security sales
Available-for-sale securities:
U.S. government	2		23		65		(1)
State and local government	(4)		0		(3)		(2)
Corporate and other debt	3		0		24		0
Residential mortgage-backed	0		1		1		1
Commercial mortgage-backed	0		(6)		0		(10)



Total available-for-sale securities	1		18		87		(12)
Equity securities:
Nonredeemable preferred stocks	(1)		(3)		2		(3)
Common equities	16		4		23		35
Total equity securities	15		1		25		32

Subtotal net realized gains (losses) on security sales	16		19		112		20




Net holding period gains (losses)
Hybrid securities	17		11		(10)		14
Equity securities	571		357		382		141

Subtotal net holding period gains (losses)	588		368		372		155





Total net realized gains (losses) on securities	$	604	$	387	$	484	$	175

During the second quarter and first six months of 2026 and 2025, the majority of our security sales were U.S. government securities that were sold for duration management. We also selectively sold securities that we viewed as having less attractive risk/reward profiles during the second quarter and first six months of 2026 and 2025.

The following table reflects our holding period realized gains (losses) recognized on equity securities held at the three and six months ended June 30:


	Three Months				Six Months
(millions)	2026		2025		2026		2025
Total net gains (losses) recognized during the period on equity securities	$	586	$	358	$	407	$	173
Less: Net gains (losses) recognized on equity securities sold during the period	15		1		25		32
Net holding period gains (losses) recognized during the period on equity securities held at period end	$	571	$	357	$	382	$	141

Net Investment Income The following table details the components of net investment income for the three and six months ended June 30:


	Three Months				Six Months
(millions)	2026		2025		2026		2025
Available-for-sale securities:
Fixed maturities:
U.S. government	$	433	$	422	$	833	$	844
State and local government	27		21		51		40

Corporate and other debt	253		208		488		379
Residential mortgage-backed	54		32		93		57
Commercial mortgage-backed	83		59		154		112
Other asset-backed	100		84		187		168

Total fixed maturities	950		826		1,806		1,600
Short-term investments	16		28		60		46
Total available-for-sale securities	966		854		1,866		1,646
Equity securities:
Nonredeemable preferred stocks	2		5		6		13
Common equities	11		12		24		26
Total equity securities	13		17		30		39
Investment income	979		871		1,896		1,685
Investment expenses	(10)		(9)		(18)		(16)
Net investment income	$	969	$	862	$	1,878	$	1,669

On a year-over-year basis, investment income (interest and dividends) increased 12% and 13% for the three and six months ended June 30, 2026, respectively, compared to the same periods last year. The increases primarily reflect growth in invested assets.

3. FAIR VALUE

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, 2026
Fixed maturities:
U.S. government	$	43,781	$	0	$	0	$	43,781	$	44,463
State and local government	0		3,852		0		3,852		3,904
Foreign government	0		16		0		16		16
Corporate and other debt	0		21,587		4		21,591		21,641
Residential mortgage-backed	0		4,282		0		4,282		4,291
Commercial mortgage-backed	0		7,453		0		7,453		7,674
Other asset-backed	0		9,310		150		9,460		9,496





Total fixed maturities	43,781		46,500		154		90,435		91,485
Short-term investments	1,930		48		0		1,978		1,978
Total available-for-sale securities	45,711		46,548		154		92,413		93,463
Equity securities:

Nonredeemable preferred stocks	0		227		49		276		292



Common equities:
Common stocks	4,485		0		8		4,493		831
Other risk investments	0		0		39		39		39
Subtotal common equities	4,485		0		47		4,532		870
Total equity securities	4,485		227		96		4,808		1,162
Total portfolio	$	50,196	$	46,775	$	250	$	97,221	$	94,625
Debt	$	0	$	7,758	$	0	$	7,758	$	8,387


	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
June 30, 2025
Fixed maturities:
U.S. government	$	46,810	$	0	$	0	$	46,810	$	46,684
State and local government	0		2,964		0		2,964		3,030
Foreign government	0		17		0		17		17
Corporate and other debt	0		18,117		5		18,122		18,004
Residential mortgage-backed	0		2,660		0		2,660		2,644
Commercial mortgage-backed	0		5,049		0		5,049		5,325
Other asset-backed	0		6,650		0		6,650		6,668





