10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

ý Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2015

or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from __________to__________             

Commission file number 1-9518

THE PROGRESSIVE CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-0963169
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
6300 Wilson Mills Road, Mayfield Village, Ohio	44143
(Address of principal executive offices)	(Zip Code)

(440) 461-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Shares, $1.00 Par Value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ý  Yes    ¨  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    ¨  Yes    ý  No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     ý  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý  Yes    ¨  No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ¨  Yes    ý  No

The aggregate market value of the voting common shares held by non-affiliates of the registrant at June 30, 2015: $16,089,731,768

The number of the registrant’s Common Shares, $1.00 par value, outstanding as of January 31, 2016: 584,328,057

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for the Annual Meeting of Shareholders to be held on May 13, 2016, and the Annual Report to Shareholders of The Progressive Corporation and subsidiaries for the year ended December 31, 2015, included as Exhibit 13 to this Form 10-K, are incorporated by reference in Parts I, II, III, and IV hereof.

PART I

ITEM 1. BUSINESS

(a) General Development of Business

The Progressive insurance organization began business in 1937. The Progressive Corporation, an insurance holding company formed in 1965, currently has insurance and non-insurance subsidiaries and affiliates. Our insurance subsidiaries and affiliates provide personal and commercial automobile and property insurance, other specialty property-casualty insurance and related services. Our vehicle insurance products protect our customers against losses due to collision and physical damage to their motor vehicles, uninsured and underinsured bodily injury, and liability to others for personal injury or property damage arising out of the use of those vehicles. Our property insurance products protect our customers against losses due to damages to their structure or possessions within the structure, as well as liability for accidents occurring in the structure or on the property. Our non-insurance subsidiaries and affiliates generally support our insurance and investment operations. We operate our vehicle businesses and our property business in a majority of the United States; we also sell personal auto physical damage and auto property damage liability insurance in Australia.

In April 2015, The Progressive Corporation acquired a controlling interest in ARX Holding Corp. (“ARX”), the parent company of American Strategic Insurance and other insurance subsidiaries and affiliates (“ASI”), and we now write property insurance for homeowners, other property owners, and renters. As a result of this acquisition, as of the acquisition date, we began reporting this business as a separate segment. The Progressive Corporation and the other continuing ARX stockholders and stock option holders are parties to a stockholders’ agreement, which addresses the parties’ respective rights and obligations. Among other provisions, the stockholders’ agreement allows, and in certain circumstances requires, The Progressive Corporation to acquire 100% of the outstanding equity of ARX by the end of 2021. These provisions are described in Note 16 - Redeemable Noncontrolling Interest to our financial statements included in our 2015 Annual Report to Shareholders, which is filed as Exhibit 13 to this Form 10-K (the “Annual Report”). Until The Progressive Corporation owns 100% of the outstanding equity of ARX, the interests of the minority stockholders in ARX’s income and assets are reflected in our financial statements as noncontrolling interest.

(b) Financial Information About Segments

Incorporated by reference from Note 10 - Segment Information in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

(c) Narrative Description of Business

We had net premiums written of $20.6 billion in 2015, compared to $18.7 billion in 2014, and $17.3 billion in 2013. Our combined ratio, which we calculate by dividing the sum of our loss and loss adjustment expenses, policy acquisition costs, and other underwriting expenses, less fees and other revenues, by our net premiums earned, was 92.5 in 2015, 92.3 in 2014, and 93.5 in 2013.

Organization

Our operations are run by our executive team, which consists of our Chief Executive Officer and the heads of our major business areas that report to him: a Chief Financial Officer, Personal Lines Chief Operating Officer (PLCOO), President of Commercial Lines, Chief Investment Officer, Chief Legal Officer, Chief Information Officer, Chief Human Resource Officer, and Chief Marketing Officer; and the Presidents of Personal Lines, Claims, and Customer Relationships, each of whom report to the PLCOO. Our Property business is headed by the President and Chief Executive Officer of ARX, who reports to the ARX Board of Directors; we appoint three of the five members of the ARX Board. 

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 as appropriate.  State-specific organizations typically report to a regional manager, who then reports to the applicable group president. Separate managers and organizations are responsible for Australia and our California Agency operations.

Personal Lines

Our Personal Lines segment writes insurance for personal autos and recreational and other vehicles. As of December 31, 2015, we write personal auto insurance in all 50 states and the District of Columbia and we write the majority of our special lines products in all 50 states. We also write personal auto insurance in Australia.

This business generally offers more than one program in a single state, with each program targeted to a specific distribution channel, market, or customer group. The Personal Lines business accounted for 86% of total net premiums written in 2015 and

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90% in both 2014 and 2013. Our strategy is to be a competitively priced provider of a full line of auto insurance products with distinctive service, distributed through whichever channel the customer prefers. Volume potential is driven by our price competitiveness, brand recognition, service quality, and the actions of our competitors, among other factors. See “Competitive Factors” below for further discussion.

The Personal Lines segment consists of our personal auto insurance products, as well as our special lines products.

• Personal auto insurance represented approximately 92% of our total Personal Lines net premiums written in 2015 and 2014, and 91% in 2013. This business includes Snapshot^®, our usage-based insurance program, which is available to consumers through both the Agency and Direct channels in 48 states and the District of Columbia.

We ranked fourth in market share in the U.S. private passenger auto market for 2014 based on net premiums written and believe that we continued to hold that position during 2015. There are approximately 310 competitors in this market. Progressive and the other leading 15 private passenger auto insurers, each of which writes over $2.0 billion of premiums annually, comprise about 79% of this market. For 2014, the industry net premiums written for private passenger auto insurance in the United States was $183.5 billion, and our share of this market was approximately 8.9%, which was up 0.2% compared to 2013; comparable industry data is not available for 2015 at this time. All industry data, including ranking and market share, was obtained directly from data reported by either SNL Financial or A.M. Best Company, Inc. (“A.M. Best”), or was estimated using A.M. Best data as the primary source.

• Special lines products include insurance for motorcycles, ATVs, RVs, manufactured homes, watercraft, snowmobiles, and similar items, and represented about 8% of our Personal Lines business for 2015 and 2014, and 9% in 2013. Due to the 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 one of the largest providers of these products, and that we have been the market share leader for the motorcycle product since 1998. As of December 31, 2015, we also offered a personal umbrella insurance product in 37 states and the District of Columbia through certain independent agents and to Direct customers via telephone.

Our Personal Lines products are sold through both the Agency and Direct channels.

• The Agency businessincludes business written by our network of more than 35,000 independent insurance agencies located throughout the United States, including 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 company-mandated procedures. Our guidelines prescribe the kinds and amounts of coverage that may be written and the premium rates that may be charged for specified categories of risk. The agents and brokers do not have authority on behalf of Progressive to establish underwriting guidelines, develop rates, settle or adjust claims, or enter into other transactions or commitments. The Agency business also writes insurance through strategic alliance business relationships with other insurance companies, financial institutions, and national agencies. The total net premiums written through the Agency channel represented 52% of our Personal Lines volume in 2015, compared to 54% in 2014 and 56% in 2013.

• The Direct business includes business written directly by us on the Internet, through mobile devices, and over the phone. The Direct business represented 48% of our Personal Lines volume in 2015, compared to 46% in 2014 and 44% in 2013.

In our Personal Lines segment, we are continuing to focus on our efforts to further penetrate customer households through cross-selling auto policies with other products, including through Progressive Home Advantage^® (PHA), to meet a broad range of customer needs. PHA is the program in which we “bundle” our auto product with property insurance provided by ASI, primarily in the Agency channel, or unaffiliated insurance carriers in the Direct channel. In addition, we introduced the Platinum product, which is a home and auto insurance combined offering that provides the agents a single offering with compensation, coordinated policy periods, single event deductible, and other features that meet the needs and desires that our agents have expressed. Platinum is targeted to those agents who have the appropriate customers and believe our bundled offering is a "must have" for their agency. Bundled products are becoming an integral part of our consumer offerings and an important part of our strategic agenda. These customers represent a sizable segment of the market, and our experience is that they tend to stay with us longer and generally have lower claims costs.

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Commercial Lines

The Commercial Lines business writes primary liability, physical damage, and other auto-related insurance for automobiles and trucks owned and/or operated predominately by small businesses as a part of the commercial auto market. We offer these products in 49 states; we do not currently write Commercial Lines products in Hawaii or the District of Columbia. This business represented 11% of our total net premiums written in 2015, and 10% during each of the two preceding years. Our Commercial Lines customers on average insure approximately two vehicles. Even though we continue to write over 90% of our Commercial Lines business through the Agency channel, net premiums written through the Direct channel increased by 12% in 2015. The Commercial Lines business operates in the following business market targets:

• Business auto – autos, vans, and pick-up trucks used by small businesses, such as retailing, farming, services, and private trucking,

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

• Contractor – vans, pick-up trucks, and dump trucks used by small businesses, such as artisans, heavy construction, and landscapers/snowplowers,

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

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

• For-hire livery – non-fleet (i.e., five or fewer vehicles) taxis, black-car services, and airport taxis.

Although Commercial Lines differs from Personal Lines auto in its customer base and products written, both businesses require the same fundamental skills, including disciplined underwriting and pricing, as well as excellent claims service.

There are approximately 330 competitors in the total U.S. commercial auto market. We primarily compete with about 37 other large companies/groups, each with over $150 million of commercial auto premiums written annually. These leading commercial auto insurers comprise about 78% of this market. Our Commercial Lines business ranked second in the commercial auto insurance market for 2014 based on net premiums written; we expect final industry data for 2015 to show that we were ranked first in the commercial auto market for the year.

Property

ASI, one of the 20 largest homeowners carriers in the United States, specializes in personal and commercial property insurance, personal umbrella insurance, and primary and excess flood insurance. There are approximately 380 competitors in the homeowners insurance market nationwide. The top 20 carriers comprise about 76% of the market.

Our Property business writes homeowners and renters insurance, primarily in the Agency channel in 31 states and the District of Columbia for personal property insurance and in 4 states for commercial property insurance. We also write flood insurance in 37 states and D.C. Property policies are generally written on a 12-month basis. As discussed above, ASI is the exclusive provider of homeowners products for new PHA business in our Agency channel. 

Our Property business represented about 3% of our total net premiums written in 2015. We tend to see more business written during the second and third quarters based on the nature of property sales. Losses also tend to be higher during the warmer weather months when storms are more prevalent. Approximately 97% of the Property net premiums written were for policies covering personal residential property (single family homes, condominium unit owners, rental coverage, etc.), with the remaining 3% covering commercial property and other coverages. The commercial business principally includes insurance covering real estate owned by condominium and homeowners associations and similar entities, as well as apartment complexes. For 2015, Texas and Florida comprised just over half of our Property business based on premium volume.

ASI has exposure to losses from catastrophes and other severe storms. To help mitigate these risks, ASI purchases reinsurance from unaffiliated reinsurance companies (most of which are “A” rated by A.M. Best) and from a reinsurance company established as part of a catastrophe bond transaction. In addition, ASI purchases state-mandated hurricane reinsurance in Florida. With respect to 2015, approximately 26% of ASI’s premiums written were ceded, including approximately 10% ceded under catastrophe reinsurance programs.

Other Indemnity

Our other indemnity businesses consist of managing our run-off businesses, including the run-off of our professional liability business. We had only five professional liability policies in force as of December 31, 2015, although we continue to process claims on expired policies.

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Service Businesses

Our service businesses, which represent less than 1% of our total revenues and do not have a material effect on our overall operations, primarily include:

• Commercial Auto Insurance Procedures/Plans (CAIP) – We are the only servicing carrier on a nationwide basis for CAIP plans, which are state-supervised plans servicing the involuntary market in 41 states and the District of Columbia. As a service provider, we provide policy issuance and claims adjusting services and collect fee revenue that is earned on a pro rata basis over the terms of the related policies. We have an agreement with AIPSO (the national organization responsible for administering the involuntary insurance market) under which we will receive a supplemental fee, when necessary, to satisfy a minimum servicing fee requirement; this agreement is scheduled to expire on August 31, 2018. We cede 100% of the premiums and losses to the plans. Reimbursements to us from the CAIP plans are required by state laws and regulations. Material violations of contractual service standards can result in ceding restrictions for the affected business. We have maintained, and plan to continue to maintain, compliance with these standards. Any changes in our participation as a CAIP service provider would not materially affect our financial condition, results of operations, or cash flows.

• Commission-based businesses – We have two commission-based service businesses:

In our Direct business, through Progressive Home Advantage^®, we offer home, condominium, and renters insurance, among other products, written by unaffiliated insurance companies on a nationwide basis. We receive commissions for policies written under this program, all of which are used to offset the expenses associated with maintaining this program.

Through Progressive Commercial Advantage^SM, we offer our customers the ability to package their auto coverage with other commercial coverages that are written by unaffiliated insurance companies or placed with additional companies through unaffiliated insurance agencies. This program offers general liability and business owners policies throughout the continental United States and workers’ compensation coverage in 44 states as of December 31, 2015. We receive commissions for the policies written under this program, all of which are used to offset the expenses associated with maintaining this program.

Claims

We manage our vehicle claims handling on a companywide basis through approximately 215 stand-alone claims offices located throughout the United States. In addition, we operate 67 Service Centers in 51 metropolitan areas across the country, of which 53 have combined claims offices and Service Centers to improve our efficiency and manage costs. Insureds and other claimants can elect to have their vehicles repaired by their own repair shops, have their vehicles repaired by one of our network shops, or have the entire repair process coordinated by one of our Service Centers. If a customer elects to repair their vehicle through a Service Center, we provide end-to-end resolution for auto physical damage losses. Customers can choose to bring their vehicles to one of these sites, where they can pick up a rental vehicle. Our representatives will arrange the repair, including pick-up and delivery of the vehicle, and inspect the vehicle once the repairs are complete. This innovative, patented approach to the vehicle repair process increases consumer satisfaction and our productivity and improves the cycle time in comparison to our other claims settlement processes. Under the Service Center and network shop options, we guarantee the repairs for as long as the customer owns or leases their car. If a customer decides not to repair their vehicle, our representatives will write an estimate and the customer can receive payment on the spot. ASI handles property claims separately through a network primarily of independent claims adjusters.

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Competitive Factors

The automobile insurance and other property-casualty markets in which we operate are highly competitive. Property-casualty insurers generally compete on the basis of price, agent commission rates, consumer 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. Many competitors invest heavily in advertising and marketing efforts and/or expanding their online or mobile service offerings. Over the past decade, these changes have further intensified the competitive nature of the property-casualty insurance markets in which we operate.

We rely heavily on technology and extensive data gathering and analysis to segment markets and price accurately according to risk potential. We have remained competitive by refining our risk measurement and price segmentation skills, closely managing expenses, and achieving operating efficiencies. Superior 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 affected by the pace of technological developments.  An insurer’s ability to adapt to change, innovate, develop, and implement new applications and other technologies can affect its competitive position. 

In addition, there has been a proliferation of patents related to new ways in which technologies can affect competitive positions in the insurance industry. Some of our competitors have many more patents than we do. A year ago, we had eight U.S. patents, and additional patent applications pending, with respect to certain methods, systems, and devices related to usage-based insurance. Certain of these patents expired in January 2016. The other patents have been invalidated by the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office. All appeals have been exhausted. As a result of the foregoing, we no longer have any enforceable patents related to usage-based insurance. Nonetheless, we continue to have a substantial amount of “know-how” developed from years of experience with usage-based insurance, and from analyzing the data from over 15 billion driving miles derived from usage-based devices. We believe this intellectual property provides us with a competitive advantage in the usage-based insurance market. 

We also hold a U.S. patent (expiring in 2021), and have a U.S. patent application pending, on the innovative approach to vehicle repair service used in our Service Centers, as described above, and two U.S. patents (expiring in 2028) on the Name Your Price^® functionality on our website. In addition, we hold two patents (expiring in 2019) related to our online policy self-service technology. Two related patents were successfully challenged in actions filed with the PTAB (in conjunction with the proceedings described above) and all appeals have been exhausted.

State Insurance Licenses

Our insurance subsidiaries operate under licenses issued by various state insurance 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 state. 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 and the District of Columbia. 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 state of domicile. Our insurance subsidiaries and our mutual insurance company affiliate are domiciled in the states of Delaware, Florida, 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.

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State 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,

• 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 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, 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 state insurance laws and regulations. In addition, in some states, 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. Although the ratio of writings to surplus that the regulators will allow is a function of a number of factors (including applicable law, 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. Thus, the amount of an insurer’s statutory surplus, in certain cases, may limit its ability to grow its business. At year-end 2015, we had net premiums written of $20.6 billion and statutory surplus of $7.6 billion. The combined premiums-to-surplus ratio for all of our insurance companies was 2.7 to 1, reflecting a lower premiums-to-surplus ratio maintained on our Property business. In addition, as of December 31, 2015, we had access to $1.3 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 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, 2015, our RBC ratios were well 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.

State 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 the “Dividends” discussion in Item 5(c) below for further information on these dividend limitations. The scope of insurance holding company regulation has expanded as states have adopted the revised model holding company act promulgated by the NAIC in 2010.

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Under state insolvency and guaranty laws, insurers can be assessed or required to contribute to state guaranty funds to cover policyholder losses resulting from the insolvency of other insurers. Insurers are also required by many states, as a condition of doing business in the state, 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 states 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 states.

Many states have laws and regulations that limit an insurer’s ability to exit a market. For example, certain states limit an automobile insurer’s ability to cancel or non-renew policies. Certain states also prohibit an insurer from withdrawing one or more lines of business from the state, except pursuant to a plan that is approved by the state insurance department. The state 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 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 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 non-public consumer information, use of credit information in underwriting and rating, insurance rate development, rate of return limitations, and the ability of insurers to cancel or non-renew insurance policies. In addition, from time to time, the United States Congress and certain federal agencies investigate the current condition of the insurance industry to determine whether federal regulation is necessary. Since 2010, the Federal Insurance Office has been required to collect information about the insurance industry and monitor the industry for systemic risk.

In addition to our U.S. operations, we write personal auto physical damage and auto property damage liability insurance in Australia through a branch of one of our U.S. insurance subsidiaries. This insurance is primarily offered through the Internet. We do not write auto bodily injury liability or medical payment insurance in Australia. There are two primary agencies that regulate insurance in Australia: the Australian Securities and Investment Commission, which regulates consumer disclosures, and the Australian Prudential Regulatory Authority, which regulates solvency. Both agencies enforce laws within their jurisdictions, issue regulations, take enforcement actions, and, in general, have broad regulatory powers. Progressive Direct Insurance Company has been issued licenses by both agencies and the licenses are in good standing.

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Statutory Accounting Principles

Our results are reported in accordance with accounting principles generally accepted in the United States of America (GAAP), which differ in certain respects from amounts reported under statutory accounting principles (SAP) prescribed by insurance regulatory authorities. Certain significant differences are described below:

Category	GAAP Accounting	SAP Accounting
Acquisition Expenses	Commissions, premium taxes, and other variable costs incurred in connection with the successful acquisition of new and renewal business are capitalized and amortized pro rata over the policy term as premiums are earned.	Commissions, premium taxes, and all other acquisition expenses are expensed as incurred.
Non-admitted Assets	Premiums receivable are reported net of an allowance for doubtful accounts.	Premiums receivable over 90 days past due are “non-admitted,” which means they are excluded from surplus. For premiums receivable less than 90 days past due, we also estimate a bad debt reserve.
	Furniture, equipment, application software, leasehold improvements, and prepaid expenses are capitalized and amortized over their useful lives or periods benefited.	Excluding computer equipment and operating software, the value of all other furniture, equipment, application software, leasehold improvements, and prepaid expenses, net of accumulated depreciation or amortization, is non-admitted against surplus. Computer equipment and operating software are capitalized, subject to statutory limitations based on surplus, and depreciated over three years.
	Deferred tax assets are recorded based on estimated future tax effects attributable to temporary differences. A valuation allowance would be recorded for any tax benefits that are not expected to be realized.	The accounting for deferred tax assets is consistent with GAAP, except for deferred tax assets that do not meet statutory requirements for recognition, which are non-admitted against surplus.
Reinsurance	Ceded reinsurance balances are shown as an asset on the balance sheet as “prepaid reinsurance premiums” and “reinsurance recoverables.”	Ceded unearned premiums are netted against the “unearned premiums” liability. Ceded unpaid loss and loss adjustment expense (LAE) amounts are netted against “loss and LAE reserves.” Only ceded paid loss and LAE are shown as a “reinsurance recoverables” asset.
Investment Valuation	Fixed-maturity securities, which are classified as available-for-sale, are reported at fair values.	Fixed-maturity securities are reported at amortized cost or the lower of amortized cost or fair value, depending on the NAIC designation of the security.
	Preferred stocks, both redeemable and nonredeemable, are reported at fair values.	Redeemable preferred stocks are reported at amortized cost or the lower of amortized cost or fair value, depending on the NAIC designation of the security. Nonredeemable preferred stocks are reported at fair value, consistent with GAAP.
Federal Income Taxes	Federal tax expense includes current and deferred income taxes.	For income statement reporting, federal tax expense only includes the current tax provision. Deferred taxes are posted to surplus. SAP deferred tax assets are subject to certain limitations on admissibility.

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Investments

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. Our portfolio is invested primarily in short-term and intermediate-term, investment-grade fixed-income securities. Our investment portfolio had a fair value of $20.9 billion at December 31, 2015, compared to $19.0 billion at December 31, 2014. 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. Total investment income, including net realized gains (losses) on securities, before expenses and taxes, was $567.3 million in 2015, compared to $632.6 million in 2014 and $740.4 million in 2013. On a pretax total return basis (i.e., total investment income plus changes in unrealized gains/losses), investment income was $242.9 million, $747.9 million, and $870.0 million for the years ended December 31, 2015, 2014, and 2013, respectively. For more detailed discussion, 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.

Employees

The number of employees at December 31, 2015 was 28,580, all of whom were employed by subsidiaries of The Progressive Corporation, including 620 employees employed by ARX and its subsidiaries and affiliates.

Liability for Property-Casualty Losses and Loss Adjustment Expenses

The consolidated financial statements include the estimated liability for unpaid losses and loss adjustment expenses (LAE) 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 December 31 of each year. These estimates are subject to the effect of future trends on claims settlement, among other factors. These estimates are continually 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. A detailed discussion of our loss reserving practices, primarily for our vehicle businesses, can be found in our “Report on Loss Reserving Practices,” which was filed with the Securities and Exchange Commission (SEC) on Form 8-K on August 26, 2015, as well as in section “V. Critical Accounting Policies” of our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report, which is included as Exhibit 13 to this Form 10-K. The accompanying tables present information concerning our property-casualty losses and LAE.

The following table provides a reconciliation of beginning and ending estimated liability balances for the last three years:

RECONCILIATION OF NET RESERVES FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

(millions)	2015			2014			2013
Balance at January 1	$	8,857.4		$	8,479.7		$	7,838.4
Less reinsurance recoverables on unpaid losses	1,185.9			1,045.9			862.1
Net balance at January 1	7,671.5			7,433.8			6,976.3
Net loss and loss adjustment expense reserves acquired1	222.4			0			0
Total net balance at January 1	7,893.9			7,433.8			6,976.3
Incurred related to:
Current year	14,657.1			13,330.3			12,427.3
Prior years	(315.1		)	(24.1		)	45.1
Total incurred	14,342.0			13,306.2			12,472.4
Paid related to:
Current year	9,577.3			8,831.5			8,095.0
Prior years	4,062.3			4,237.0			3,919.9
Total paid	13,639.6			13,068.5			12,014.9
Net balance at December 31	8,596.3			7,671.5			7,433.8
Plus reinsurance recoverables on unpaid losses	1,442.7			1,185.9			1,045.9
Balance at December 31	$	10,039.0		$	8,857.4		$	8,479.7

¹Net reserves acquired in ARX acquisition.

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Our reserves developed favorably by $315.1 million in 2015 and $24.1 million in 2014, compared to unfavorable development of $45.1 million in 2013, which is reflected as “Incurred related to prior years” in the table above. Total development consists of net changes made by our actuarial department on prior accident year reserves, based on regularly scheduled reviews, claims settling for more or less than reserved, changes in reserve estimates by claim representatives, and emergence of unrecorded claims at rates different than anticipated.

During 2015, favorable reserve development was recognized in all of our segments, with Personal Lines accounting for about 70% and the remainder split between our Commercial Lines and Property businesses. The personal auto and Commercial Lines development was primarily related to bodily injury and uninsured motorist bodily injury coverages, due to lower than anticipated severity. For the Property business the favorable development was due to lower than anticipated frequency and severity.

During 2014, favorable reserve development in our Commercial Lines business was primarily related to favorable case reserve development on our high limit policies. This favorable development was partially offset by unfavorable development in our Agency auto business, which was primarily in our personal injury protection (PIP) loss reserves and our adjusting and other LAE reserves. Our Direct auto business experienced slight favorable development.

During 2013, unfavorable reserve development in our Commercial Lines business was primarily attributable to higher frequency and severity on late emerging IBNR claims primarily in bodily injury coverage for our truck business. In addition, unfavorable development in our Personal Lines business reflected unfavorable reserve development in our Agency auto business IBNR reserves due to higher frequency and severity on late emerging claims, offset in large part by favorable development in our Direct auto business due to lower than anticipated severity costs on case reserves. We also experienced unfavorable reserve development in our other businesses, primarily due to reserve increases in our run-off professional liability group business, based on internal actuarial reviews of our claims history.

In establishing loss reserves, we take into account projected changes in claim severity caused by anticipated inflation and a number of factors that vary with the individual type of policy written. These severities are 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.

We have not entered into any loss reserve transfers or similar transactions having a material effect on earnings or reserves.

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ANALYSIS OF LOSS AND LOSS ADJUSTMENT EXPENSES DEVELOPMENT
($ in millions)
	2005			2006			2007			2008			2009		2010		2011			2012			2013			2014		2015
Liability for Unpaid Losses and LAE-Gross	$	5,660.3		$	5,725.0		$	5,942.7		$	6,177.4		$	6,653.0	$	7,071.0	$	7,245.8		$	7,838.4		$	8,479.7		$	8,857.4	$	10,039.0
Liability for Unpaid Losses and LAE-Acquired	—			—			—			—			—		—		—			—			—			264.3		—
Liability for Unpaid Losses and LAE-Gross	5,660.3			5,725.0			5,942.7			6,177.4			6,653.0		7,071.0		7,245.8			7,838.4			8,479.7			9,121.7		10,039.0
Less: Reinsurance Recoverables on Unpaid Losses1	347.2			361.4			287.5			244.5			529.4		704.1		785.7			862.1			1,045.9			1,227.8		1,442.7
Liability for Unpaid Losses and LAE-Net2	5,313.1			5,363.6			5,655.2			5,932.9			6,123.6		6,366.9		6,460.1			6,976.3			7,433.8			7,893.9		8,596.3
Paid (Cumulative) as of:
One year later	2,662.1			2,897.4			3,036.9			3,172.0			3,047.0		3,252.3		3,536.5			3,919.9			4,237.0			4,062.3
Two years later	3,931.0			4,240.4			4,361.4			4,427.8			4,348.4		4,724.0		5,111.6			5,580.8			5,857.3			—
Three years later	4,584.7			4,856.2			4,966.1			5,031.7			5,007.9		5,459.4		5,876.1			6,304.6			—			—
Four years later	4,839.1			5,121.9			5,227.5			5,314.7			5,323.9		5,794.3		6,182.9			—			—			—
Five years later	4,948.7			5,229.0			5,340.1			5,452.0			5,467.9		5,937.0		—			—			—			—
Six years later	4,995.6			5,282.1			5,402.3			5,521.1			5,537.6		—		—			—			—			—
Seven years later	5,023.7			5,317.8			5,443.0			5,563.3			—		—		—			—			—			—
Eight years later	5,042.3			5,344.5			5,472.0			—			—		—		—			—			—			—
Nine years later	5,061.2			5,358.6			—			—			—		—		—			—			—			—
Ten years later	5,068.0			—			—			—			—		—		—			—			—			—
Liability Re-estimated as of:
One year later	5,066.2			5,443.9			5,688.4			5,796.9			5,803.2		6,124.9		6,482.1			7,021.4			7,409.7			7,578.8
Two years later	5,130.5			5,469.8			5,593.8			5,702.1			5,647.7		6,074.4		6,519.6			6,994.7			7,402.4			—
Three years later	5,093.6			5,381.9			5,508.0			5,573.8			5,575.0		6,075.9		6,495.4			6,983.2			—			—
Four years later	5,046.7			5,336.5			5,442.1			5,538.5			5,564.6		6,050.6		6,459.8			—			—			—
Five years later	5,054.6			5,342.8			5,452.8			5,580.0			5,605.6		6,097.4		—			—			—			—
Six years later	5,060.8			5,352.8			5,475.6			5,609.1			5,638.8		—		—			—			—			—
Seven years later	5,070.2			5,369.7			5,501.3			5,634.9			—		—		—			—			—			—
Eight years later	5,081.7			5,391.2			5,527.1			—			—		—		—			—			—			—
Nine years later	5,100.6			5,406.4			—			—			—		—		—			—			—			—
Ten years later	5,110.2			—			—			—			—		—		—			—			—			—
Net Cumulative Development Favorable/ (Unfavorable)	$	202.9		$	(42.8	)	$	128.1		$	298.0		$	484.8	$	269.5	$	0.3		$	(6.9	)	$	31.4		$	315.1
Percentage3	3.8			(0.8		)	2.3			5.0			7.9		4.2		—			(0.1		)	0.4			4.0
Re-estimated Liability for Unpaid Losses and LAE-Gross	$	5,725.4		$	6,076.5		$	6,217.9		$	6,368.2		$	6,451.4	$	7,041.4	$	7,442.9		$	8,081.2		$	8,592.4		$	8,882.3
Less: Re-estimated Reinsurance Recoverables on Unpaid Losses	615.2			670.1			690.8			733.3			812.6		944.0		983.1			1,098.0			1,190.0			1,303.5
Re-estimated Liability for Unpaid Losses and LAE - Net2	$	5,110.2		$	5,406.4		$	5,527.1		$	5,634.9		$	5,638.8	$	6,097.4	$	6,459.8		$	6,983.2		$	7,402.4		$	7,578.8
Gross cumulative Development: Favorable /(Unfavorable)	$	(65.1	)	$	(351.5	)	$	(275.2	)	$	(190.8	)	$	201.6	$	29.6	$	(197.1	)	$	(242.8	)	$	(112.7	)	$	239.4

¹Reinsurance Recoverables on Unpaid Losses for 2014 include $41.9 million related to the balance of ARX's reinsurance recoverables upon acquisition.

²Represents loss and LAE reserves net of reinsurance recoverables on net unpaid losses at the balance sheet date.

³Cumulative development ÷ liability for unpaid losses and LAE - net.

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The above table presents the development of balance sheet liabilities for losses and LAE from 2005 through 2014. The top line of the table shows the estimated liability for unpaid losses and LAE recorded at December 31 for each of the indicated years for the property-casualty insurance subsidiaries only. This liability represents the estimated amount of losses and LAE for claims that were unpaid at the balance sheet date, including IBNR. The table also presents the re-estimated liability for unpaid losses and LAE on a gross and net basis, with separate disclosure of the re-estimated reinsurance recoverables on unpaid losses.

