PROGRESSIVE CORP/OH/ (PGR) Business

ITEM 1. BUSINESS

General Development of Business

The Progressive Corporation, an insurance holding company, has insurance and non-insurance subsidiaries and affiliates (references in this Item to subsidiaries include affiliates as well). Our insurance subsidiaries write personal and commercial auto insurance, personal residential property insurance, and insurance for motorcycles, watercraft, and other recreational vehicles. We also offer business-related general liability and commercial property insurance predominantly for small businesses, workers’ compensation insurance primarily for the transportation industry, and other specialty property-casualty insurance and provide related services. Our non-insurance subsidiaries generally support our insurance and investment operations. We operate throughout the United States. Unless noted, references to “state(s)” throughout this report include the District of Columbia. The Progressive Corporation, together with its insurance and non-insurance subsidiaries, comprise what we refer to as Progressive.

Progressive’s vision is to become consumers’, agents’, and business owners’ number one destination for insurance and other financial needs. Progressive’s four strategic pillars of people and culture, broad needs of our customers, leading brand, and competitive prices serve as the foundation of how we will achieve our vision.

Description of Business

Organization

Our Chief Executive Officer (CEO) assesses performance and makes key operating decisions for our insurance, investment, and service operations and is supported by the following management team that oversees the business and corporate functions that support all areas of our organization.

Our insurance and claims organizations are generally managed on a state-by-state basis due to the nature of insurance, legal and regulatory requirements, and other local factors, and are supplemented by national operations and supported by our corporate functions. State-specific organizations typically report to a regional general manager, who then reports to the applicable group president. In California, we operate a separate agency auto organization with its own management and customer relationship management organization.

Personal Lines

Our Personal Lines operating segment writes insurance for personal autos and special lines products (e.g., recreational vehicles, such as motorcycles, RVs, and watercraft), collectively referred to as our personal vehicle business, and personal residential property insurance for homeowners and renters. The Personal Lines segment accounted for 87% of our total net premiums written in 2025, 85% in 2024, and 84% in 2023.

For 2025, our personal vehicle products represented 96% of our total Personal Lines net premiums written, 95% for 2024, and 94% for 2023. We write our personal vehicle insurance in all states, however, our special lines products are not written in the District of Columbia.

•Personal auto insurance represented 95% of our total personal vehicle net premiums written in both 2025 and 2024, and 94% in 2023. We ranked second in market share in the U.S. private passenger auto insurance market, based on 2024 premiums written, and we believe we continue to hold that position for 2025. There are approximately 230 competitors in this market. Progressive and the other leading 15 private passenger auto insurers, each of which writes over $3 billion of premiums annually, comprise about 85% of this market. All industry data, including ranking and market share, based on premiums written, has been obtained directly from data reported by either S&P Global Market Intelligence or A.M. Best Company, Inc. (A.M. Best), or was estimated using A.M. Best data as the primary source.

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•Special lines products represented the remaining personal vehicle net premiums written for the years mentioned above. Due to the seasonal nature of these products, we typically experience higher losses during the warmer weather months. Our competitors are specialty companies and large multi-line insurance carriers. Although industry figures are not available, based on our analysis of this market, we believe that we are the market share leader for both the motorcycle and boat products and that we are one of the largest providers of RV insurance.

In addition to writing residential property insurance for homeowners and renters, in virtually all states, our personal property business offers insurance for manufactured homes, personal umbrella insurance, and primary and excess flood insurance. We also act as a participant in the “Write Your Own” program for the National Flood Insurance Program (NFIP) under which we write flood insurance in virtually all states; 100% of this business is reinsured with the NFIP.

Our personal property business represented 4% of our total Personal Lines net premiums written in 2025, 5% in 2024, and 6% in 2023, with about 95% of the total personal property net premiums written attributable to the homeowners and renters products. We were the twelfth largest homeowners carrier in the U.S., based on 2024 premiums written, and we are currently unable to determine if we will hold that ranking for 2025. There are approximately 360 competitors in the homeowners insurance market nationwide and we compete with many of these companies. Progressive and the other leading 28 large companies/groups, each with over $1 billion of premiums written annually, comprise about 80% of the market.

We tend to see more personal property business written during the second and third quarters of the year based on the cyclical nature of property sales. Losses also tend to be higher during the warmer weather months when storms are more prevalent. As a property insurer, we have exposure to losses from catastrophes, including hurricanes, and other severe weather events. See Item 1A, Risk Factors – II. Insurance Risks below for more information. To help mitigate these risks, we enter into reinsurance arrangements. See the “Reinsurance” section below for further discussion of our reinsurance programs.

Our Personal Lines products are sold through both the agency and direct channels.

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. These independent insurance agents and brokers have the ability to place business with Progressive for specified insurance coverages within prescribed underwriting guidelines, subject to compliance with our mandated procedures. The agents and brokers do not have authority to establish underwriting guidelines, develop rates, settle or adjust claims, or enter into other transactions or commitments. The agency personal vehicle business also writes insurance through strategic alliance business relationships with other insurance companies, financial institutions, and national agencies. The total personal vehicle net premiums written through the agency channel represented 43% of our total personal vehicle volume in 2025, 45% in 2024, and 46% in 2023.

•Our personal property business is primarily written through the independent agency channel and through select agents under our Platinum program as part of our Destination Era strategy, discussed below. The total personal property net premiums written through the agency channel represented 72% of our total personal property volume in 2025, 74% in 2024, and 77% in 2023.