Total fixed maturities	46,810		35,457		5		82,272		82,372
Short-term investments	1,922		181		0		2,103		2,103
Total available-for-sale securities	48,732		35,638		5		84,375		84,475
Equity securities:

Nonredeemable preferred stocks	0		440		60		500		517



Common equities:
Common stocks	3,694		0		9		3,703		743
Other risk investments	0		0		32		32		32
Subtotal common equities	3,694		0		41		3,735		775
Total equity securities	3,694		440		101		4,235		1,292
Total portfolio	$	52,426	$	36,078	$	106	$	88,610	$	85,767
Debt	$	0	$	6,294	$	0	$	6,294	$	6,895


	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2025
Fixed maturities:
U.S. government	$	43,298	$	0	$	0	$	43,298	$	43,114
State and local government	0		3,303		0		3,303		3,342
Foreign government	0		17		0		17		17
Corporate and other debt	0		19,987		4		19,991		19,773
Residential mortgage-backed	0		3,175		0		3,175		3,152
Commercial mortgage-backed	0		5,973		0		5,973		6,194
Other asset-backed	0		7,109		0		7,109		7,112





Total fixed maturities	43,298		39,564		4		82,866		82,704
Short-term investments	9,810		195		0		10,005		10,005
Total available-for-sale securities	53,108		39,759		4		92,871		92,709
Equity securities:

Nonredeemable preferred stocks	0		344		60		404		419



Common equities:
Common stocks	4,057		0		5		4,062		783
Other risk investments	0		0		36		36		36
Subtotal common equities	4,057		0		41		4,098		819
Total equity securities	4,057		344		101		4,502		1,238
Total portfolio	$	57,165	$	40,103	$	105	$	97,373	$	93,947
Debt	$	0	$	6,345	$	0	$	6,345	$	6,897

Our portfolio valuations, excluding short-term investments valued at adjusted original cost and 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. At each reporting period, we concluded there was sufficient market activity in the relevant sectors and securities, further supporting our Level 1 and Level 2 classifications.

Our short-term investments classified as Level 1 include commercial paper, U.S. 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 June 30, 2026 and December 31, 2025, vendor-quoted prices represented 91% of our Level 1 classifications (excluding short-term investments valued at adjusted original cost), compared to 93%, at June 30, 2025. The securities quoted by vendors in Level 1 primarily represent our holdings in U.S. government securities, 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 June 30, 2026 and 2025, vendor-quoted prices comprised 99% of our Level 2 classifications (excluding short-term investments valued at adjusted original cost), with the balance from dealer quotes, compared to 100% at December 31, 2025. 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 asset-backed securities, including residential, commercial, 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 asset-backed 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 state and local government (municipal) securities, 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 adjusted 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 adjusted 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 six months of 2026 and for the full year of 2025, 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 six months of 2026 and for the full year of 2025, 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, 2026 and 2025:


(millions)	Fair Value at March 31, 2026		Calls/ Maturities/ Paydowns/ Other		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation1		Net Transfers In (Out)		Fair Value at June 30, 2026
Fixed maturities:
Corporate and other debt	$	4	$	0	$	0	$	0	$	0	$	0	$	0	$	4
Other asset-backed	0		0		150		0		0		0		0		150
Equity securities:

Nonredeemable preferred stocks	49		0		0		0		0		0		0		49

Common equities:
Common stocks	5		0		0		0		0		3		0		8
Other risk investments	37		2		0		0		0		0		0		39
Total Level 3 securities	$	95	$	2	$	150	$	0	$	0	$	3	$	0	$	250





(millions)	Fair Value at March 31, 2025		Calls/ Maturities/ Paydowns/ Other		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation1		Net Transfers In (Out)		Fair Value at June 30, 2025
Fixed maturities:
Corporate and other debt	$	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	31		1		0		0		0		0		0		32
Total Level 3 securities	$	105	$	1	$	0	$	0	$	0	$	0	$	0	$	106

(millions)	Fair Value at December 31, 2025		Calls/ Maturities/ Paydowns/ Other		Purchases		Sales		Net Realized (Gain)/Loss on Sales		Change in Valuation1		Net Transfers In (Out)		Fair Value at June 30, 2026
Fixed maturities:
Corporate and other debt	$	4	$	0	$	0	$	0	$	0	$	0	$	0	$	4
Other asset-backed	0		0		150		0		0		0		0		150
Equity securities:

