Progressive Corp/Oh (PGR) Economic Moat Analysis50

Evidence

Product 9.0 also includes updates to our rating calculation that improve our ability to more accurately match rate to risk by expanding our use of external data, introducing new rating variables, and refining existing rating variables.

Business: personal auto model 9.0 rating variables · Filed 02/03/2026

As of December 31, 2025, 10 states, that represented about 25% of our companywide personal auto net premiums written, are on model 9.0 and, overall, we are seeing favorable conversion results in both the agency and direct channels.

Business: deployed model coverage and conversion · Filed 02/03/2026

Through the end of the year, we had 39 states elevated to our next-generation-product models (5.0 and higher), which represented close to 90% of our personal property net premiums written.

Business: personal property model deployment · Filed 02/03/2026

Agency Distribution Channel •The agency personal vehicle business includes business written by our network of more than 40,000 independent insurance agencies located throughout the U.S., as well as brokerages in New York and California.

Business: independent agency distribution · Filed 02/03/2026

During this five-year period, Progressive: •delivered annualized rates of return on net income and comprehensive income of 26.0% and 25.2%, respectively; •outpaced the S&P 500 by 1.6x and exceeded its peer group by 1.2x for total shareholder return; •achieved annualized growth in net premiums written by 15%; •maintained underwriting profitability aligned with its long-term 96 combined ratio target; and •responsibly increased policies in force at a 9% annualized growth rate.

Board letter: five-year operating results · Filed 23/03/2026

And on an industry-wide basis, Progressive’s five-year annualized underwriting margin of 8.3% and net premiums written growth of 15%, exceeded the industry’s underwriting margin of (0.4)% and net premiums written growth of 7%, in each case based on 2024 U.S.

Board letter: issuer-presented industry comparison · Filed 23/03/2026

For the respective periods, our underwriting profitability results were as follows: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Underwriting Profit (Loss) Underwriting Profit (Loss) Underwriting Profit (Loss) Underwriting Profit (Loss) ($ in millions) $ Margin $ Margin $ Margin $ Margin Personal Lines Vehicles Agency $ 1,041 13.6 % $ 1,135 15.6 % $ 2,325 15.4 % $ 2,406 16.8 % Direct 1,134 10.8 1,185 12.5 2,258 11.0 2,198 12.0 Property 171 22.0 128 16.4 338 21.9 227 14.6 Total Personal Lines 2,346 12.4 2,448 14.0 4,921 13.2 4,831 14.1 Commercial Lines 397 14.7 364 13.2 681 12.9 702 12.9 Other indemnity1 (13) NM (4) NM (20) NM (8) NM Total underwriting operations $ 2,730 12.7 % $ 2,808 13.8 % $ 5,582 13.1 % $ 5,525 13.9 % 1 Underwriting margins for our other indemnity businesses are not meaningful (NM) due to the low level of premiums earned by, and the variability of loss costs in, such businesses.

MD&A: underwriting profitability by segment and channel · Filed 03/08/2026

We also surpassed the 40 million policies in force milestone by adding 0.5 million more policies during the quarter and ending the second quarter with 2.8 million more policies in force than at June 30, 2025.

MD&A overview: policies in force growth · Filed 03/08/2026

During the second quarter and first six months of 2026, direct personal auto quote volume decreased 7% and 6%, respectively, with a rate of conversion increase of 9% in both periods, compared to the same periods last year, primarily driven by our competitiveness in the marketplace.

MD&A: direct auto quote volume and conversion · Filed 03/08/2026

For the second quarter 2026, trailing 12-month total personal auto policy life expectancy decreased 8% year over year, while trailing 3-month policy life expectancy decreased 9%, compared to the same period last year.

MD&A: personal auto policy life expectancy · Filed 03/08/2026

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

MD&A: personal property policy life expectancy · Filed 03/08/2026

For core commercial auto products, trailing 12-month policy life expectancy increased 2%, compared to the same period in the prior year.

MD&A: core commercial auto policy life expectancy · Filed 03/08/2026

The decrease in written premium per policy for new and renewal personal auto agency business for the second quarter and first six months 2026, compared to the same periods last year, was in part attributable to rate decreases in certain markets and a shift in the mix of business, including a shift to a higher percentage of 6-month term policies, which have about half of the amount of net premiums written as policies with 12-month terms.

MD&A: agency auto premium declines, rate reductions, and mix · Filed 03/08/2026

Personal Auto - Direct The year-over-year changes in our personal auto direct business were as follows: Quarter Year-to-date 2026 2025 2026 2025 Applications New 1 % 9 % 2 % 21 % Renewal 13 25 14 23 Total 10 21 11 22 Written premium per policy New 3 3 4 3 Renewal (2) 1 (1) 1 Total 0 1 0 1 Policy life expectancy Trailing 3 months (10) (8) Trailing 12 months (9) (6) The personal auto direct business includes business written directly by Progressive online or by phone.

MD&A: direct auto applications, premiums, and policy life expectancy · Filed 03/08/2026

Increases in both net premiums written and policies in force were primarily driven by volume growth due to rate decreases in targeted state and BMT combinations, and increased advertising and agent incentive spend.