Direct Distribution Channel

•The direct personal vehicle business includes business written directly by us online or by phone. The total net premiums written by the direct personal vehicle business represented 57% of our total personal vehicle volume in 2025, 55% in 2024, and 54% in 2023.

•Our direct personal property business is written by us over the phone and through HomeQuote Explorer® (HQX), our multi-carrier, direct-to-consumers online personal property offering. The HQX online buy button is available in almost every state. In addition to being able to quote our personal property products on HQX, consumers are able to quickly and easily compare homeowners insurance online from Progressive and other carriers. The total net premiums written by the direct personal property business represented 28% of our total personal property volume in 2025, 26% in 2024, and 23% in 2023.

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We continue to provide personal auto customers in both the agency and direct channels the opportunity to improve their auto insurance rates based on their personal driving behavior through Snapshot®, our usage-based insurance (UBI) program. We offer Snapshot through our hardware-based and/or mobile-app versions in all states, other than California. We believe this mobile app improves the user experience. In addition to the personal benefits for our customers, the data collected via the mobile app affords us a unique perspective on vehicle operations, accidents, and mobile device usage. Our updated personal auto product models, discussed below, often also include Snapshot enhancements intended to improve its accuracy and competitiveness and broaden its applicability.

We seek to refine our product segmentation, underwriting models, and pricing over time, and we regularly elevate new product models. At any one time, we could have multiple product models in the marketplace, as new versions are rolled out on a state-by-state basis. Such new product models generally introduce new risk variables intended to improve the accuracy of matching rate to risk, increase our competitiveness, and/or make our products more attractive to specific market segments, among other enhancements.

In the third quarter 2025, we started rolling out our latest personal auto product offering, model 9.0, which contains new and expanded coverage features. With the 9.0 model, we introduced embedded renters insurance as an optional endorsement to an auto policy. This endorsement provides coverage that used to only be offered through a stand-alone renters policy. 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. 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. Our 9.1 model is currently in execution planning, and we expect the first state to elevate in early 2027.

We are continuing to roll out our newest special lines product model (R17), which was first launched in late 2024 and consists of 27 product enhancements that expand segmentation.

We continued to advance our personal property product segmentation, pricing, and risk selection capabilities in 2025. 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. Key features of our next-generation-product models include expanded peril rating and the introduction of new rating variables. We continue to refine our model design and deployment processes to increase quality and speed to market.

Our Personal Lines strategy is to be a competitively priced provider of a broad range of personal auto, special lines, and personal property insurance products with distinctive service, distributed through whichever channel the customer prefers, and bundled with other products when appropriate to match our customers’ needs. Volume potential is driven by our price competitiveness, the actions of our competitors, brand recognition, and quality service delivered through our employees who embody the Progressive culture, among other factors. See “Competitive Factors” below for further discussion.

Our Personal Lines business is focused on efforts to form deeper and longer-term relationships with our customers through our Destination Era strategy, which supports the pursuit of our vision described above. Through this strategy, we seek to leverage our personal auto business with that of our personal property business, as well as insurance products and non-insurance services offered by unaffiliated third parties, to provide our customers access to a range of products addressing their diverse needs, with the option to “bundle” certain of the products together. Bundled products are an integral part of our consumer offerings and an important part of our strategic agenda. Customers who prefer to bundle represent a sizable segment of the insurance market, and our experience is that they tend to stay with us longer and generally have lower claims costs.

Our Destination Era strategy involves a number of initiatives, including:

•In our agency distribution channel, we offer customers the opportunity to bundle our personal auto, special lines, and personal property offerings. To further drive bundling in the agency channel, we offer the Platinum program to those select agents who have the appropriate customers for our bundled offering. This program combines our personal auto and property insurance with the compensation, coordinated policy periods, single event deductible, and other features that meet the needs and desires that our agents have expressed. As of December 31, 2025, we had nearly 6,000 Platinum agents.

•We offer independent agents a quoting system that makes it easier for them to bundle multiple policies with us. Our “Portfolio” quoting system reduces data entry, displays all available products eligible for bundled quotes, simplifies the agents’ experience on third-party comparative rater systems, and provides agents and their customers an overview of premium, bundle savings, and applied discounts to allow them to add or remove products with one click. Portfolio is available for all agents appointed to write new business where we offer personal property products.

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•In the direct channel, we bundle Progressive personal auto with our personal property products in almost all states, as well as with homeowners and renters products provided by unaffiliated insurance carriers nationwide. We offer these bundles by providing a single destination to which consumers may come for both their personal auto and property insurance needs. In many cases, we may offer discounts to incentivize or reward this bundling.

•Where available, our special lines products and umbrella insurance can be combined with any of the personal auto, homeowners, or renters coverages that we offer, in either the direct or agency channel.

•As we increase our penetration of the more complex, multi-product customers who are critical to our Destination Era success, we are further expanding the roster of products provided by unaffiliated companies that we make available through online and telephonic referrals and for which we receive commissions, or other compensation, that are reported as service revenues. Our list of unaffiliated company products includes items such as pet health, life, and classic and specialty car insurance.

Commercial Lines

The Commercial Lines operating 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. The Commercial Lines business accounted for 13% of our total net premiums written in 2025, 15% in 2024, and 16% in 2023.

Unless otherwise noted, the following discussion focuses on our commercial auto business and, therefore, excludes business-related general liability and commercial property insurance (business owners’ policy (BOP)) and workers’ compensation products, which are discussed below.