Nonredeemable preferred stocks	60		0		0		(5)		(7)		1		0		49

Common equities:
Common stocks	5		0		0		0		0		3		0		8
Other risk investments	36		3		0		0		0		0		0		39
Total Level 3 securities	$	105	$	3	$	150	$	(5)	$	(7)	$	4	$	0	$	250








(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 June 30, 2025
Fixed maturities:
Corporate and other debt	$	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		7		0		0		0		0		0		32
Total Level 3 securities	$	105	$	7	$	8	$	0	$	0	$	(14)	$	0	$	106

1For fixed maturities, amounts included are unrealized gains (losses) reflected 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, 2026 and 2025, and December 31, 2025:



($ in millions)	Fair Value at June 30, 2026		Valuation Technique	Unobservable Input	Range of Input Values Increase (Decrease)	Weighted Average Increase (Decrease)
Fixed maturities:
Corporate and other debt	$	4	Market comparables	Weighted average market capitalization price change %	(0.8)% to 1.4%	(0.1)	%
Equity securities:
Nonredeemable preferred stocks	49		Market comparables	Weighted average market capitalization price change %	(9.3)% to 46.6%	14.4	%








Common stocks	8		Market comparables	Weighted average market capitalization price change %	(36.7)% to 77.2%	32.0	%
Subtotal Level 3 securities	61
External price securities	150
Pricing exemption securities	39
Total Level 3 securities	$	250



($ in millions)	Fair Value at June 30, 2025		Valuation Technique	Unobservable Input	Range of Input Values Increase (Decrease)	Weighted Average Increase (Decrease)
Fixed maturities:
Corporate and other debt	$	5	Market comparables	Weighted average market capitalization price change %	0.6% to 0.8%	0.7	%
Equity securities:
Nonredeemable preferred stocks	60		Market comparables	Weighted average market capitalization price change %	(13.1)% to 22.7%	3.7	%




Common stocks	9		Market comparables	Weighted average market capitalization price change %	(26.3)% to 56.6%	21.3	%
Subtotal Level 3 securities	74
Pricing exemption securities	32
Total Level 3 securities	$	106



($ in millions)	Fair Value at December 31, 2025		Valuation Technique	Unobservable Input	Range of Input Values Increase (Decrease)	Weighted Average Increase (Decrease)
Fixed maturities:
Corporate and other debt	$	4	Market comparables	Weighted average market capitalization price change %	(0.1)% to 0.1%	0	%
Equity securities:
Nonredeemable preferred stocks	60		Market comparables	Weighted average market capitalization price change %	(14.5)% to 7.6%	(4.5)	%


Common stocks	5		Market comparables	Weighted average market capitalization price change %	(40.9)% to 36.3%	7.6	%
Subtotal Level 3 securities	69
Pricing exemption securities	36
Total Level 3 securities	$	105

4. DEBT

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


($ in millions)						June 30, 2026				June 30, 2025			December 31, 2025
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	January 2027	$	500	$	495		$	499	$	488	$	499	$	493
500		2.50		March 2022	March 2027	500		493			499		487		499		492
300		6 5/8		March 1999	March 2029	299		316			298		324		299		323
550		4.00		October 2018	March 2029	548		544			548		547		548		551
500		3.20		March 2020	March 2030	498		477			498		477		498		484
500		4.60		March 2026	March 2031	497		498			0		0		0		0
500		3.00		March 2022	March 2032	497		456			497		456		497		462
400		6.25		November 2002	December 2032	398		432			397		438		397		442
500		4.95		May 2023	June 2033	497		504			497		511		497		513
1,000		5.15		March 2026	March 2036	990		1,000			0		0		0		0
350		4.35		April 2014	April 2044	347		297			347		299		347		304
400		3.70		January 2015	January 2045	396		311			396		310		396		314
850		4.125		April 2017	April 2047	843		688			843		699		843		702
600		4.20		March 2018	March 2048	591		491			591		493		591		498
500		3.95		March 2020	March 2050	492		389			491		392		492		392
500		3.70		March 2022	March 2052	494		367			494		373		494		375
Total						$	8,387	$	7,758		$	6,895	$	6,294	$	6,897	$	6,345

At June 30, 2026, short-term debt consisted of the $500 million 2.45% senior notes that mature in January 2027 and the $500 million 2.50% senior notes that mature in March 2027. There was no short-term debt outstanding at June 30, 2025, or December 31, 2025.

