AM Best Affirms Credit Ratings of The Progressive Corporation and Its Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) of the members of The Progressive Corporation (Progressive) (Mayfield Village, OH) [NYSE: PGR]. Additionally, AM Best has affirmed the Long-Term ICR of “a” (Excellent) of Progressive, the parent holding company, and all of the Long-Term Issue Credit Ratings (Long-Term IR) of Progressive’s senior unsecured issuances. Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) of Protective Insurance Company (Carmel, IN) and its wholly owned subsidiaries, collectively known as Protective Insurance Corporation Group (Protective). AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of National Continental Insurance Company (National Continental) (Bohemia, NY). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)

The ratings of Progressive reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favorable business profile and appropriate enterprise risk management (ERM).

Progressive’s risk-adjusted capitalization, considered strongest, as measured by Best’s Capital Adequacy Ratio (BCAR), traditionally benefits from consistently favorable underwriting results and reliable levels of investment income. In addition, Progressive continues to experience strong premium growth, reflective of its widespread brand recognition and sophisticated pricing algorithms that incorporates detailed segmentation. Based on its five-year combined ratio average, Progressive continues to outperform AM Best’s private passenger standard auto composite despite the impact of inflation and supply chain issues throughout the automobile insurance industry. These results consistently leverage advanced underwriting and claims-handling technology; the latter exemplified by the continued refinement and incorporation of usage-based technologies. Notably, the property segment reported a sub-100 combined ratio in 2023, reflective of a concerted effort by management to rebalance exposure accumulations in light of recent weather-related challenges.

The group reported $5.1 billion in comprehensive income in 2023, considerable improvement from a $2.1 billion comprehensive loss in 2022. The favorable shift is due to stronger underwriting and investment incomes, as well as $1.2 billion in net unrealized gains related to fixed-maturity securities. Partially offsetting results were the emergences of more material unfavorable loss reserve development than in prior years, primarily stemming from higher severity of private passenger auto physical damage claims, an increase in litigated auto claims in Florida ahead of new legislation taking effect as well as unfavorable development related to the transportation network company business. In the two prior years, one-year loss reserve development had been slightly favorable. Progressive also maintains high underwriting leverage relative to industry averages; however, it has done so traditionally while consistently producing favorable underwriting results with low levels of volatility.

The ratings of Protective reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. Additionally, the ratings reflect the strategic advantages that the members gain through their affiliation with Progressive.

The ratings of National Continental reflect its balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate ERM. Additionally, the ratings recognize the financial strength, infrastructure and technological capabilities afforded as a subsidiary of Progressive.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa” (Superior) have been affirmed with stable outlooks for the following members of The Progressive Corporation:

• Progressive Casualty Insurance Company
• Progressive Northern Insurance Company
• Progressive Northwestern Insurance Company
• Progressive Specialty Insurance Company
• Progressive Preferred Insurance Company
• Progressive Classic Insurance Company
• Progressive American Insurance Company
• Progressive Gulf Insurance Company
• Progressive Bayside Insurance Company
• Progressive Mountain Insurance Company
• Progressive Southeastern Insurance Company
• Progressive Hawaii Insurance Corp.
• Progressive Michigan Insurance Company
• Progressive Security Insurance Company
• Drive Insurance Company
• Progressive County Mutual Insurance Company
• Progressive Direct Insurance Company
• Progressive Marathon Insurance Company
• Progressive Max Insurance Company
• Progressive Advanced Insurance Company
• Progressive Universal Insurance Company
• Progressive Premier Insurance Company of Illinois
• Progressive Paloverde Insurance Company
• Progressive Select Insurance Company
• Progressive Garden State Insurance Company
• Progressive Express Insurance Company
• Progressive Property Insurance Company
• Progressive Choice Insurance Company
• Progressive Freedom Insurance Company
• Artisan and Truckers Casualty Company
• American Strategic Insurance Corp.
• ASI Assurance Corp.
• ASI Home Insurance Corp.
• ASI Lloyds
• ASI Preferred Insurance Corp.
• ASI Select Insurance Corp.
• Blue Hill Specialty Insurance Company
• Drive New Jersey Insurance Company
• Mountain Laurel Assurance Company
• United Financial Casualty Company

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for Protective Insurance Company and its wholly owned subsidiaries:

• Sagamore Insurance Company
• Protective Specialty Insurance Company

The FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) have been affirmed with a stable outlook for National Continental Insurance Company.

The Long-Term ICRs of “a” (Excellent) and the following Long-Term IRs of The Progressive Corporation have been affirmed with stable outlooks:

The Progressive Corporation—

-- “a” (Excellent) on $500 million 2.45% senior unsecured notes, due 2027

-- “a” (Excellent) on $500 million 2.50% senior unsecured notes, due 2027

-- “a” (Excellent) on $300 million 6.625% senior unsecured notes, due 2029

-- “a” (Excellent) on $550 million 4.00% senior unsecured notes, due 2029

-- “a” (Excellent) on $500 million 3.20% senior unsecured notes, due 2030

-- “a” (Excellent) on $400 million 6.25% senior unsecured notes, due 2032

-- “a” (Excellent) on $500 million 3.00% senior unsecured notes, due 2032

-- “a” (Excellent) on $500 million 4.95% senior unsecured notes, due 2033

-- “a” (Excellent) on $350 million 4.35% senior unsecured notes, due 2044

-- “a” (Excellent) on $400 million 3.70% senior unsecured notes, due 2045

-- “a” (Excellent) on $850 million 4.125% senior unsecured notes, due 2047

-- “a” (Excellent) on $600 million 4.20% senior unsecured notes, due 2048

-- “a” (Excellent) on $500 million 3.95% senior unsecured notes, due 2050

-- “a” (Excellent) on $500 million 3.70% senior unsecured notes, due 2052

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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