The upper section of the table (labeled “Paid (Cumulative) as of”) shows the cumulative amount paid with respect to the previously recorded liability as of the end of each succeeding year. The middle portion of the table (labeled “Liability Re-estimated as of”) shows the re-estimated amount of the previously recorded liability based on experience as of the end of each succeeding year. The re-estimated amount is the sum of the paid amounts above and the outstanding reserve for occurrences prior to the balance sheet date. The estimate is increased or decreased as more information about the claims becomes known for individual years. For example, as of December 31, 2015, our insurance subsidiaries had paid $5,358.6 million of the currently estimated $5,406.4 million of losses and LAE that had been unpaid at the end of 2006; thus, an estimated $47.8 million of losses incurred through 2006 remain unpaid as of the current financial statement date.

The “Net Cumulative Development” represents the aggregate change in the ultimate loss estimate over all prior years. For example, the 2005 liability has developed favorably by $202.9 million over ten years. That amount has been reflected in income over the ten years and had the largest impact on income in calendar year 2006. The effects on income during the past three years due to changes in estimates of the liabilities for losses and LAE are shown in the reconciliation table on page 11 as the “prior years” contribution to incurred losses and LAE.

In evaluating this information, note that each cumulative development amount includes the effects of all changes in amounts during the current year for prior periods. For example, the amount of the development related to losses settled in 2014, but incurred in 2011, will be included in the cumulative development amount for years 2011, 2012, and 2013. Conditions and trends that have affected development of the liability in the past may not necessarily occur in the future. Accordingly, it generally is not appropriate to extrapolate future development based on this table.

The favorable reserve development for 2005 and 2007 through 2010 was about 2% to 8% of our original carried reserves, which primarily reflects the decreases in severity between our original estimate and what we experienced in both our personal auto and commercial auto businesses during that period. For 2011, 2012, and 2013, we experienced very minimal development, or less than 1% of our original estimate. The favorable development for 2014 primarily reflects lower than anticipated severity than was originally estimated in all segments.

Although the detail is not presented in the table on page 13, we also re-estimate the reinsurance recoverables on unpaid losses each year. The top of the table shows the amount of reinsurance recoverables on unpaid losses that we had at the end of the calendar year, while the bottom shows the reserves re-estimated based on development in subsequent years. For example, at December 31, 2014, we estimated our reinsurance recoverables on unpaid losses to be $1,227.8 million. During 2015, these reserves developed unfavorably by $75.7 million, bringing the re-estimated reinsurance recoverables on unpaid losses to $1,303.5 million, as shown at the bottom of the table. Over the last ten years, we have experienced unfavorable development in our reinsurance recoverables on unpaid losses. The majority of this development reflects our continuing process of re-evaluating Michigan PIP claims that require lifetime reserve estimates. As a result, we have increased both our direct reserves and corresponding reinsurance recoverables, since these claims are reinsured through the Michigan Catastrophic Claims Association (MCCA) state-mandated plan. The MCCA is funded indirectly through an assessment that insurance companies collect from policyholders in the state; therefore, our exposure to losses from the failure of this reinsurer is minimal. For our Property business the development during 2015 was consistent on a gross and net basis.

The Analysis of Loss and Loss Adjustment Expenses Development table on page 13 is constructed from Schedule P, Part-1, from the Consolidated Annual Statements of Progressive’s insurance subsidiaries, as filed with the state insurance departments.

(d) Financial Information About Geographic Areas

We operate our businesses throughout the United States; we also sell personal auto physical damage and auto property damage liability insurance in Australia. For the years ended December 31, 2015, 2014, and 2013, net premiums earned in our Australian business were $15.9 million, $17.1million, and $13.0 million, respectively. The amount of Australian assets is immaterial to our consolidated financial condition.

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(e) Available Information

Our website is located at progressive.com. 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: http://www.sec.gov.

ITEM 1A. RISK FACTORS

Our business involves various risks and uncertainties, certain of which are discussed in this section. Management divides these risks into four broad categories in assessing how they may affect our financial condition, cash flows, and results of operations, as well as our ability to achieve our business objectives:

• Insurance Risks - risks associated with assuming, or indemnifying for, the losses or liabilities incurred by policyholders

• Operating Risks - risks stemming from external or internal events or circumstances that directly or indirectly may affect our insurance operations

• Market Risks - risks that may causechanges in the value of assets held in our investment portfolios, and

• Credit and Other Financial Risks - the risks that the other party to a transaction will fail to perform according to the terms of a contract, or that we will be unable to satisfy our obligations when due or obtain capital when necessary.

Although we have organized risks generally according to these categories in the discussion below, many of the risks may have ramifications in more than one category. For example, although presented as an Operating Risk below, governmental regulation of insurance companies also affects our underwriting, investing, and financing activities, which are addressed separately under Insurance Risks, Market Risks, and Credit and Other Financial Risks below. These categories, therefore, should be viewed as a starting point for understanding the significant risks facing us and not as a limitation on the potential impact of the matters discussed.

It also should be noted that our business and that of other insurers may be adversely affected by a downturn in general economic conditions and other forces beyond our control. Issues such as unemployment rates, the number of vehicles sold, home ownership trends, inflation or deflation, consumer confidence, and construction spending, among a host of other factors, will have a bearing on the amount of insurance that is purchased by consumers and small businesses and the costs that we incur. Also, to the extent that we have a concentration of business in one or more states or regions of the country, general economic conditions in those states or regions may have a greater impact on our business.

We cannot predict whether the risks and uncertainties discussed in this section, or other risks not presently known to us or that we currently believe to be immaterial, may develop into actual events and impact our businesses. If any one or more of them does so, the events could materially adversely affect our financial condition, cash flows, or results of operations, and the market prices of our common shares or debt securities could decline.

This information should be considered carefully together with the other information contained in this report and in the other reports and materials filed by us with the SEC, as well as news releases and other information we publicly disseminate from time to time.

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I.     Insurance Risks

Our success depends on our ability to underwrite and price risks accurately and to charge adequate rates to policyholders.

Our financial condition, cash flows, and results of operations depend on our ability to underwrite and set rates accurately for a full spectrum of risks. A primary role of the pricing function is to ensure that rates are adequate to generate sufficient premiums to pay losses, loss adjustment expenses, and underwriting expenses, and to earn a profit.

Pricing involves the acquisition and analysis of historical accident and loss data, and the projection of future accident trends, loss costs and expenses, and inflation trends, among other factors, for each of our products in multiple risk tiers and many different markets. Our ability to price accurately is subject to a number of risks and uncertainties, including, without limitation:

• the availability of sufficient, reliable data

• our ability to conduct a complete and accurate analysis of available data

• uncertainties inherent in estimates and assumptions, generally

• our ability to timely recognize changes in trends and to predict both the severity and frequency of future losses with reasonable accuracy

• our ability to predict changes in operating expenses with reasonable accuracy

• the development, selection, and application of appropriate rating formulae or other pricing methodologies

• our ability to innovate with new pricing strategies and the success of those strategies

• our ability to implement rate changes and obtain any required regulatory approvals on a timely basis

• our ability to predict policyholder retention accurately

• unanticipated court decisions, legislation, or regulatory actions

• the frequency and severity of catastrophe events

• our ability to understand the impact of ongoing changes in our claims settlement practices

• changing vehicle usage and driving patterns, which may be influenced by oil and gas prices, the emerging “sharing economy,” or residential occupancy patterns, among other factors

• advancements in vehicle or home technology or safety features, such as accident and loss prevention technologies or the development of autonomous or partially autonomous vehicles

• unexpected changes in the medical sector of the economy, including medical costs and systemic changes resulting from national or state health care laws or regulations

• unforeseen disruptive technologies and events, and

• unanticipated changes in auto repair costs, auto parts prices, used car prices, or construction labor and materials costs.

The realization of one or more of these risks may result in our pricing being based on inadequate or inaccurate data or inappropriate analyses, assumptions, or methodologies, and may cause us to estimate incorrectly future changes in the frequency or severity of claims. As a result, we could underprice risks, which would negatively affect our underwriting profit margins, or we could overprice risks, which could reduce our competitiveness and growth prospects. In either event, our financial condition, cash flows, and results of operations could be materially adversely affected. In addition, underpricing insurance policies over time could erode the capital position of one or more of our insurance subsidiaries, thereby constraining our ability to write new business.

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Our success depends on our ability to establish accurate loss reserves.

Our financial statements include loss reserves, which represent our best estimate of the amounts that our insurance subsidiaries ultimately will pay on claims that have been incurred, and the related costs of adjusting those claims, as of the date of the financial statements. There is inherent uncertainty in the process of establishing property and casualty insurance loss reserves, which can arise from a number of factors, including:

• the availability of sufficient, reliable data

• the difficulty in predicting the rate and direction of changes in frequency and severity trends, including the effects of future inflation rates, for multiple products in multiple markets

• unexpected changes in medical costs, auto repair costs, or the costs of construction labor and materials

• unanticipated changes in governing statutes and regulations

• new or changing interpretations of insurance policy provisions and coverage-related issues by courts

• the effects of changes in our claims settlement practices

• our ability to recognize fraudulent or inflated claims

• the accuracy of our estimates regarding claims that have been incurred but not recorded as of the date of the financial statements

• the accuracy and adequacy of actuarial techniques and databases used in estimating loss reserves, and

• the accuracy and timeliness of our estimates of loss and loss adjustment expenses as determined for different categories of claims.

The ultimate paid losses and loss adjustment expenses may deviate, perhaps substantially, from point-in-time estimates of such losses and expenses, as reflected in the loss reserves included in our financial statements. Consequently, ultimate losses paid could materially exceed reported loss reserves and have a material adverse effect on our financial condition, cash flows, or results of operations. Further information on our loss reserves can be found in the “Liability for Property-Casualty Losses and Loss Adjustment Expenses” discussion beginning on page 11 of this report, as well as our “Report on Loss Reserving Practices,” which primarily discusses our vehicle business reserves and was filed with the SEC on Form 8-K on August 26, 2015.

Our insurance operating results may be materially adversely affected by severe weather conditions or other catastrophe events.

Catastrophes can be caused by natural events, such as hurricanes, tornadoes, windstorms, floods, earthquakes, hailstorms, severe winter weather, and fires, or by other events, such as explosions, terrorist attacks, riots, and hazardous material releases. The frequency and severity of such events are inherently unpredictable. Moreover, changing climate conditions, whether due to an increase in average temperatures (global climate change) or other causes, may increase how often severe weather events and other natural disasters occur and how much insured damage they cause. Catastrophe losses may adversely affect the results of our Property segment more than they affect the results of our other businesses.

The extent of insured losses from a catastrophe is a function of both our total net insured exposure in the area affected by the event and the nature and severity of the event. We use catastrophe modeling tools and third-party experts to help estimate our exposure to such events. Those tools and expert opinions are based on historical data and other assumptions that limit their reliability and predictive value, and they may become even less reliable as climatic conditions change. As a result, our forecasting efforts may generate projections that prove to be materially inaccurate. An increase in the frequency or severity of catastrophes could materially adversely affect our financial condition, cash flows, and results of operations.

Our success will depend on our ability to continue to accurately predict our reinsurance needs, obtain sufficient reinsurance coverage for our homeowners and other businesses at reasonable cost, and collect under our reinsurance contracts.

Like many homeowners insurance companies, our Property business relies on reinsurance contracts, state reinsurance funding, and catastrophe bonds (collectively, “reinsurance arrangements”) to reduce its exposure to certain catastrophe events and its aggregate exposure to certain other severe storms. We also use reinsurance contracts to reinsure portions of our Commercial Lines and umbrella insurance businesses. Reinsurance arrangements are often subject to an aggregate dollar coverage limit, so if a significant catastrophe or other events are covered by reinsurance, our claims liabilities arising from those events may

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exceed our reinsurance coverage. In addition, although the reinsurer is liable to the insurer to the extent of the reinsurance coverage, the original insurer remains liable under the policies to the insured as the direct insurer on all risks reinsured. As a result, we are subject to the risk that reinsurers will be unable to pay, or will dispute, reinsurance claims. Further, the availability and cost of reinsurance are subject to prevailing reinsurance market conditions (which can be impacted by the occurrence of significant reinsured events). We may not be able to obtain reinsurance coverage in the future at commercially reasonable rates or at all. The availability and cost of reinsurance could adversely affect our business volume, profitability, or financial condition.

II.     Operating Risks

We compete in property-casualty markets that are highly competitive.

We write insurance for personal autos and recreational vehicles, commercial autos and trucks for small businesses, and homeowners, renters, and commercial property owners. All of these markets are highly competitive. We face vigorous competition from large, well-capitalized national and international companies, as well as smaller regional insurers. Other large insurance or financial services companies also may enter these markets in the future. Many of these companies have substantial resources, experienced management, and strong marketing, underwriting, and pricing capabilities. The property and casualty insurance industry is a relatively mature industry, in which brand recognition, marketing skills, operational effectiveness, pricing, scale, and cost control are major competitive factors. If our competitors offer similar insurance products at lower prices, offer such insurance products bundled with other products or services that we do not offer, or engage in other successful competitive initiatives, our ability to generate new business or to retain a sufficient number of our existing customers could be compromised. In addition, because auto insurance constitutes a significant portion of our overall business, we may be more sensitive than other insurers to, and more adversely affected by, trends that could decrease auto insurance rates or reduce demand for auto insurance over time.

Historically, the auto and property insurance markets have been known as cyclical, with periods of relatively strong profitability being followed by increased pricing competition among insurers. This price competition, which is sometimes referred to as a “soft market,” can adversely affect revenue and profitability levels. As insurers recognize this situation (which can occur at different times for different companies), the historical reaction has been for insurers to raise their rates (sometimes referred to as a “hard market”) in an attempt to restore profitability to acceptable levels. As more insurers react in this way, profit levels in the industry may increase to a point where some insurers begin to lower their rates, starting the cycle over again. In the past, this cycle has generally played out over a number of years. We cannot be certain whether and to what extent such cyclicality is currently impacting the auto or property insurance markets, nor can we predict whether it will do so in the future.

The highly competitive nature of the insurance marketplace could result in consolidation within the industry, or in the failure of one or more competitors. The concentration of premium volume in a reduced number of major competitors could significantly increase the level of competition in a manner that is not favorable to us. In addition, in the event of a failure of a major insurer or a state-sponsored catastrophe fund, our company and other insurance companies may be required by law to absorb the losses of the failed insurer or fund, resulting in a potentially significant increase in our costs. We might also be faced with an unexpected surge in new business from a failed insurer’s former policyholders. Such events could materially adversely affect our financial results, brand, and future business prospects.

Our success depends on our ability to innovate effectively and respond to our competitors’ initiatives.

Our ability to develop and implement innovative products and services that are accepted and valued by our customers and independent agents is critical to maintaining and enhancing our competitive position. Innovations must be implemented in compliance with applicable insurance regulations and may require extensive modifications to our systems and processes and extensive coordination with the systems of third parties. As a result, if we do not handle these transitions effectively and efficiently, the quality of our products, our relationships with our customers and agents, and our business prospects, may be materially adversely affected. In addition, innovations by competitors or other market participants may increase the level of competition in the industry. If we fail to respond appropriately to those innovations, our competitive position and results may be materially adversely affected.

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We must effectively manage complexity as we develop and deliver high quality products and customer experiences.

Ongoing competitive, technological, regulatory, informational, and other developments result in significant levels of complexity in our products and in the systems and processes we use to run our business. These risks include our increasing reliance on third-party systems, the development of new modes of communication, changing insurance shopping trends, and the availability of very large volumes of data (i.e., Big Data) and the challenges relating to analyzing those data sets. Complexity may create barriers to innovation or the provision of high-quality products and customer and agent experiences, may require us to modify our business practices, to adopt new systems, or to upgrade or replace outdated systems, each at significant expense, and may lead to the increased difficulty in executing our business strategies.

Intellectual property rights could affect our competitiveness and our business operations.

There has been a proliferation of patents, both inside and outside the insurance industry, that significantly impacts our businesses. The existence of such patents, and other claimed intellectual property rights, may result in legal challenges to certain of our business practices by other insurance companies and non-insurance entities alleging that we are violating their rights.  Such legal challenges could result in costly legal proceedings, substantial monetary damages, or expensive changes in our business processes and practices. Similarly, we may seek or obtain patent protection for innovations developed by us.  However, we may not be able to obtain patents on these processes and practices, and defending our patents and other intellectual property rights against challenges, and enforcing and defending our rights, including if necessary through litigation, can be time consuming and expensive, and the results are inherently uncertain, which can further complicate business plans.

Our success depends on our ability to adjust claims accurately.

We must accurately evaluate and pay claims that are made under our insurance policies. Our failure to pay claims fairly, accurately, and in a timely manner, or to deploy claims resources appropriately and in a cost-effective manner, could result in unanticipated costs to us, lead to material litigation, undermine customer goodwill and our reputation in the marketplace, and impair our brand and, as a result, materially adversely affect our competitiveness, customer retention, financial results, prospects, and liquidity.

We must develop and maintain a brand that is recognized and trusted by consumers.

It is critical to our business that consumers recognize and trust the Progressive brand. We undertake distinctive advertising and marketing campaigns and other efforts to improve brand recognition, enhance perceptions of us, generate new business, and increase the retention of our current customers. We believe that improving the effectiveness of our advertising and marketing campaigns relative to those of our competitors is particularly important given the significance of brand and reputation in the marketplace and the continuing high level of advertising and marketing efforts and related expenditures within the insurance market. If our marketing campaigns are unsuccessful or are less effective than those of competitors, or if our reliance on a particular spokesperson or character is compromised, our business could be materially adversely affected.

Our brand also could be adversely affected by incidents that reflect negatively on us, whether due to our business practices, the conduct of our officers or employees, the actions of businesses with which we do business, including unaffiliated insurers through which we offer bundled products (such as homeowners), or other causes. The negative impacts of these or other events may be aggravated as the perceptions of consumers and others are formed based on modern communication and social media tools over which we have no control.

Our ability to attract, develop, and retain talented employees, managers, and executives, and to maintain appropriate staffing levels, is critical to our success.

Our success depends on our ability to attract, develop, compensate, motivate, and retain talented employees, including executives, other key managers, and employees with strong technological, analytical, and other skills and know-how necessary for us to run our vehicle and property insurance businesses. Our loss of certain officers and key employees, or the failure to attract or develop talented executives and managers with diverse backgrounds and experiences, could have a material adverse effect on our business.

In addition, we must forecast sales and claims volume and other factors in changing business environments (for multiple products and business units and in many geographic markets) with reasonable accuracy and adjust our hiring and training programs and employment levels accordingly. Our failure to recognize the need for such adjustments, or our failure or inability to react appropriately on a timely basis, could lead either to over-staffing or under-staffing in one or more business units or locations. In either such event, our financial results, customer relationships, employee morale, and brand could be materially adversely affected.

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Our success also depends, in large part, on our ability to maintain and improve the staffing effectiveness and culture that we have developed over the years. Our ability to do so may be impaired as a result of litigation against us, other judicial decisions, legislation or regulations, or other factors in the employment marketplace, as well as our failure to recognize and respond to changing trends and other circumstances that affect our employees. In such events, the productivity of our workers and the efficiency of our operations could be adversely affected, which could lead to an erosion of our operating performance and margins.

We are subject to a variety of complex laws and regulations.

Our insurance businesses operate in highly regulated environments. Our insurance subsidiaries are subject to regulation and supervision by state insurance departments in all 50 states, the District of Columbia, and Australia, each of which has a unique and complex set of laws and regulations. In addition, certain federal laws impose additional requirements on businesses, including insurers, in a wide range of areas, such as the use of credit information, privacy, and the reimbursement of certain medical costs incurred by the government. Our insurance subsidiaries’ ability to implement business plans and remain competitive while complying with these laws and regulations, and to obtain necessary regulatory action in a timely manner, is and will continue to be critical to our success.

Most jurisdictions impose restrictions on, or require prior regulatory approval of, various actions by regulated insurers, which may adversely affect our insurance subsidiaries’ ability to operate, innovate, and obtain necessary rate adjustments in a timely manner. Our compliance efforts are further complicated by changes in laws or regulations applicable to insurance companies, or by judicial interpretations of those laws or regulations. Insurance laws and regulations may limit, among other things, our insurance subsidiaries’ ability to underwrite and price risks accurately, prevent our subsidiaries from obtaining timely rate changes to respond to increased or decreased costs, restrict our subsidiaries’ ability to discontinue unprofitable businesses or exit unprofitable markets, prevent insurers from terminating policies under certain circumstances, and dictate or limit the types of investments that an insurance company may hold. Moreover, inconsistencies between requirements at the state and federal level may further complicate our compliance efforts, potentially resulting in additional costs being imposed on us. In addition, laws in certain jurisdictions mandate that insurance companies pay assessments in a number of circumstances, including assessments to pay claims upon the insolvency of other insurance companies or to cover losses in government-provided insurance programs for high risk auto and homeowners coverages. Compliance with laws and regulations often results in increased costs, which can be substantial, to our insurance subsidiaries. These costs, in turn, may adversely affect our profitability or our ability or desire to grow or operate our business in the applicable jurisdictions.

The actual or alleged failure to comply with this complex variety of laws and regulations by us or other companies in the insurance, financial services, or related industries, also could result in actions or investigations by regulators, state attorneys general, federal officials, or other law enforcement officials. Such actions and investigations, and any determination that we have not complied with an applicable law or regulation, could potentially lead to significant monetary payments, fines and penalties, adverse publicity and damage to our reputation in the marketplace, and in certain cases, revocation of a subsidiary’s authority to do business in one or more jurisdictions. In addition, The Progressive Corporation and its subsidiaries could face individual and class action lawsuits by insureds and other parties for alleged violations of certain of these laws or regulations.

New federal or state legislation or regulations may be adopted in the future that could materially adversely affect our operations or ability to write business profitably in one or more jurisdictions.

For further information on these risks and uncertainties, see the “Insurance Regulation” discussion beginning on page 7 of this report.

Lawsuits challenging our business practices, and those of our competitors and other companies, are pending and more may be filed in the future.

The Progressive Corporation and/or its subsidiaries are named as defendants in class action and other lawsuits challenging various aspects of the subsidiaries’ business operations. Additional litigation may arise in the future concerning similar or other business practices. These lawsuits have included cases alleging damages as a result of our subsidiaries’ use of credit in underwriting and related requirements under the U.S. Fair Credit Reporting Act; methods used for evaluating and paying certain bodily injury, personal injury protection, and medical payment claims; other claims handling procedures; challenges relating to our network of repair facilities or our Service Center program; interpretations of the provisions of our insurance policies; policy implementation and renewal procedures; and employment-related litigation, including federal wage and hour claims, among other matters. Additional litigation may be filed against us concerning allegations of other general liability theories. In addition, lawsuits have been filed, and other lawsuits may be filed in the future, against our competitors and other businesses, and although we are not a party to such litigation, the results of those cases may create additional risks for, and/or impose additional costs and/or limitations on, our subsidiaries’ business operations.

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Lawsuits against us often seek significant monetary damages and injunctive relief. The potential for injunctive relief can threaten our use of important business practices. Moreover, the resolution of individual or class action litigation in insurance or related fields may lead to a new layer of judicial regulation, resulting in material increases in our costs of doing business.

Litigation is inherently unpredictable. Adverse court decisions or significant settlements of pending or future cases could have a material adverse effect on our financial condition, cash flows, and results of operations. For further information on pending litigation, see Note 12 - Litigation in the Annual Report.

Our business could be materially adversely affected by a security breach or other attack involving our computer systems or the systems of one or more of our vendors.

Our business requires that we develop and maintain large and complex computer systems to run our operations and to store the significant volume of data that we acquire, including the personal confidential information of our customers and employees and our intellectual property, trade secrets, and other sensitive business and financial information. All of these systems are subject to “cyber attacks” by sophisticated third parties with substantial computing resources and capabilities, and to unauthorized or illegitimate actions by employees, consultants, agents and other persons with legitimate access to our systems. Such attacks or actions may include attempts to:

• steal, corrupt, or destroy data, including our intellectual property, financial data or the personal information of our customers or employees

• misappropriate funds

• disrupt or shut down our systems

• deny customers, agents, brokers, or others access to our systems, or

• infect our systems with viruses or malware.

Some of our systems rely on third-party vendors, through either a connection to, or an integration with, those third-parties’ systems. This approach may increase the risk of loss, corruption, or unauthorized publication of our information or the confidential information of our customers and employees or other cyber attack. Third-party risks may include, among other factors, lax third-party’s security measures, data location uncertainty, and the possibility of data storage in inappropriate jurisdictions, where laws or security measures may be inadequate.

We undertake substantial efforts to protect our systems and sensitive or confidential information. These efforts include internal processes and technological defenses that are preventative or detective, and other controls designed to provide multiple layers of security protection. In addition, we seek to protect the security and confidentiality of information provided to our vendors under “cloud computing” or other arrangements through appropriate risk evaluation, security and financial due diligence, contracts designed to require high security and confidentiality standards, and review of third-party compliance with the required standards. While we expend significant resources on these defensive measures, there can be no assurance that we will be successful in preventing attacks or detecting and stopping them once they have begun.

Our business could be significantly damaged by a security breach, data loss or corruption, or cyber attack. In addition to the potentially high costs of investigating and stopping such an event and implementing necessary fixes, we could incur substantial liability if confidential customer or employee information is stolen. In addition, such an event could cause a significant disruption of our ability to conduct our insurance operations, adversely affect our competitive position if material trade secrets or other confidential information are stolen, and have severe ramifications on our reputation and brand, potentially causing customers to refrain from buying insurance from us or other businesses to refrain from doing business with us. We have elected to self-insure these risks at this time. Therefore, the occurrence of a security breach, data loss or corruption, or cyber-attack, if sufficiently severe, could have a material adverse effect on our business results, prospects, and liquidity.

If we were not able to send or accept electronic payments, our business and financial results could be adversely affected.

We rely on access to various financial networks to process payments received from our customers. These include credit card and debit card networks and the Automated Clearing House (ACH) network. Our ability to participate in these networks is dependent on our compliance with applicable laws and regulations and with the complex rules of each network and any related industry supervisory groups. If we fail to comply with legal requirements or rules and best practices established by a network or industry group, including those related to data security, we could be assessed significant monetary fines and other penalties, including, in certain cases, the termination of our right to use the applicable network or system. Such fines and penalties, and any disruption in or termination of our ability to process customer payments electronically, could materially adversely affect our business and our brand.

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Our business depends on the secure and uninterrupted operation of our facilities, systems, and business functions.

Our business is highly dependent upon our ability to perform, in an efficient and uninterrupted manner, necessary business functions. The shut-down or unavailability of one or more of our systems or facilities for any reason could significantly impair our ability to perform critical business functions on a timely basis. In addition, many of our critical business systems interface with and depend on third-party systems; an interruption of service from a third party for any reason could significantly impair our ability to perform critical business functions. If sustained or repeated, and if an alternate system, process, or vendor is not immediately available to us, such events could result in a deterioration of our ability to write and process policies, provide customer service, resolve claims in a timely manner, make payments when required, or perform other necessary business functions. Any such event could have a material adverse effect on our financial results and business prospects, as well as damage to our brand and customer goodwill.

The ARX acquisition may not produce the anticipated benefits to the company and our goodwill or intangible assets may become impaired.

The ARX acquisition may not produce the anticipated benefits to us, or such benefits may be delayed longer than anticipated. At the time of the ARX acquisition, we recorded goodwill and intangible assets at fair value. Goodwill and intangible assets determined to have indefinite useful lives are not amortized, while other intangible assets are amortized over their estimated useful lives. Goodwill and intangible assets are reviewed for impairment at least annually. Valuing these assets, and evaluating their recoverability, requires us to make estimates and assumptions related to future returns on equity, margins, growth rates, discount rates, and other matters, and our estimates may change over time, potentially resulting in write-downs of the assets. Goodwill and intangible assets impairment charges could result from declines in operating results, divestitures or sustained market declines, among other factors, and could materially affect our financial condition and results of operations in the period in which they are recognized.

III.     Market Risks

The performance of our fixed-income and equity investment portfolios is subject to a variety of investment risks.

Our investment portfolio consists principally of fixed-income securities and common equities. General economic conditions and other factors beyond our control can adversely affect the value of our investments and the amount and realization of investment income, or result in realized or unrealized investment losses.

Our fixed-income portfolio is actively managed by our investment group and includes short-term investments, fixed-maturity securities, and preferred stocks. The performance of the fixed-income portfolio is subject to a number of risks, including:

• Interest rate risk - the risk of adverse changes in the value of fixed-income securities as a result of increases in market interest rates.

• Investment credit risk - the risk that the value of certain investments may decrease due to a deterioration in the financial condition, operating performance or business prospects of, or the liquidity available to, one or more issuers of those securities or, in the case of asset-backed securities, due to the deterioration of the loans or other assets that underlie the securities.

• Concentration risk - the risk that the portfolio may be too heavily concentrated in the securities of one or more issuers, sectors, or industries, which could result in a significant decrease in the value of the portfolio in the event of a deterioration of the financial condition or performance of, or outlook for, those issuers, sectors, or industries.

• Prepayment or extension risk - applicable to certain securities in the portfolio, such as residential mortgage-backed securities and other bonds with call provisions, prepayment risk is the risk that, as interest rates change, the principal of such securities may be repaid earlier than anticipated, requiring that we reinvest the proceeds at less attractive rates. Extension risk is the risk that a security may not be redeemed when anticipated, adversely affecting the value of the security and preventing the reinvestment of the principal at higher market rates.

• Liquidity risk - the risk that we will not be able to convert investment securities into cash on favorable terms and on a timely basis, or that we will not be able to sell them at all, when we desire to do so.

In addition, the success of our investment strategies and asset allocations in the fixed-income portfolio may vary depending on the market environment. The fixed-income portfolio’s performance also may be adversely impacted if, among other factors: there is a deterioration in the underlying businesses of the issuers of the securities that we hold; credit ratings assigned to such securities by nationally recognized statistical rating organizations are based on incomplete or inaccurate information or otherwise prove unwarranted; or our risk mitigation strategies are ineffective for the applicable market conditions.

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The common equity portfolio is primarily managed externally to track the Russell 1000 Index, with a small portion actively managed by an external investment advisor. Our equity investments are subject to general movements in the values of equity markets and to the changes in the prices of the securities we hold. An investment portfolio that is designed to track an index, such as the Russell 1000, or that follows a specific investment discipline, such as value investing, is not necessarily less risky than other equity investment strategies. Equity markets, sectors, industries, and individual securities may be subject to high volatility and to long periods of depressed or declining valuations, and are also subject to most of the same risks that affect our fixed-income portfolio, as discussed above. In addition, even though the Russell 1000 Index is broadly diversified, significant portions of the index may be concentrated in one or more sectors, reducing our ability to manage our concentration risk through sector diversification. The actively managed equity portfolio is also subject to risks arising from the investment decisions of the investment advisor.

Both the fixed-income and the common equity portfolios are also subject to risks inherent in the nation’s and world’s capital markets. Any disruption in the functioning of those markets or our ability to liquidate investments when desired could have a material adverse effect on our financial condition, cash flows, and results of operations. In addition, if the fixed-income or equity portfolios, or both, were to suffer a substantial decrease in value, our liquidity, financial position, and financial results could be materially adversely affected. Under these circumstances, our income from these investments could be materially reduced, and declines in the value of our securities could further reduce our reported earnings and capital levels. A decrease in value of an insurance subsidiary’s investment portfolio could also put the subsidiary at risk of failing to satisfy regulatory minimum capital requirements and could limit the subsidiary’s ability to write new business. In any such event, our business could be materially adversely affected.

See Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Annual Report for additional discussion of the composition of our investment portfolio as of December 31, 2015, and of the market risk associated with our investment portfolio.

IV.     Credit and Other Financial Risks

Our financial condition may be adversely affected if one or more parties with which we enter into significant contracts become insolvent, experience other financial difficulties, or default in the performance of contractual obligations.

Our business is dependent on the performance by third parties of their responsibilities under various contractual or service arrangements. These include, for example: agreements with other insurance carriers to bundle products that we do not offer, and arrangements for transferring certain of our risks (including reinsurance arrangements used by us, our corporate insurance policies, and the performance of state reinsurance facilities/associations). In addition, from time to time, we enter into significant financial transactions, such as derivative instruments, with major banks, other financial institutions, or security clearinghouses. If one or more of these parties were to default in the performance of their obligations under their respective contracts or determine to abandon or terminate support for a system, product, obligation, or service that is significant to our business, we could suffer significant financial losses or other problems, which in turn could materially adversely affect our financial condition, cash flows, or results of operations and cause damage to our brand and reputation.

Our insurance subsidiaries may be limited in the amount of dividends that they can pay, which in turn may limit our ability to repay indebtedness, make capital contributions to other subsidiaries or affiliates, pay dividends to shareholders, repurchase securities, or meet other obligations.

The Progressive Corporation is a holding company with no business operations of its own. Consequently, if its subsidiaries are unable to pay dividends or make other distributions, or are able to pay only limited amounts, The Progressive Corporation may be unable to make payments on its indebtedness, make capital contributions to or otherwise fund its subsidiaries or affiliates, pay dividends to its shareholders, or meet its other obligations. Each insurance subsidiary’s ability to pay dividends may be limited by one or more of the following factors:

• insurance regulatory authorities require insurance companies to maintain specified minimum levels of statutory capital and surplus

• insurance regulations restrict the amounts available for distribution based on either net income or surplus of the insurance company

• competitive pressures require our insurance subsidiaries to maintain high financial strength ratings, and

• in certain jurisdictions, prior approval must be obtained from regulatory authorities for the insurance subsidiaries to pay dividends or make other distributions to affiliated entities, including the parent holding company.

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In addition, under the ARX stockholders’ agreement, ARX cannot pay a dividend without the consent of Progressive and other specified ARX stockholders. Further information on insurance laws and regulations that may limit the ability of our insurance subsidiaries to pay dividends can be found in Item 5(c), “Dividends,” of this report.

If we are unable to obtain capital when necessary to support our business, our financial condition could be materially adversely affected.

We may need to acquire additional capital from time to time as a result of many factors. These could include increased regulatory requirements, losses in our insurance or investment operations, or significant growth in the insurance premiums that we write, among others. If we are unable to obtain capital at favorable rates when needed, whether due to our results, volatility or disruptions in debt and equity markets beyond our control, or other reasons, our financial condition could be materially adversely affected. In such an event, unless and until additional sources of capital are secured, we may be limited in our ability, or unable, to service our debt obligations, pay dividends, grow our business, pay our other obligations when due or engage in other corporate transactions. Such a deterioration of our financial condition could adversely affect the perception of our company by insurance regulators, potentially resulting in regulatory actions, and the price of our common shares or debt securities could fall significantly.

Our access to capital markets, ability to obtain or renew financing arrangements, obligations to post collateral under certain derivative contracts, and business operations are dependent on favorable evaluations and ratings by credit and other rating agencies.

Our credit and financial strength are evaluated and rated by various rating agencies, such as Standard & Poor’s, Moody’s Investors Service, Fitch Ratings, and A.M. Best. Downgrades in our credit ratings could adversely affect our ability to access the capital markets and/or lead to increased borrowing costs in the future (although the interest rates we pay on our current indebtedness would not be affected), as would adverse recommendations by equity analysts at the various brokerage houses and investment firms. Perceptions of our company by other businesses and consumers could also be significantly impaired. In addition, a downgrade could trigger contractual obligations in certain derivative transactions requiring us to post substantial amounts of additional collateral or allow a third party to liquidate the derivative transaction. Downgrades in the ratings of our insurance subsidiaries could likewise negatively impact our operations, potentially resulting in lower or negative premium growth. In any such event, our financial performance could be materially adversely affected.

Our annual dividend policy will result in a variable payment to shareholders each year, or no payment in some years, and the dividend program ultimately may be changed in the discretion of the Board of Directors.

We have previously announced our intention to pay a dividend to shareholders on an annual basis under a formula that multiplies our annual after-tax underwriting income by a percentage factor set by the Board of Directors (33-1/3% for 2015 and 2016) and then by the Gainshare factor (determined under our Gainsharing (cash bonus) plans for most of our employees and based on the operating performance of our vehicle insurance businesses). If our Gainshare factor for the year is zero or after-tax comprehensive income (which includes the change in unrealized investment gains and losses, among other items) is less than after-tax underwriting income, no dividend will be paid under our annual variable dividend policy.

Because the dividend calculation is performance-based, the amount (if any) to be paid in any particular year may not be subject to accurate prediction and will likely vary, perhaps significantly, from the amounts paid in the preceding year(s). As a result, the amount paid may be inconsistent with some shareholders’ expectations. In addition, although we have announced our intent to repeat the annual variable dividend in 2016 (to be paid early in 2017), the dividend, if any, would not be declared by the Board until late 2016 or early 2017, and the Board retains the discretion, at any time, to alter our policy or not to pay the annual dividend for 2016 or future years. Such an action by the Board could result from, among other reasons, changes in the insurance marketplace, changes in our performance or capital needs, changes in U.S. federal income tax laws, disruptions of national or international capital markets, or other events affecting our liquidity, financial position or prospects, as described above under “Market Risks.” Any such change could adversely affect investors’ perceptions of the company and the value of, or the total return of an investment in, our common shares.

We do not manage to short-term earnings expectations; our goal is to maximize the long-term value of the enterprise, which, at times, may adversely affect short-term results.

We believe that shareholder value will be increased in the long run if we meet or exceed the financial goals and policies that we establish each year. We do not manage our business to maximize short-term stock performance or the amount of the dividend that may be paid under our annual variable dividend policy or otherwise. We report earnings and other operating results on a monthly basis. We also do not provide earnings estimates to the market and do not comment on earnings estimates by analysts. As a result, our reported results for a particular period may vary, perhaps significantly, from investors’ expectations, which could result in significant volatility in the price of our common shares or debt securities. The addition of our Property business,

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which includes the results of our homeowners business, beginning in April 2015, may introduce additional volatility in our consolidated results compared to prior periods.

In addition, due to our focus on the long-term value of the enterprise, we may undertake business strategies and establish related financial goals for a specific year that are designed to enhance our longer-term performance, while understanding that such strategies may not always similarly benefit short-term results, such as our annual underwriting profit or earnings per share. Consequently, these strategies may adversely affect short-term performance or the amount of our variable dividend for a given year, and may result in additional volatility in the price of our common shares or debt securities.

ITEM 1B. UNRESOLVED STAFF COMMENTS

We currently do not have any unresolved comments from the SEC staff.

ITEM 2. PROPERTIES

All of our properties are owned or leased by subsidiaries of The Progressive Corporation and are used for office functions (corporate, claims, and business unit), as call centers, for training, for warehouse space, or as Service Centers.

We own 92 buildings located throughout the United States. Nearly two-thirds of our owned buildings are for our Service Centers, the majority of which are combined with a claims office. Our owned facilities, which contain approximately 4.8 million square feet of space, are generally not segregated by industry segment. In addition to our corporate headquarters and another office complex and call center in Mayfield Village, Ohio, we own significant locations in Colorado Springs, Colorado; St. Petersburg, Florida; Tampa, Florida; and Tempe, Arizona.

We lease approximately 2.1 million square feet of space throughout the United States and one location in Australia. These leases are generally short-term to medium-term leases of commercial space.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

Incorporated by reference from information with respect to executive officers of The Progressive Corporation and its subsidiaries set forth in Item 10 in Part III of this Form 10-K.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

(a) Market Information

Progressive’s Common Shares, $1.00 par value, are traded on the New York Stock Exchange under the symbol PGR. The high and low prices set forth below are as reported on the consolidated transaction reporting system.

Year	Quarter	High		Low		Close		Dividends Declared Per Share
2015	1	$	27.90	$	25.23	$	27.20	$	0
	2	28.50		26.44		27.83		0
	3	31.70		27.23		30.64		0
	4	33.95		30.09		31.80		0.8882
		$	33.95	$	25.23	$	31.80	$	0.8882
2014	1	$	27.30	$	22.53	$	24.22	$	0
	2	26.03		23.40		25.36		0
	3	25.63		23.20		25.28		0
	4	27.52		24.16		26.99		0.6862
		$	27.52	$	22.53	$	26.99	$	0.6862

The closing price of our common shares on January 29, 2016, was $31.25.

(b) Holders

We had 2,255 shareholders of record on December 31, 2015.

(c) Dividends

We maintain a policy of paying an annual variable dividend that, if declared, would be payable shortly after the close of the year. This annual variable dividend is based on a target percentage of after-tax underwriting income multiplied by a companywide performance factor (“Gainshare factor”), subject to the limitations discussed below. The target percentage is determined by our Board of Directors on an annual basis and announced to shareholders and the public. In December 2014, the Board determined the target percentage for 2015 to be 33-1/3% of annual after-tax underwriting income, which is unchanged from the target percentage in both 2014 and 2013. The Board also determined that this target will remain at 33-1/3% for 2016.

The Gainshare factor can range from zero to two and is determined by comparing our operating performance for the year to certain predetermined profitability and growth objectives for our vehicle insurance businesses, as approved by the Compensation Committee of the Board. This Gainshare factor is also used in the annual cash incentive program currently in place for our employees (our “Gainsharing program”). Although reviewed every year, the structure of the Gainsharing program generally remains the same. Our annual dividend program will result in a variable payment to shareholders each year, subject to certain limitations. If the Gainshare factor is zero or if our comprehensive income is less than after-tax underwriting income, no dividend would be payable under our annual variable dividend policy.

Although it is our intent to calculate an annual variable dividend based on the formula outlined above, the Board could decide to alter our policy, or not to pay the annual variable dividend for 2016 or future years, at any time prior to the declaration of the dividend for the year. Such an action by the Board could result from, among other reasons, changes in the insurance marketplace, changes in our performance or capital needs, changes in federal income tax laws, disruptions of national or international capital markets, or other events affecting our business, liquidity, or financial position.

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Following is a summary of our shareholder dividends, both variable and special:

(millions, except per share amounts)			Amount
Dividend Type	Declared	Paid	Per Share		Total1
Annual – Variable	December 2015	February 2016	$	0.8882	$	519.2
Annual – Variable	December 2014	February 2015	0.6862		404.1
Annual – Variable	December 2013	February 2014	0.4929		293.9
Special	December 2013	February 2014	1.0000		596.3

¹ Based on shares outstanding as of the record date.

Consolidated statutory surplus was $7.6 billion on December 31, 2015, and $6.4 billion on December 31, 2014. At December 31, 2015, $637.6 million of consolidated statutory surplus represented net admitted assets of Progressive’s insurance subsidiaries and affiliate that are required to meet minimum statutory surplus requirements in such entities’ states of domicile. The companies may be licensed in states other than their states of domicile, however, which may have higher minimum statutory surplus requirements. Generally, the net admitted assets of insurance companies that, subject to other applicable insurance laws and regulations, are available for transfer to the parent company cannot include the net admitted assets required to meet the minimum statutory surplus requirements of the states where the companies are licensed. Based on the dividend laws currently in effect, the insurance subsidiaries could pay aggregate dividends of $1,325.0 million in 2016 without prior approval from regulatory authorities, provided the dividend payments are not made within 12 months of previous dividends paid by the applicable subsidiary.

In connection with the acquisition of a controlling interest in ARX, The Progressive Corporation entered into a stockholders’ agreement with the other ARX stockholders. Among other provisions, the stockholders’ agreement prohibits ARX from taking a number of actions, including the payment of dividends, without the consent of The Progressive Corporation and two other stockholders.

(d) Securities Authorized for Issuance Under Equity Compensation Plans

See Part III, Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” for information about securities authorized for issuance under our equity compensation plans.

(e) Performance Graph

Incorporated by reference from the Performance Graph section in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

(f) Recent Sales of Unregistered Securities

None.

(g) Share Repurchases

ISSUER PURCHASES OF EQUITY SECURITIES
2015 Calendar Month	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
October	85,004	$	30.55	61,349,419	13,650,581
November	279,933	31.55		61,629,352	13,370,648
December	713,250	31.15		62,342,602	12,657,398
Total	1,078,187	$	31.21

In June 2011, the Board approved an authorization to repurchase up to 75 million of our common shares; this Board authorization does not have an expiration date. Share repurchases under this authorization may be accomplished through open market purchases, privately negotiated transactions, or otherwise, and may include trading plans entered into with one or more

- 26 -

brokerage firms in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. In the fourth quarter 2015, all repurchases were accomplished through the open market or in conjunction with our incentive compensation plans at the then-current market prices.

Progressive’s financial policies state that we will repurchase shares to neutralize dilution from equity-based compensation in the year of issuance and as an option to effectively use underleveraged capital. See Note 9 - Employee Benefit Plans, “Incentive Compensation Plans” in our Annual Report, which is included as Exhibit 13 to this Form 10-K, for a summary of our restricted equity grants.

ITEM 6.SELECTED FINANCIAL DATA

(millions - except per share amounts)

	For the years ended December 31,
	2015		2014		2013		2012		2011
Total revenues	$	20,853.8	$	19,391.4	$	18,170.9	$	17,083.9	$	15,774.6
Net income attributable to Progressive	1,267.6		1,281.0		1,165.4		902.3		1,015.5
Per share:
Net income	2.15		2.15		1.93		1.48		1.59
Dividends declared	0.8882		0.6862		1.4929		1.2845		0.4072
Comprehensive income	1,044.9		1,352.4		1,246.1		1,080.8		924.3
Total assets	29,819.3		25,787.6		24,408.2		22,694.7		21,844.8
Debt outstanding	2,707.9		2,164.7		1,860.9		2,063.1		2,442.1
Redeemable noncontrolling interest	464.9		--		--		--		--

See Note 15 - Acquisition and Note 16 - Redeemable Noncontrolling Interest in the Annual Report, which is included as Exhibit 13 to this Form 10-K, for a discussion of the acquisition of a controlling interest in ARX on April 1, 2015.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Incorporated by reference from Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The quantitative and qualitative disclosures about market risk are incorporated by reference from section “IV. Results of Operations – Investments” in our Management’s Discussion and Analysis of Financial Condition and Results of Operations, as described in Item 7 above. Additional information is incorporated by reference from the Quantitative Market Risk Disclosures section in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements of Progressive, along with the related Notes, Supplemental Information, and Report of the Independent Registered Public Accounting Firm, are incorporated by reference from our Annual Report, which is included as Exhibit 13 to this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

- 27 -

ITEM 9A. CONTROLS AND PROCEDURES

Progressive, under the direction of the Chief Executive Officer and the Chief Financial Officer, has established disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

During 2015, Progressive acquired a controlling interest in ARX. The scope of management's assessment of the effectiveness of internal control over financial reporting did not include this acquisition. ARX represented about 3% of our consolidated revenues for the year ended December 31, 2015 and accounted for about 6% of total consolidated assets as of December 31, 2015. This exclusion is in accordance with the SEC's guidance, which permit companies to omit an acquired business's internal controls over financial reporting from management's assessment during the first year after the acquisition.

The Chief Executive Officer and the Chief Financial Officer reviewed and evaluated Progressive’s disclosure controls and procedures as of the end of the period covered by this report. Based on that review and evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that Progressive’s disclosure controls and procedures are effectively serving the stated purposes as of the end of the period covered by this report.

Management’s Report on Internal Control over Financial Reporting is incorporated by reference from our Annual Report, which is included as Exhibit 13 to this Form 10-K.

The attestation of the independent registered public accounting firm is incorporated by reference from our Annual Report, which is included as Exhibit 13 to this Form 10-K.

There has been no change in Progressive’s internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

- 28 -

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information relating to our directors is incorporated herein by reference from the section entitled “Item 1: Election of Directors” in The Progressive Corporation's Proxy Statement for the Annual Meeting of Shareholders to be held on May 13, 2016 (the "Proxy Statement").

Information relating to executive officers of Progressive follows. Unless otherwise indicated, the executive officer has held the position(s) indicated for at least the last five years.

Name	Age	Offices Held and Last Five Years’ Business Experience
Glenn M. Renwick	60	Chairman of the Board since November 2013; President and Chief Executive Officer
John P. Sauerland	51	Vice President since May 2015; Chief Financial Officer since April 2015; Personal Lines Group President prior to April 2015
Susan Patricia Griffith	51	Vice President since May 2015; Personal Lines Chief Operating Officer since April 2015; President of Customer Operations from April 2014 to April 2015; Claims Group President prior to April 2014
Charles E. Jarrett	58	Vice President, Secretary, and Chief Legal Officer
Jeffrey W. Basch	57	Vice President and Chief Accounting Officer
Thomas A. King	56	Vice President; Treasurer prior to January 2016
John F. Auer	61	President, Chief Executive Officer, and Treasurer of ARX Holding Corp.
John A. Barbagallo	56	Commercial Lines President; Commercial Lines Group President, including Agency Operations prior to May 2015
Steven A. Broz	45	Chief Information Officer since February 2016; Claims Process General Manager from March 2015 to January 2016; Enterprise Project Management Office Leader from April 2011 to March 2015; Personal Lines General Manager prior to April 2011
Patrick K. Callahan	45	Personal Lines President since April 2015; Direct Acquisition Business Leader from March 2013 to March 2015; Special Lines General Manager prior to March 2013
M. Jeffrey Charney	56	Chief Marketing Officer
William M. Cody	53	Chief Investment Officer
Valerie Krasowski	50	Chief Human Resource Officer
John Murphy	46	Customer Relationship Management President since January 2016; Customer Relationship Management Business Leader from February 2015 to January2016; Corporate Process Business Leader prior to February 2015
Michael D. Sieger	54	Claims President since January 2015; Claims Process General Manager prior to January 2015

Section 16(a) Beneficial Ownership Reporting Compliance. Incorporated by reference from the "Section 16(a) Beneficial Ownership Reporting Compliance" section of the Proxy Statement (which can be found in "Security Ownership of Certain Beneficial Owners and Management").

Code of Ethics. Progressive has a Code of Ethics for the Chief Executive Officer, Chief Financial Officer, and other senior financial officers. This Code of Ethics is available at: progressive.com/governance. We intend to satisfy the disclosure requirements under Item 5.05 of Form 8-K regarding amendments to, and waivers from, the provisions of the foregoing Code of Ethics by posting such information on our Internet website at: progressive.com/governance.

Shareholder-Proposed Candidate Procedures. There were no material changes during 2015 to Progressive’s procedures by which shareholder can recommend a director candidate during 2015. The description of those procedures is incorporated by reference from the “To Recommend a Candidate for our Board of Directors” section of the Proxy Statement (which can be found in “Procedures for Recommendations and Nominations of Directors and Shareholder Proposals”).

Audit Committee. Incorporated by reference from the “Audit Committee” section of the Proxy Statement.

Financial Expert. Incorporated by reference from the “Audit Committee Financial Experts” section of the Proxy Statement (which can be found in “Audit Committee”).

- 29 -

ITEM 11. EXECUTIVE COMPENSATION

Incorporated by reference from the sections of the Proxy Statement entitled “Compensation Discussion and Analysis,” “Executive Compensation,” “Other Board of Directors Information: Compensation Committee Interlocks and Insider Participation,” and “Compensation Committee Report.”

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding ownership of Common Shares by certain beneficial owners and management is incorporated by reference from the section of the Proxy Statement entitled “Security Ownership of Certain Beneficial Owners and Management.”

The following information is set forth with respect to our equity compensation plans at December 31, 2015.

EQUITY COMPENSATION PLAN INFORMATION
Plan Category	Number of Securities to be Issued upon  Exercise of Outstanding Options, Warrants and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights	Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans
Equity compensation plans approved by security holders:
Employee Plans:
2015 Equity Incentive Plan	129,326	1,2	NA	12,741,348	3
2010 Equity Incentive Plan	7,595,901	1,2	NA	2,824,555	3
Subtotal Employee Plans	7,725,227		NA	15,565,903
Director Plans:
2003 Directors Equity Incentive Plan	89,427		NA	305,878
Subtotal Director Plans	89,427		NA	305,878
Equity compensation plans not approved by security holders:
None
Total	7,814,654		NA	15,871,781

NA = Not applicable because restricted stock and restricted stock unit awards do not have an exercise price.

¹ Reflects restricted stock unit awards, including reinvested dividend equivalents, under which, upon vesting, the holder has the right to receive common shares on a one-to-one basis; there is no exercise price associated with restricted stock unit awards.

² Performance-based restricted stock unit awards, including dividend equivalents, if applicable, of 1,896,545 and 129,326 units, are included under the 2010 Equity Incentive Plan and the 2015 Equity Incentive Plan, respectively, at their target value. The ultimate amount that could vest can range from 0 to 250% of target amount for the performance versus market insurance awards, and up to 200% of target for all other awards. Maximum potential payout for the performance awards outstanding under the 2010 Equity Incentive Plan and the 2015 Equity Incentive Plan were 4,643,572 and 258,652, respectively. For further discussion of these awards, see Note 9—Employee Benefit Plans in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

³ Gives effect to reservation of common shares subject to performance-based awards at maximum potential payout.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Incorporated by reference from the section of the Proxy Statement entitled “Other Board of Directors Information,” subsections “Board of Directors Independence Determinations” and “Transactions with Related Parties.”

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Incorporated by reference from the section of the Proxy Statement entitled “Other Independent Registered Public Accounting Firm Information.”

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PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Listing of Financial Statements

The following consolidated financial statements are included in our Annual Report, which is included as Exhibit 13 to this Form 10-K, and are incorporated by reference in Item 8:

• Report of Independent Registered Public Accounting Firm

• Consolidated Statements of Comprehensive Income - For the Years Ended December 31, 2015, 2014, and 2013

• Consolidated Balance Sheets - December 31, 2015 and 2014

• Consolidated Statements of Changes in Shareholders’ Equity - For the Years Ended December 31, 2015, 2014, and 2013

• Consolidated Statements of Cash Flows - For the Years Ended December 31, 2015, 2014, and 2013

• Notes to Consolidated Financial Statements

• Supplemental Information (Unaudited)

(a)(2) Listing of Financial Statement Schedules

The following financial statement schedules, Report of Independent Registered Public Accounting Firm and Consent of Independent Registered Public Accounting Firm are included in Item 15(c):

• Schedule I - Summary of Investments - Other than Investments in Related Parties

• Schedule II - Condensed Financial Information of Registrant

• Schedule III - Supplementary Insurance Information

• Schedule IV - Reinsurance

• Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations

• Report of Independent Registered Public Accounting Firm on Financial Statement Schedules

• Consent of Independent Registered Public Accounting Firm

• No other schedules are required to be filed herewith pursuant to Article 7 of Regulation S-X.

(a)(3) Listing of Exhibits

See exhibit index contained herein beginning at page 45. Management contracts and compensatory plans and arrangements are identified in the Exhibit Index as Exhibit Nos. 10.2 through 10.91.

(b) Exhibits

The exhibits in response to this portion of Item 15 are submitted concurrently with this report.

(c) Financial Statement Schedules

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SCHEDULE I — SUMMARY OF INVESTMENTS — OTHER THAN INVESTMENTS IN RELATED PARTIES

THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

(millions)

	December 31, 2015
Type of Investment	Cost		Fair Value		Amount At Which Shown In The Balance Sheet
Available-for-sale
Fixed maturities:
Bonds:
United States Government and government agencies and authorities	$	2,425.4	$	2,429.2	$	2,429.2
States, municipalities, and political subdivisions	2,677.6		2,721.4		2,721.4
Foreign government obligations	18.6		18.6		18.6
Public utilities	140.3		139.7		139.7
Corporate and other debt securities	3,572.9		3,551.9		3,551.9
Asset-backed securities	6,253.1		6,237.1		6,237.1
Redeemable preferred stocks	260.0		234.3		234.3
Total fixed maturities	15,347.9		15,332.2		15,332.2
Equity securities:
Common stocks:
Public utilities	113.1		151.8		151.8
Banks, trusts, and insurance companies	264.1		484.2		484.2
Industrial, miscellaneous, and all other	1,117.1		2,014.5		2,014.5
Nonredeemable preferred stocks	674.2		782.6		782.6
Total equity securities	2,168.5		3,433.1		3,433.1
Short-term investments1	2,172.0		2,172.0		2,172.0
Total investments	$	19,688.4	$	20,937.3	$	20,937.3

¹ Includes $2.5 million in treasury bills issued by the Australian government.

Progressive did not have any securities of any one issuer, excluding U.S. government obligations, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at December 31, 2015.

- 32 -

SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

THE PROGRESSIVE CORPORATION (PARENT COMPANY)

(millions)

	Years Ended December 31,
	2015			2014			2013
Revenues
Dividends from subsidiaries	$	852.5		$	1,000.2		$	1,119.7
Undistributed income (loss) from subsidiaries	500.0			358.3			117.5
Equity in net income of subsidiaries*	1,352.5			1,358.5			1,237.2
Intercompany investment income*	3.9			2.4			2.8
Gains (losses) on extinguishment of debt	(0.9		)	(4.8		)	(4.3		)
Other income1	0			0			2.6
Total revenues	1,355.5			1,356.1			1,238.3
Expenses
Interest expense	136.1			120.2			121.2
Deferred compensation2	5.3			2.8			9.5
Other operating costs and expenses	5.4			4.4			4.0
Total expenses	146.8			127.4			134.7
Income before income taxes	1,208.7			1,228.7			1,103.6
Benefit for income taxes	(58.9		)	(52.3		)	(61.8		)
Net income attributable to Progressive	1,267.6			1,281.0			1,165.4
Other comprehensive income (loss)	(222.7		)	71.4			80.7
Comprehensive income attributable to Progressive	$	1,044.9		$	1,352.4		$	1,246.1

* Eliminated in consolidation.

¹ Represents gain on net death benefit received on life insurance policies.

² See Note 4 – Employee Benefit Plans in these condensed financial statements.

See notes to condensed financial statements.

- 33 -

SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

CONDENSED BALANCE SHEETS

THE PROGRESSIVE CORPORATION (PARENT COMPANY)

(millions)

	December 31,
	2015		2014
Assets
Investment in affiliate	$	5.0	$	5.0
Investment in subsidiaries*	9,192.3		7,423.5
Receivable from investment subsidiary*	1,200.5		1,677.5
Intercompany receivable*	406.0		413.0
Net deferred income taxes	90.6		74.5
Other assets	124.8		123.9
Total Assets	$	11,019.2	$	9,717.4
Liabilities and Shareholders’ Equity
Accounts payable, accrued expenses, and other liabilities	$	202.7	$	220.0
Dividend payable	519.2		404.1
Debt	2,543.0		2,164.7
Total liabilities	3,264.9		2,788.8
Redeemable noncontrolling interest (NCI)	464.9		0
Shareholders' Equity
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 214.0 and 209.8)	583.6		587.8
Paid-in capital	1,218.8		1,184.3
Retained earnings	4,686.6		4,133.4
Total accumulated other comprehensive income	800.4		1,023.1
Total shareholders’ equity	7,289.4		6,928.6
Total Liabilities, Redeemable NCI, and Shareholders’ Equity	$	11,019.2	$	9,717.4

*Eliminated in consolidation.

See notes to condensed financial statements.

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SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

CONDENSED STATEMENTS OF CASH FLOWS

THE PROGRESSIVE CORPORATION (PARENT COMPANY)

(millions)

	Years Ended December 31,
	2015			2014			2013
Cash Flows From Operating Activities:
Net income attributable to Progressive	$	1,267.6		$	1,281.0		$	1,165.4
Adjustments to reconcile net income attributable to Progressive to net cash provided by operating activities:
Undistributed (income) loss from subsidiaries	(500.0		)	(358.3		)	(117.5		)
Amortization of equity-based compensation	2.4			2.2			2.1
(Gains) losses on extinguishment of debt	0.9			4.8			4.3
Changes in:
Intercompany receivable	7.0			(105.4		)	(11.4		)
Accounts payable, accrued expenses, and other liabilities	(46.2		)	18.2			19.4
Income taxes	12.3			61.1			(55.8		)
Other, net	(3.1		)	0.4			(16.3		)
Net cash provided by operating activities	740.9			904.0			990.2
Cash Flows From Investing Activities:
Additional investments in equity securities of consolidated subsidiaries	(40.2		)	(21.1		)	(13.9		)
Investment in affiliate	0.0			0			(4.0		)
Acquisition of ARX	(890.1		)	0			0
(Paid to) received from investment subsidiary	409.1			(29.1		)	(325.5		)
Net cash used in investing activities	(521.2		)	(50.2		)	(343.4		)
Cash Flows From Financing Activities:
Tax benefit from exercise/vesting of equity-based compensation	16.8			12.8			10.3
Net proceeds from debt issuance	394.9			346.3			0
Payment of debt	0			0			(150.0		)
Reacquisition of debt	(19.3		)	(48.9		)	(58.1		)
Dividends paid to shareholders	(403.6		)	(892.6		)	(175.6		)
Acquisition of treasury shares	(208.5		)	(271.4		)	(273.4		)
Net cash used in financing activities	(219.7		)	(853.8		)	(646.8		)
Change in cash	0			0			0
Cash, beginning of year	0			0			0
Cash, end of year	$	0		$	0		$	0

See notes to condensed financial statements.

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SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT (Continued)

NOTES TO CONDENSED FINANCIAL STATEMENTS

The accompanying condensed financial statements of The Progressive Corporation (parent company) should be read in conjunction with the consolidated financial statements and notes thereto in the Annual Report to Shareholders of The Progressive Corporation and its subsidiaries, which is included as Exhibit 13 to this Form 10-K.

Note 1. Statements of Cash Flows — For the purpose of the Statements of Cash Flows, cash includes only bank demand deposits. The Progressive Corporation does not hold any cash but has unrestricted access to funds maintained in a non-insurance, investment subsidiary to meet its holding company obligations; at year-end 2015 and 2014, $1.3 billion and $1.9 billion, respectively, of marketable securities were available in this subsidiary. Non-cash activity includes declared but unpaid dividends, the transfer of the previous 5% ownership interest in ARX to The Progressive Corporation from an investment subsidiary, and the change in redemption value of the redeemable NCI. For the years ended December 31, The Progressive Corporation paid the following:

(millions)	2015		2014		2013
Income taxes	$	625.0	$	515.0	$	497.0
Interest	128.2		116.0		122.3

Note 2. Income Taxes — The Progressive Corporation files a consolidated federal income tax return with all eligible subsidiaries and acts as an agent for the consolidated tax group when making payments to the Internal Revenue Service. Since The Progressive Corporation owns less than 80% of ARX's outstanding stock, ARX and its subsidiaries are not eligible to file on a consolidated basis with The Progressive Corporation. The Progressive Corporation consolidated group’s net income taxes currently payable/recoverable are included in other liabilities/assets, respectively, in the accompanying Condensed Balance Sheets based on the balance at the end of the year. The Progressive Corporation and its eligible subsidiaries have adopted, pursuant to a written agreement, a method of allocating consolidated federal income taxes. Amounts allocated to the eligible subsidiaries under the written agreement are included in “Intercompany Receivable” in the accompanying Condensed Balance Sheets.