In March 2026, The Progressive Corporation issued $500 million of 4.60% Senior Notes due 2031 and $1 billion of 5.15% Senior Notes due 2036 in an underwritten public offering. The net proceeds from the issuances, after deducting underwriters’ discounts, commissions, and other issuance costs, were approximately $1,487 million in aggregate. Consistent with the other senior notes issued by The Progressive Corporation, interest on these notes is payable semiannually, principal is

due at maturity, and the notes are redeemable, in whole or in part, at any time, subject to a treasury “make whole” provision.

During the second quarter 2026, 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 30, 2027. The renewal amended the interest rate to 1-month term Secured Overnight Financing Rate (SOFR) plus 1.0%. The remaining terms are unchanged from the previous line of credit. See the 2025 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, 2026, was 21.3% and 21.2%, respectively, compared to 20.3% and 20.4% for the same periods last year. The lower effective tax rate for the prior-year periods was primarily due to the tax benefits associated with distributions of deferred compensation during the second quarter 2025.

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 June 30, 2026 and 2025, and December 31, 2025.

We had net current income taxes recoverable of $50 million and $115 million at June 30, 2026 and 2025, respectively, which were reported in other assets on our consolidated balance sheets, compared to net current income taxes payable of $28 million at December 31, 2025, which was reported in accounts payable, accrued expenses, and other liabilities. The balance may fluctuate from period to period due to normal timing differences.

At June 30, 2026 and 2025, and December 31, 2025, 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:


	June 30,
(millions)	2026		2025
Balance at January 1	$	43,310	$	39,057
Less reinsurance recoverables on unpaid losses	3,807		4,487
Net balance at January 1	39,503		34,570
Incurred related to:
Current year	29,401		27,016
Prior years	(1,002)		(607)
Total incurred	28,399		26,409
Paid related to:
Current year	13,928		12,842
Prior years	12,073		10,883
Total paid	26,001		23,725
Net balance at June 30	41,901		37,254
Plus reinsurance recoverables on unpaid losses	3,666		3,900
Balance at June 30	$	45,567	$	41,154

We experienced favorable reserve development of $1,002 million and $607 million during the first six months of 2026 and 2025, respectively, which is reflected as “incurred related to prior years” in the table above.

Year-to-date June 30, 2026

The favorable prior-year reserve development included approximately $670 million attributable to accident year 2025, $220 million to accident year 2024, and the remainder to accident years 2023 and prior.
Our personal auto products incurred about $845 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 bodily injury severity and, to a lesser extent, lower than anticipated payments on reopened property damage claims that were previously closed and lower than anticipated personal injury protection loss adjustment expenses.
Our Commercial Lines business incurred about $140 million of favorable loss and LAE reserve development. The favorable development was primarily due to lower than anticipated injury severity in our transportation network company (TNC) business, partially offset by higher than anticipated injury severity and litigation defense costs in our core commercial auto products.

Year-to-date June 30, 2025

The favorable prior-year reserve development included approximately $400 million attributable to accident year 2024, $115 million to accident year 2023, and the remainder to accident years 2022 and prior.
Our personal auto products incurred about $520 million of favorable loss and 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.
Our personal property products experienced about $50 million of favorable development, primarily attributable to favorable development on 2024 catastrophe events.
Our Commercial Lines business experienced about $45 million of favorable development, primarily attributable to lower than anticipated severity in our TNC business.

7. 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.