We offer our commercial auto products in all states, excluding the District of Columbia. Our commercial auto customers insure approximately two vehicles per policy, excluding large fleet policies. During 2025, we wrote about 90% of our commercial auto business through the agency channel, excluding transportation network company (TNC) business, which is all written through the direct channel.

There are approximately 340 competitors in the total U.S. commercial auto market. We primarily compete with about 64 other large companies/groups, each having over $200 million of commercial auto premiums written annually. Progressive and these leading commercial auto insurers comprise 88% of this market. Progressive has ranked number one in the U.S. commercial auto market since 2015, and we believe that we continued to hold that position for 2025.

The core commercial auto business (which excludes TNC business and our Progressive Fleet & Specialty Programs (Fleet & Specialty) products) operates in the following commercial auto business market targets (BMT):

•For-hire specialty – dump trucks, log trucks, and garbage trucks used primarily by dirt, sand and gravel, logging, garbage/debris removal, and coal-type businesses,

•For-hire transportation – tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses and long-haul operators,

•Tow – tow trucks and wreckers used in towing services and gas/service station businesses,

•Contractor – vans, pick-up trucks, and dump trucks used by light contractors (e.g., painters, plumbers, landscapers), and heavy construction, and

•Business auto – autos, vans, pick-up trucks used by small businesses (e.g., retailing, manufacturing, farming) and for-hire livery (e.g., non-fleet (i.e., five or fewer vehicles) taxis, black-car services, and airport taxis).

As with our personal auto products, we regularly introduce new commercial auto product models designed to improve our pricing accuracy and competitiveness through improved segmentation, the use of additional risk variables, and other enhancements. New models are typically rolled out on a state-by-state basis and, as a result, we often have more than one product version in the marketplace at a time.

During 2025, we began to roll out our next-generation-product models across our core commercial auto, medium fleet, and BOP products, expanding segmentation and pricing variables. Our 8.3 core commercial auto product model launched in 11 states that represent 43% of our core commercial auto countrywide net premiums written at the end of 2025. Our newest medium-fleet product model was fully deployed, in nearly all states, and our newest BOP model was in market in 34 states that represent 92% of our countrywide BOP net premiums written as of the end of 2025. The BOP product, at year-end 2025, was available to agents in 46 states, excluding the District of Columbia. In core commercial auto, we also launched and rolled out our new Cargo Plus endorsement. The Cargo Plus endorsement expands coverage to better meet the needs of our for-hire transportation customers and was available in 49 states as of the end of 2025.

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Similar to Snapshot in the personal auto business, the Commercial Lines business offers its commercial auto customers UBI options. Smart Haul® is the UBI program that uses driving data from a motor carrier’s existing electronic-logging device. Smart Haul offers owner operators and small fleets the ability to receive discounts on their insurance by sharing their electronic-logging-device-generated data with us. Snapshot ProView® is the UBI program for commercial auto customers without their own electronic logging device. Snapshot ProView allows customers to earn upfront discounts and provides value-added services, like fleet management and personalized tips, to encourage safe driving. Both programs are available in nearly all states.

In addition to the BMTs listed above, as of December 31, 2025, we provided commercial auto coverage in the TNC business to Uber Technologies subsidiaries in 14 states. TNC represented 14% of our Commercial Lines net premiums written in 2025, 15% in 2024, and 13% in 2023. Premiums written in our TNC business are determined, in part, by estimating the number of miles to be driven over the life of the policy term, on a policy-by-policy basis. These premium estimates are adjusted monthly based both on actual miles driven and an estimate of miles to be driven during the remaining policy term.

We also offer workers’ compensation insurance tailored for the transportation industry. Our offering includes loss prevention services that promote safe operations and dedicated claims-handling specialists. This product is available through a limited network of licensed brokers and includes options ranging from guaranteed premium cost plans to loss dependent plans, to meet the varying needs of small to large trucking fleets.

We also continue to act as an agent for business customers to place BOP, general liability, professional liability, and workers’ compensation coverage through unaffiliated insurance carriers and are compensated through commissions, which are reported as service revenues. To further help our direct customers, we offer BusinessQuote Explorer® (BQX), a digital application that allows small business owners to obtain quotes for our BOP product and the products offered from a select group of unaffiliated carriers.

Reinsurance

Our reinsurance activity includes both transactions which are regulated and those that are non-regulated. The regulated programs include several mandatory state pools, such as the Michigan Catastrophic Claims Association, Florida Hurricane Catastrophe Fund (FHCF), and North Carolina Reinsurance Facility, as well as the government-backed NFIP and other reinsurance facilities required by specific states for various lines of business. All of these programs are governed by the federal government or an individual state’s insurance regulations.

Our non-regulated transactions represent voluntary external reinsurance arrangements related to portions of our personal property and Commercial Lines businesses; we generally do not reinsure our personal vehicles business outside of the regulated programs discussed above.

Personal Property Programs

The property reinsurance program is designed to reduce overall risk while, to the extent of coverage purchased, protecting capital from the costs associated with catastrophic events. The program provides coverage for our personal property business and certain BOP product coverages. The program includes contracts that cover multi-year periods.