Note 3. Debt — The information relating to debt is incorporated by reference from Note 4 – Debt in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

Note 4. Employee Benefit Plans — The information relating to incentive compensation plans and deferred compensation is incorporated by reference from Note 9 – Employee Benefit Plans in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

Note 5. Other Comprehensive Income — On the condensed Statements of Comprehensive Income, other comprehensive income represents activity of the subsidiaries of The Progressive Corporation and includes net unrealized gains (losses) on securities, net unrealized gains on forecasted transactions, and foreign currency translation adjustments.

Note 6. Dividends — The information relating to our dividend policy is incorporated by reference from Note 14 – Dividends in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

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SCHEDULE III — SUPPLEMENTARY INSURANCE INFORMATION

THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

(millions)

Segment	Deferred policy acquisition costs1		Future policy benefits, losses, claims, and loss expenses1		Unearned premiums1		Other policy claims and benefits payable1		Premium revenue			Net investment income1,2		Benefits, claims, losses, and settlement expenses			Amortization of deferred policy acquisition costs		Other operating expenses		Net premiums written
Year ended December 31, 2015:
Personal Lines									$	17,294.5				$	12,748.7		$	1,331.3	$	2,379.9	$	17,703.6
Commercial Lines									1,995.9					1,244.5			219.4		232.6		2,171.2
Property									609.1					349.0			101.1		98.8		689.6
Other indemnity									(0.4		)			(0.2		)	0		0.8		(0.4		)
Total	$	564.1	$	10,039.0	$	6,621.8	$	0	$	19,899.1		$	431.8	$	14,342.0		$	1,651.8	$	2,712.1	$	20,564.0
Year ended December 31, 2014:
Personal Lines									$	16,561.0				$	12,161.2		$	1,322.9	$	2,262.6	$	16,759.2
Commercial Lines									1,837.5					1,133.4			201.1		204.2		1,895.4
Property									0					0			0		0		0
Other indemnity									0					11.6			0		0.3		0
Total	$	457.2	$	8,857.4	$	5,440.1	$	0	$	18,398.5		$	389.5	$	13,306.2		$	1,524.0	$	2,467.1	$	18,654.6
Year ended December 31, 2013:
Personal Lines									$	15,341.6				$	11,194.6		$	1,257.5	$	2,149.2	$	15,569.2
Commercial Lines									1,761.6					1,267.3			194.3		201.2		1,770.5
Property									0					0			0		0		0
Other indemnity									0.2					10.5			0		0.5		0
Total	$	447.6	$	8,479.7	$	5,174.5	$	0	$	17,103.4		$	403.2	$	12,472.4		$	1,451.8	$	2,350.9	$	17,339.7

¹ Progressive does not allocate assets, liabilities, or investment income to operating segments.

² Excludes total net realized gains (losses) on securities.

- 37 -

SCHEDULE IV — REINSURANCE

THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

(millions)

Year Ended:	Gross Amount		Ceded to Other Companies		Assumed From Other Companies		Net Amount		Percentage of Amount Assumed to Net
December 31, 2015
Premiums earned:
Property and liability insurance	$	20,454.1	$	555.0	$	0	$	19,899.1	0
December 31, 2014
Premiums earned:
Property and liability insurance	$	18,648.4	$	249.9	$	0	$	18,398.5	0
December 31, 2013
Premiums earned:
Property and liability insurance	$	17,317.9	$	214.5	$	0	$	17,103.4	0

- 38 -

SCHEDULE VI — SUPPLEMENTAL INFORMATION CONCERNING PROPERTY - CASUALTY INSURANCE OPERATIONS

THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

(millions)

	Losses and Loss Adjustment Expenses Incurred Related to
Year Ended	Current Year		Prior Years			Paid Losses and Loss Adjustment Expenses
December 31, 2015	$	14,657.1	$	(315.1	)	$	13,639.6
December 31, 2014	$	13,330.3	$	(24.1	)	$	13,068.5
December 31, 2013	$	12,427.3	$	45.1		$	12,014.9

Pursuant to Rule 12-18 of Regulation S-X. See Schedule III for the additional information required in Schedule VI.

- 39 -

Report of Independent Registered Public Accounting Firm on Financial Statement Schedules

To the Board of Directors and Shareholders of The Progressive Corporation

Our audits of the consolidated financial statements and of the effectiveness of internal control over financial reporting referred to in our report dated February 29, 2016 appearing in the 2015 Annual Report to Shareholders of The Progressive Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

Cleveland, Ohio

February 29, 2016

- 40 -

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Forms:

Form	Filing No.	Filing Date
S-8	333-204406	May 22, 2015
S-8	333-185704	December 27, 2012
S-8	333-185703	December 27, 2012
S-8	333-172663	March 8, 2011
S-8	333-104646	April 21, 2003
S-8	333-104653	April 21, 2003
S-8	333-41238	July 12, 2000
S-8	33-57121	December 29, 1994
S-8	33-51034	August 20, 1992
S-8	33-16509	August 14, 1987

of The Progressive Corporation of our report dated February 29, 2016 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in the 2015 Annual Report to Shareholders, which is incorporated by reference in The Progressive Corporation’s Annual Report on Form 10‑K. We also consent to the incorporation by reference of our report dated February 29, 2016 relating to the financial statement schedules, which appears in this Form 10‑K.

/s/ PricewaterhouseCoopers LLP

Cleveland, Ohio

February 29, 2016

- 41 -

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	THE PROGRESSIVE CORPORATION
February 29, 2016	By:	/s/ Glenn M. Renwick
		Glenn M. Renwick
		Chairman of the Board, President, and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Glenn M. Renwick	Director, Chairman of the Board, President, and Chief Executive Officer	February 29, 2016
Glenn M. Renwick
/s/ John P. Sauerland	Vice President and Chief Financial Officer	February 29, 2016
John P. Sauerland
/s/ Jeffrey W. Basch	Vice President and Chief Accounting Officer	February 29, 2016
Jeffrey W. Basch
*	Lead Independent Director	February 29, 2016
Stephen R. Hardis
*	Director	February 29, 2016
Stuart B. Burgdoerfer
*	Director	February 29, 2016
Charles A. Davis
*	Director	February 29, 2016
Roger N. Farah
*	Director	February 29, 2016
Lawton W. Fitt
*	Director	February 29, 2016
Jeffrey D. Kelly
*	Director	February 29, 2016
Patrick H. Nettles, Ph.D.
*	Director	February 29, 2016
Bradley T. Sheares, Ph.D.
*	Director	February 29, 2016
Barbara R. Snyder

- 42 -

* Charles E. Jarrett, by signing his name hereto, does sign this document on behalf of the persons indicated above pursuant to powers of attorney duly executed by such persons.

By:	/s/ Charles E. Jarrett	February 29, 2016
	Charles E. Jarrett
	Attorney-in-fact

- 43 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
3(i)	3.1	Amended Articles of Incorporation of The Progressive Corporation (as amended April 18, 2008)	Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 3.1 therein)
3(ii)	3.2	Code of Regulations of The Progressive Corporation (as amended January 29, 2016)	Current Report on Form 8-K (filed on February 2, 2016; Exhibit 3 therein)
4	4.1	Form of 3.75% Senior Notes due 2021, issued in the aggregate principal amount of $500,000,000 under the 1993 Senior Indenture (see exhibit 4.5 below), as amended and supplemented	Current Report on Form 8-K (filed on August 22, 2011; Exhibit 4.2 therein)
4	4.2	Form of 6 5/8% Senior Notes due 2029, issued in the aggregate principal amount of $300,000,000 under the 1993 Senior Indenture, as amended and supplemented	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 4.2 therein)
4	4.3	Form of 6.25% Senior Notes due 2032, issued in the aggregate principal amount of $400,000,000 under the 1993 Senior Indenture, as amended and supplemented	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.4 therein)
4	4.4	Form of 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067, issued in the original aggregate principal amount of $1,000,000,000 under the Junior Subordinated Indenture (see exhibit 4.11 below), as amended and supplemented	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.5 therein)
4	4.5	Form of 4.35% Senior Notes due 2044, issued in the aggregate principal amount of $350,000,000 under the 1993 Senior Indenture, as amended and supplemented	Current Report on Form 8-K (filed on April 25, 2014; Exhibit 4.2 therein)
4	4.6	Form of 3.70% Senior Notes due 2045, issued in the aggregate principal amount of $400,000,000 under the 1993 Senior Indenture, as amended and supplemented	Current Report on Form 8-K (filed on January 26, 2015; Exhibit 4.2 therein)
4	4.7	Indenture dated as of September 15, 1993 between The Progressive Corporation and State Street Bank and Trust Company (successor in interest to The First National Bank of Boston), as Trustee (“1993 Senior Indenture”) (including table of contents and cross-reference sheet)	Registration Statement No. 333-48935 (filed on March 31, 1998; Exhibit 4.1 therein)
4	4.8	First Supplemental Indenture dated March 15, 1996 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company	Registration Statement No. 333-01745 (filed on March 15, 1996; Exhibit 4.2 therein)
4	4.9	Second Supplemental Indenture dated February 26, 1999 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company, as Trustee	Registration Statement No. 333-100674 (filed on October 22, 2002; Exhibit 4.3 therein)

- 44 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
4	4.10	Fourth Supplemental Indenture dated November 21, 2002 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company, as Trustee	Registration Statement No. 333-143824 (filed on June 18, 2007; Exhibit 4.5 therein)
4	4.11	Fifth Supplemental Indenture dated June 13, 2007 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, evidencing the designation of U.S. Bank National Association as successor Trustee under the 1993 Senior Indenture	Registration Statement No. 333-143824 (filed on June 18, 2007; Exhibit 4.6 therein)
4	4.12	Sixth Supplemental Indenture dated August 22, 2011 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, as Trustee	Quarterly Report on Form 10-Q (filed on November 7, 2011; Exhibit 4.1 therein)
4	4.13	Seventh Supplemental Indenture dated April 25, 2014 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, as Trustee	Current Report on Form 8-K (filed on April 25, 2014; Exhibit 4.1 therein)
4	4.14	Eighth Supplemental Indenture dated January 26, 2015 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, as Trustee	Current Report on Form 8-K (filed on January 26, 2015; Exhibit 4.1 therein)
4	4.15	Junior Subordinated Indenture dated as of June 21, 2007 between The Progressive Corporation and The Bank of New York Trust Company, N.A., Trustee (“Junior Subordinated Indenture”) (including table of contents and cross-reference sheet)	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.12 therein)
4	4.16	First Supplemental Indenture dated June 21, 2007 to the Junior Subordinated Indenture between The Progressive Corporation and The Bank of New York Trust Company, N.A., as Trustee	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.13 therein)
4	4.17	Second Supplemental Indenture dated September 2, 2011, to the Junior Subordinated Indenture dated June 21, 2007, between The Progressive Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee	Current Report on Form 8-K (filed on September 7, 2011; Exhibit 4 therein)
4	4.18	Replacement Capital Covenant dated June 21, 2007, of The Progressive Corporation	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.15 therein)
4	4.19	Termination of Replacement Capital Covenant, dated June 23, 2010	Filed herewith
4	4.20	Confirmation Letter-Discretionary Line of Credit dated March 20, 2015 from PNC Bank, National Association to The Progressive Corporation	Current Report on Form 8-K (filed on March 25, 2015; Substantially the same form as Exhibit 4.1 filed with the Form 8-K filed on March 25, 2014 therein)

- 45 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
4	4.21	Discretionary Line of Credit Note dated March 20, 2015 from The Progressive Corporation to PNC Bank, National Association	Quarterly Report on Form 10-Q (filed on May 11, 2015; Exhibits 4.1 & 4.2 therein)
4	4.22	The Company agrees, upon request, to furnish to the U.S. Securities and Exchange Commission a copy of any instrument authorizing long-term debt that does not authorize debt in excess of 10% of the total assets of the Company and its subsidiaries on a consolidated basis.
10(i)	10.1	Stock Purchase Agreement, dated as of December 15, 2014, among ARX Holding Corp., The Progressive Corporation and the selling shareholders identified therein, including Exhibit H, the form of Stockholders' Agreement to be executed at closing	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.1 therein)
10(iii)	10.2	The Progressive Corporation 2013 Gainsharing Plan	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 10.6 therein)
10(iii)	10.3	The Progressive Corporation 2014 Gainsharing Plan	Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 10.7 therein)
10(iii)	10.4	The Progressive Corporation 2015 Gainsharing Plan	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.8 therein)
10(iii)	10.5	The Progressive Corporation 2016 Gainsharing Plan	Filed herewith
10(iii)	10.6	The Progressive Corporation 2007 Executive Bonus Plan	Annual Report on Form 10-K (filed on February 28, 2012; Exhibit 10.8 therein)
10(iii)	10.7	The Progressive Corporation 2003 Incentive Plan	Registration Statement No. 333-104646 (filed on April 21, 2003; Exhibit 4(a) therein)
10(iii)	10.8	First Amendment to The Progressive Corporation 2003 Incentive Plan	Annual Report on Form 10-K (filed on February 28, 2012; Exhibit 10.10 therein)
10(iii)	10.9	Second Amendment to The Progressive Corporation 2003 Incentive Plan	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.12 therein)
10(iii)	10.10	Third Amendment to The Progressive Corporation 2003 Incentive Plan	Filed herewith
10(iii)	10.11	Fourth Amendment to The Progressive Corporation 2003 Incentive Plan	Quarterly Report on Form 10-Q (filed on May 7, 2012; Exhibit 10.4 therein)

- 46 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
10(iii)	10.12	Form of The Progressive Corporation 2003 Incentive Plan Restricted Stock Award Agreement (Performance-Based Award) (for 2004 through February 2007)	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.16 therein)
10(iii)	10.13	Form of The Progressive Corporation 2003 Incentive Plan Restricted Stock Award Agreement (Performance-Based Award) (for March 2007 through February 2009)	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 10.15 therein)
10(iii)	10.14	Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2003 Incentive Plan	Filed herewith
10(iii)	10.15	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards under The Progressive Corporation 2003 Incentive Plan	Filed herewith
10(iii)	10.16	The Progressive Corporation 2010 Equity Incentive Plan	Registration Statement No. 333-172663 (filed on March 8, 2011; Exhibit 4.1 therein)
10(iii)	10.17	First Amendment to The Progressive Corporation 2010 Equity Incentive Plan	Registration Statement No. 333-172663 (filed on March 8, 2011; Exhibit 4.2 therein)
10(iii)	10.18	Second Amendment to The Progressive Corporation 2010 Equity Incentive Plan	Registration Statement No. 333-172663 (filed on March 8, 2011; Exhibit 4.3 therein)
10(iii)	10.19	Third Amendment to The Progressive Corporation 2010 Equity Incentive Plan	Registration Statement No. 333-172663 (filed on March 8, 2011; Exhibit 4.4 therein)
10(iii)	10.20	Fourth Amendment to The Progressive Corporation 2010 Equity Incentive Plan	Current Report on Form 8-K (filed on February 2, 2012; Exhibit 10.1 therein)
10(iii)	10.21	Fifth Amendment to The Progressive Corporation 2010 Equity Incentive Plan	Quarterly Report on Form 10-Q (filed on May 7, 2012; Exhibit 10.5 therein)
10(iii)	10.22	Sixth Amendment to The Progressive Corporation 2010 Equity Incentive Plan	Current Report on Form 8-K (filed on December 11, 2012; Exhibit 10.1 therein)
10(iii)	10.23	Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2010 Equity Incentive Plan (for 2011 and 2012)	Current Report on Form 8-K (filed on March 25, 2011; Exhibit 10.1 therein)
10(iii)	10.24	Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2010 Equity Incentive Plan (for 2013)	Current Report on Form 8-K (filed on March 22, 2013; Exhibit 10.1 therein)
10(iii)	10.25	Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2010 Equity Incentive Plan (for 2014)	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.30 therein)

- 47 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
10(iii)	10.26	Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2010 Equity Incentive Plan (for 2015)	Quarterly Report on Form 10-Q (filed on May 11, 2015; Exhibit 10.1 therein)
10(iii)	10.27	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Insurance Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2011 and 2012)	Current Report on Form 8-K (filed on March 25, 2011; Exhibit 10.2 therein)
10(iii)	10.28	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Performance) under The Progressive Corporation 2010 Equity Incentive Plan (for 2012)	Current Report on Form 8-K (filed on March 22, 2012; Exhibit 10.1 therein)
10(iii)	10.29	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Insurance Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2013)	Current Report on Form 8-K (filed on March 22, 2013; Exhibit 10.2 therein)
10(iii)	10.30	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2013)	Current Report on Form 8-K (filed on March 22, 2013; Exhibit 10.3 therein)
10(iii)	10.31	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Insurance Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2014)	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.35 therein)
10(iii)	10.32	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2014)	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.36 therein)
10(iii)	10.33	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Insurance Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2015)	Quarterly Report on Form 10-Q (filed on May 11, 2015; Exhibit 10.2 therein)
10(iii)	10.34	Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2015)	Quarterly Report on Form 10-Q (filed on May 11, 2015; Exhibit 10.3 therein)
10(iii)	10.35	The Progressive Corporation 2015 Equity Incentive Plan	Current Report on Form 8-K (filed on February 4, 2015; Exhibit 10.1 therein)
10(iii)	10.36	Restricted Stock Unit Award Agreement (2015 Performance-Based Award - Special Award) under the Progressive Corporation 2015 Equity Incentive Plan	Current Report on Form 8-K (filed on August 14,2015; Exhibit 10.1 therein)

- 48 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
10(iii)	10.37	Employment Agreement, dated March 30, 2004, between ARX Holding Corp. and John F. Auer	Filed herewith
10(iii)	10.38	The Progressive Corporation 2003 Directors Equity Incentive Plan	Registration Statement No. 333-104653 (filed on April 21, 2003; Exhibit 4(a) therein)
10(iii)	10.39	Amendment No. 1 to The Progressive Corporation 2003 Directors Equity Incentive Plan	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.39 therein)
10(iii)	10.40	Amendment No. 2 to The Progressive Corporation 2003 Directors Equity Incentive Plan	Current Report on Form 8-K (filed on February 2, 2012; Exhibit 10.2 therein)
10(iii)	10.41	Amendment No. 3 to The Progressive Corporation 2003 Directors Equity Incentive Plan	Quarterly Report on Form 10-Q (filed on May 7, 2012; Exhibit 10.3 therein)
10(iii)	10.42	Form of The Progressive Corporation 2003 Directors Equity Incentive Plan Restricted Stock Award Agreement (for 2004 and thereafter)	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.42 therein)
10(iii)	10.43	The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.3 therein)
10(iii)	10.44	First Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.4 therein)
10(iii)	10.45	Second Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.5 therein)
10(iii)	10.46	Third Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.6 therein)
10(iii)	10.47	Fourth Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.7 therein)
10(iii)	10.48	The Progressive Corporation Executive Deferred Compensation Plan (2008 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.8 therein)
10(iii)	10.49	First Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2008 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.9 therein)

- 49 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
10(iii)	10.50	The Progressive Corporation Executive Deferred Compensation Plan (2010 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.10 therein)
10(iii)	10.51	First Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2010 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.11 therein)
10(iii)	10.52	Second Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2010 Amendment and Restatement)	Current Report on Form 8-K (filed on October 14, 2014; Exhibit 10 therein)
10(iii)	10.53	Third Amendment to the Progressive Corporation Executive Deferred Compensation Plan (2010 Amendment and Restatement)	Filed herewith
10(iii)	10.54	Form of The Progressive Corporation Executive Deferred Compensation Plan Deferral Agreement (for 2005 through 2009)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.12 therein)
10(iii)	10.55	Form of The Progressive Corporation Executive Deferred Compensation Plan Gainsharing/Bonus Deferral Agreement (for 2010 and thereafter)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.13 therein)
10(iii)	10.56	Form of The Progressive Corporation Executive Deferred Compensation Plan Performance-Based Restricted Stock Deferral Agreement (for 2004)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.14 therein)
10(iii)	10.57	Form of The Progressive Corporation Executive Deferred Compensation Plan Performance-Based Restricted Stock Deferral Agreement (for 2005)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.15 therein)
10(iii)	10.58	Form of The Progressive Corporation Executive Deferred Compensation Plan Performance-Based Restricted Stock Deferral Agreement (for 2006 through 2009)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.16 therein)
10(iii)	10.59	Form of The Progressive Corporation Executive Deferred Compensation Plan Performance-Based Restricted Stock Unit Deferral Agreement (for 2010 through 2014)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.17 therein)
10(iii)	10.60	Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Deferral Agreement (for 2003)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.18 therein)

- 50 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
10(iii)	10.61	Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Deferral Agreement (for 2004)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.19 therein)
10(iii)	10.62	Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Deferral Agreement (for 2005)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.20 therein)
10(iii)	10.63	Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Deferral Agreement (for 2006 through 2009)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.21 therein)
10(iii)	10.64	Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Unit Deferral Agreement (for 2010 and thereafter)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.22 therein)
10(iii)	10.65	The Progressive Corporation Executive Deferred Compensation Trust (November 8, 2002 Amendment and Restatement)	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.23 therein)
10(iii)	10.66	First Amendment to Trust Agreement between Fidelity Management Trust Company and Progressive	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.24 therein)
10(iii)	10.67	Second Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.25 therein)
10(iii)	10.68	Third Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.26 therein)
10(iii)	10.69	Fourth Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.27 therein)
10(iii)	10.70	Fifth Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.28 therein)
10(iii)	10.71	Sixth Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.29 therein)
10(iii)	10.72	Seventh Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.30 therein)
10(iii)	10.73	Eighth Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 10.66 therein)

- 51 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
10(iii)	10.74	Ninth Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Quarterly Report on Form 10-Q (filed on May 11, 2015; Exhibit 10.5 therein)
10(iii)	10.75	Tenth Amendment to The Progressive Corporation Executive Deferred Compensation Trust	Quarterly Report on Form 10-Q (filed on May 11, 2015; Exhibit 10.6 therein)
10(iii)	10.76	The Progressive Corporation Directors Deferral Plan (2008 Amendment and Restatement)	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 10.62 therein)
10(iii)	10.77	The Progressive Corporation Directors Deferral Plan (2015 Amendment and Restatement)	Filed herewith
10(iii)	10.78	The Progressive Corporation Directors Restricted Stock Deferral Plan	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.76 therein)
10(iii)	10.79	The Progressive Corporation Directors Restricted Stock Deferral Plan (2008 Amendment and Restatement)	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 10.63 therein)
10(iii)	10.80	First Amendment to The Progressive Corporation Directors Restricted Stock Deferral Plan (2008 Amendment and Restatement)	Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 10.69 therein)
10(iii)	10.81	Form of The Progressive Corporation Directors Restricted Stock Deferral Plan Deferral Agreement	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.76 therein)
10(iii)	10.82	Director Compensation Schedule for 2013 - 2014 Term	Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 10.72 therein)
10(iii)	10.83	Director Compensation Schedule for 2014 - 2015 Term	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.79 therein)
10(iii)	10.84	Director Compensation Schedule for 2015 - 2016 Term	Filed herewith
10(iii)	10.85	The Progressive Corporation Executive Separation Allowance Plan (2015 Amendment and Restatement)	Current Report on Form 8-K (filed on August 11, 2015; Exhibit 10.1 therein)
10(iii)	10.86	First Amendment to the Progressive Corporation Executive Separation Allowance Plan (2015 Amendment and Restatement)	Current Report on Form 8-K (filed on February 2, 2016; Exhibit 10 therein)
10(iii)	10.87	2013 Progressive Capital Management Bonus Plan	Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 10.73 therein)
10(iii)	10.88	2014 Progressive Capital Management Bonus Plan	Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 10.82 therein)
10(iii)	10.89	2015 Progressive Capital Management Bonus Plan	Annual Report on Form 10-K (filed on March 2, 2015; Exhibit 10.90 therein)
10(iii)	10.90	2016 Progressive Capital Management Bonus Plan	Filed herewith

- 52 -

EXHIBIT INDEX
Exhibit No. Under Reg. S-K, Item 601	Form 10-K Exhibit No.	Description of Exhibit	If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC
10(iii)	10.91	Form of Capital Management Bonus Plan (2015)	Quarterly Report on Form 10-Q (filed on May 11, 2015; Exhibit 10.7 therein)
11	11	Computation of Earnings Per Share	Filed herewith
13	13	The Progressive Corporation 2015 Annual Report to Shareholders	Filed herewith
21	21	Subsidiaries of The Progressive Corporation	Filed herewith
23	23	Consent of Independent Registered Public Accounting Firm	Incorporated herein by reference to page 42 of this Annual Report on Form 10-K
24	24	Powers of Attorney	Filed herewith
31	31.1	Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer, Glenn M. Renwick	Filed herewith
31	31.2	Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer, John P. Sauerland	Filed herewith
32	32.1	Section 1350 Certification of the Principal Executive Officer, Glenn M. Renwick	Furnished herewith
32	32.2	Section 1350 Certification of the Principal Financial Officer, John P. Sauerland	Furnished herewith
99	99	Letter to Shareholders from Glenn M. Renwick, President and Chief Executive Officer	Furnished herewith
101	101.INS	XBRL Instance Document	Filed herewith
101	101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101	101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith
101	101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101	101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith

- 53 -

EX-4.19

Exhibit 4.19

TERMINATION OF THE REPLACEMENT CAPITAL COVENANT

TERMINATION OF THE REPLACEMENT CAPITAL COVENANT, dated as of June 23, 2010 (this “Termination”), by The Progressive Corporation, an Ohio corporation (together with its successors and assigns, the “Company”).

WHEREAS, on June 21, 2007, the Company granted a Replacement Capital Covenant (the “Covenant”) in favor of certain holders of the Company’s senior debt, which at all times during the effectiveness of the Covenant have been the holders of the Company’s 6.25% Senior Notes due December 1, 2032 (collectively, the “Notes”);

WHEREAS, pursuant to Section 4(a) of the Covenant, the Covenant may be terminated if the holders of a majority in aggregate principal amount of the Notes consent or agree in writing to the termination of the Covenant and the obligations of the Company thereunder;

WHEREAS, on June 10, 2010, the Company commenced a solicitation of consents (“Consent Solicitation”) from the holders of the Notes of record on June 9, 2010 to the proposed termination of the Covenant; and

WHEREAS, pursuant to the Consent Solicitation, as of 5:00 p.m., New York City time, on June 23, 2010, the expiration time for the Consent Solicitation, holders of a majority in aggregate principal amount of the Notes validly delivered, and did not validly revoke, their consent to the termination of the Covenant.

NOW, THEREFORE, the Company hereby terminates the Covenant and the obligations of the Company thereunder, which shall be of no further force or effect.

IN WITNESS WHEREOF, the Company has caused this Termination to be executed by its duly authorized officer, as of the day and year first above written.

THE PROGRESSIVE CORPORATION
By:	/s/ Charles E. Jarrett
	Name:	Charles E. Jarrett
	Title:	Secretary, Vice President and Chief Legal Officer

EX-10.5

Exhibit 10.5

THE PROGRESSIVE CORPORATION

2016 GAINSHARING PLAN

1.The Plan. The Progressive Corporation and its subsidiaries and mutual insurance company affiliate (other than ARX Holding Corp. and its direct and indirect subsidiaries and affiliates (“ARX”)) (collectively, "Progressive" or the "Company") have adopted The Progressive Corporation 2016 Gainsharing Plan (the "Plan") as part of their overall compensation program. The Plan is performance-based and is administered under the direction of the Compensation Committee of the Board of Directors of The Progressive Corporation (the “Committee”). Plan years will coincide with Progressive’s fiscal years.

2.Participants. Plan participants for each Plan year shall include all officers and regular employees of Progressive, unless determined otherwise by the Committee. Temporary employees and employees of ARX are not eligible to participate in the Plan. The Gainsharing opportunity, if any, for those executive officers who participate in The Progressive Corporation 2007 Executive Bonus Plan (the “Executive Bonus Plan”) will be provided by the Executive Bonus Plan, although participants in that plan may also participate in this Plan if and to the extent determined by the Committee. Throughout this Plan, references to “executive officers” refer to executive officers within the meaning of any Securities and Exchange Commission (“SEC”) or New York Stock Exchange rule applicable to the Company.

3.Gainsharing Formula. Annual Gainsharing Payments under the Plan will be determined by application of the following formula:

Annual Gainsharing = Paid Eligible Earnings x Target Percentage x Performance Factor

Payment

4.Paid Eligible Earnings. Paid Eligible Earnings for any Plan year shall mean and include the following: regular, Earned Time Benefit pay (excluding the payout of unused Earned Time Benefit pay at termination), sick pay, holiday pay, funeral pay, overtime pay, military make-up pay, shift differential, and retroactive payments of any of the foregoing items, received by the participant during the Plan year for work or services performed as an officer or employee of Progressive.

For purposes of the Plan, Paid Eligible Earnings shall exclude all other types of compensation, including, without limitation: any short-term or long-term disability payments made to the participant; the earnings replacement component of any workers’ compensation benefit or award; any amounts paid pursuant to a judgment in, or settlement related to, any action, suit or proceeding, whether in law or equity, to any extent arising from or relating to a participant’s employment with the Company, or work or services performed for or on behalf of the Company; any amount paid under a separation allowance (or severance) plan; any bonus, Gainsharing or other incentive compensation award (whether denominated, or payable, in cash or equity), including, without limitation, payments from any discretionary cash fund; any dividend payments or dividend equivalent amounts; and any unused Earned Time Benefit.

5.Target Percentages. Target Percentages vary by position. Target Percentages for Plan participants typically are as follows:

POSITION	TARGET %
Senior Executives and Executive Level Managers	60 - 150%
Business Leaders	35 - 60%
Directors and Senior Directors	20 - 35%
Middle Managers and Senior Managers	15 - 20%
Senior Professionals and Entry Level Managers	8 - 20%
Administrative Support and Entry Level Professionals	0 - 8%

Target Percentages will be established within the above ranges by, and may be changed with the approval of, the following officers of The Progressive Corporation (collectively, the “Designated Executives”): (a) the Chief Executive Officer, and (b) either the Chief Human Resource Officer or the Chief Financial Officer; provided that the Chief Human Resource Officer may establish appropriate procedures to evaluate the need for, and if appropriate, implement individual exceptions to the foregoing ranges. Target Percentages may be changed from year to year by the Designated Executives. Notwithstanding anything herein to the contrary, only the Committee may establish or modify the Target Percentages for the Company’s executive officers.

If a participant’s Target Percentage changes during a Plan year, the Target Percentages used to calculate such participant’s Annual Gainsharing Payment hereunder shall be weighted appropriately to reflect such participant’s tenure in each such position during the Plan year.

6. The Performance Factor.

A.Core Business Defined

The Performance Factor shall be determined by the performance of the Core Business during the Plan year, pursuant to the procedures and calculations described below. The “Core Business” shall be comprised of the following:

• The Agency Auto business unit, consisting of the auto business produced by independent agents or brokers, including Strategic Alliances Agency auto, but excluding all Agency Special Lines businesses;

• The Direct Auto business unit, consisting of the personal auto business produced by phone, over the Internet, or via a mobile device, but excluding all Direct Special Lines businesses;

• The Special Lines business unit, consisting of Special Lines business generated by agents and brokers or directly by phone, over the Internet, or via a mobile device, but excluding umbrella policies; and

• The Commercial Lines business unit.