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 primarily 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:



(millions)	Personal Lines		Commercial Lines		Other1		Companywide
Three Months Ended June 30, 2026
Net premiums earned	$	18,880	$	2,691	$	2	$	21,573
Fees and other revenues	288		18		(1)		305
Total underwriting revenue	19,168		2,709		1		21,878
Losses and loss adjustment expenses:
Losses (excluding catastrophe losses)	10,501		1,390		6		11,897
Catastrophe losses	759		14		0		773
Loss adjustment expenses	1,600		302		0		1,902
Total losses and loss adjustment expenses	12,860		1,706		6		14,572
Underwriting expenses:
Distribution expenses2	2,536		316		3		2,855
Other underwriting expenses3	1,426		290		5		1,721
Total underwriting expenses	3,962		606		8		4,576
Pretax underwriting profit (loss)	$	2,346	$	397	$	(13)	2,730
Investment profit (loss)4							1,573
Service businesses profit (loss)							(6)
Interest expense							(88)
Total pretax profit (loss)							$	4,209



(millions)	Personal Lines		Commercial Lines		Other1		Companywide
Three Months Ended June 30, 2025
Net premiums earned	$	17,544	$	2,765	$	1	$	20,310
Fees and other revenues	263		40		0		303
Total underwriting revenue	17,807		2,805		1		20,613
Losses and loss adjustment expenses:
Losses (excluding catastrophe losses)	9,574		1,561		(1)		11,134
Catastrophe losses	688		19		0		707
Loss adjustment expenses	1,471		292		1		1,764
Total losses and loss adjustment expenses	11,733		1,872		0		13,605
Underwriting expenses:
Distribution expenses2	2,328		308		1		2,637
Other underwriting expenses3	1,298		261		4		1,563
Total underwriting expenses	3,626		569		5		4,200
Pretax underwriting profit (loss)	$	2,448	$	364	$	(4)	2,808
Investment profit (loss)4							1,249
Service businesses profit (loss)							(6)
Interest expense							(69)
Total pretax profit (loss)							$	3,982


(millions)	Personal Lines		Commercial Lines		Other1		Companywide
Six Months Ended June 30, 2026
Net premiums earned	$	37,264	$	5,274	$	3	$	42,541
Fees and other revenues	564		38		0		602
Total underwriting revenue	37,828		5,312		3		43,143
Losses and loss adjustment expenses:
Losses (excluding catastrophe losses)	20,720		2,847		7		23,574
Catastrophe losses	1,022		19		0		1,041
Loss adjustment expenses	3,193		591		0		3,784
Total losses and loss adjustment expenses	24,935		3,457		7		28,399
Underwriting expenses:
Distribution expenses2	5,200		616		5		5,821
Other underwriting expenses3	2,772		558		11		3,341
Total underwriting expenses	7,972		1,174		16		9,162
Pretax underwriting profit (loss)	$	4,921	$	681	$	(20)	5,582
Investment profit (loss)4							2,362
Service businesses profit (loss)							(11)
Interest expense							(158)
Total pretax profit (loss)							$	7,775


(millions)	Personal Lines		Commercial Lines		Other1		Companywide
Six Months Ended June 30, 2025
Net premiums earned	$	34,254	$	5,464	$	1	$	39,719
Fees and other revenues	512		78		0		590
Total underwriting revenue	34,766		5,542		1		40,309
Losses and loss adjustment expenses:
Losses (excluding catastrophe losses)	18,683		3,120		(1)		21,802
Catastrophe losses	1,142		24		0		1,166
Loss adjustment expenses	2,861		579		1		3,441
Total losses and loss adjustment expenses	22,686		3,723		0		26,409
Underwriting expenses:
Distribution expenses2	4,676		594		1		5,271
Other underwriting expenses3	2,573		523		8		3,104
Total underwriting expenses	7,249		1,117		9		8,375
Pretax underwriting profit (loss)	$	4,831	$	702	$	(8)	5,525
Investment profit (loss)4							1,844
Service businesses profit (loss)							(12)
Interest expense							(139)
Total pretax profit (loss)							$	7,218

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, 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.