The occurrence excess of loss (XOL) program, which is in place from June 1, 2025 through May 31, 2026, supports the goal of maintaining adequate capital and is comprised of privately placed reinsurance, reinsurance placed through catastrophe bond transactions, and coverage obtained through the FHCF. The 2025 occurrence XOL program has a retention threshold of $200 million of losses and allocated loss adjustment expenses (ALAE) for the first event outside of Florida and $75 million for an event in Florida. The Florida retention is lower due to a Florida-only XOL layer generally providing up to $125 million of coverage in excess of the $75 million retention threshold and mandatory FHCF coverage. For losses that exceed $200 million, we also retain a percent of the first reinsurance layer, up to $48 million, after applying FHCF coverage. We may be responsible for additional losses if we experience more than two such events or if claims incurred exceed the maximum coverage limits of the reinsurance that is then in place. The coverage limits, net of retention but including the shared limit coverage discussed below, in place at December 31, 2025, were as follows:

•$2.2 billion for a first event in Florida; and

•$2.0 billion for a first event outside of Florida.

The coverage limits above were reduced by $70 million effective January 8, 2026, with the maturation of a catastrophe bond. Portions of the reinsurance coverage limits above only provide coverage for hurricanes and tropical storms as designated by the U.S. National Weather Service (named storms).

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Coverage for a second event (and, potentially, for subsequent covered events) under the occurrence XOL program would depend on several factors, including the location and the extent of covered losses of the earlier events in the contract period. Portions of our program include reinstatement limits providing coverage for subsequent events. Some portions of our occurrence XOL program have an obligatory reinstatement of coverage. Reinstatement premiums would have no effect on our results of operations since, per our contracts, we have separate reinsurance to cover these situations. During 2025, no losses were ceded under the occurrence XOL program that is currently in place or the occurrence XOL that was in place from June 1, 2024 through May 31, 2025.

Included in the occurrence XOL, from June 1, 2025 through December 31, 2025, we had shared limit coverage in our reinsurance program that provided $175 million of coverage for named storms. This reinsurance arrangement can, depending on the circumstances, provide additional coverage for a significant covered event, or provide coverage for aggregate losses under our occurrence XOL retention. During 2025, no losses were ceded under this “hurricane season” coverage. We have renewed this coverage from May 31, 2026 through December 31, 2026 (i.e., the 2026 hurricane season) for $175 million of coverage.

During 2025, our personal property business also had an aggregate XOL program structure with multiple layers providing coverage for catastrophe losses and ALAE. No losses were ceded under this aggregate XOL agreement during 2025. In January 2026, we entered into a new aggregate XOL for claims occurring in 2026. The layers for the aggregate XOL programs active in 2025 and 2026 provided coverage, as follows:

For 2026, all layers include coverage for named storms and other types of perils (e.g., wildfires, winter storms, and severe thunderstorms). Any one portion of the aggregate XOL program does not have to be exhausted before the other portions can be applied.

The 2025 severe convective storm modeled loss aggregate XOL program, that provided $15 million of coverage, net of a retention of $665 million, was not renewed for 2026.

Beginning in 2026, we have an occurrence XOL program covering our special lines boat product, which provides coverage from January 1, 2026, through December 31, 2026. This program provides $150 million of coverage for named windstorms in excess of a $225 million per event retention. Portions of the boat XOL program include reinstatement limits providing coverage for subsequent events.

Commercial Lines Programs

The reinsurance program in our Commercial Lines business is designed to help manage certain exposures in our commercial auto, TNC, BOP, and workers’ compensation products. Our Commercial Lines business uses quota-share reinsurance agreements for TNC, and certain workers’ compensation and BOP product coverages. We also have XOL reinsurance agreements for higher-limit commercial auto liability, and certain BOP and workers’ compensation product coverages, which reinsure a portion of loss above a retention threshold. Under each agreement, we cede a portion of premiums, losses, and, in most cases, loss adjustment expenses (LAE).

For the large fleet commercial auto business, we retain the first $1 million, per occurrence, and have a coverage limit, net of retention, of up to $4 million. The retention threshold for the BOP XOL agreement is $2 million, for each property loss, with a coverage limit up to $4 million. Lastly, for the workers’ compensation product, we have catastrophe workers’ compensation coverage up to $74 million per occurrence pursuant to a $20 million maximum one-life sublimit. In general, we retain approximately $1 million per occurrence on workers’ compensation through the use of XOL and quota-share reinsurance.

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For our TNC product, the amounts retained vary by state and cost-sharing agreements are in place with companies owned by the TNC company. 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.

Program Evaluation

We evaluate our reinsurance programs during our renewal discussions, if not more frequently, to ensure they continue to effectively address the company’s risk tolerance. We plan to continue to assess our ability to assume more risk with the availability and costs of various types of reinsurance contracts. See Item 1A, Risk Factors – II. Insurance Risks and – VI. Credit and Other Financial Risks below and Note 7 – Reinsurance in our 2025 Annual Report to Shareholders, which is filed as Exhibit 13 to this Form 10-K (the Annual Report) for more information.

Claims

Our employees handle nearly all of our Personal Lines vehicle and Commercial Lines claims from either physical claims offices throughout the U.S. or through a virtual environment, and are supported by centralized functions at our corporate offices and a nationwide network of about 4,700 third-party repair shops. During 2025, we used independent claim adjusters opportunistically in our vehicle businesses to help support our claim employees in managing our claims inventory and to timely respond to our customers impacted by certain catastrophe events. While not intended to be a significant part of our claims handling model for these businesses, we may use independent adjusters from time to time.

For our Personal Lines property business, we manage claims through a network of independent claim field adjusters and employee claim representatives who manage the overall claims process. As of December 31, 2025, we had about 1,270 claims employees to handle our personal property claims.