MD&A: commercial growth from targeted rate reductions and acquisition spending · Filed 03/08/2026

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

MD&A: aggregate core commercial auto rates · Filed 03/08/2026

During the second quarter 2026, advertising expense was $1.4 billion, or 16% higher than the second quarter last year.

MD&A: advertising expense · Filed 03/08/2026

Rate regulation varies from “use and file,” to “file and use,” to “prior approval.”

Regulation: rate filing and approval regimes · Filed 02/03/2026

These policyholder credits represented the estimated profit we earned for the three-accident-year period ended December 31, 2025, in excess of the statutory profit limit that a Florida statute imposes on the profit that any insurance group can earn on personal auto insurance over any contiguous three-accident-year period.

Liquidity: Florida statutory profit limit and policyholder credits · Filed 03/08/2026

In recent years, legislation, regulatory measures, and voter initiatives have been introduced, and in some cases adopted, which deal with use of consumer information, cybersecurity, use of credit and other information in underwriting and rating, insurance rate development, use of artificial intelligence and algorithms, rate of return limitations, and the ability of insurers to cancel or non-renew insurance policies.

Regulation: rating data, algorithms, profitability, and policy restrictions · Filed 02/03/2026

Several of our competitors have many more patents than we do.

Competition: competitors' patent holdings · Filed 02/03/2026

Following are a few key performance metrics for 2025: Net premiums written growth 12 % Policies in force growth 10 % Combined ratio 87.4 Underwriting profit margin 12.6 % Return on average common shareholders’ equity: Net income 35.3 % Comprehensive income 40.1 % Net income $11.3 billion Net income per common share $19.23 Dividends declared on common shares $8.1 billion Repurchased common shares $0.2 billion We encourage you to review our Annual Report to Shareholders for additional information on our 2025 performance and our financial results.

Proxy performance overview: ROE, earnings, growth, and distributions · Filed 23/03/2026

36 ELEMENTS OF COMPENSATION The following chart provides general information about the elements of compensation for our 2025 executive compensation program: Element Why We Use This Element Annual or Long-Term Fixed or Variable Salary •Provides a fixed amount of income to attract and retain executive talent and rewards individual performance Annual Fixed Gainshare Plan (cash incentive)* •Motivates nearly all employees, including our executives, to achieve challenging and objective operating goals in our insurance businesses •Measures the annual growth in policies in force and profitability in our insurance businesses •Generally, provides executives with the potential (when combined with other compensation elements) to earn compensation above the market median Annual Variable Progressive Capital Management Annual Incentive Plan (cash incentive) •Applies to our investment professionals, including our Chief Investment Officer (CIO), and motivates them to balance short- and long-term performance of our fixed-income portfolio with our investment goal of protecting our balance sheet (no current NEO participates in this plan) •Measures the performance of our fixed-income portfolio over one- and three-year periods against the performance results of a benchmark •Provides the CIO with the potential (when combined with other compensation elements) to earn compensation above the market median Annual Variable Performance-Based Restricted Stock Units Performance versus Market Insurance Results* •Motivates executives to focus on longer-term operating performance of our insurance businesses •Rewards our profitable growth in market share of our insurance businesses over a three-year performance period •Aligns the interests of executives with those of shareholders by tying the value of compensation to the market value of our common shares •Generally, provides executives with the potential (when combined with other compensation elements) to earn compensation above the market median Long-Term Variable Performance-Based Restricted Stock Units Investment Results* •Motivates our CEO, CFO, CIO, and investment professionals to focus on longer-term fixed-income portfolio investment performance •Measures the performance of our fixed-income portfolio over a three-year period against the performance results of a benchmark •Aligns the interests of these executives with those of shareholders by tying the value of compensation to the market value of our common shares •Provides these executives with the potential (when combined with other compensation elements) to earn compensation above the market median Long-Term Variable Time-Based Restricted Stock Units •Further aligns the interests of executives with those of shareholders by tying the value of compensation to the market value of our common shares Long-Term Variable *The pay-for-performance alignment of these elements of compensation are described in more detail in “Pay Versus Performance.”

Executive compensation: actual 2025 incentive program structure · Filed 23/03/2026

The Compensation and Talent Committee also granted annual performance-based awards to these NEOs in March 2025, which were tied to the operating performance of our private passenger auto and commercial auto business lines.

Executive compensation: performance awards granted in March 2025 · Filed 23/03/2026

For the performance-based restricted stock unit awards tied to the operating performance of our private passenger auto and commercial auto business lines, the awards have a performance goal that compares our growth to industry growth over the performance period (2025 through 2027) and includes a restriction on vesting based on a profitability requirement.