Each of the Agency Auto, Direct Auto, Special Lines and Commercial Lines business units is referred to herein as a “Business Unit” or “Unit.” For all purposes under this Plan, the following are excluded from the Core Business results (both growth and profitability): results of the Professional Liability business, the Midland Financial Group, Inc. and other businesses in run-off; results of the CAIP Servicing Group; results of the Company’s Australian operations; renters insurance policies, umbrella policies and related expenses; the results of ARX; and any results of any Commercial Lines product or program pursuant to which the Company insures any transportation network company or other entity engaged in a ride, cartage, or vehicle sharing business, operation, platform, or program or in a business based on matching and/or sharing time, use and/or assets by and among people and/or businesses.

B.Matrices

For purposes of computing a performance score for the Core Business, operating performance results for each Business Unit are evaluated using a performance matrix for the Plan year. Each matrix assigns performance scores to various combinations of profitability and growth outcomes for the applicable Business Unit.

For 2016, and for each Plan year thereafter until otherwise determined by the Committee, each Business Unit will be evaluated according to the performance of the Business Unit as a whole. Therefore, separate Gainsharing matrices will be established by the Committee for the following:

• Agency Auto;

• Direct Auto;

• Special Lines; and

• Commercial Lines.

C.Performance Measures

Growth. The growth measure for the Plan year under all matrices will be based on policies in force (“PIFs”).

For all matrices, growth will be measured by the percentage change in average PIFs for the Plan year compared to the average PIFs of the immediately preceding fiscal year. Average PIFs for the Plan year and for the immediately preceding fiscal year will be determined by adding the fiscal-month-end number of PIFs for each month during such year and dividing the total by twelve.

Assigned risk business will not be included in determining the growth of any Business Unit.

Profitability. For all Business Unit matrices, the measurement of profitability will be the combined ratio (calculated in accordance with U.S. generally accepted accounting principles) (the “GAAP Combined Ratio”) for the Plan year for the applicable Unit.

Assigned risk business will be included in determining the GAAP Combined Ratio for the applicable Business Unit. The net operating expense of Corporate Products (e.g., self-insurance) shall be apportioned among the appropriate Business Units in accordance with the respective amount(s) of net earned premiums generated by each such Business Unit and will be reflected in the calculation of the GAAP Combined Ratio for such Business Units.

D.Calculation of Performance Factor

Performance Scores

Using the actual performance results and the Gainsharing matrix for each Business Unit, the GAAP Combined Ratio for each such Unit will be matched with the growth levels achieved by such Unit, to determine the performance score for each such Unit. The performance score for each Business Unit, which will be used to calculate the Performance Factor as described further below, can vary from 0 to 2.0.

Performance Factor

The resulting performance scores for each of the Agency Auto, Direct Auto, Commercial Lines and Special Lines Business Units will then be multiplied by a weighting factor, which shall be a fraction or decimal equivalent, determined by dividing the net earned premiums generated by such Business Unit during the Plan year by the net earned premiums generated by all of the Business Units comprising the Core Business in the aggregate. The sum of these weighted performance scores will be the Performance Factor for the Plan year.

E.Limitations

The final Performance Factor cannot exceed 2.0.

7.Payment Procedures; Deferral. Subject to Paragraphs 9 and 16 below, no later than December 31 of each Plan year, each participant will receive an initial payment in respect of his or her Annual Gainsharing Payment for that Plan year, if any, equal to 75% of an amount calculated on the basis of Paid Eligible Earnings for the first 24 pay periods of the Plan year, estimated earnings for the remainder of the Plan year, and an estimated performance factor determined using the performance data for each Business Unit through the first 11 months of the Plan year (estimated, if necessary), the applicable Gainsharing matrix and the calculations described above. No later than February 28 of the following year, each participant will receive the balance of his or her Annual Gainsharing Payment, if any, for such Plan year, based on his or her Paid Eligible Earnings and performance data for the entire Plan year.

Any Plan participant who is then eligible to participate in The Progressive Corporation Executive Deferred Compensation Plan ("Deferral Plan") may elect to defer all or a portion of the Annual Gainsharing Payment otherwise payable to him/her under this Plan, subject to and in accordance with the terms of the Deferral Plan.

8.Other Plans. If, for any Plan year, an employee has been selected to participate in both this Plan and another cash incentive plan offered by the Company, then with respect to such employee, the Gainsharing formula set forth in Paragraph 3 hereof shall be appropriately adjusted by applying a weighting factor to reflect the proportion of the employee’s total annual incentive opportunity that is being provided by this Plan. The Committee shall have full authority to determine the incentive plan or plans in which any employee will participate during any plan year and, if an employee is selected to participate in more than one plan, the weighting factor that will apply to each such plan.

9.Qualification Date; Leave of Absence; Withholding. Unless otherwise determined by the Committee, and except as expressly provided herein, in order to be entitled to receive an Annual Gainsharing Payment for any Plan year, the participant must be an active officer or regular employee of the Company on November 30 of the Plan year (“Qualification Date”). Individuals who are hired on or after December 1 of any Plan year are not entitled to an Annual Gainsharing Payment for that Plan year.

Any participant who is on a leave of absence covered by the Family and Medical Leave Act of 1993, as amended (or equivalent state or local law), the Americans with Disabilities Act of 1991, as amended (or equivalent state or local law), personal leave of absence with the approval of the Company, military leave or short or long-term disability (provided that, in the case of a long-term disability, the participant is still an employee of the Company) on the Qualification Date with respect to any Plan year will be entitled to receive an Annual Gainsharing Payment for such Plan year, calculated as provided in Paragraphs 3 through 6 above, based on the amount of Paid Eligible Earnings received by such participant during the Plan year and paid in the manner and at the times as are described in Paragraph 7 above but subject to Paragraph 16 below.

All payments made hereunder will be net of any legally required deductions and/or withholdings for federal, state and local taxes and other items.

10.Non-Transferability. The right to any Annual Gainsharing Payment hereunder may not be sold, transferred, assigned or encumbered by any participant. Nothing herein shall prevent any participant's interest hereunder from being subject to involuntary attachment, levy or other legal process.

11.Administration. The Plan shall be administered by or under the direction of the Committee. The Committee shall have the authority to adopt, amend, revise and repeal such rules, guidelines, procedures and practices governing the Plan as it shall, from time to time, in its sole discretion, deem advisable.

The Committee shall have full authority to determine the manner in which the Plan will operate, to interpret the provisions of the Plan and to make all determinations hereunder. All such interpretations and determinations shall be final and binding on Progressive, all Plan participants and all other parties. No such interpretation or determination shall be relied on as a precedent for any similar action or decision.

Unless otherwise determined by the Committee, all of the authority of the Committee hereunder (including, without limitation, the authority to administer the Plan, select the persons entitled to participate herein, interpret the provisions thereof, waive any of the requirements specified herein and make determinations hereunder and to select, approve, establish, change or modify the Business Units and the Gainsharing formulae, weighting factors, performance targets and Target Percentages) may be exercised by the Designated Executives; provided, however, that only the Committee may take such actions or make such determinations for the Company’s executive officers. In the event of a dispute or conflict, the determination of the Committee will govern.

12.Miscellaneous.

A. Recoupment. Progressive shall have the right to recoup any Annual Gainsharing Payment (or an appropriate portion thereof, as hereinafter provided) with respect to any Plan year paid to a participant hereunder who was an executive officer of Progressive at any time during such Plan year, if: (i) the Annual Gainsharing Payment was predicated upon the achievement during such Plan year of certain financial or operating results (which includes, for purposes hereof, the Performance Factor described in Section 6); (ii) such financial or operating results were incorrect and were subsequently the subject of a restatement by Progressive within three (3) years after the date on which such Annual Gainsharing Payment was paid to the participant; and (iii) a lower payment would have been made to the participant if the restated financial or operating results had been known at the time the payment was made. Such recoupment right shall be available to Progressive whether or not the participant in question was at fault or responsible in any way in causing such restatement. In such circumstances, Progressive will have the right to recover from each participant for such Plan year, and each such participant will refund to Progressive, the amount by which the Annual Gainsharing Payment paid to such participant for the Plan year in question exceeded the lower payment that would have been made based on the restated results, without interest; provided, however, that Progressive will not seek to recover such amounts unless the amount due would exceed the lesser of five percent (5%) of the Annual Gainsharing Payment previously paid or twenty-thousand dollars ($20,000). Such recovery, at the Committee’s discretion, may be made by lump sum payment, installment payments, credits against future bonus payments, or other appropriate mechanism.

B. Further Rights. Notwithstanding the foregoing subsection A., if any participant that was an executive officer at any time during such Plan year engaged in fraud or other misconduct (as determined by the Committee or the Board, in their respective sole discretion) resulting, in whole or in part, in a restatement of the financial or operating results used hereunder to determine the Annual Gainsharing Payments for a specific Plan year, Progressive will further have the right to recover from such participant, and the participant will refund to Progressive upon demand, an amount equal to the entire Annual Gainsharing Payment paid to such participant for such Plan year plus interest at the rate of eight percent (8%) per annum or, if lower, the highest rate permitted by law, calculated from the date that such bonus was paid to the participant. Progressive shall further have the right to recover from such participant Progressive’s costs and expenses incurred in connection with recovering such Annual Gainsharing Payment from the participant, including, without limitation, reasonable attorneys’ fees. There shall be no time limit on the Company’s right to recover such amounts under this subsection B., except as otherwise provided by applicable law.

C. Rights Not Exclusive. The rights contained in the foregoing subsections A. and B. shall be in addition to, and shall not limit, any other rights or remedies that the Company may have under any applicable law or regulation.

D. Compliance with Law. The Annual Gainsharing Payments determined and paid pursuant to the Plan shall be subject to all applicable laws and regulations. Without limiting the foregoing, and notwithstanding anything to the contrary contained in this Plan, if the SEC adopts final rules under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that require, as a condition to the Company’s continued listing on a national securities exchange (“Exchange”), that the Company develop and implement a policy requiring the recovery of erroneously awarded compensation, and such regulations are applicable

to any participant awarded Annual Gainsharing Payments pursuant to the Plan, then the following shall apply to such participant:

In the event that the Company is required to prepare a restatement of one or more of its financial statements due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, the Company will be entitled to recover from participant, and participant will promptly upon written demand return to the Company (whether or not participant remains an employee of the Company at the time of such restatement or thereafter), the amount (or portion thereof) of any Annual Gainsharing Payment that (i) was paid to participant during the three year period preceding the date on which the Company is required to prepare such restatement and (ii) is in excess of what would have been paid to the participant under the restatement, or such other amount as may be required by the rules of the SEC or an applicable Exchange or any policy of the Company adopted in response to such rules.

13.Termination; Amendment. The Plan may be terminated, amended or revised, in whole or in part, at any time and from time to time by the Committee, in its sole discretion.

14.Unfunded Obligations. The Plan will be unfunded and all payments due under the Plan shall be made from Progressive's general assets.

15.No Employment Rights. Nothing in the Plan shall be construed as conferring upon any person the right to remain a participant in the Plan or to remain employed by Progressive, nor shall the Plan limit Progressive's right to discipline or discharge any of its officers or employees or change any of their job titles, duties or compensation.

16.Misconduct; Set-Off Rights. No Participant shall have the right to receive any portion of any Annual Gainsharing Payment if, prior to such payment being made, Participant’s employment is terminated as a result of any action or inaction that, under Progressive’s employment practices or policies as then in effect, constitutes grounds for immediate termination of employment, as determined by Progressive (or, in the case of an executive officer, the Committee) in its sole discretion. Progressive shall have the unrestricted right to set off against or recover out of any Annual Gainsharing Payment or other sums owed to any participant under the Plan any amounts owed by such participant to Progressive.

17.Prior Plans. This Plan supersedes all prior plans, agreements, understandings and arrangements regarding bonuses or other cash incentive compensation payable to participants by or due from Progressive. Without limiting the generality of the foregoing, this Plan supersedes and replaces The Progressive Corporation 2015 Gainsharing Plan (the "Prior Plan”), which is and shall be deemed to have terminated on the last day of the Company’s 2015 fiscal year (the "Prior Plan Termination Date"); provided, however, that any bonuses or other sums earned and payable under the Prior Plan with respect to any Plan year ended on or prior to the Prior Plan Termination Date shall be unaffected by such termination and shall be paid to the appropriate participants when and as provided thereunder.

18.Effective Date. This Plan is adopted, and is to be effective, as of the first day of Progressive’s 2016 fiscal year. This Plan shall be effective for the 2016 Plan year and for each Plan year thereafter unless and until terminated by the Committee.

19.Governing Law. This Plan shall be interpreted and construed in accordance with the laws of the State of Ohio.

EX-10.10

Exhibit 10.10

THIRD AMENDMENT

TO

THE PROGRESSIVE CORPORATION

2003 INCENTIVE PLAN

WHEREAS, The Progressive Corporation 2003 Incentive Plan, as heretofore amended (the “Plan”) is currently in effect; and

WHEREAS, the Board of Directors believes that it is desirable to further amend the Plan;

NOW, THEREFORE, the Plan is hereby amended as follows:

1.Section 6(d), entitled "Buyout Provisions," is hereby deleted in its entirety.

2.Except as expressly modified hereby, the terms of the Plan shall be unchanged.

EX-10.14

Exhibit 10.14

RESTRICTED STOCK UNIT AWARD AGREEMENT

(<Year of Grant> Time-Based Award)

This Agreement (“Agreement”) is made this <Grant Date> by and between <Participant Name> (“Participant”) and The Progressive Corporation (the “Company”).

1. Definitions. Unless otherwise defined in this Agreement, each capitalized term in this Agreement shall have the meaning given to it in The Progressive Corporation 2003 Incentive Plan, as amended (collectively, the “Plan”).

2. Award of Restricted Stock Units. The Company grants to Participant an award (the “Award”) consisting of <# of Units> restricted stock units (the “Restricted Stock Units” or “Units”), pursuant and subject to the Plan.

3. Condition to Participant’s Rights under this Agreement. This Agreement shall not become effective, and Participant shall have no rights with respect to the Award or the Restricted Stock Units, unless and until Participant has fully executed this Agreement and delivered it to the Company. In the Company’s discretion, such execution and delivery may be accomplished through electronic means.

4. Restrictions; Vesting. Subject to the terms and conditions of the Plan and this Agreement, Participant’s rights in and to the Units shall vest according to the following schedule:

a. One-third of the Units shall vest on <Vesting Date>;

  b. One-third of the Units shall vest on <Vesting Date>; and

c. One-third of the Units shall vest on <Vesting Date>.

The Restricted Stock Units awarded under this Agreement shall vest in accordance with the schedule set forth above unless, prior to the vesting date set forth above, the Award and the applicable Units are forfeited or have become subject to accelerated vesting under the terms and conditions of the Plan.

5. Dividend Equivalents. Participant shall be credited with Dividend Equivalents with respect to outstanding Restricted Stock Units prior to the applicable vesting date, including any Units resulting from prior reinvestments of Dividend Equivalents as provided in this Paragraph. Subject to the immediately following sentence, all Dividend Equivalents so credited will be deemed to be reinvested in Restricted Stock Units on the date that the applicable dividend or distribution is made to the Company’s shareholders, in the number of Units determined by dividing the value of the Dividend Equivalent by the Fair Market Value of the Company’s Stock on such date (rounded to the nearest ten-thousandth of a whole Unit). In the event that Dividend Equivalents cannot be reinvested in Units due to the operation of Section 10(f) of the Plan, such Dividend Equivalents will be credited to Participant as a cash value, which shall be held by the Company (without interest) subject hereto. The Units and, if applicable, cash value resulting from the reinvestment of such Dividend Equivalents shall be subject to the same terms and conditions, and shall vest or be forfeited (if applicable) at the same time, as the Restricted Stock Units to which they relate.

6.. Units Non-Transferable. No Restricted Stock Units shall be transferable by Participant other than by will or by the laws of descent and distribution. In the event any Award is transferred or assigned pursuant to a court order, such transfer or assignment shall be without liability to the Company, and the Company shall have the right to offset against such Award any expenses (including attorneys’ fees) incurred by the Company in connection with such transfer or assignment.

7. Executive Deferred Compensation Plan. If Participant is eligible, and has made the appropriate election, to defer the Award into The Progressive Corporation Executive Deferred Compensation Plan (the “Deferral Plan”), upon vesting, the Award shall be considered to be deferred pursuant to the Deferral Plan, subject to and in accordance with the terms and conditions of the Deferral Plan and any deferral agreement entered into by Participant under the Deferral Plan.

8. Termination of Employment. Except as otherwise provided in the Plan or as determined by the Committee, if Participant’s employment with the Company is terminated for any reason other than death or RSU Qualified Retirement, all Restricted Stock Units held by Participant which are unvested or subject to restriction at the time of such termination shall be automatically forfeited.

9. Taxes. No later than the date as of which an amount relating to the Award first becomes taxable, Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state and local taxes and other items of any kind required by law to be withheld with respect to such amount. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries and Affiliates, to the extent permitted by law, shall have the right to deduct any such taxes from any payment of any kind otherwise due to Participant. At vesting, Restricted Stock Units awarded under this Agreement will be valued at the Fair Market Value of the Company’s Stock on such date.

Participant must satisfy the minimum statutory tax withholding obligations resulting from the vesting of Restricted Stock Units (“Minimum Withholding Obligations”) either (a) by surrendering to the Company Restricted Stock Units which are then vesting with a value sufficient to satisfy the Minimum Withholding Obligations, or (b) by paying to the Company the appropriate amount in cash or, if acceptable to the Company, by check or other instrument. Unless Participant advises the Company of his or her election to use an alternative payment method, Participant shall be deemed to have elected to surrender to the Company Restricted Stock Units which are then vesting with a value sufficient to satisfy the Minimum Withholding Obligations. If Participant requests that the Company withhold taxes in addition to the Minimum Withholding Obligations, such additional withholding must be satisfied by Participant either (x) by paying to the Company the appropriate amount in cash or, if acceptable to the Company, by check or other instrument, or (y) provided that Participant has obtained the approval of either the Company or the Committee (as required under rules adopted by the Committee) prior to the date of vesting, by surrendering unrestricted shares of the Company’s Stock which are not being distributed to Participant as a result of the vesting event and which have then been owned by Participant in unrestricted form for more than six (6) months.

Under no circumstances will Participant be entitled to satisfy any such additional withholding by surrendering Restricted Stock Units, shares of the Company’s Stock that are being distributed to Participant as a result of the vesting event, or other shares of Stock which have then been owned by Participant in unrestricted form for six (6) months or less. In addition, under no circumstances will Participant be entitled to satisfy any Minimum Withholding Obligations or additional withholding by surrendering Restricted Stock Units which are not then vesting or any Restricted Stock Units which Participant has elected to defer under Paragraph 7 above. All payments, surrenders of Units or shares, elections or requests for approval must be made by Participant in accordance with such procedures as may be adopted by the Company in connection therewith, and subject to such rules as have been or may be adopted by the Committee.

10. Distribution at Vesting. Subject to the provisions of the Plan and this Agreement, upon vesting of all or part of the Award, the Company shall distribute to the Participant one share of the Company’s Stock in exchange for each such vested Restricted Stock Unit, and the applicable Restricted Stock Units shall be cancelled. Unless determined otherwise by the Company at any time prior to the applicable distribution, each fractional Restricted Stock Unit shall vest and be settled in an equal fraction of a share of the Company’s Stock.

11. Non-Solicitation. In consideration of the Award made to Participant under this Agreement, for a period of twelve (12) months immediately following Participant’s Separation Date, Participant shall not directly or indirectly recruit or solicit for hire, or hire, or assist in any manner in the recruitment, solicitation for hire or hiring of any employee or officer of the Company or its subsidiaries, or in any way induce any such employee or officer to terminate his or her employment with the Company or its subsidiaries. For purposes of this Paragraph, “Separation Date” means the date on which Participant’s employment with the Company or its subsidiaries is terminated for any reason.

12. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes and cancels any other agreement, representation or communication, whether oral or in writing, between the parties relating to the Award, provided that the Agreement shall be at all times subject to the Plan.

13. Amendment. The Committee, in its sole discretion, may amend the terms of this Award, but no such amendment shall be made which would impair the rights of Participant, without Participant’s consent.

14. Acknowledgments. Participant: (i) acknowledges receiving a copy of the Plan Description relating to the Plan, and represents that he or she is familiar with all of the material provisions of the Plan, as set forth in such Plan Description; (ii) accepts this Agreement and the Award subject to all provisions of the Plan and this Agreement; and (iii) agrees to accept as binding, conclusive and final all decisions and interpretations of the Committee relating to the Plan, this Agreement or the Award.

Participant evidences his or her agreement with the terms and conditions of this Agreement, and his or her intention to be bound by this Agreement, by electronically accepting the Award pursuant to the procedures adopted by the Company.Upon such acceptance by Participant, this Agreement will be immediately binding and enforceable against Participant and the Company.

THE PROGRESSIVE CORPORATION
By:	/s/ Charles E. Jarrett
	Vice President & Secretary

EX-10.15

Exhibit 10.15

RESTRICTED STOCK UNIT AWARD AGREEMENT

(<Year of Grant> Performance-Based Award)

This Agreement (“Agreement”) is made this <Grant Date> by and between <Participant Name> (“Participant”) and The Progressive Corporation (the “Company”).

1. Definitions. Unless otherwise defined in this Agreement, each capitalized term in this Agreement shall have the meaning given to it in The Progressive Corporation 2003 Incentive Plan, as amended (collectively, the “Plan”).

2. Award of Restricted Stock Units. The Company grants to Participant an award (the “Award”) of performance-based restricted stock units (“Restricted Stock Units” or “Units”), pursuant and subject to the Plan. The Award is based on an initial award value of <# of Units> Units (the “Initial Award Value”). The number of Restricted Stock Units that are ultimately earned pursuant to the Award (if any) will be determined based on the Initial Award Value and the procedures and calculations set forth in this Agreement. Under the calculations set forth below, the maximum potential Award would be a number of Units equal to two (2) times the Initial Award Value (the “Maximum Award Value”).

3. Condition to Participant’s Rights under this Agreement. This Agreement shall not become effective, and Participant shall have no rights with respect to the Award or any Restricted Stock Units, unless and until Participant has fully executed this Agreement and delivered it to the Company. In the Company’s discretion, such execution and delivery may be accomplished through electronic means.

4. Restrictions; Vesting. Subject to the terms and conditions of the Plan and this Agreement, Participant’s rights in and to Restricted Stock Units shall vest, if at all, as follows:

a. Evaluation Period. The Evaluation Period shall be the <#>-year period comprised of the years <Calendar Years>.

b. Certification. The Award shall vest (if at all) only if, to the extent, and when the Compensation Committee of the Board of Directors (the “Committee”) certifies:

1. the extent to which the Company’s performance results have satisfied the performance criteria set forth in both subparagraphs c. and d. below; and

2. the corresponding number of Restricted Stock Units (if any) that have vested as a result of such performance.

Such certification shall occur as soon as practicable after the end of the Evaluation Period, but in any event must occur (if at all) on or before <expiration date> (the “Expiration Date”). If the Committee certifies the vesting of a number of Units that is less than the Maximum Award Value, the Award will terminate and be forfeited with respect to all other Units that could have been earned under this Agreement.

c. Profitability Requirement. The Award shall not vest unless the Company has achieved a combined ratio of 96 or less, determined in accordance with GAAP, for the twelve (12) consecutive fiscal months immediately preceding the date of the certification described in subparagraph b. above (the “Profitability Requirement”).

d. Number of Units Vesting. Provided that the Profitability Requirement has been satisfied, the number of Restricted Stock Units (if any) that vest in connection with the Award will be determined as follows:

1. The Company’s compounded annual rate of growth in “Written Premiums” (defined below) for the Evaluation Period for the Company’s private passenger auto and commercial auto businesses (“Company Growth Rate”) will be compared to the compounded annual rate of growth of the private passenger auto and commercial auto markets as a whole for the Evaluation Period (“Market Growth Rate”), in each case determined as provided below. If the Company Growth Rate exceeds the Market Growth Rate, the applicable calculation required by the following table will determine the number of Restricted Stock Units vesting:

<Vesting Goals and Formulae>

2. If the Company Growth Rate is equal to or less than the Market Growth Rate, or if the Profitability Requirement has not been satisfied with respect to the Award prior to the Expiration Date, none of the Award shall vest, and the Award shall be forfeited in its entirety;

3. For purposes of these determinations:

A. Subject to any adjustment(s) that may be required by subparagraphs B., C. or D. below:

i. Written Premiums shall mean premiums written directly during the applicable time period for the specified types of business, without taking into account reinsurance.

ii. The Company Growth Rate will be the compounded annual rate of growth in Written Premiums during the Evaluation Period, determined by comparing (a) the annual aggregate Written Premiums of the subsidiaries and affiliates of the Company in their Private Passenger Auto and Commercial Auto businesses for <Last Year of Evaluation Period>, as reported by A.M. Best in its annual report currently know as the “A2 Report,” with (b) such Written Premiums of the subsidiaries and affiliates of the Company for <Comparison Year> as reported in A.M. Best’s A2 Report; and

iii. The Market Growth Rate will be the compounded annual rate of growth in Written Premiums during the Evaluation Period, determined by comparing (a) the aggregate Written Premiums of the Private Passenger Auto market and the Commercial Auto market for <Last Year of Evaluation Period>, as reported in A.M. Best’s A2 Report, with (b) such Written Premiums for <Comparison Year> as reported in A.M. Best’s A2 Report, but excluding (in each case) the applicable Written Premiums of the subsidiaries and affiliates of the Company;

B. If <Comparison Year/Last Year of Evaluation Period> is a 53-week year under the Company’s fiscal calendar, then in determining the Company Growth Rate as set forth in subparagraph A. above, the aggregate Written Premiums for such year will be reduced by an amount equal to twenty percent (20%) of the Written Premiums of the subsidiaries and affiliates of the Company in fiscal December <Comparison Year/Last Year of Evaluation Period> in their Private Passenger Auto and Commercial Auto businesses, as determined from the Company’s records;

C. In making the calculations required under this Agreement: the Company Growth Rate and the Market Growth Rate shall each be rounded to the nearest one-thousandth of a whole percentage point (e.g., a growth rate of 2.376666% will be rounded to 2.377%); and the number of Restricted Stock Units shall be rounded to the nearest ten-thousandth of a whole Unit (e.g., 1,432.456789 will be rounded to 1,432.4568); and

D. In the event that A.M. Best ceases to publish the A2 Report, or modifies the A2 Report in such a way as to render the comparisons required by this calculation to be not meaningful, in the Committee’s sole judgment, the determinations required above shall be made using such comparable Company and

industry-wide data as may be then available from A.M. Best in any successor or replacement report or publication, or such comparable data as may be available from another nationally recognized provider of insurance industry data, in each case as the Committee may approve in its sole discretion.

e. Committee Discretion. Notwithstanding anything to the contrary contained in this Agreement, at or prior to the time of vesting, the Committee, in its sole discretion, may reduce the number of Restricted Stock Units that otherwise would vest according to this Agreement, or eliminate the Award in full. The Committee may, in its sole discretion, treat individual participants differently for these purposes. Any such determination by the Committee shall be final and binding on Participant. Under no circumstances shall the Committee have discretion to increase the award to any Participant in excess of the number of Units that would have been awarded at vesting based on this Paragraph 4 (except for adjustments required by Section 3(c) of the Plan).

The Award shall vest in accordance with and subject to the foregoing unless, prior to the Committee’s certification of the Award, the Award is forfeited or has become subject to accelerated vesting under the terms and conditions of the Plan.

5. Expiration of Award. Notwithstanding anything to the contrary in this Agreement, if Participant’s rights in and to the Award have not vested in accordance with Section 4 of this Agreement on or before the Expiration Date, this Award shall expire at 11:59 p.m. on the Expiration Date. Upon such expiration, the Award shall automatically be forfeited, and Participant shall have no further rights with respect to the Award.

6. Dividend Equivalents. Participant shall be credited with Dividend Equivalents with respect to the outstanding Award prior to the applicable vesting date. Subject to the immediately following sentence, all Dividend Equivalents so credited will be deemed to be reinvested in Restricted Stock Units based on the Initial Award Value and any Units resulting from prior reinvestments of Dividend Equivalents (rounded to the nearest ten-thousandth of a whole Unit). In the event that Dividend Equivalents cannot be reinvested in Units due to the operation of Section 10(f) of the Plan, such Dividend Equivalents will be credited to Participant as a cash value based on the Initial Award Value and any Units resulting from prior reinvestments of Dividend Equivalents, which cash value shall be held by the Company (without interest) subject to this Agreement. The Units and, if applicable, cash value resulting from the reinvestment of such Dividend Equivalents shall be subject to the same terms and conditions, and shall vest or be forfeited (if applicable) at the same time and in the same proportion, as the Initial Award Value set forth in this Award.

7. Units Non-Transferable. No Restricted Stock Units shall be transferable by Participant other than by will or by the laws of descent and distribution. In the event any Award is transferred or assigned pursuant to a court order, such transfer or assignment shall be without liability to the Company, and the Company shall have the right to offset against such Award any expenses (including attorneys’ fees) incurred by the Company in connection with such transfer or assignment.

8. Executive Deferred Compensation Plan. If Participant is eligible, and has made the appropriate election, to defer the Award into The Progressive Corporation Executive Deferred Compensation Plan (the “Deferral Plan”), upon vesting, the Restricted Stock Units that would otherwise vest under this Agreement shall be considered to be deferred pursuant to the Deferral Plan, subject to and in accordance with the terms and conditions of the Deferral Plan and any deferral agreement entered into by Participant under the Deferral Plan.

9. Termination of Employment. Except as otherwise provided in the Plan or as determined by the Committee, if Participant’s employment with the Company is terminated for any reason other than death or RSU Qualified Retirement, all Restricted Stock Units held by Participant which are unvested or subject to restriction at the time of such termination shall be automatically forfeited. Without limiting the foregoing, in the event that any such termination occurs after the end of the Evaluation Period but prior to the Committee’s certification as described in Section 4(b) above, the Award shall be automatically forfeited.

10. Taxes. No later than the date as of which an amount relating to the Award first becomes taxable, Participant shall pay to the Company, or make arrangements satisfactory to the Committee regarding the payment of, any federal, state and local taxes and other items of any kind required by law to be withheld with respect to such amount. The obligations of the Company under the Plan shall be conditional on such payment or arrangements and the Company and its Subsidiaries and Affiliates, to the extent permitted by law, shall have the right to deduct any such taxes from any payment of any kind otherwise due to Participant. At vesting, Restricted Stock Units awarded under this Agreement will be valued at the Fair Market Value of the Company’s Stock on such date.