Competitive Factors

The insurance markets in which we operate are highly competitive. Property-casualty insurers generally compete on the basis of price, agent commission rates, consumer brand recognition and confidence, coverages offered and other product features, claims handling, financial stability, customer service, and geographic coverage. Vigorous competition is provided by large, well-capitalized national companies in both the agency and direct channels, and by smaller regional insurers. In the agency channel, some of our competitors have broad distribution networks of employed or captive agents. With widely available comparative rating services, consumers can easily compare prices among competitors. Due to the highly competitive nature of the property-casualty insurance markets in which we operate, many competitors invest heavily in advertising and marketing efforts and/or expanding their online or mobile service offerings.

We rely heavily on technology to operate our business and on extensive data gathering and analysis to segment markets and price our products accurately according to risk. We have remained competitive by refining our risk measurement and price segmentation skills, closely managing expenses, and achieving operating efficiencies. High-quality customer service, fair and accurate claims adjusting, and strong brand recognition are also important factors in our competitive strategy. Competition in our insurance markets is also affected by the pace of technological developments. An insurer’s ability to adapt to change, innovate, develop, implement and use new applications and other technologies can affect its competitive position. In addition, our competitive position could be adversely impacted if we, or one of our third-party vendors, experience a cybersecurity attack or incident or we are unable to maintain uninterrupted access to our systems, business functions, and the systems of certain third-party providers. See Item 1A, Risk Factors and Item 1C, Cybersecurity below for more information.

In addition, there continues to be a proliferation of patents related to new ways in which technologies can affect competitive positions in the insurance industry. Several of our competitors have many more patents than we do. Some of the patents we currently hold include two patents on the Name Your Price® functionality on our website (expiring in 2028 or after), a usage-based insurance patent (expiring in 2032 or after), three multi-product quoting patents (expiring in 2032 or after), three patents for our implementation of a mobile insurance platform and architecture (expiring in 2032 or after), a patent on our system of providing customized insurance quotes based on a user’s price and/or coverage preferences (expiring in 2033 or after), two patents for our loyalty call routing system (expiring in 2033 or after), two patents for a multivariate predictive system that processes usage-based data (expiring in 2035 or after), four patents for the implementation of chatbots in online quoting and servicing (expiring in 2038 or after), two patents for our Commercial Lines business classification system (expiring in 2039 or after), three patents for our automated document classification system (expiring in 2040 or after), and two patents for embedded quoting (expiring in 2043 or after).

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We have a substantial amount of “know-how” developed from years of experience with usage-based insurance, and from analyzing the data from billions of driving miles derived from our usage-based devices and our mobile app. We believe this intellectual property provides us with a competitive advantage in the usage-based insurance market.

Insurance Licenses

Our insurance subsidiaries operate under licenses issued by various insurance regulatory authorities. These licenses may be of perpetual duration or renewable periodically, provided the holder continues to meet applicable regulatory requirements. Our licenses govern the kinds of insurance coverages that may be written by our insurance subsidiaries in the issuing jurisdiction. Such licenses are normally issued only after the filing of an appropriate application and the satisfaction of prescribed criteria. All licenses that are material to our subsidiaries’ businesses are in good standing.

Insurance Regulation

Our insurance subsidiaries are generally subject to regulation and supervision by insurance departments of the jurisdictions in which they are domiciled or licensed to transact business. At least one of our insurance subsidiaries is licensed and subject to regulation in each of the 50 states, the District of Columbia, Bermuda, and Canada and its provinces. We also have subsidiaries that write excess and surplus lines, which are regulated in a different fashion that generally offers additional product flexibility. The nature and extent of such regulation and supervision varies from jurisdiction to jurisdiction. Generally, an insurance company is subject to a higher degree of regulation and supervision in its jurisdiction of domicile. Our domestic insurance subsidiaries are domiciled in the states of Florida, Illinois, Indiana, Louisiana, Michigan, New Jersey, New York, Ohio, Texas, and Wisconsin. In addition, California and Florida treat certain of our subsidiaries as domestic insurers for certain purposes under their “commercial domicile” laws.

Insurance laws impose numerous requirements, conditions, and limitations on the operations of insurance companies. Insurance departments have broad regulatory powers relating to those operations. Regulated areas include, among others:

•licensing of insurers and agents,

•capital and surplus requirements,

•restrictions on marketing,

•statutory accounting principles specific to insurance companies and the content of required financial and other reports,

•requirements for establishing insurance reserves,

•investments,

•acquisitions of insurers and transactions between insurers and their affiliates,

•limitations on rates of return or excess profitability,

•rating criteria, rate levels, and rate changes,

•insolvencies of insurance companies,

•assigned risk programs,

•authority to exit a business, and

•numerous requirements relating to other areas of insurance operations, including: required coverages, policy forms, policy cancellations and non-renewals, underwriting standards, and claims handling.

Insurance departments are authorized to conduct periodic and other examinations of regulated insurers’ financial condition and operations to monitor the financial stability of the insurers and to ensure adherence to statutory accounting principles and compliance with insurance laws and regulations. In addition, in some jurisdictions, the attorney general’s office may exercise certain supervisory authority over insurance companies and, from time to time, may investigate certain insurance company practices.