Executive compensation: relative growth goal and profitability vesting restriction · Filed 23/03/2026

Some of our corporate governance practices include: Effective Structure and Composition Additional Practices and Policies Shareholder Rights ✔ Independent, experienced Chairperson ✔ Robust director stock ownership guidelines ✔ Single class voting ✔ Independent committee leadership and strong independent committee membership ✔ Established Board and committee risk oversight practices ✔ Annual election of all directors ✔ A highly qualified Board with diverse backgrounds, experiences, perspectives, skills, and tenure ✔ Board technology and cybersecurity oversight ✔ Majority voting in uncontested director elections ✔ Mandatory director retirement policy (no exemptions or waivers within the past three years) ✔ Sustainability matters (including climate risk) oversight ✔ Proxy access available ✔ Independent directors meet regularly without management ✔ Talent management oversight ✔ No poison pill ✔ Restrictions limiting the number of public company boards on which a director may serve ✔ Ongoing director education ✔ Annual Board and committee evaluation process Board Risk Oversight The Board is ultimately responsible for overseeing our risk profile and risk management processes.

Corporate governance: board structure and shareholder rights · Filed 23/03/2026

All directors attended at least 75% of their scheduled Board and committee meetings during their committee tenure in 2025.

Corporate governance: actual 2025 board and committee attendance · Filed 23/03/2026

surplus of $28.4 billion. The combined premiums-to-surplus ratio for all of our insurance companies was 2.9 to 1 at December 31, 2025.

Regulation: year-end statutory surplus and combined premiums-to-surplus ratio · Filed 02/03/2026

At December 31, 2025, our RBC ratios were in excess of minimum requirements.

Regulation: RBC compliance at December 31, 2025 · Filed 02/03/2026

As of June 30, 2026, our estimated consolidated statutory surplus was $32.9 billion.

Capital resources: estimated June 2026 statutory surplus · Filed 03/08/2026

At June 30, 2026, we had $6.7 billion in a consolidated, non-insurance subsidiary of the holding company that can be used to fund corporate obligations and provide additional capital to our insurance subsidiaries to support potential future growth and other opportunities.

Capital resources: non-insurance subsidiary funds available · Filed 03/08/2026

Operations generated positive cash flows of $8.0 billion and $9.2 billion for the six months ended June 30, 2026 and 2025, respectively.

Liquidity: first-half operating cash flows · Filed 03/08/2026

The modest decrease from year-end 2025 primarily reflected valuation declines across fixed-maturity sectors, the $7.9 billion payment of our annual variable common share dividend, and the $1.1 billion of repurchases of our common shares, mostly offset by significant positive cash flows from insurance operations and proceeds from the $1.5 billion senior note issuances in March 2026.

Investments: dividends, repurchases, operating cash generation, and debt issuance · Filed 03/08/2026

During the first six months of 2026, we repurchased 5.4 million common shares, at a total cost of $1.1 billion, both in the open market and to satisfy tax withholding obligations in connection with the vesting of equity awards under our employee equity compensation plans.

Capital management: actual first-half share repurchases · Filed 03/08/2026

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.

Consolidated income statements: earnings, interest expense, and diluted shares · Filed 03/08/2026

1 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.

Consolidated balance sheets: investments, reserves, debt, and equity · Filed 03/08/2026

As primarily an auto insurer, our claims liabilities generally have a short-term duration.

Liquidity: generally short-duration claims liabilities · Filed 03/08/2026

The duration of the financial instruments held in our portfolio that are subject to interest rate risk was 3.5 years at June 30, 2026, compared to 3.4 years at June 30, 2025 and December 31, 2025.

Market risk: interest-sensitive investment duration · Filed 03/08/2026

Recoverable balances under these arrangements are required by our contracts to be collateralized (i.e., secured by assets held by an independent third party or a letter of credit issued by a commercial bank) at a target of over 100% of the recoverable balance.

Commercial reinsurance: collateral requirements for TNC arrangements · Filed 02/03/2026

Several factors contributed to the increase in underwriting profit margin over the prior year, including lower personal and commercial auto accident frequency, lower weather-related catastrophe losses, and favorable prior accident years development, partially offset by $1.2 billion of policyholder credit expense related to personal auto excess profits earned in Florida.

Operating results: frequency, catastrophes, reserve development, and Florida credits · Filed 23/03/2026

For the year ended December 31, 2025, our fully taxable equivalent total return on our investment portfolio was 7.3%.

Investment results: 2025 fully taxable equivalent portfolio return · Filed 23/03/2026

Our debt-to-total capital ratio was 19.6% at June 30, 2026, compared to 17.5% at June 30, 2025, and 18.5% at December 31, 2025.

Capital management: debt-to-total capital ratio · Filed 03/08/2026

We did not engage in short-term borrowings, including any borrowings under the line of credit, to fund our operations or for liquidity purposes during the reported periods.

Liquidity: absence of short-term operational borrowing · Filed 03/08/2026

At June 30, 2026, we held $45.8 billion in short-term investments and U.S.

Liquidity: amount held in short-term investments and Treasury securities, passage begins · Filed 03/08/2026

Treasury securities, which represented about half of our total portfolio’s fair value at quarter end.

Liquidity: Treasury securities and portfolio share, passage continues · Filed 03/08/2026

Publication history

Sources

• filing-1 · Filed 02/03/2026
• filing-2 · Filed 03/08/2026
• filing-3 · Filed 23/03/2026
• filing-4 · Filed 03/03/2025
• filing-5 · Filed 26/02/2024
• filing-6 · Filed 04/05/2026