Participant must satisfy the minimum statutory tax withholding obligations resulting from the vesting of Restricted Stock Units (“Minimum Withholding Obligations”) either (a) by surrendering to the Company Restricted Stock Units which are then vesting with a value sufficient to satisfy the Minimum Withholding Obligations, or (b) by paying to the Company the appropriate amount in cash or, if acceptable to the Company, by check or other instrument. Unless Participant advises the Company of his or her election to use an alternative payment method, Participant shall be deemed to have elected to surrender to the Company Restricted Stock Units which are then vesting with a value sufficient to satisfy the Minimum Withholding Obligations. If Participant requests that the Company withhold taxes in addition to the Minimum Withholding Obligations, such additional withholding must be satisfied by Participant either (x) by paying to the Company the appropriate amount in cash or, if acceptable to the Company, by check or other instrument, or (y) provided that Participant has obtained the approval of either the Company or the Committee (as required under rules adopted by the Committee) prior to the date of vesting, by surrendering unrestricted shares of the Company’s Stock which are not being distributed to Participant as a result of the vesting event and which have then been owned by Participant in unrestricted form for more than six (6) months.Under no circumstances will Participant be entitled to satisfy any such additional withholding by surrendering Restricted Stock Units, shares of the Company’s Stock that are being distributed to Participant as a result of the vesting event, or other shares of Stock which have then been owned by Participant in unrestricted form for six (6) months or less. In addition, under no circumstances will Participant be entitled to satisfy any Minimum Withholding Obligations or additional withholding by surrendering Restricted Stock Units which are not then vesting or any Restricted Stock Units which Participant has elected to defer under Paragraph 8 above. All payments, surrenders of Units or shares, elections or requests for approval must be made by Participant in accordance with such procedures as may be adopted by the Company in connection therewith, and subject to such rules as have been or may be adopted by the Committee.

11. Distribution at Vesting. Subject to the provisions of the Plan and this Agreement, upon vesting of all or part of the Award, the Company shall distribute to Participant one share of the Company’s Stock in exchange for each such vested Restricted Stock Unit, and the applicable Restricted Stock Units shall be cancelled. Unless determined otherwise by the Company at any time prior to the applicable distribution, each fractional Restricted Stock Unit shall vest and be settled in an equal fraction of a share of the Company’s Stock.

12. Non-Solicitation. In consideration of the Award made to Participant under this Agreement, for a period of twelve (12) months immediately following Participant’s Separation Date, Participant shall not directly or indirectly recruit or solicit for hire, or hire, or assist in any manner in the recruitment, solicitation for hire or hiring of any employee or officer of the Company or its subsidiaries, or in any way induce any such employee or officer to terminate his or her employment with the Company or its subsidiaries. For purposes of this Paragraph, “Separation Date” means the date on which Participant’s employment with the Company or its subsidiaries is terminated for any reason.

13. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes and cancels any other agreement, representation or communication, whether oral or in writing, between the parties relating to the Award, provided that the Agreement shall be at all times subject to the Plan.

14. Amendment. The Committee, in its sole discretion, may amend the terms of this Award, but no such amendment shall be made which would impair the rights of Participant, without Participant’s consent.

15. Acknowledgments. Participant: (i) acknowledges receiving a copy of the Plan Description relating to the Plan, and represents that he or she is familiar with all of the material provisions of the Plan, as set forth in such Plan Description; (ii) accepts this Agreement and the Award subject to all provisions of the Plan and this Agreement; and (iii) agrees to accept as binding, conclusive and final all decisions and interpretations of the Committee relating to the Plan, this Agreement or the Award.

Participant evidences his or her agreement with the terms and conditions of this Agreement, and his or her intention to be bound by this Agreement, by electronically accepting the Award pursuant to the procedures adopted by the Company.Upon such acceptance by Participant, this Agreement will be immediately binding and enforceable against Participant and the Company.

THE PROGRESSIVE CORPORATION
By:	/s/ Charles E. Jarrett
	Vice President & Secretary

- 5 -

EX-10.37

Exhibit 10.37

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the "Agreement"), is dated as of March 30, 2004, between ARX HOLDING CORP., a Delaware corporation (the "Company"), and JOHN F. AUER (the "Executive").

RECITALS:

WHEREAS, the Company was organized under the laws of Delaware on June 5, 1997 and was newly formed for the purpose of being a holding company to own the stock of American Strategic Insurance Corp., a Florida corporation ("ASIC'') and numerous ASIC affiliates (collectively the "ASI Companies");

WHEREAS, pursuant to the Share Purchase Agreement dated as of December 4, 2003 (the "Securities Purchase Agreement"), among Arch Re, as the seller of shares of the Company's stock, and X.L. Reinsurance Company, Ltd. ("XL'') and ARX Executive Holdings, LLLP, a Florida limited liability limited partnership (the "LLLP'') as the buyers of such shares, Arch re has agreed to sell the thirty five percent (35%) equity interest it owns in the Company to XL (14%) and to the LLLP (21%) (collectively the "ARX Sale Transaction");

WHEREAS, there exists an Employment Agreement dated August 4, 1997 between ASIC, as Employer, and Executive, as Employee (the "Prior Employment Agreement") which, by executing this Agreement, the parties hereto desire to supersede, replace and terminate;

WHEREAS, the parties recognize that the future growth, profitability and success of the Company's business will be substantially dependent on the employment of Executive by the Company; and

WHEREAS, the Company desires to employ Executive, and Executive has indicated his willingness to provide his services to the Company, all on the terms and conditions set forth herein;

NOW, THEREFORE, on the basis of the foregoing premises and in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

SECTION 1. Employment; Duties and Responsibilities. The Company hereby agrees to employ Executive, and Executive hereby accepts employment with the Company, on the terms and subject to the conditions hereinafter set forth. During the Term (as defined below) of this Agreement, Executive shall serve as President of the Company and shall have such duties and responsibilities as are specified by the Board of Directors of the Company (the "Board") from time to time and as are consistent with his position. Executive agrees to devote his full time and efforts to promote the interests of the Company.

SECTION 2. Term. Subject to the provisions and conditions of this Agreement, Executive's employment hereunder shall commence on the date hereof and shall continue during the period ending on the fifth (5th) anniversary of the date hereof (the "Initial Term"). Following the Initial Term, Executive's employment shall continue for a yearly term from year to year, unless terminated by the Company or by Executive at least 30 days prior to the end of the fifth (5th) anniversary of the date hereof, or the current year anniversary, as the case may be (the Initial Term, as extended herein, if applicable, will be referred to herein as the "Term").

SECTION 3. Compensation. As compensation and consideration for the performance by Executive of his obligations hereunder, Executive shall be entitled, during the Term, to the following:

(a)Salary. The Company shall pay to Executive a base salary (the "Salary") in the amount of not less than $250,000 per annum, which may be increased from time to time upon the approval of the Company's Board. The Salary shall be payable in accordance with the payroll practices of the Company as the same shall exist from time to time and shall be subject to such withholding and other routine employee deductions as may be required from time to time.

(b)Bonus. Executive shall be eligible to receive a discretionary annual cash bonus (the "Bonus") based on the performance of the Company. The amount of the Bonus, if any, with respect to any such annual period shall be determined by the Board (or the Compensation Committee thereof, if then constituted) in its sole discretion.

(a)Benefits. Executive shall be eligible to participate in such employee benefit plans and programs for the benefit of the employees and officers of the Company, as may be maintained from time to time during the Term, in each case to the extent and in the manner available to other senior executives of the Company and subject to the terms and provisions of such plan or program.

(b)Vacation. Executive shall be entitled to reasonable paid vacation periods, not to exceed twenty days for each full year during the terms of this Agreement, to be taken at his discretion, in a manner consistent with his obligations to the Company under this Agreement. Executive shall also be entitled to the same number of holidays, sick days and other benefits as are generally allowed to other senior executives of the Company in accordance with the Company's policy in effect from time to time.

SECTION 4. Exclusivity. Executive agrees to perform his duties, responsibilities and obligations hereunder efficiently and to the best of his ability. Executive agrees that he will devote his entire working time, care and attention and best efforts to such duties, responsibilities and obligations throughout the Term. Executive also agrees that during the Term he will not engage in any other business activities, including, without limitation, any business activities that are competitive with the business activities of the Company or any of its divisions, subsidiaries or affiliates, whether or not any such activity shall be engaged in for pecuniary profit, except that Executive may participate in the activities of professional trade organizations related to the business of the Company.

SECTION 5. Reimbursement for Expenses. Executive is authorized to incur reasonable expenses in the discharge of the services to be performed hereunder, including expenses for travel, entertainment, lodging and similar items in accordance with the Company's expense reimbursement policy, as the same may be modified by the Board from time to time. The Company shall reimburse Executive for all such proper expenses upon presentation by Executive of itemized accounts of such expenditures in accordance with the financial policy of the Company, as in effect from time to time.

SECTION 6. Termination.

(a)Death. This Agreement shall automatically terminate upon the death of Executive and upon such event, Executive's estate shall be entitled to receive the amounts specified in Section 6 (d) (i) below.

(b)Disability. In the event that Executive shall suffer from an illness, incapacity, or physical or mental disability which shall have prevented him from satisfactorily performing his obligations hereunder for a period of at least 180 consecutive days during the Term of this Agreement, this Agreement (other than Sections 6(d) and 7 hereof), including, but not limited to, the Company's obligations to pay any Salary or to provide any privileges under this Agreement, shall terminate, such termination to be effective upon receipt of notice in accordance with Section 15 hereof.

(c)Cause and Good Reason. The Company may terminate this Agreement (other than Sections 6(d) and 7 hereof) at any time, with or without "Cause" (as defined below), and the Executive may terminate this Agreement (other than Sections 6(d) and 7 hereof) for "Good Reason" (as defined below). If Executive's employment is terminated pursuant to this Section 6(c), Executive shall be entitled to receive the amounts specified in Section 6 (d) (i) below. Termination of Executive's employment hereunder shall be effective upon delivery of such notice of termination in accordance with Section 15 hereof.

For purposes of this Agreement, "Cause" shall mean: (i) Executive's refusal (except where due to an illness or injury, or a disability contemplated by subsection (b) hereof), to perform his duties hereunder, which refusal is continued, repeated, and unexcused, and where the Executive shall not have begun to perform his duties within 5 days of receipt by Executive of written notice from the Company of such refusal, (ii) the Executive's repeated willful or intentional refusal to follow the lawful instructions, orders or directives of the Board (or any committee constituted thereunder) with respect to his duties and responsibilities hereunder, and where the Executive shall not have begun following such lawful instructions, orders or directives of the Board (or any committee constituted thereunder) within 5 days of receipt by Executive of written notice from the Board (or any committee constituted thereunder) of such refusal, (iii) except as required by law, any willful or intentional act of Executive that has the effect of materially and adversely injuring the reputation or business of the Company or any of its divisions, subsidiaries or affiliates monetarily or otherwise; (iv) any continued or repeated absence from the Company, unless such absence is (A) approved or excused by the Board or (B) is the result of Executive's illness, injury, disability or incapacity (in which event the provisions of Section 6 (b) hereof shall control); (v) Executive's continued repeated drunkenness while rendering services on behalf of the Company, where the Executive shall not have taken corrective action within 15 days of receipt by Executive of written notice from the Company of such drunkenness; (vi) conviction of Executive beyond all appeal periods for, or the entry of a guilty plea (including nolo contendere or its equivalent) by the Executive with respect to, the commission of a felony; (vii) the commission by Executive of an act of fraud or embezzlement against the Company or any of its divisions, subsidiaries or affiliates; or (viii) any continued material breach of this Agreement by the Executive that causes harm to the Company, where the Executive shall not have stopped such breach within 10 days of receipt by Executive of written notice from the Company of such breach.

If the Executive resigns for "Good Reason," as defined hereinafter, that resignation will be regarded as the equivalent of a Company termination without Cause. For purposes of this Agreement, "Good Reason" shall mean: (i) demotion of the Executive; or (ii) a material breach of this Agreement by the Company, including but not limited to the .Company's failure to pay compensation or provide benefits due the Executive under this Agreement, which is not cured within 15 days of receipt by the Company of a written notice identifying the breach. In addition, if the Company terminates the Executive without Cause, or if he is terminated for Cause and there is subsequently a final judicial determination that this termination was without Cause, and the Company fails to pay him such Compensation as is required by Section 6(d)(ii), then the Executive, at his option, may either choose to assert his right to Compensation

under Section 6(d)(ii) or engage in competition otherwise prohibited by Section 7(a). If he engages in competition otherwise prohibited by Section 7(a) he shall be deemed to have waived his right to Compensation for such period of time that he is engaging in competition.

(d)Effect of Termination - Payments.

(i)In the event that Executive's employment hereunder terminates for any reason, the Company shall pay to Executive (or to his beneficiary in the event of his death) all accrued but unpaid Salary, and all unreimbursed expenses, through the date of termination.

(ii)In the event that the Company terminates Executive's employment hereunder without Cause pursuant to Section 6(c), or if the Executive resigns for Good Reason as provided by Section 6(c), in addition to the amounts set forth in Section 6 (d)(i), the Company shall continue to pay Executive, until the termination of the Restricted Period (as defined in Section 7 (a)), the Salary (less any applicable withholding or similar taxes) at the rate in effect hereunder on the date of such termination periodically, in accordance with the Company's prevailing payroll practices, together with the average amount of any Bonus the Executive has received, over the last two (2) years preceding the year of such termination (collectively the "Compensation"); provided, that in the event that the Company gives the Executive a written notice waiving and releasing its rights under Section 7(a) of this Agreement (the "Waiver Notice"), the Executive shall not be entitled to receive Compensation after such Waiver Notice. In the event that the Company terminates the Executive for Cause, and there is a final judicial determination that there was not Cause for such termination as defined above in Section 6(c), then the Executive shall be entitled to receive the Compensation for such periods of time within the Restricted Period that he is not engaging in competition prohibited by Section 7, unless or until the Company gives the Executive a Waiver Notice.

(iii)In the event Executive accepts other employment or engages in his own business prior to the last date of the period referenced in Section 6 (d)(ii), Executive shall forthwith notify the Company, and the Company shall be entitled to set off from amounts due Executive under Section 6 (d)(ii), fifty percent (50%) of the amounts paid to Executive in respect of such other employment or business activity.

(iv)In no event shall a liquidation, dissolution or winding up of the Company create an obligation on the part of the Company hereunder to pay to Executive any amount in addition to amounts set forth in Section 6 (d)(i).

(v)Upon any termination of this Agreement, all of the rights, privileges and duties of Executive hereunder shall cease, except for his rights under this Section 6(d) and his obligations under Section 7 hereunder.

(vi)In the event that the Company terminates Executive's employment hereunder without Cause pursuant to Section 6(c), or if Executive resigns for Good Reason pursuant to Section 6(c), Executive shall have a duty to mitigate with respect to the payments described in Section 6 (d)(ii) by actively seeking comparable employment.

(vii)The Company shall have no obligation to pay the Executive Compensation during any period of time that the Executive is acting in breach of Section 7 of this Agreement; however, in the event that the Company seeks and obtains an injunction against the Executive for an extended Restricted Period, as provided by Section 7(e) of this Agreement, then the Employee

shall be entitled to receive Compensation during that Extended Period unless his employment was appropriately terminated for Cause.

SECTION 7. Non-Competition and Secrecy.

(a)No Competing Activities. Executive acknowledges that the agreements and covenants contained in this Section 7 are essential to protect the value of the Company's business and assets and by his current employment with the Company and its subsidiaries, Executive has obtained and will obtain such knowledge, contacts, know-how, training, experience and information relating to the Company's business operations and there is a substantial probability that such knowledge, know-how, contacts, training, experience and information could be used to the substantial advantage of a competitor of the Company and to the Company's substantial detriment. Therefore, Executive agrees that, subject to the last sentence of this Section 7(a), for the period commencing on the date of this Agreement and ending on the second anniversary of the termination of Executive's employment hereunder (such period is hereinafter referred to as the "Restricted Period"), Executive shall not, in any state in the United States of America in which the Company or any of its subsidiaries underwrites or issues policies or otherwise engages in business, (A) participate or engage, directly or indirectly, for himself or on behalf of or in conjunction with any person, partnership, corporation or other entity, whether as an employee, agent, officer, director, shareholder, partner, joint venturer, investor or otherwise, in any business activities that compete with the businesses conducted or proposed to be conducted by the Company or any subsidiary, division or affiliate thereof at the time of such termination; or (B) directly or indirectly interfere with or disrupt, or attempt to interfere with or disrupt, the relationship, contractual or otherwise, between the Company or any of its subsidiaries, divisions or affiliates and any customer, client, agent, distributor, consultant, independent contractor or employee of the Company or any of its subsidiaries, divisions or affiliates.

(b)Nondisclosure of Confidential Information. Executive, except in connection with his employment hereunder, shall not disclose to any person or entity or use, either during the Term or at any time thereafter, any information not in the public domain or generally known in the industry, in any form, acquired by Executive while employed by the Company or, if acquired following the Term, such information which, to Executive's knowledge, has been acquired, directly or indirectly, from any person or entity owing a duty of confidentiality to the Company or any of its subsidiaries or affiliates, relating to the Company, its subsidiaries or affiliates, including but not limited to information regarding customers, vendors, suppliers, trade secrets, training programs, manuals or materials, technical information, contracts, systems, procedures, mailing lists, know-how, trade names, improvements, price lists, financial or other data (including the revenues, costs or profits associated with any of the Company's products or services), business plans, code books, invoices and other financial statements, computer programs, software systems, databases, discs and printouts, plans (business, technical or otherwise), customer arid industry lists, correspondence, internal reports, personnel files, sales and advertising material, telephone numbers, names, addresses or any other compilation of information, written or unwritten, which is or was used in the business of the Company or any subsidiaries or affiliates thereof. Executive agrees not to remove from the premises of the Company, except as an employee of the Company in pursuit of the business of the Company or except as specifically permitted in writing by the Board, any document or other object containing or reflecting any such confidential information.

Executive agrees and acknowledges that all of such information, whether developed by him or someone else in any form, and copies and extracts thereof, are and shall remain the sole and

exclusive property of the Company, and upon termination of his employment with the Company, Executive shall return to the Company the originals and all copies of any such information provided to or acquired by Executive in connection with the performance of his duties for the Company, and shall return to the Company all files, correspondence and/or other communications received, maintained and/or originated by Executive during the course of his employment.

(c)Severability. Executive acknowledges and agrees that the covenants set forth in this Section 7 hereof are reasonable and valid in geographical and temporal scope and in all other respects. If any of such covenants or such other provisions of this Agreement are found to be invalid or unenforceable by a final determination of a court or competent jurisdiction (i) the remaining terms and provisions hereof shall be unimpaired and (ii) the invalid or unenforceable term or provision shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

(d)Injunctive Relief. Without intending to limit the remedies available to the Company, Executive acknowledges that a breach of any of the covenants contained in this Section 7 hereof may result in material irreparable injury to the Company or its subsidiaries or affiliates for which there is no adequate remedy at law, that it will not be possible to measure damages for such injuries precisely and that, in the event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction, without the necessity of proving irreparable harm or injury as a result of such breach or threatened breach of this Section 7 hereof, restraining Executive from engaging in activities prohibited by this Section 7 hereof or such other relief as may be required specifically to enforce any of the covenants in this Section 7 hereof.

(e)Extension of Restricted Period. In addition to the remedies the Company may seek and obtain pursuant to Section 7(d) hereof, the Restricted Period shall be extended by any and all periods during which Executive shall be found by a court to have been in violation of the covenants contained in this Section 7 hereof.

(f)Further Cooperation. Executive agrees that, at any time and from time to time during and after the Term, he will execute any and all documents which the Company may deem reasonably necessary or appropriate to effectuate the provisions of this Section 7.

SECTION 8. Successors and Assigns; Third-Party Beneficiaries. This Agreement shall inure to the benefit of, and be binding upon, the successors and assigns of each of the parties, including, but not limited to, Executive's heirs and the personal representative of Executive's estate; provided, however, and except as provided with respect to the repurchase options in sections 11 and 12 below, that neither party shall assign or delegate any of the obligations created under this Agreement without the prior written consent of the other party. Notwithstanding the foregoing, the Company shall have the unrestricted right to assign this Agreement and to delegate all or any part of its obligations hereunder to any of its subsidiaries or affiliates or to any entity which succeeds to the business or assets of the Company, but in such event such assignee shall expressly assume all obligations of the Company hereunder. Nothing in this Agreement shall confer upon any person or entity not a party to this Agreement, or the legal representatives of such person or entity, any rights or remedies of any nature or kind whatsoever under or by reason of this Agreement.

SECTION 9. Waiver and Amendments. Any waiver, alteration, amendment or modification of any of the terms of this Agreement shall be valid only if made in writing and signed by the parties hereto. No waiver by either of the parties hereto of their rights hereunder shall be deemed to

constitute a waiver with respect to any subsequent occurrences or transactions hereunder unless such waiver specifically states that it is to be construed as a continuing waiver.

SECTION 10. Co-Brokerage Agreement Payments. As indicated in the Recitals, and as a part of the ARX Sale Transaction, the LLLP has: (i) purchased twenty-one percent (21%) of the outstanding equity stock of the Company (the "Company Stock"); (ii) obtained a loan from United Bank and Trust in St. Petersburg, Florida in the amount of $4,554,000.00 (the "Loan"), the proceeds of which will be used almost entirely by the LLLP to fund its acquisition of such stock of the Company; and (iii) caused ASIC, ASI Lloyds, the LLLP and Willis Re, Inc. (''Willis'') to enter into a Co­ Brokerage Agreement on or about the date hereof, wherein, among other things, Willis agrees to make certain co-brokerage payments to the LLLP as more specifically described therein (the "Co-Brokerage Agreement") . The payments received by the LLLP from Willis under the Willis Agreement will be used by the LLLP to repay the indebtedness evidenced by the Loan.

SECTION 11. Termination for Cause and Voluntary Termination - Repurchase Option. The parties hereto acknowledge and agree that, should the Company terminate Executive for Cause, as defined in this Agreement, or should the Executive voluntarily terminate his employment for any reason, the Company shall have the right for a period of one hundred twenty (120) days following the date of such termination, but not the obligation, to elect to repurchase from the LLLP the number of shares of the Company's stock purchased by the LLLP in the ARX Sale Transaction equal to: eighty percent (80%) of the total number of shares purchased by the LLLP, multiplied by a fraction, the numerator of which is the unamortized principal amount of the Loan, and the denominator of which is the total original principal amount of the Loan (the ''For Cause Repurchase Option"). In the event the Company exercises the For Cause Repurchase Option, the purchase price per share shall be equal to the sum of: (a) $2,200.00 per share, plus (ii) the interest paid on $2,200.00 of Loan principal from the date the Loan was made, until the day of closing of the repurchase. The Company is free to assign the For Cause Repurchase Option to any of its shareholders, or other individuals or entities, if and when it becomes exercisable. Upon the valid exercise of the For Cause Repurchase Option, the closing thereunder must occur within ninety (90) days thereafter, unless delayed by regulatory approval, in which case the closing must occur within one hundred eighty (180) days thereafter.

SECTION 12. Termination Without Cause - Repurchase Option. The parties hereto acknowledge and agree that should the Company terminate Executive without Cause, as defined in this Agreement, the Company shall have the right for a period of sixty (60) days following the date of such termination, but not the obligation, to elect to repurchase from the LLLP the number of shares of the Company's stock purchased by the LLLP in the ARX Sale Transaction equal to: eighty percent (80%) of the total number of shares purchased by the LLLP, multiplied by a fraction, the numerator of which is the unamortized principal amount of the Loan, and the denominator of which is the total original principal amount of the Loan (the ''Without Cause Repurchase Option").

In the event the Company exercises the Without Cause Repurchase Option, the purchase price per share shall be the "Fair Market Value" of the shares as of the time of termination of employment, as agreed to in writing by the parties. In the event the parties cannot agree on the Fair Market Value of the shares, the parties shall each submit their respective determinations of the Fair Market Value to a third party appraiser mutually agreeable to the parties within twenty days of such date. Such appraiser shall choose, pursuant to a written notice to the parties (the "Appraiser Notice") which of the two estimations of Fair Market Value the appraiser determines is correct. The determination of such appraiser shall be binding on the parties. The parties shall equally share the cost of the appraiser. The appraiser appointed pursuant to this section shall be a nationally recognized accounting firm qualified in determining the value of shares purchased in similar investments, and shall not be an affiliate of any of the parties. In the event

the parties cannot agree on the appointment of an appraiser, the parties shall each select an appraiser, both of whom shall be nationally recognized accounting firms qualified in determining the value of shares purchased in similar investments, and neither appraiser shall be an affiliate of any of the parties. The two appraisers chosen shall mutually agree upon a third appraiser, which shall also be a nationally recognized accounting firm qualified in determining the value of shares purchased in similar investments and shall not be an affiliate of any of the parties. The third appraiser shall choose which of the two estimations of Fair Market Value shall govern, within fifteen (15) days of the date of its selection, which choice shall be binding .on all parties and appraisers. The Company is free to assign its Without Cause Repurchase Option to any of its shareholders, or other individuals or entities, if and when it becomes exercisable. Upon the valid exercise of the Without Cause Repurchase. Option, the closing thereunder must occur within ninety (90) days thereafter, unless delayed by regulatory approval, in which case the closing must occur within one hundred eighty (180) days thereafter.

SECTION 13. Replacement Agreement. This Agreement supersedes and replaces in its entirety the Prior Employment Agreement, as defined in the Recitals.

SECTION 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. THE VENUE FOR ANY LEGAL ACTION HEREUNDER SHALL BE EITHER IN THE CIRCUIT COURT OF PINELLAS COUNTY, FLORIDA, OR IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA.

SECTION 15. Notices. Any notice required or provided for in this Agreement to be given to any party shall be mailed by certified mail, return receipt requested, and postage prepaid, or hand delivered, or provided via facsimile, to the party at the following addresses:

If to Company:

If to Executive: John F. Auer

President

American Strategic Insurance Corp.

1325 Snell Isle Boulevard #211

St. Petersburg, Florida 33704

Facsimile: (727) 822-8765

Such notice shall be effective upon receipt by such other party of such notice. Any such addresses for notice may be changed by the applicable party to this Agreement as to such party by providing the other party with notice of any such address change in the same manner provided above, which shall be effective upon the receipt of such written notice by the other party.

SECTION 16. No Drafter. This Agreement shall be construed without regard to whether it was prepared by any party hereto.

SECTION 17. Additional Documents. The parties hereto agree that they will from time to time execute and delivery any and all additional and supplemental instruments, and do such other acts and things and may be necessary or desirable to effect the purposes of this Agreement and the consummation of the transactions contemplated hereby.

SECTION 18. Attorneys' Fees. Except as provided in Section 12, in the event any action or proceeding is brought by either party against the other under this Agreement, the prevailing party shall be entitled to receive reasonable attorneys' fees and costs from the non-prevailing party. Attorneys' fees and costs for appellate proceedings shall likewise be governed by this paragraph.

SECTION 19. Invalidity. If any provision contained in this Agreement is held invalid, in whole or in part, such invalidity shall not affect any other provision of this Agreement, and the remainder of this Agreement shall be in force to the full extent provided by applicable law.

SECTION 20. Time. Time is of the essence in all dealings of the parties pursuant to this Agreement.

SECTION 21. Waiver or Breach. No waiver or breach by the parties hereto of any provision of this Agreement shall be construed or operate as a waiver of any subsequent breach by either party.

SECTION 22. Section Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof, affect the meaning or interpretation of this Agreement or of any term or provision hereof.

SECTION 23. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties hereto regarding the employment of Executive. This Agreement supersedes all prior negotiations, discussions, correspondence, communications, understandings and agreements between the parties relating to the subject matter of this Agreement.

SECTION 24. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

COMPANY:

ARX HOLDING CORP.

By:/s/ Marc Fasteau

Name: Marc Fasteau

Title: Chairman of the Board

(CORPORATE SEAL)

EXECUTIVE:

/s/ John F. Auer

CONSENT AND JOINDER

The undersigned hereby acknowledges and agrees to the provisions of Sections 11 and 12 of the Employment Agreement to which this Consent and Joinder is attached.

Dated:March 30, 2004

ARX EXECUTIVE HOLDINGS,

LLLP, a Florida limited liability

limited partnership, by its General Partner

EX-10.53

Exhibit 10.53

THIRD AMENDMENT TO THE PROGRESSIVE COPORATION EXECUTIVE

DEFERRED COMPENSATION PLAN

(2010 AMENDMENT AND RESTATEMENT)

WHEREAS, The Progressive Corporation ("Company") currently maintains The Progressive Corporation Executive Deferred Compensation Plan ("Plan") pursuant to the 2010 Amendment and Restatement; and

WHEREAS, the Company desires to amend the Plan further;

NOW THEREFORE, the Plan is hereby amended as follows, effective March 31, 2015:

1. Section 1.1 of Article 1 of the Plan is hereby amended and restated in its entirety to provide as follows:

"Affiliated Company" means any corporation included in the affiliated group of corporations as defined in Section 1504 of the Code (determined without regard to 1504(b) of which the Company is the common parent corporation, excluding ARX Holding Corp. and its direct and indirect subsidiaries.

IN WITNESS THEREOF, The Progressive Corporation has hereunto caused this Amendment to be executed by its duly authorized representative on the 26th day of March, 2015.

THE PROGRESSIVE CORPORATION    

By:______________________________

Title:_____________________________

EX-10.77

Exhibit 10.77

EXHIBIT A

THE PROGRESSIVE CORPORATION

DIRECTORS DEFERRAL PLAN

(2015 Amendment and Restatement)

1. Purposes of the Plan; Effective Date.

The purposes of this Plan are to attract and retain qualified Directors and to provide incentives to these Directors through the ability to defer their receipt of cash compensation and by providing Directors with the opportunity to participate in the Company's growth. This amendment and restatement shall be effective as of the Effective Date; provided, however, that this amendment and restatement shall only apply to Cash Compensation deferred pursuant to the Plan after the Effective Date.

2. Definitions.

(a) "Board" means the Board of Directors of the Company.

(b) “Cash Compensation” means any compensation payable to a Director in the form of cash for service on the Board; provided, however, that Cash Compensation shall not apply to any reimbursement of expenses incurred by a Director in connection with his or her service as a Director.

(c) “Change in Control” means a change in the ownership of the Company, a change in effective control of the Company or a change in the ownership of a substantial portion of the Company’s assets, each as determined in accordance with Section 409A of the Code.

(d) “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated pursuant thereto.

(e) “Committee” means the Compensation Committee of the Board or such other committee of the Board to which the Board delegates the authority to administer the Plan.

(f) "Common Shares" means Common Shares, $1.00 par value, of the Company.

(g) "Company" means The Progressive Corporation, an Ohio corporation, and its successors.

(h) "Deferral Account" means the account established by the Company for each Member in accordance with Section 5.

(i) “Deferral Agreement” means the written Deferral Election, in the form approved by the Committee, executed by the Director.

(j) “Deferral Election” means the election of any Director to defer 100% of his or her Cash Compensation with respect to any Term.

(k) "Director" means any director of the Company who is not an employee of the Company.

(l) “Designated Deferral Period” shall mean the deferral period selected by the Director and specified in a Deferral Agreement.

(m) “Effective Date” means November 30, 2015.

(n) "Market Price" means the average of the high and low price at which a Common Share is traded on the New York Stock Exchange (or such other exchange on which the Common Shares may then be traded) on a given date.

(o) "Member" means any Director who has at any time deferred the receipt of Cash Compensation in accordance with this Plan.

(p) "Plan" means The Progressive Corporation Directors Deferral Plan (2015 Amendment and Restatement), as set forth herein and as it may be amended from time to time in accordance with the terms hereof.

(q) "Term" means the duration of the term for which a Director is elected.

(r) “Unit” means one unit, representing the right to receive the value equivalent of one Common Share.

(s) "Year" means the calendar year.

(t) Whenever appropriate, words used herein in the singular may be read as the plural and the plural may be read as the singular.

3. Election to Defer Cash Compensation.

(a) Eligibility.