Insurance departments establish and monitor compliance with capital and surplus requirements. One prominent ratio monitored by regulators is the amount of net premiums written as a ratio of surplus. Although the ratio of written premiums to surplus that the regulators will allow is a function of a number of factors (including applicable laws, the type of business being written, the adequacy of the insurer’s reserves, and the quality of the insurer’s assets), the annual net premiums that an insurer may write historically have been perceived to be limited to a specified multiple of the insurer’s total surplus, generally 3 to 1 for property and casualty insurance, which is generally the target for our vehicle businesses; however, two states have permitted us to target a premiums-to-surplus ratio for our personal vehicle insurance companies to a maximum ratio of 3.5 to 1 based on our strong financial condition. For 2025, these subsidiaries represented 91% of our companywide total net premiums written. Our personal property business maintains a lower premiums-to-surplus ratio. Thus, the amount of an insurer’s statutory surplus, in certain cases, may limit its ability to grow its business. At year-end 2025, we had net premiums written of $83.2 billion and statutory

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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. In addition, as of January 31, 2026 we had access to $5.5 billion of securities held in a non-insurance subsidiary, portions of which could be contributed to the capital of our insurance subsidiaries to support growth or for other purposes.

The National Association of Insurance Commissioners (NAIC) also has developed a risk-based capital (RBC) program to enable regulators to identify and take appropriate and timely regulatory actions relating to insurers that show signs of weak or deteriorating financial condition. RBC is determined by a series of dynamic surplus-related formulas that contain a variety of factors that are applied to financial balances based on the degree of certain risks, such as asset, credit, and underwriting risks. At December 31, 2025, our RBC ratios were in excess of minimum requirements.

Insurance companies are generally required to file detailed annual and other reports with the insurance department of each jurisdiction in which they conduct business. These reports include:

•the insurer’s financial statements under statutory accounting principles,

•details concerning claims reserves held by the insurer,

•specific investments held by the insurer, and

•numerous other disclosures about the insurer’s financial condition and operations.

Insurance laws and insurance departments also regulate investments that insurers are permitted to make. Limitations are placed on the amounts an insurer may invest in a particular issuer, as well as the aggregate amount an insurer may invest in certain types of investments. Certain investments are prohibited.

Insurance holding company laws enacted in many jurisdictions authorize insurance departments to regulate acquisitions of insurers and certain other transactions and to require periodic disclosure of specified information. These laws impose prior approval requirements for certain transactions between insurers and their affiliates and generally regulate dividend and other distributions, including loans and cash advances, between insurers and their affiliates. See Note 8 – Statutory Financial Information in the Annual Report for further discussion.

Under insolvency and guaranty laws, insurers can be assessed or required to contribute to applicable guaranty funds to cover policyholder losses resulting from the insolvency of other insurers. Insurers are also required by many jurisdictions, as a condition of doing business in the jurisdiction, to provide coverage to certain risks that cannot find coverage in the voluntary market. These “assigned risk” plans generally specify the types of insurance and the level of coverage that must be offered to such involuntary risks, as well as the allowable premium. Many jurisdictions also have involuntary market plans, which hire a limited number of servicing carriers to provide insurance to involuntary risks. These plans, through assessments, pass underwriting and administrative expenses on to insurers that write voluntary coverages in those jurisdictions.

Many jurisdictions have laws and regulations that limit an insurer’s ability to exit a market. For example, certain jurisdictions limit an insurer’s ability to cancel or non-renew policies. Certain jurisdictions also prohibit an insurer from withdrawing one or more lines of business from the jurisdiction, except pursuant to a plan that is approved by the jurisdiction’s insurance department. The insurance department may disapprove a plan that may lead to market disruption. Laws and regulations that limit the cancellation or non-renewal of policies, or that subject program withdrawals to prior approval requirements, may delay or restrict an insurer’s ability to exit unprofitable markets or businesses.

As mentioned above, insurance departments have regulatory authority over many other aspects of an insurer’s insurance operations, including coverages, forms, rating criteria, and rate levels. The ability to implement changes to these items on a timely basis is critical to our ability to compete effectively in the marketplace. Rate regulation varies from “use and file,” to “file and use,” to “prior approval.”

Regulation of insurance constantly changes as real or perceived issues and developments arise. Some changes may be due to economic developments, such as changes in investment laws made to recognize new investment products or to respond to perceived investment risks, while others reflect concerns about consumer privacy, insurance availability, prices, allegations of unfair-discriminatory pricing, underwriting practices, and solvency. 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. In addition, from time to time, the U.S. Congress and certain federal agencies have investigated the current condition of the insurance industry to determine whether federal regulation is necessary. The Federal Insurance Office is required to collect information about the insurance industry and monitor the industry for systemic risk.

See Item 1A, Risk Factors below for more information.

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Investments

Our investment portfolio, which had a fair value of $97.4 billion at December 31, 2025, compared to $80.3 billion at December 31, 2024, consists of fixed-maturity securities, short-term investments, and equity securities (nonredeemable preferred stocks and common equity securities). Our fixed-maturity securities, short-term investments, and nonredeemable preferred stocks are collectively referred to as fixed-income securities. Our principal investment goals are to manage our portfolio on a total return basis to support all of the insurance premiums that we can profitably write and contribute to our comprehensive income. In our actively managed fixed-income securities portfolio, we believe that, in addition to many traditional considerations of fixed-income investing, there is less risk in securities that score higher across various environmental, social, and governance factors. Therefore, we consider these assessments when evaluating these investment decisions. Our portfolio is invested primarily in short-term and intermediate-term, investment-grade fixed-income securities.