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; and (iii) other underwriting expenses. 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. 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,
	2026			2025			2026			2025
	Under- writing Margin		Combined Ratio	Under- writing Margin		Combined Ratio	Under- writing Margin		Combined Ratio	Under- writing Margin		Combined Ratio
Personal Lines	12.4	%	87.6	14.0	%	86.0	13.2	%	86.8	14.1	%	85.9
Commercial Lines	14.7		85.3	13.2		86.8	12.9		87.1	12.9		87.1
Total underwriting operations	12.7		87.3	13.8		86.2	13.1		86.9	13.9		86.1

8. 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, 2026	$	(596)	$	125	$	(471)	$	(457)	$	(13)	$	(1)
Other comprehensive income (loss) before reclassifications:
Investment securities	(438)		92		(346)		(346)		0		0


Foreign currency translation adjustment	(1)		0		(1)		0		0		(1)

Total other comprehensive income (loss) before reclassifications	(439)		92		(347)		(346)		0		(1)
Less: Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities	37		(8)		29		29		0		0

Total reclassification adjustment for amounts realized in net income	37		(8)		29		29		0		0
Total other comprehensive income (loss)	(476)		100		(376)		(375)		0		(1)
Balance at June 30, 2026	$	(1,072)	$	225	$	(847)	$	(832)	$	(13)	$	(2)

							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, 2025	$	(671)	$	147	$	(524)	$	(509)	$	(14)	$	(1)


Other comprehensive income (loss) before reclassifications for investment securities	558		(117)		441		441		0		0





Less: Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities	16		(3)		13		13		0		0
Interest expense	(1)		0		(1)		0		(1)		0
Total reclassification adjustment for amounts realized in net income	15		(3)		12		13		(1)		0
Total other comprehensive income (loss)	543		(114)		429		428		1		0
Balance at June 30, 2025	$	(128)	$	33	$	(95)	$	(81)	$	(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, 2025	$	130	$	(27)	$	103	$	117	$	(13)	$	(1)
Other comprehensive income (loss) before reclassifications:
Investment securities	(1,066)		224		(842)		(842)		0		0


Foreign currency translation adjustment	(1)		0		(1)		0		0		(1)

Total other comprehensive income (loss) before reclassifications	(1,067)		224		(843)		(842)		0		(1)
Less: Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities	135		(28)		107		107		0		0

Total reclassification adjustment for amounts realized in net income	135		(28)		107		107		0		0
Total other comprehensive income (loss)	(1,202)		252		(950)		(949)		0		(1)
Balance at June 30, 2026	$	(1,072)	$	225	$	(847)	$	(832)	$	(13)	$	(2)

							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 for investment securities	1,666		(350)		1,316		1,316		0		0





Less: Reclassification adjustment for amounts realized in net income by income statement line item:

Net realized gains (losses) on securities	(14)		3		(11)		(11)		0		0
Interest expense	(1)		0		(1)		0		(1)		0
Total reclassification adjustment for amounts realized in net income	(15)		3		(12)		(11)		(1)		0
Total other comprehensive income (loss)	1,681		(353)		1,328		1,327		1		0
Balance at June 30, 2025	$	(128)	$	33	$	(95)	$	(81)	$	(13)	$	(1)

In an effort to manage interest rate risk, we entered into forecasted transactions on certain issuances of The Progressive Corporation’s debt. During the next 12 months, we expect to reclassify approximately $1 million (pretax) into interest expense, related to net unrealized losses on forecasted transactions (see Note 4 – Debt in our 2025 Annual Report to Shareholders for further discussion).

9. 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 2025 Annual Report to Shareholders.

As of June 30, 2026, 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 Colorado, North Carolina, and Ohio; 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 June 30, 2026, 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 three 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 June 30, 2026.

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, 2026 and 2025, or December 31, 2025, and there were no material settlements during 2025 or the first six months of 2026. 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 2025 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 2025 Annual Report to Shareholders.

10. DIVIDENDS

Following is a summary of our common share dividends that were declared and/or paid during the six months ended June 30, 2026 and 2025:


(millions — except per share amounts)		Amount
Declared	Payable	Per Share		Accrued/Paid1
Annual-Variable Dividends:
December 2025	January 2026	$	13.50	$	7,913
December 2024	January 2025	4.50		2,637

Quarterly Dividends:
May 2026	July 2026	0.10		58
March 2026	April 2026	0.10		58
December 2025	January 2026	0.10		59
May 2025	July 2025	0.10		58
March 2025	April 2025	0.10		59
December 2024	January 2025	0.10		58

1 The accrual is based on an estimate of shares outstanding as of the record date and recorded as dividends payable on common shares on our consolidated balance sheets until paid; the prior period accrual was reclassified into this line item from accounts payable, accrued expenses, and other liabilities to conform to the current period’s presentation.

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