A Director may elect to defer receipt of 100% (but not less than 100%) of his or her Cash Compensation (if any) for any Term in accordance with Section 3(b) hereof.

(b)Time of Election.

A Director desiring to defer his or her Cash Compensation (if any) for the Term beginning in the upcoming Year must file with the Committee or its designated agent a Deferral Agreement no later than the last day of the Year prior to the Year in which the Term will begin. For example, to defer any Cash Compensation payable for the one-year Term beginning in May 2016, a Director must file a Deferral Agreement with the Committee no later than December 31, 2015.

Any Director who was not a Director at any time during the previous Year may make an election to defer all or a portion of the Cash Compensation for the Term in which the Director is elected to the Board by delivering a Deferral Agreement to the Company (i) within thirty (30) days of such election to the Board and (ii) prior to the payment of any Cash Compensation which is the subject of such Deferral Agreement. For example, if an individual that has never served as a Director is elected to the Board on October 1, 2016, then to defer any Cash Compensation payable for the initial pro-rated Term, the individual must file a Deferral Agreement with the Committee no later than October 31, 2016 and prior to the payment of any Cash Compensation for the initial pro-rated Term.

A Director fulfilling the above requirements shall be considered a "Member" for purposes of this Plan.

If an eligible Director fails to file a Deferral Agreement with respect to any eligible Cash Compensation before the deadline provided in the first sentence of this Section 3(b) (or, if applicable, the third sentence of this Section 3(b)), then he or she shall be deemed to have elected not to make a Deferral Election for such Term.

(c)Duration and Effect of Election.

Once made, a Deferral Election shall be irrevocable. A Deferral Election shall be deemed to have been made when the completed and executed Deferral Agreement is received by the Committee.

If a Director timely files a Deferral Agreement with the Committee with respect to Cash Compensation, then (i) instead of being paid to the Member, the amount of such Cash Compensation shall be credited to such Member’s Deferral Account in accordance with Section 5(b), and (ii) the delivery of such Cash Compensation will be deferred until the end of the Member’s Designated Deferral Period or such earlier time as this Plan may specify.

4. The Amount and Date of Deferral.

The Deferral Agreement of the Member shall indicate the date on which, subject to the terms of this Plan, the Designated Deferral Period will end and distributions shall begin. Subject to the terms of this Plan, a Member may indicate in the Deferral Election Agreement any of the following manners of distribution following the earlier to occur of (a) termination of the Member’s service as a Director or (b) expiration of the Member’s Designated Deferral Period (the “Starting Distribution Date”): (i) a lump-sum distribution; (ii) three (3) annual installments, (iii) five (5) annual installments, or (iv) ten (10) annual installments. All distributions will be made, or in the case of installment distributions will commence, within thirty (30) days following the Starting Distribution Date. Subsequent installment distributions, if any, will be made within thirty (30) days of the anniversary of the Starting Distribution Date. Notwithstanding the foregoing and any Designated Deferral Period and manner of distribution stated in a Deferral Agreement, (i) in the event of a Change in Control, distributions shall be made in accordance with Section 6(b), and (ii) in the case of the death of the Member, distributions shall be made in accordance with Section 8.

5. Deferral Accounts.

(a) Establishment of Deferral Accounts.

The Company shall establish and preserve one or more Deferral Accounts for each Member, which will be credited with amounts as described in Section 5(b). The Company may establish separate Deferral Accounts (or sub-accounts within a Member’s Deferral Account) for a Member to properly account for Cash Compensation deferred pursuant to separate Deferral Agreements.

(a) Credits to Deferral Accounts.

Each Member’s Deferral Account shall be credited as follows:

(i) Cash Compensation. On the date that Cash Compensation that is subject to a Deferral Agreement would otherwise be payable to a Member, the Member’s Deferral Account shall be credited with the number of Units (whole or fractional, rounded to the nearest thousandth of a share) determined by dividing (A) the amount of the Cash Compensation that the Member has elected to defer that otherwise would have been paid to him or her on such date, by (B) the Market Price on such date.

(i)Dividends. Except as provided in the final sentence of Section 6(a) hereof, on the date on which a dividend is paid on (or any other distribution is made on account of) the Common Shares, the Deferral Account shall be credited with the number of Units (whole or fractional, rounded to the nearest thousandth of a share) determined by dividing (A) the dollar amount (or value of other property) that the Member would have received with respect to the number of Units held in his or her Deferral Account on the applicable record date if such Units had been actual Common Shares instead of Units, by (B) the Market Price on the date such dividend is paid.

(c)No Segregation or Trust;Claims of General Creditors.

No assets shall be segregated or earmarked in respect of any Deferral Accounts. The Plan and the crediting of Deferral Accounts hereunder shall not constitute a trust and shall be structured solely for the purpose of recording an unsecured contractual obligation. All amounts distributable or otherwise payable pursuant to the terms of this Plan shall remain a part of the general assets of the

Company. In no event shall any Member or beneficiary have any claims or rights to any distribution or other payment hereunder that are superior to any claims or rights of any general creditor of the Company.

6. Distributionof Deferral Accounts.

(a) The Units in a Deferral Account or subaccount thereof established and maintained for each Member shall, subject to the terms of the Plan, be distributed in a lump sum or installments as indicated in the Deferral Agreement. A Member may elect to change the distribution date(s) and method of distribution set forth in a Deferral Agreement; provided that such change (i) must be made in writing and on such form(s) as the Company shall specify, (ii) must be delivered to the Company at least one (1) year prior to the distribution date being changed, and (iii) shall delay the distribution or installment distribution for a period of at least five (5) years following the date such distribution otherwise would have been made or would have commenced. In the case of a distribution to be made in installments, the provisions of this paragraph shall apply to each installment distribution as if each such installment distribution were a separate distribution.

With respect to all distributions to be made under the Plan, the following rules shall apply:

(i) All distributions shall be paid in cash and shall be subject to withholding or deduction by the Company of any taxes, contributions, payments and assessments which the Company is now or may hereafter be required or authorized by law to withhold or deduct from distributions; and

(ii) Each Unit in the Deferral Account shall be valued based on the Market Price on a date determined by the Company within five (5) business days before the date of the distribution and, upon distribution, the Unit shall be cancelled.

In the event a Member elects to receive installment distributions, the following additional rules shall apply:

(i) The balance of the Deferral Account shall be credited, pursuant to Section 5(b) above, with additional Units upon the payment of dividends until the Deferral Account is completely distributed; and

(ii) The amount of each installment distribution shall be determined by (x) multiplying the number of Units in the Deferral Account by the Market Price on a date within five (5) business days before the date of the distribution and (y) dividing that number by the number of installments remaining to be distributed to the Member.

Notwithstanding anything to the contrary contained herein, if:

(a) a Member would otherwise be entitled to have additional Units equal to the value of a dividend (or other distribution) credited to his or her Deferral Account under Section 5(b) hereof in respect of Units held in such Deferral Account on the record date for such dividend (or other distribution);

(a) the cash equivalent of such Units (or a portion of such Units) was distributed hereunder to the Member after the record date but before the payment date for such dividend (or other distribution); and

(b) such distribution from the Deferral Account was either a lump sum distribution or the final installment of installment distributions hereunder,

then the amount equal to such dividend (or other distribution) in respect of the Units that were so cancelled upon distribution shall not be credited to the Member’s Deferral Account, and such amount shall be distributed to the Member in cash as soon as practicable after the payment date for such dividend.

(a) Notwithstanding the foregoing, if a Change in Control occurs, each Member’s entire Account balance shall be distributed to such Member in one lump sum within thirty (30) days following the Change in Control.

7.Beneficiaries.

Each Member shall have the right to designate in writing one or more beneficiaries to receive distributions (in accordance with Section 8) in the event of the Member’s death by filing with the Company a beneficiary designation on a form provided by the Committee. The designated beneficiary or beneficiaries may be changed by a Member at any time prior to his or her death by the delivery to the Committee of a new beneficiary designation form. The change shall become effective only when the new beneficiary designation form is received and accepted by the Committee; provided, however, any beneficiary designation form received by the Committee after the designating Member’s death will be disregarded.

8.Death of Member.

If a Member dies, a lump-sum distribution of the Member’s Deferral Account will be made to the Member’s estate or beneficiary (if identified in accordance with Section 7) within thirty (30) days following the date the Committee receives written notice of the Member’s death.

9. Valuation of Accounts.

Each Deferral Account shall be valued as of the last day of each Year and from time to time as amounts are credited to, or distributed from, the Deferral Account until distribution of the Deferral Account in full in accordance with Section 6 or Section 8. Each Member shall receive a statement of his Deferral Accounts not less than annually.

1. Capital Changes.

In the event of any change in the number of outstanding Common Shares or the kind of securities held by a shareholder by reason of any stock dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of shares or a similar corporate change, the Board shall determine, in its sole discretion, the extent to which such change equitably requires an adjustment in the number or type of Units held in the Deferral Accounts and such adjustment shall be made by the Company and shall be conclusive and binding on all Members of the Plan.

11.Administration.

Except for those powers and duties expressly reserved for the Board hereunder, the Committee will have full power to administer the Plan. Such power includes, but is not limited to, the following authority:

(a) To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;

(b) To interpret the Plan and to decide all matters arising thereunder, including the right to resolve or remedy any ambiguities, errors, inconsistencies or omissions. All such interpretations shall be final and binding on all parties;

(c) To determine the amount of distributions to be made to each Member and beneficiary or other person in accordance with the provisions of the Plan;

(d) To authorize and effect distributions under the Plan;

(e) To keep such records and submit such filings, elections, applications, returns or other documents or forms as may be required under applicable law;

(f) To appoint such agents, counsel, accountants and consultants as may be desirable in administering the Plan, including agents to receive Deferral Agreements;

(g) To exercise the other powers that are expressly granted to it herein, or that are impliedly necessary for it to carry out any of its responsibilities hereunder; and

(h) By written instrument to delegate any of the foregoing powers to one or more designated officers or employees of the Company or other persons.

All decisions of the Committee or its designees shall be binding upon all Members and their respective legal representatives, successors and assigns, and any and all persons claiming under or through any of them. No member of the Committee or any of its designees shall be liable to any Member or to the Company for any determination made within the scope of the administrative and interpretive functions provided in this Plan. No member of the Committee shall participate in any discussion or determination involving his or her own specific rights, benefits or obligations under this Plan.

12.Termination.

Notwithstanding any other provision of the Plan, the Board may terminate the Plan at any time for any reason without any liability to any Member, beneficiary or other person for any such termination or for any other action taken pursuant to this Section 12. Following termination of the Plan, and notwithstanding the provisions of any Deferral Agreement entered into prior to such termination, no additional deferrals may be made hereunder, but all existing Deferral Accounts shall be administered in accordance with the Plan, as in effect immediately prior to termination, and shall be distributed in accordance with the terms of the Plan and the applicable Deferral Agreements, unless and until the Board elects to accelerate distributions as provided below. Subject to the limitations and conditions provided for in this Section 12, at any time on or after the effective date of termination of the Plan, the Board, in its sole discretion, may elect to accelerate the distribution with respect to all Deferral Accounts to the extent permitted under Section 409A of the Code; provided, that (a) the termination of the Plan is not proximate to a downturn of the Company’s financial health; (b) the Company terminates and liquidates all plans, programs, agreements, and other arrangements (“Other Program”) that must be aggregated with the Plan in accordance with Treasury Regulation Section 1.409A-1(c) if a Member participated in the Other Program; and (c) the Company shall not adopt a new Other Program that would be required to be aggregated with the Plan in accordance with Treasury Regulation Section 1.409A-1(c) if a Member participated in the Other Program within three (3) years following termination of the Plan. Such accelerated distributions shall be made in a lump sum at a time selected by the

Company in accordance with Section 409A of the Code; provided, that no accelerated distributions, other than those that could be made under the terms of the Plan absent its termination, shall be made earlier than twelve (12) months from the date that the Company takes all actions necessary to irrevocably terminate the Plan and cause all distributions to be made thereunder and all distributions shall be made no later than twenty-four (24) months from the date the Company takes all actions necessary to irrevocably terminate the Plan and cause all distributions to be made thereunder. Upon completion of distributions to all Members, or beneficiaries, as the case may be, no Member, beneficiary or person claiming under or through them, will have any claims in respect of the Plan.

13.Non-alienation.

The amounts credited to any Deferral Account maintained under the Plan may not be pledged, assigned, or transferred by the Member for whom such Deferral Account is maintained or by any other individual, and any purported pledge, assignment, or transfer shall be void and unenforceable.

14.Claims of Other Persons; Set-Off.

The provisions of the Plan shall in no event be construed as giving any person, firm or corporation any legal or equitable right as against the Company or any subsidiary, or the officers, employees, or directors of the Company or any subsidiary, except any such rights as are specifically provided for in the Plan or are hereafter created in accordance with the terms and provisions of the Plan. The right of each Member to any Deferral Account, benefit, Units, right or distribution hereunder shall not, to the extent permitted by law, be subject in any manner to attachment or other legal process for the debts of such Member, and no Deferral Account, benefit, Units, right or distribution shall be subject to anticipation, alienation, sale, pledge, transfer, assignment or encumbrance; provided, however, the Company shall have the unrestricted right to set off against or recover out of any distributions due a Member, beneficiary or other person at the time such distributions would otherwise have been made hereunder, any amounts owed the Company or any subsidiary of the Company by such Member, beneficiary or other person.

15.Severability.

The invalidity and unenforceability of any particular provision of the Plan shall not affect any other provision hereof, and the Plan shall be construed in all respects as if such invalid or unenforceable provisions were omitted herefrom.

16.Reports.

Until a Member’s entire Deferral Account shall have been distributed in full, the Company will furnish or make available to the Member a written or electronic report, at least annually, setting forth any changes in such Deferral Account and the amounts credited to such Deferral Account.

17.Director and Shareholder Status.

Nothing in the Plan shall interfere with or limit in any way the right of the Company or its shareholders to terminate any Member’s service as a director, at any time, nor confer upon any Member any right to continue as a director of the Company or to be nominated for election to the Board at any time. The Plan will not give any person any right or claim to any benefits under the Plan unless such right or claim has specifically accrued under the terms of the Plan. Participation in the Plan shall not create any rights in a Member (or any other person) to receive Common Shares or to be treated as a shareholder of the Company for any purpose.

18.Section 409A.

The Plan is intended to comply with the requirements of Section 409A or an exemption or exclusion therefrom, and it is intended that the Plan be administered in all respects in accordance with Section 409A. Accordingly, any action taken under the Plan, including any distribution under Section 6(b), shall be made in compliance with Section 409A. Each distribution shall be treated as a “separate payment” for purposes of Section 409A. Notwithstanding any other provision of the Plan to the contrary, in the event that a Member is a “specified employee” within the meaning of Section 409A (as determined in accordance with the methodology established by the Company), amounts that constitute “non-qualified deferred compensation” within the meaning of Section 409A that would otherwise be distributable during the six (6) month period immediately following a Member’s termination of employment with the Company and its subsidiaries and affiliates by reason of such termination shall instead be distributed or provided on the first business day of the 7th month following the month in which the Member’s termination occurs. If the Member dies following any termination of employment with the Company and its subsidiaries and affiliates and prior to the distribution of any amounts delayed on account of Section 409A, such amounts shall be distributed to the personal representative of the Member’s estate within thirty (30) days following the date of the Member’s death (with the first date following the date of the Member’s death being the first day of such thirty (30)-day period). Interest shall not accrue on such amounts during the period of delay; however, Units attributable to any dividends paid during the period of delay shall continue to accrue in accordance with Section 5(b)(ii). All references in this to a Member’s “termination”, “termination of employment”, “termination of service” and any other similar terminology, shall be interpreted as requiring that a “separation from service” within the meaning of Section 409A has occurred upon any such referenced event.

19.Tax Consequences; No Liability.

The Company shall not be responsible for the tax consequences under federal, state or local law of any election made by any Member under the Plan. Participation in the Plan is entirely at the risk of each Member. Neither the Company, the Committee, the Board nor any other person associated with this Plan shall have any liability for any loss or diminution in the value of Deferral Accounts, or for any failure of this Plan to effectively defer recognition of income or to achieve any Member’s desired tax treatment or financial results.

20.Amendments.

Notwithstanding any other provision of this Plan, the Board may amend this Plan at any time for any reason without liability to any Member, beneficiary or other person for any such amendment or for any other action taken pursuant to this Section 20, provided that no such amendment shall be made retroactively in a manner that would deprive any Member of any rights or benefits which have accrued to his/her benefit under the Plan as of the date such amendment is proposed to be effective, unless such amendment is necessary to comply with applicable law.

21.Facility of Distributions.

If the Committee determines that a Member or beneficiary entitled to receive a distribution under this Plan is (at the time such distribution is to be made) a minor or physically, mentally or legally incompetent to receive such distribution and that another person or any institution has legal custody of such minor or incompetent individual, the Committee may cause the distribution to be made to such person or institution having custody of such Member or beneficiary. Such distribution, to the extent made, shall

operate as a complete discharge of all obligations by the Committee, the Company and the Board to such Member or beneficiary.

22.Governing Law.

The provisions of the Plan shall be governed by and construed in accordance with the laws of the State of Ohio.

IN WITNESS WHEREOF, the Company has caused this instrument to be executed by its duly authorized officer as of the _____day of November, 2015, effective on the Effective Date.

THE PROGRESSIVE CORPORATION

By: ______________________________

Title: ____________________________

EX-10.84

Exhibit 10.84

THE PROGRESSIVE CORPORATION

DIRECTOR COMPENSATION

	2015-2016 Compensation
Lead Independent Director	$25,000 additional
Audit Committee Chair	$280,000
Audit Committee Member	$255,000
Compensation Committee Chair	$275,000
Compensation Committee Member	$250,000
Investment Committee Chair	$275,000
Investment Committee Member	$250,000
Additional Committee Chair*	$20,000 additional
Additional Committee Member*	$15,000 additional

*Excludes Executive Committee

EX-10.90

Exhibit 10.90

2016 PROGRESSIVE CAPITAL

MANAGEMENT BONUS PLAN

1. The Plan. The Progressive Corporation and its subsidiaries (collectively "Progressive" or the “Company”) have adopted the 2016 Progressive Capital Management Bonus Plan (the “Plan”) as part of their compensation program for the Company’s investment professionals for the Company’s 2016 fiscal year (the “Plan year”). The Plan is performance-based and is administered under the direction of the Compensation Committee of the Board of Directors of The Progressive Corporation (the “Compensation Committee” or “Committee”). References in this Plan to the Company’s portfolio mean the respective portfolios of the Company’s subsidiaries and affiliates that are actively managed by Progressive Capital Management Corp., and references in this Plan to the Company’s investment results mean the investment results of those portfolios only.

The Company’s investment professionals invest the funds of the Company in accordance with investment guidelines approved from time to time by the Investment and Capital Committee of the Board of Directors. Those guidelines address such matters as minimum average credit quality and the duration of the portfolio, as well as limitations on the extent to which the portfolio can be concentrated in individual issuers. Compliance with the guidelines is routinely monitored and variations therefrom must be reported to, and approved by, the Investment and Capital Committee.

2. Participants. Progressive employees who are assigned primarily to the Company’s capital management function, including the Company’s Chief Investment Officer (“CIO”), are eligible to be selected for participation in the Plan. Eligible employees in addition to the CIO will be selected by the CIO in consultation with the Chief Executive Officer (“CEO”) and Chief Human Resource Officer (“CHRO”) (the “Designated Executives”) to participate in the Plan. Participants may also participate in other Gainsharing, bonus or incentive compensation plans maintained by Progressive, if so determined by the Designated Executives (or in the case of the CIO or any other executive officer, by the Compensation Committee). Other eligible employees of the Company may be selected for participation in the Plan for or at any time during the Plan year by the Designated Executives. In such cases, the Designated Executives will determine the new participant’s Target Percentage (described below) and other terms of participation (except with respect to the CIO or any other executive officer, as to whom all determinations must be made by the Committee). Throughout this Plan, references to “executive officers” refer to executive officers within the meaning of any Securities and Exchange Commission (“SEC”) or New York Stock Exchange rule applicable to the Company.

3.Annual Bonus Determination.

A. Annual Bonus. Each participant may earn an annual cash bonus (the “Annual Bonus”), subject to the terms of this Plan. The amount of the Annual Bonus earned by any participant will be determined by application of the following formula:

Annual Bonus = Paid Eligible Earnings x Target Percentage x Performance Factor

B. Paid Eligible Earnings. Paid Eligible Earnings for the Plan year shall mean and include the following: regular, Earned Time Benefit pay (excluding the payout of unused Earned Time Benefit pay at termination), sick pay, holiday pay, funeral pay, military make-up pay, overtime pay, shift differential, and retroactive payments of any of the foregoing items, received by the participant during the Plan year for work or services performed as an officer or employee of Progressive.

For purposes of the Plan, Paid Eligible Earnings shall exclude all other types of compensation, including, without limitation: any short-term or long-term disability payments made to the

participant; the earnings replacement component of any worker's compensation benefit or award; any amounts paid pursuant to a judgment in, or settlement related to, any action, suit or proceeding, whether in law or equity, to any extent arising from or relating to a participant’s employment with the Company, or work or services performed for or on behalf of the Company; any amount paid under a separation allowance (or severance) plan; any bonus (including PCM Bonus Plan bonus), Gainsharing or other incentive compensation award (whether denominated, or payable, in cash or equity), including, without limitation, payments from any discretionary cash fund; any dividend payments or dividend equivalent amounts; and any unused Earned Time Benefit.

C.Target Percentage. The Target Percentages for participants in the Plan shall be determined by or under the direction of the Committee, but will not exceed 125% for any participant. Target Percentages may vary among Plan participants and may be changed from year to year by or under the direction of the Designated Executives (or in the case of the CIO or any other executive officer, by the Compensation Committee).

D.Performance Factor. The Performance Factor will be determined by the Committee after the expiration of the Plan year based on the performance of the Company’s fixed-income investment portfolio (the “Fixed-Income Portfolio” or “Portfolio”), and such other factors and information relating to the performance of the Company’s investment professionals as the Committee shall determine.

First, an indicated performance factor will be determined based on the fully taxable equivalent total return of the Fixed-Income Portfolio, in comparison to the total returns of the group of comparable investment firms identified by Rogers Casey (the “Investment Benchmark”), over the one- and three-year periods ending on December 31 of the Plan year, as described below. After the end of the Plan year, Rogers Casey will determine the firms that are included in the Investment Benchmark in accordance with the criteria specified on Exhibit I hereto. Rogers Casey will also provide to the Company the monthly total return data for each of the Investment Benchmark firms for the three-year period ending on December 31 of the Plan year.

Investment results for the Fixed-Income Portfolio will be marked to market, including the benefit of any state premium tax abatements for municipal securities held in the Portfolio that are realized by the Company during the Plan year, in order to calculate the Portfolio’s fully taxable equivalent total return for the one-year (2016) and three-year period (2014-2016) periods, in each case compounded on a monthly basis. The investment performance achieved by the Fixed-Income Portfolio for the one- and three-year periods (each, a “comparison period”) will then be compared against the total returns of the firms included in the Investment Benchmark for the same periods, also compounded on a monthly basis, as determined by the Company from the monthly performance data supplied by Rogers Casey for each firm in the Investment Benchmark, to determine, for each comparison period, where the Fixed Income Portfolio’s performance falls on a percentile basis when compared to the firms in the Investment Benchmark, as further described on Exhibit II (“Performance Ranking”).

The Portfolio’s Performance Ranking will be used to determine a performance score of between 0 and 2.0 for each comparison period, based on the following schedule:

Comparison Period	Score = 0 Rank at or below	Score = 1.0 Rank equal to	Score = 2.0 Rank at or above
One year	15th Percentile	50th Percentile	85th Percentile
Three year	25th Percentile	50th Percentile	75th Percentile

A Performance Ranking between the values identified in the schedule will be interpolated on a straight-line basis to generate the applicable performance score, as further described on Exhibit II.

Once these performance scores are determined, an overall indicated performance factor will be determined by averaging the performance scores for the one- and three-year comparison periods.

The overall indicated performance factor will be reported to the Compensation Committee after the expiration of the Plan year, together with such supporting documentation as the Committee may require. The Committee may consider such additional information as it deems necessary or appropriate in its discretion. Such information may include, without limitation:

• the primary investment factors that are responsible for favorable or unfavorable results relative to the peer group, such as the Company’s duration and yield curve position and the extent of its exposure to sectors of the fixed-income markets, including corporate bonds, residential mortgage-backed securities, commercial mortgage-backed securities, other asset-backed securities, government bonds, preferred stocks and non-investment-grade bonds;

• the Company’s holdings within each sector relative to the general market composition of each sector;

• the extent to which material investment decisions may have been driven by Company strategic or capital considerations; and

• the impact on investment results of significant portfolio cash flows driven by Company operations, strategic decisions or capital transactions.

In addition, the Committee may choose to consult with others, including, without limitation, management, the Board’s Investment and Capital Committee, other Board members, and outside compensation and investment professionals, in evaluating the performance of the Company’s investment professionals for the year. The Committee will then determine the Performance Factor, provided that under no circumstances may the Performance Factor exceed 2.0 for the year.

E.In the event that Rogers Casey (or its successor or assigns) discontinues providing the data that is necessary to make the calculations required by this Plan, or modifies the information in such a way as to render the comparisons required by this Plan to be not meaningful, in the Committee’s sole judgment, the determinations required above shall be made using investment return data for comparable firms satisfying the criteria set forth on Exhibit I as may be available from another recognized provider of investment industry data as the Committee may approve in its sole discretion.

4. Payment Procedures; Deferral. The Annual Bonuses will be determined and paid to Plan participants as soon as practicable after the Performance Factor has been determined by the Committee, but no later than March 15th following the Plan year.

Any Plan participant who is eligible to participate in The Progressive Corporation Executive Deferred Compensation Plan ("Deferral Plan") may elect to defer all or any portion of his or her Annual Bonus otherwise payable under this Plan, subject to and in accordance with the terms of the Deferral Plan.

5. Qualification Date; Leave of Absence; Withholding. Unless otherwise determined by the Committee, and except as otherwise provided herein, in order to be entitled to receive an Annual Bonus for the Plan year, the participant must be an active regular employee of Progressive on November 30 of the Plan year (“Qualification Date”). Individuals who are hired on or after December 1 of any Plan year are not entitled to an Annual Bonus for that Plan year. Any participant who is on a leave of absence covered by the Family and Medical Leave Act of 1993, as amended (or equivalent state or local law), the American with Disabilities Act of 1991, as amended (or equivalent state or local law), personal leave approved by the Company, military leave or short- or long-term disability (provided that, in the case of a long-term disability, the participant is still an employee of the Company) on the Qualification Date relating to the Plan year will be entitled to receive an Annual Bonus for the Plan year based on the Paid Eligible Earnings received by the participant during the Plan year. Annual Bonus payments made to participants will be net of any legally required deductions and/or withholdings for federal, state and local taxes and other items.

6. Other Plans. Participants may be selected to participate in this Plan and in one or more other incentive plans offered by the Company. In the case of the CIO or any other executive officer, all determinations with respect to such incentive plans and the executive’s participation therein shall be made by the Compensation Committee. In all other cases, the Designated Executives shall have full authority to determine the incentive plan or plans in which any employee shall participate during the Plan year and the weighting factor (if any) that will apply to each such plan.

7. Non-Transferability. The right to any Annual Bonuses hereunder may not be sold, transferred, assigned or encumbered by any participant. Nothing herein shall prevent any participant's interest hereunder from being subject to involuntary attachment, levy or other legal process.

8. Administration. The Plan will be administered by or under the direction of the Committee. The Committee will have the authority to adopt, alter, amend, modify and repeal such rules, guidelines, procedures and practices governing the Plan as it, from time to time, in its sole discretion deems advisable.

The Committee will have full authority to determine the manner in which the Plan will operate, to interpret the provisions of the Plan and to make all determinations thereunder. All such interpretations and determinations will be final and binding on Progressive, all Plan participants and all other parties. No such interpretation or determination may be relied on as a precedent for any similar action or decision.

Unless otherwise determined by the Committee, all of the authority of the Committee hereunder (including, without limitation, the authority to administer the Plan, select the persons entitled to participate herein, interpret the provisions hereof, waive any of the requirements specified herein and make determinations hereunder and to establish, approve, change or modify Investment Benchmarks, Performance Targets and Target Percentages) may be exercised by the Designated Officers. If one or more of the Designated Officers is unavailable or unable to participate, or if such position is vacant, the Chief Financial Officer may act instead of such officer.

Notwithstanding anything in this Plan to the contrary: (a) all determinations made under this Plan with respect to the CIO or any other individual deemed to be an executive officer of the Company must be made only by the Compensation Committee; and (b) only the Committee may make the determination of the Performance Factor required by Section 3.D. above.

9. Miscellaneous.

A. Recoupment. Progressive shall have the right to recoup any Annual Bonus (or an appropriate portion thereof, as hereinafter provided) with respect to any Plan year paid to a participant hereunder who was an executive officer of Progressive at any time during such Plan year, if: (i) the Annual Bonus payment was predicated upon the achievement during such Plan year of certain financial or operating results (which includes, for purposes hereof, the performance of the Fixed-Income Portfolio); (ii) such financial or operating results were incorrect and were subsequently the subject of a restatement by Progressive within three (3) years after the date on which such Annual Bonus was paid to the participant; and (iii) a lower payment would have been made to the participant if the restated financial or operating results had been known at the time the payment was made. Such recoupment right shall be available to Progressive whether or not the participant in question was at fault or responsible in any way in causing such restatement. In such circumstances, Progressive will have the right to recover from each participant for such Plan year, and each such participant will refund to Progressive, the amount by which the Annual Bonus paid to such participant for the Plan year in question exceeded the lower payment that would have been made based on the restated results, without interest; provided, however, that Progressive will not seek to recover such amounts unless the amount due would exceed the lesser of five percent (5%) of the Annual Bonus previously paid or twenty-thousand dollars ($20,000). Such recovery, at the Committee’s discretion, may be made by lump sum payment, installment payments, credits against future bonus payments, or other appropriate mechanism.

B. Further Rights. Notwithstanding the foregoing subsection A., if any participant that was an executive officer at any time during such Plan year engaged in fraud or other misconduct (as determined by the Committee or the Board, in their respective sole discretion) resulting, in whole or in part, in a restatement of the financial or operating results used hereunder to determine the Annual Bonuses for a specific Plan year, Progressive will further have the right to recover from such participant, and the participant will refund to Progressive upon demand, an amount equal to the entire Annual Bonus paid to such participant for such Plan year plus interest at the rate of eight percent (8%) per annum or, if lower, the highest rate permitted by law, calculated from the date that such bonus was paid to the participant. Progressive shall further have the right to recover from such participant Progressive’s costs and expenses incurred in connection with recovering such Annual Bonus from the participant, including, without limitation, reasonable attorneys’ fees. There shall be no time limit on the Company’s right to recover such amounts under this subsection B., except as otherwise provided by applicable law.

C. Rights Not Exclusive. The rights contained in the foregoing subsections A. and B. shall be in addition to, and shall not limit, any other rights or remedies that the Company may have under any applicable law or regulation.