Investment income is affected by the variability of cash flows to or from the portfolio, shifts in the type and quality of investments in the portfolio, changes in yield, and other factors. For securities related to our investment portfolios, total investment income includes interest, dividends, accretion, amortization, and total net realized gains (losses) on securities. Total investment income, before expenses and taxes, was $4.3 billion in 2025, $3.1 billion in 2024, and $2.3 billion in 2023. On a pretax total return basis (i.e., total investment income plus changes in net unrealized gains (losses) on our fixed-maturity securities), our investment portfolio generated investment income of $6.2 billion in 2025, $3.3 billion in 2024, and $3.8 billion in 2023. For more detailed discussion of our investment portfolio, see Note 2 – Investments, Note 3 – Fair Value, and Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Annual Report.

Service Businesses

Our service businesses, which represented less than 1% of our total revenues at December 31, 2025, 2024, and 2023, and did not have a material effect on our overall operations, primarily include our commission- or fee-based businesses, where we often act as an agent for other insurance companies. We offer home, condominium, and renters insurance, among other products, written by affiliated and unaffiliated insurance companies in almost all states in the direct channel. We also offer our customers the ability to package their commercial auto coverage with other commercial coverages that are written by unaffiliated insurance companies. We receive commissions for the policies written under this program and allocate marketing and other servicing costs associated with maintaining these programs.

Liability for Property-Casualty Losses and Loss Adjustment Expenses

The consolidated financial statements include the estimated liability for unpaid losses and LAE, which include ALAE (e.g., defense and cost containment expenses) and unallocated LAE (e.g., adjusting and other expenses), of our insurance subsidiaries. Our objective is to ensure that total reserves (i.e., case reserves and incurred but not recorded reserves, or IBNR) are adequate to cover all loss costs, while sustaining minimal variation from the time reserves are initially established until losses are fully developed. The liabilities for losses and LAE are determined using actuarial and statistical procedures and represent undiscounted estimates of the ultimate net cost of all unpaid losses and LAE incurred through the end of the period. These estimates are subject to the effect of future trends on claims settlement, among other factors.

These estimates are regularly reviewed and adjusted as experience develops and new information becomes known. Adjustments, if any, relating to accidents that occurred in prior years are reflected in the current year results of operations and are referred to as “development” of the prior year estimates. In establishing loss reserves, we take into account projected changes in claim severity caused by a number of factors that vary with the individual type of policy written. This severity is projected based on historical trends, adjusted for anticipated changes in underwriting standards, inflation, policy provisions, claims resolution practices, and general economic trends. These anticipated trends are reconsidered periodically based on actual development and are modified if necessary.

See Note 6 – Loss and Loss Adjustment Expense Reserves in the Annual Report for a detailed discussion of our loss reserving practices and a reconciliation of our loss and LAE reserve activity, along with incurred and paid claims development by accident year for our segments, based on definitions pursuant to statutory accounting principles.

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Human Capital

We believe that our people and our culture remain our most significant competitive advantage, and that having the right people working together in the right way is critical to driving our results, building our enduring business, and creating long-term shareholder value. Our culture is deeply rooted in our Core Values (Integrity, Golden Rule, Excellence, Objectives, and Profit) and is the foundation for our human capital management strategies to attract, hire, engage, and retain highly qualified employees.

Our People

We believe that our culture and continued success has enabled us to create a workplace composed of highly talented people across diverse markets and with a broad range of backgrounds and experiences. They create innovative products and services, serve our customers, and work hard to help us achieve our vision.

Attract and Hire

We employ extensive recruiting practices with a goal of developing qualified and deep candidate pools and attracting candidates from both established and new sources. We believe that our recruitment efforts generally have enabled us to present pools of high-potential job candidates to our hiring managers. In turn, we train our hiring managers to identify and avoid unconscious biases they may have during the interview and selection process. We also train our hiring managers on the importance of employing individuals with different kinds of backgrounds, experiences, perspectives, and skills. We believe these strategies collectively enhance our ability to hire the best candidate for each of our openings and contribute to our continued success.

Engage and Retain

We appreciate that engaged employees are more productive, provide better service to our customers, and are more likely to stay with Progressive. Each year, we survey our people to measure their engagement. Our 2025 engagement and culture survey results placed us in the top 1% of all companies using the survey, which is designed by a nationally-known third party and administered in like form to over 1,000 employers in the United States. We use the results, along with other information, to evaluate our human capital strategies and the health of our culture.

Employee retention is an important part of our strategy. As of December 31, 2025, our annualized retention rate was 90%, up 1% from the prior year, and more than 18,000 employees had over 10 years of tenure at the company. Promoting from within also is a key part of our strategy. Many of our leaders, including all executive team members, joined Progressive in a more junior position and advanced to significant leadership positions within the organization. In 2025, we filled over 81% of our open positions above entry level by hiring from within, including just over 2,200 managerial positions. As of December 31, 2025, we had about 70,000 employees. We disclose our consolidated EEO-1 data on our website.

Supporting our People and Culture

We strive to support our employees by providing challenging work experiences, career opportunities, and a culture of learning. We aim to provide a work environment that enables employees to present innovative ideas, share differing viewpoints, and constructively challenge assumptions. We believe this approach has helped the company expand and grow our businesses and create additional career opportunities for our employees.

Training and Development

We are focused on coaching and development, which we believe promotes greater engagement in our business and improves individual performance. We actively foster a learning culture and offer several leadership development programs, including a program open to employees with a focus on leading inclusively. Two of our career development boot camps (IT Programmer and Analyst) are intended to increase job learning and accelerate career opportunities. Moreover, we endeavor to provide employees with the tools and support to excel in their roles and build long-term careers at the company. Our professional development resource, “Career Central,” encourages employees to take control of their careers through career exploration guides, video insights, sample career journeys, discovery questionnaires to guide employees to roles that match their skills, and more. Available to new and tenured employees, our learning solutions are tailored to both individual contributors and leaders and cover a broad swath of skills and competencies. We also leverage our extensive contemporary art collection to offer training sessions to spark conversations about our culture, innovation, ethical obligations, and respecting our differences, among other things.

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Employee Resource Groups

Our first Employee Resource Groups (ERGs) were created in 2007 to help build communities for our employees and drive business impact. We have nine inclusive ERGs (Asian American Network, Disabilities Awareness Network, LGBTQ+ Network, Military Network, Network for Empowering Women, Parent Connection, Progressive’s African American Network, Progressive’s Latin American NETworking Association, and Young Professionals Network), and each one is open to all employees at the company. We believe our ERGs provide spaces for networking, understanding differences, and sharing experiences. In addition to enhancing our work environment, we believe our ERGs give the company valuable insights to better serve our customers. Nearly 44% of Progressive people belong to at least one ERG as of December 31, 2025. Additionally, we believe that ERG members are more engaged and more likely to stay with the company; as of December 31, 2025, their annualized employee retention rate was 94%, compared to 87% for non-ERG members.

Ethics

Our Core Values are the foundation for our Code of Business Conduct and Ethics, which provides clear expectations for all our people and confirms our commitment to high ethical standards and compliance with legal requirements. We provide ethics training, as well as regular communications, video series, and outside speakers presenting on themes such as Celebrate Disagreement, Core Conversations, and Courage at our Core, to emphasize our commitment to our ethical and legal responsibilities. Additionally, we have an “open door” policy that empowers every employee to reach out to any manager or any human resources representative when they have a question or concern or they want to share an idea. We also provide a confidential Alertline that is available for employees and others who want to raise a concern anonymously. We encourage our people to speak up, and when they do, we give timely attention to their concerns, take remedial action where appropriate, and do not discriminate or retaliate against them for reporting any concern to us in good faith.

Compensation and Benefits

We seek to provide competitive pay through a combination of fixed and variable compensation and have designed our compensation programs for employees to earn above market total compensation when company performance warrants it. We publish, internally, our competitive annualized base pay ranges and annual cash incentive targets for virtually all of our positions. As part of employee compensation, nearly all Progressive people participate in our annual cash incentive program, named Gainshare, which measures the growth and profitability of our insurance businesses. We believe Gainshare contributes to the cooperative and collaborative way we work together and, in part, defines our culture. Our executives and other senior leaders also receive compensation in the form of equity awards, which we believe supports a strong pay-for-performance linkage and further aligns their interests with those of our shareholders. We monitor overall pay equity among employees with similar performance, experience, and job responsibilities, and publish the results annually on our website.

Our employee benefits are intended to be competitive and to support the needs of our people and their families. We invest in the health and wellbeing of Progressive people by providing a broad range of benefits, including: medical, prescription drug, dental, and vision benefits; a 401(k) plan with up to a 6% company match; life insurance; long- and short-term disability insurance; and paid parental leave following birth, adoption, or placement of a foster child. Our health and wellness offerings include on-site fitness centers, medical clinics, and health seminars. We provide several on-site and online offerings, such as fitness classes and health discussions, to meet the needs of our employees who are working remotely. We continue to offer a variety of health and wellness programs accessible to employees working from the office or remotely. We also offer an Employee Assistance Program that provides 24-hour support, flexible work arrangements, and provide paid time off to help our people balance their work and personal lives.

Supporting An Inclusive Workplace

We believe that in order to be consumers’, agents’, and business owners’ number one destination for insurance and other financial needs, we need to anticipate and understand the needs of our customers. Therefore, we aspire to take full advantage of the rich diversity of our employees’ unique backgrounds, experiences, perspectives, skills, and talents.

We’re committed to creating an environment where all our people feel welcomed, valued, and respected, and we integrate this commitment into our workplace. We support inter-cultural and inter-personal awareness among our employees by offering formal training sessions and workshops focused on building our overall awareness and individual competencies to address difficult topics and foster an inclusive culture. This includes hosting regular IQ Inclusion QuarterlySM events which feature a series of speakers, discussion groups, and storytelling focused on themes such as embracing vulnerability and increasing collaboration. We also have companywide Courageous Conversations and Speakers Bureau programs, where presenters and facilitators lead work teams in discussions around topics such as the development of inclusive behaviors.

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We support efforts to contribute to our communities, through our Keys to Progress® program (which provides vehicles to veterans and veteran-related organizations), and by supporting programs which furnish homes for individuals emerging from homelessness, our various education and engagement efforts, and our financial contributions to various community organizations.

For over 20 years, we also have contributed to The Progressive Insurance Foundation. Through the Name Your Cause® program, each employee can recommend an eligible charity to receive a fixed amount of the Foundation’s charitable giving without requiring the employee to make an out-of-pocket donation. This is the Foundation’s way of supporting causes and reaching communities across the country where our people, and our customers, live and work. Since 2020, Progressive has also contributed, either directly or through the Foundation, to national charitable organizations identified by our ERGs.

Available Information

Our website is located at progressive.com. Except as expressly noted herein, the information on this website is not incorporated by reference in, and does not form part of, this Form 10-K. As soon as reasonably practicable, we make all documents that we file with, or furnish to, the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to these reports, available free of charge via our website at progressive.com/investors. These reports are also available on the SEC’s website: https://www.sec.gov. Information on our website does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Progressive filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent we specifically incorporate such information by reference in such a filing.

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