D. Compliance with Law. The Annual Bonuses determined and paid pursuant to the Plan shall be subject to all applicable laws and regulations. Without limiting the foregoing, and notwithstanding anything to the contrary contained in this Plan, if the SEC adopts final rules under Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that require, as a condition to the Company’s continued listing on a national securities exchange (“Exchange”), that the Company develop and implement a policy requiring the recovery of erroneously awarded compensation, and such regulations are applicable to any participant awarded an Annual Bonus pursuant to the Plan, then the following shall apply to such participant:

In the event that the Company is required to prepare a restatement of one or more of its financial statements due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, the Company will be entitled to recover from participant, and participant will promptly upon written demand return to the Company (whether or not participant remains an employee of the Company at the time of such restatement or thereafter), the amount (or portion thereof) of any Annual Bonus that (i) was paid to participant during the three year period preceding the date on which the Company is required to prepare such restatement and (ii) is in excess of what would have been paid to the participant under the restatement, or such other amount as may be required by the rules of the SEC or an applicable Exchange or any policy of the Company adopted in response to such rules.

10. Termination; Amendments. The Plan may be terminated, amended or revised, in whole or in part, at any time and from time to time by the Committee, in its sole discretion.

11. Unfunded Obligations. The Plan will be unfunded and all payments due under the Plan will be made from Progressive's general assets.

12. No Employment Rights. Nothing in the Plan shall be construed as conferring upon any person the right to remain a participant in the Plan or to remain employed by Progressive, nor shall the Plan limit Progressive's right to discipline or discharge any of its officers or employees or change any of their job titles, duties or compensation.

13. Misconduct; Set-off Rights. No participant shall have the right to receive any Annual Bonus if, prior to such payment being made, participant’s employment is terminated as a result of any action or inaction that, under Progressive’s employment practices or policies as then in effect, constitutes grounds for immediate termination of employment, as determined by Progressive (or, in the case of an executive officer, the Committee) in its sole discretion. Progressive shall have the unrestricted right to set off against or recover

out of any bonuses or other sums owed to any participant under the Plan any amounts owed by such participant to Progressive.

14. Prior Plans. This Plan supersedes all prior plans, agreements, understandings and arrangements regarding bonuses or other cash incentive compensation payable or due to any participant from Progressive with respect to the performance of Progressive’s investment portfolio. Without limiting the generality of the foregoing, this Plan supersedes and replaces the 2015 Progressive Capital Management Bonus Plan (the "Prior Plan”), which is and shall be deemed to have terminated on the last day of the Company’s 2015 fiscal year (the "Prior Plan Termination Date"); provided, however, that any bonuses or other sums earned and payable under the Prior Plan with respect to any Plan year ended on or prior to the Prior Plan Termination Date shall be unaffected by such termination and shall be paid to the appropriate participants when and as provided thereunder.

15. Effective Date. This Plan is adopted, and is effective, as of the first day of the Company’s 2016 fiscal year and will be effective for the 2016 Plan year (which coincides with Progressive’s 2016 fiscal year, except that investment returns are calculated on a calendar year basis).

16. Governing Law. This Plan shall be interpreted and construed in accordance with the laws of the State of Ohio.

EX-11

Exhibit 11

THE PROGRESSIVE CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(millions - except per share amounts)
	Years Ended December 31,
	2015		2014		2013
Net Income attributable to Progressive	$	1,267.6	$	1,281.0	$	1,165.4
Computation of Net Income Per Share
Average shares outstanding - Basic	585.5		590.6		599.1
Net effect of dilutive stock-based compensation	3.7		4.2		4.5
Total equivalent shares - Diluted	589.2		594.8		603.6
Basic: Net income per share	$	2.16	$	2.17	$	1.95
Diluted: Net income per share	$	2.15	$	2.15	$	1.93

EX-13

Exhibit 13

THE PROGRESSIVE CORPORATION

2015 ANNUAL REPORT TO SHAREHOLDERS

App.-A-1

The Progressive Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31,

(millions—except per share amounts)	2015			2014			2013
Revenues
Net premiums earned	$	19,899.1		$	18,398.5		$	17,103.4
Investment income	454.6			408.4			422.0
Net realized gains (losses) on securities:
Other-than-temporary impairment (OTTI) losses:
Total OTTI losses	(23.8		)	(7.9		)	(6.0		)
Non-credit losses, net of credit losses recognized on previously recorded non-credit OTTI losses	0			0			(0.1		)
Net impairment losses recognized in earnings	(23.8		)	(7.9		)	(6.1		)
Net realized gains (losses) on securities	136.5			232.1			324.5
Total net realized gains (losses) on securities	112.7			224.2			318.4
Fees and other revenues	302.0			309.1			291.8
Service revenues	86.3			56.0			39.6
Gains (losses) on extinguishment of debt	(0.9		)	(4.8		)	(4.3		)
Total revenues	20,853.8			19,391.4			18,170.9
Expenses
Losses and loss adjustment expenses	14,342.0			13,306.2			12,472.4
Policy acquisition costs	1,651.8			1,524.0			1,451.8
Other underwriting expenses	2,712.1			2,467.1			2,350.9
Investment expenses	22.8			18.9			18.8
Service expenses	77.5			50.9			38.8
Interest expense	136.0			116.9			118.2
Total expenses	18,942.2			17,484.0			16,450.9
Net Income
Income before income taxes	1,911.6			1,907.4			1,720.0
Provision for income taxes	611.1			626.4			554.6
Net income	1,300.5			1,281.0			1,165.4
Net income attributable to noncontrolling interest (NCI), net of tax	32.9			0			0
Net income attributable to Progressive	$	1,267.6		$	1,281.0		$	1,165.4
Other Comprehensive Income (Loss), Net of Tax
Changes in:
Net unrealized gains (losses) on securities:
Net non-credit related OTTI losses, adjusted for valuation changes	$	0		$	0		$	0.3
Other net unrealized gains (losses) on securities	(212.9		)	74.9			84.0
Total net unrealized gains (losses) on securities	(212.9		)	74.9			84.3
Net unrealized gains (losses) on forecasted transactions	(9.7		)	(2.6		)	(2.0		)
Foreign currency translation adjustment	(1.2		)	(0.9		)	(1.6		)
Other comprehensive income (loss)	(223.8		)	71.4			80.7
Other comprehensive (income) loss attributable to NCI	1.1			0			0
Comprehensive income attributable to Progressive	$	1,044.9		$	1,352.4		$	1,246.1
Computation of Net Income Per Share
Average shares outstanding — Basic	585.5			590.6			599.1
Net effect of dilutive stock-based compensation	3.7			4.2			4.5
Total equivalent shares — Diluted	589.2			594.8			603.6
Basic: Net income per share	$	2.16		$	2.17		$	1.95
Diluted: Net income per share	$	2.15		$	2.15		$	1.93

See notes to consolidated financial statements.

App.-A-2

The Progressive Corporation and Subsidiaries

Consolidated Balance Sheets

December 31,

(millions)	2015			2014
Assets
Investments - Available-for-sale, at fair value:
Fixed maturities (amortized cost: $15,347.9 and $13,374.2)	$	15,332.2		$	13,549.2
Equity securities:
Nonredeemable preferred stocks (cost: $674.2 and $590.4)	782.6			827.5
Common equities (cost: $1,494.3 and $1,289.2)	2,650.5			2,492.3
Short-term investments (amortized cost: $2,172.0 and $2,149.0)	2,172.0			2,149.0
Total investments	20,937.3			19,018.0
Cash	224.4			108.4
Accrued investment income	102.2			87.3
Premiums receivable, net of allowance for doubtful accounts of $164.8 and $152.2	3,987.7			3,537.5
Reinsurance recoverables, including $46.1 and $46.0 on paid losses and loss adjustment expenses	1,488.8			1,231.9
Prepaid reinsurance premiums	199.3			85.3
Deferred acquisition costs	564.1			457.2
Property and equipment, net of accumulated depreciation of $778.3 and $731.0	1,037.2			960.6
Goodwill	447.6			1.6
Intangible assets, net of accumulated amortization of $47.4 and $0.6	494.9			11.3
Other assets	335.8			288.5
Total assets	$	29,819.3		$	25,787.6
Liabilities
Unearned premiums	$	6,621.8		$	5,440.1
Loss and loss adjustment expense reserves	10,039.0			8,857.4
Net deferred income taxes	109.3			98.9
Dividends payable	519.2			404.1
Accounts payable, accrued expenses, and other liabilities1	2,067.8			1,893.8
Debt2	2,707.9			2,164.7
Total liabilities	22,065.0			18,859.0
Redeemable noncontrolling interest (NCI)3	464.9			0
Shareholders' Equity
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 214.0 and 209.8)	583.6			587.8
Paid-in capital	1,218.8			1,184.3
Retained earnings	4,686.6			4,133.4
Accumulated other comprehensive income, net of tax:
Net unrealized gains (losses) on securities	809.0			1,021.9
Net unrealized gains (losses) on forecasted transactions	(8.2		)	1.5
Foreign currency translation adjustment	(1.5		)	(0.3		)
Accumulated other comprehensive (income) loss attributable to noncontrolling interest	1.1			0
Total accumulated other comprehensive income	800.4			1,023.1
Total shareholders’ equity	7,289.4			6,928.6
Total liabilities, redeemable NCI, and shareholders’ equity	$	29,819.3		$	25,787.6

¹ See Note 12 – Litigation and Note 13 – Commitments and Contingencies for further discussion.

² Consists of both short-term and long-term debt. See Note 4 – Debt for further discussion.

³ See Note 15 – Acquisition and Note 16 – Redeemable Noncontrolling Interest for further discussion.

See notes to consolidated financial statements.

App.-A-3

The Progressive Corporation and Subsidiaries

Consolidated Statements of Changes in Shareholders’ Equity

For the years ended December 31,

(millions — except per share amounts)	2015			2014			2013
Common Shares, $1.00 Par Value
Balance, Beginning of year	$	587.8		$	595.8		$	604.6
Treasury shares purchased1	(7.3		)	(11.1		)	(11.0		)
Net restricted equity awards issued/vested/(forfeited)	3.1			3.1			2.2
Balance, End of year	$	583.6		$	587.8		$	595.8
Paid-In Capital
Balance, Beginning of year	$	1,184.3		$	1,142.0		$	1,077.0
Tax benefit from exercise/vesting of equity-based compensation	16.8			12.8			10.3
Treasury shares purchased1	(15.2		)	(21.6		)	(20.4		)
Net restricted equity awards (issued)/(vested)/forfeited	(3.1		)	(3.1		)	(2.2		)
Amortization of equity-based compensation	64.5			51.4			64.9
Reinvested dividends on restricted stock units	5.7			2.8			12.4
Adjustment to carrying amount of noncontrolling interest	(34.2		)	0			0
Balance, End of year	$	1,218.8		$	1,184.3		$	1,142.0
Retained Earnings
Balance, Beginning of year	$	4,133.4		$	3,500.0		$	3,454.4
Net income attributable to Progressive	1,267.6			1,281.0			1,165.4
Treasury shares purchased1	(186.0		)	(238.7		)	(242.0		)
Cash dividends declared on common shares ($0.8882, $0.6862, and $1.4929 per share)	(520.5		)	(402.6		)	(889.2		)
Reinvested dividends on restricted stock units	(5.7		)	(2.8		)	(12.4		)
Other, net	(2.2		)	(3.5		)	23.8
Balance, End of year	$	4,686.6		$	4,133.4		$	3,500.0
Accumulated Other Comprehensive Income, Net of Tax
Balance, Beginning of year	$	1,023.1		$	951.7		$	871.0
Attributable to noncontrolling interest	1.1			0			0
Other comprehensive income	(223.8		)	71.4			80.7
Balance, End of year	$	800.4		$	1,023.1		$	951.7
Total Shareholders’ Equity	$	7,289.4		$	6,928.6		$	6,189.5

¹ In December 2013, we purchased 4.0 million shares at a price of $25.50 per share in a privately negotiated transaction with the "Peter B. Lewis Trust under Agreement dated December 21, 1994, as modified." Mr. Lewis was our non-executive Chairman of the Board until his death in November 2013.

There are 20.0 million Serial Preferred Shares authorized; no such shares are issued or outstanding.

There are 5.0 million Voting Preference Shares authorized; no such shares have been issued.

See notes to consolidated financial statements.

App.-A-4

The Progressive Corporation and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31,

(millions)	2015			2014			2013
Cash Flows From Operating Activities
Net income	$	1,300.5		$	1,281.0		$	1,165.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	103.7			97.1			101.3
Net amortization of intangible assets	46.8			0			0
Net amortization of fixed-income securities	98.4			78.2			134.0
Amortization of equity-based compensation	66.2			51.4			64.9
Net realized (gains) losses on securities	(112.7		)	(224.2		)	(318.4		)
Net (gains) losses on disposition of property and equipment	2.0			5.4			5.6
(Gains) losses on extinguishment of debt	0.9			4.8			4.3
Changes in:
Premiums receivable	(421.1		)	(227.1		)	(127.4		)
Reinsurance recoverables	(202.6		)	(141.7		)	(189.2		)
Prepaid reinsurance premiums	32.5			(10.4		)	(8.6		)
Deferred acquisition costs	(42.3		)	(9.6		)	(13.1		)
Income taxes	(107.2		)	97.5			57.8
Unearned premiums	632.4			266.4			244.8
Loss and loss adjustment expense reserves	917.7			378.0			641.6
Accounts payable, accrued expenses, and other liabilities	37.9			92.0			165.0
Other, net	(60.2		)	(13.2		)	(28.1		)
Net cash provided by operating activities	2,292.9			1,725.6			1,899.9
Cash Flows From Investing Activities
Purchases:
Fixed maturities	(9,311.1		)	(7,967.5		)	(7,100.6		)
Equity securities	(647.1		)	(369.7		)	(322.2		)
Sales:
Fixed maturities	4,913.5			5,637.5			3,083.9
Equity securities	402.4			560.1			369.2
Maturities, paydowns, calls, and other:
Fixed maturities	3,579.5			2,296.6			1,859.6
Equity securities	12.0			14.3			21.5
Net sales (purchases) of short-term investments	20.5			(876.0		)	716.6
Net unsettled security transactions	(8.2		)	(30.0		)	152.2
Purchases of property and equipment	(130.7		)	(108.1		)	(140.4		)
Sales of property and equipment	10.6			5.9			3.7
Acquisition of ARX Holding Corp., net of cash acquired	(752.7		)	0			0
Acquisition of additional shares of ARX Holding Corp.	(12.6		)	0			0
Net cash used in investing activities	(1,923.9		)	(836.9		)	(1,356.5		)
Cash Flows From Financing Activities
Proceeds from exercise of equity options	0.2			0			0
Tax benefit from exercise/vesting of equity-based compensation	16.8			12.8			10.3
Net proceeds from debt issuance	382.0			344.7			0
Payment of debt	(20.4		)	0			(150.0		)
Reacquisition of debt	(19.3		)	(48.9		)	(58.1		)
Dividends paid to shareholders	(403.6		)	(892.6		)	(175.6		)
Acquisition of treasury shares	(208.5		)	(271.4		)	(273.4		)
Net cash used in financing activities	(252.8		)	(855.4		)	(646.8		)
Effect of exchange rate changes on cash	(0.2		)	0.0			(0.6		)
Increase (decrease) in cash	116.0			33.3			(104.0		)
Cash, Beginning of year	108.4			75.1			179.1
Cash, End of year	$	224.4		$	108.4		$	75.1

See notes to consolidated financial statements.

App.-A-5

The Progressive Corporation and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014, and 2013

1.  REPORTING AND ACCOUNTING POLICIES

Nature of OperationsThe Progressive insurance organization began business in 1937. The Progressive Corporation, an insurance holding company was formed in 1965. The financial results of The Progressive Corporation include its subsidiaries and affiliates (references to “subsidiaries” in these notes include affiliates as well). Our insurance subsidiaries (collectively the Progressive Group of Insurance Companies) provide personal and commercial automobile and property insurance, other specialty property-casualty insurance and related services. Our Personal Lines segment writes insurance for personal autos and recreational vehicles through both an independent insurance agency channel and a direct channel. Our Commercial Lines segment writes primary liability and physical damage insurance for automobiles and trucks owned and/or operated predominantly by small businesses through both the independent agency and direct channels. Our Property segment writes personal and commercial property insurance for homeowners, other property owners, and renters, primarily through the independent insurance agency channel. We operate our businesses throughout the United States; we also sell personal auto physical damage and auto property damage liability insurance in Australia.

Basis of Consolidation and Reporting The accompanying consolidated financial statements include the accounts of The Progressive Corporation and ARX Holding Corp. (ARX), and their respective wholly owned insurance and non-insurance subsidiaries and affiliates, in which Progressive or ARX has a controlling financial interest.  The Progressive Corporation owned 69.2% of the outstanding capital stock of ARX at December 31, 2015. All intercompany accounts and transactions are eliminated in consolidation.

EstimatesWe are required to make estimates and assumptions when preparing our financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (GAAP). As estimates develop into fact (e.g., losses are paid), results may, and will likely, differ from those estimates.

InvestmentsOur fixed-maturity securities, equity securities, and short-term investments are accounted for on an available-for-sale basis. See Note 2 – Investments for details regarding the composition of our investment portfolio.

Fixed-maturity securities include debt securities and redeemable preferred stocks, which may have fixed or variable principal payment schedules, may be held for indefinite periods of time, and may be used as a part of our asset/liability strategy or sold in response to changes in interest rates, anticipated prepayments, risk/reward characteristics, liquidity needs, or other economic factors. These securities are carried at fair value with the corresponding unrealized gains (losses), net of deferred income taxes, reported in accumulated other comprehensive income. Fair values are obtained from recognized pricing services or are quoted by market makers and dealers, with limited exceptions discussed in Note 3 – Fair Value.

Included in the fixed-maturity portfolio are asset-backed securities. The asset-backed securities are generally accounted for under the retrospective method. The retrospective method recalculates yield assumptions (based on changes in interest rates or cash flow expectations) historically to the inception of the investment holding period, and applies the required adjustment, if any, to the cost basis, with the offset recorded to investment income. The prospective method is used primarily for interest-only securities, non-investment-grade asset-backed securities, and certain asset-backed securities with sub-prime loan exposure or where there is a greater risk of non-performance and where it is possible the initial investment may not be substantially recovered. The prospective method requires a calculation of expected future repayments and resets the yield to allow for future period adjustments; no current period impact to investment income or the security’s cost is made based on the cash flow update. Prepayment assumptions are based on market expectations and are updated quarterly.

Equity securities include common stocks, nonredeemable preferred stocks, and other risk investments, and are reported at fair values. Changes in fair value of these securities, net of deferred income taxes, are reflected as unrealized gains (losses) in accumulated other comprehensive income. To the extent we hold any foreign equities or foreign currency hedges, any change in value due to exchange rate fluctuations would be limited by foreign currency hedges, if any, and would be recognized in income in the current period.

Short-term investments may include Eurodollar deposits, commercial paper, repurchase transactions, and other securities expected to mature within one year. In addition, short-term investments can include auction rate securities (i.e., certain municipal bonds and preferred stocks). Due to the nature of auction rate securities, these securities are classified as short-term based upon their expected auction date (generally 7-49 days) rather than on their contractual maturity date (which is greater than one year at original issuance). In the event that an auction fails, the security may need to be reclassified from short-term.

App.-A-6

Changes in fair value of these securities, net of deferred income taxes, are reflected as unrealized gains (losses) in accumulated other comprehensive income.

Trading securities are securities bought principally for the purpose of sale in the near term. To the extent we have trading securities, changes in fair value would be recognized in income in the current period. Derivative instruments, which may be used for trading purposes or classified as trading derivatives due to the characteristics of the transaction, are discussed below.

Derivative instruments may include futures, options, forward positions, foreign currency forwards, interest rate swap agreements, and credit default swaps and may be used in the portfolio for general investment purposes or to hedge the exposure to:

• Changes in fair value of an asset or liability (fair value hedge),

• Foreign currency of an investment in a foreign operation (foreign currency hedge), or

• Variable cash flows of a forecasted transaction (cash flow hedge).

To the extent we have derivatives held for general investment purposes, these derivative instruments are recognized as either assets or liabilities and measured at fair value, with changes in fair value recognized in income as a component of net realized gains (losses) on securities during the period of change.

Derivatives designated as hedges are required to be evaluated on established criteria to determine the effectiveness of their correlation to, and ability to reduce the designated risk of, specific securities or transactions. Effectiveness is required to be reassessed regularly. Hedges that are deemed to be effective would be accounted for as follows:

• Fair value hedge:  changes in fair value of the hedge, as well as the hedged item, would be recognized in income in the period of change while the hedge is in effect.

• Foreign currency hedge:  changes in fair value of the hedge, as well as the hedged item, would be reflected as a change in translation adjustment as part of accumulated other comprehensive income. Gains and losses on the foreign currency hedge would offset the foreign exchange gains and losses on the foreign investment as they are recognized into income.

• Cash flow hedge:  changes in fair value of the hedge would be reported as a component of accumulated other comprehensive income and subsequently amortized into earnings over the life of the hedged transaction.

If a hedge is deemed to become ineffective or discontinued, the following accounting treatment would be applied:

• Fair value hedge:  the derivative instrument would continue to be adjusted through income, while the adjustment in the change in value of the hedged item would be reflected as a change in unrealized gains (losses) as part of accumulated other comprehensive income.

• Foreign currency hedge:  changes in the value of the hedged item would continue to be reflected as a change in translation adjustment as part of accumulated other comprehensive income, but the derivative instrument would be adjusted through income for the current period.

• Cash flow hedge:  changes in fair value of the derivative instrument would be reported in income for the current period.

For all derivative positions, net cash requirements are limited to changes in fair values, which may vary resulting from changes in interest rates, currency exchange rates, and other factors. Exposure to credit risk is limited to the carrying value; collateral may be required to limit credit risk. We have elected not to offset fair value amounts that arise from derivative positions with the same counterparty under a master netting arrangement.

Investment securities are exposed to various risks such as interest rate, market, credit, and liquidity risk. Fair values of securities fluctuate based on the nature and magnitude of changing market conditions; significant changes in market conditions could materially affect the portfolio’s value in the near term. We regularly monitor our portfolio for price changes, which might indicate potential impairments, and perform detailed reviews of securities with unrealized losses. In such cases, changes in fair value are evaluated to determine the extent to which such changes are attributable to: (i) fundamental factors specific to the issuer, such as financial condition, business prospects, or other factors, (ii) market-related factors, such as interest rates or equity market declines, or (iii) credit-related losses, where the present value of cash flows expected to be collected are lower than the amortized cost basis of the security.

We analyze our debt securities that are in a loss position to determine if we intend to sell, or if it is more likely than not that we will be required to sell, the security prior to recovery and, if so, we write down the security to its current fair value, with the entire amount of the write-down recorded to earnings. To the extent that it is more likely than not that we will hold the debt security until recovery (which could be maturity), we determine if any of the decline in value is due to a credit loss (i.e., where the present value of future cash flows expected to be collected is lower than the amortized cost basis of the security) and, if so, we recognize that portion of the impairment as a component of net realized gains (losses) in the comprehensive income

App.-A-7

statement, with the difference (i.e., non-credit related impairment) recognized as part of our net unrealized gains (losses) in accumulated other comprehensive income. When an equity security (common equity and nonredeemable preferred stock) in our investment portfolio has an unrealized loss in fair value that is deemed to be other-than-temporary, we reduce the book value of such security to its current fair value, recognizing the decline as a realized loss in the comprehensive income statement. Any future changes in fair value, either increases or decreases, are reflected as changes in unrealized gains (losses) as part of accumulated other comprehensive income.

Investment income consists of interest, dividends, and amortization. In addition to the discussion above for asset-backed securities, interest is recognized on an accrual basis using the effective yield method. Depending on the nature of the equity instruments, dividends are recorded at either the ex-dividend date or on an accrual basis.

Realized gains (losses) on securities are computed based on the first-in first-out method and include write-downs on available-for-sale securities considered to have other-than-temporary declines in fair value (excluding non-credit related impairments), as well as holding period valuation changes on derivatives, trading securities, and hybrid instruments (e.g., securities with embedded options, where the option is a feature of the overall change in the value of the instrument).

Insurance Premiums and Receivables  Insurance premiums written are earned into income on a pro rata basis over the period of risk, based on a daily earnings convention. Accordingly, unearned premiums represent the portion of premiums written that are applicable to the unexpired risk. We provide insurance and related services to individuals and small commercial accounts and offer a variety of payment plans. Generally, premiums are collected prior to providing risk coverage, minimizing our exposure to credit risk. For our vehicle businesses, we perform a policy level evaluation to determine the extent to which the premiums receivable balance exceeds the unearned premiums balance. We then age this exposure to establish an allowance for doubtful accounts based on prior experience. For our Property business, we do not establish an allowance for doubtful accounts since the risk of uncollectibility is relatively low. If premiums are unpaid by the policy due date, we provide advance notice of cancellation in accordance with each state's requirements and cancel the policy if the premiums remain unpaid after receipt of notice and write off any remaining balance.

Deferred Acquisition CostsDeferred acquisition costs include commissions, premium taxes, and other variable underwriting and direct sales costs incurred in connection with the successful acquisition or renewal of insurance contracts. These acquisition costs, net of ceding allowances, are deferred and amortized over the policy period in which the related premiums are earned. We consider anticipated investment income in determining the recoverability of these costs. Management believes that these costs will be fully recoverable in the near term.

We do not defer any advertising costs. Total advertising costs, which are expensed as incurred, for the years ended

December 31, were:

(millions)	Advertising Costs
2015	$	748.3
2014	681.8
2013	619.3

Loss and Loss Adjustment Expense ReservesLoss reserves represent the estimated liability on claims reported to us, plus reserves for losses incurred but not recorded (IBNR). These estimates are reported net of amounts estimated to be recoverable from salvage and subrogation. Loss adjustment expense reserves represent the estimated expenses required to settle these claims and losses. The methods of making estimates and establishing these reserves are reviewed regularly, and resulting adjustments are reflected in income in the current period. Such loss and loss adjustment expense reserves are susceptible to change in the near term.

Reinsurance  Our reinsurance transactions include premium ceded to “Regulated” plans and “Non-Regulated” plans.  Regulated plans are plans in which we are required to participate by insurance regulations and include the Michigan Catastrophic Claims Association, Florida Hurricane Catastrophe Fund, North Carolina Reinsurance Facility, state-mandated involuntary plans for commercial vehicles (Commercial Auto Insurance Procedures/Plans - “CAIP”), and federally regulated plans for flood (National Flood Insurance Program). Non-Regulated plans are voluntary contractual arrangements and primarily relate to our Property business.  Prepaid reinsurance premiums are earned on a pro rata basis over the period of risk, based on a daily earnings convention, which is consistent with premiums written.  See Note 7 - Reinsurance for further discussion.

Income Taxes  The income tax provision is calculated under the balance sheet approach. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal items giving rise to such differences are investment securities (e.g., net unrealized gains (losses), write-downs on

App.-A-8

securities determined to be other-than-temporarily impaired, and derivative instruments), loss and loss adjustment expense reserves, unearned premiums reserves, deferred acquisition costs, property and equipment, intangible assets, and non-deductible accruals. We review our deferred tax assets regularly for recoverability. See Note 5 – Income Taxes for further discussion.

Property and Equipment  Property and equipment are recorded at cost, less accumulated depreciation, and include capitalized software developed or acquired for internal use. Depreciation is recognized over the estimated useful lives of the assets using accelerated methods for computer equipment and the straight-line method for all other fixed assets. The useful life for computer equipment and laptop computers is 3 years. The useful lives range from 7 to 40 years for buildings, improvements, and integrated components, and 3 to 15 years for all other property and equipment. We evaluate impairment of our property and equipment at least annually and expense any item determined to be impaired. Land and buildings comprised 75% and 77% of total property and equipment at December 31, 2015 and 2014, respectively.

During 2014, the decision was made to sell one property originally purchased for a future Service Center site. At December 31, 2015 and 2014, included in other assets in the consolidated balance sheets is $8.7 million of "held for sale" property, which represents the fair value of this property less the estimated costs to sell.

Total capitalized interest, which primarily relates to capitalized software projects, for the years ended December 31, was:

(millions)	Capitalized Interest
2015	$	2.4
2014	1.3
2013	0.8

Goodwill and Intangible Assets Goodwill is the excess of the purchase price over the estimated fair value of the assets and liabilities acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Substantially all of the goodwill recorded as of December 31, 2015, relates to the April 1, 2015 acquisition of a controlling interest in ARX.

Intangible assets primarily arose through the acquisition of ARX and mainly represent the future premiums that will be recognized from the existing policies and current agency relationships, the value of software acquired, and the value of its trade name, "American Strategic Insurance," in the marketplace. The majority of the intangible assets have finite lives ranging from 7 to 14 years. See Note 15 - Acquisition for further discussion.

We evaluate our goodwill for impairment at least annually. If events or changes in circumstances indicate that the carrying value of goodwill or intangible assets may not be recoverable, we will evaluate such items for impairment.

Guaranty Fund Assessments  We are subject to state guaranty fund assessments, which provide for the payment of covered claims or other insurance obligations of insurance companies deemed insolvent. These assessments are accrued after a formal determination of insolvency has occurred, and we have written the premiums on which the assessments will be based. Assessments that are available for recoupment from policyholders or to offset against future premium taxes are capitalized when incurred; all other assessments are expensed.

Fees and Other Revenues  Fees and other revenues primarily represent fees collected from policyholders relating to installment charges in accordance with our bill plans, as well as late payment and insufficient funds fees. Other revenues may include revenue from the sale of tax credits, rental income, and other revenue transactions.

Service Revenues and ExpensesOur service businesses provide insurance-related services. Service revenues and expenses from our commission-based businesses are recorded in the period in which they are earned or incurred. Service revenues generated from processing business for involuntary CAIP plans are earned on a pro rata basis over the term of the related policies. Service expenses related to these CAIP plans are expensed as incurred.

Equity-Based Compensation  We currently issue time-based and performance-based restricted stock unit awards to key members of management (other than management of ARX and its subsidiaries) as our form of equity compensation, and time-based restricted stock awards to non-employee directors. Collectively, we refer to these awards as “restricted equity awards.” Compensation expense for time-based restricted equity awards with installment vesting is recognized over each respective vesting period. For performance-based restricted equity awards, compensation expense is recognized over the respective estimated vesting periods. Dividend equivalent units are credited to outstanding restricted unit awards, both time-based and performance-based, at the time a dividend is paid to shareholders.

App.-A-9

We record an estimate for expected forfeitures of restricted equity awards based on our historical forfeiture rates. In addition, we shorten the vesting periods of certain time-based restricted equity awards based on the “qualified retirement” provisions in our equity compensation plans, under which (among other provisions) if the participant is 55 years of age or older and satisfies certain years-of-service requirements, the vesting and distribution of 50% of outstanding time-based restricted equity awards accelerates upon reaching eligibility for a qualified retirement and shortly after the grant date for each subsequent award. For awards granted before March 2013, awards held by an individual who satisfies the "qualified retirement" provisions vest in part upon separation from the company if earlier than the contractual vesting date.

ARX has nonqualified and incentive stock options outstanding that were issued prior to April 2015 as a form of equity compensation to certain of the officers and employees of ARX and its subsidiaries. These outstanding stock options are subject to the put/call features contained in the current stockholders' agreement, pursuant to which The Progressive Corporation has the right, and can be required, to purchase a portion or all of the shares underlying these awards in 2018 and 2021. See Note 16 - Redeemable Noncontrolling Interest. These stock options, which are treated for accounting purposes as liability awards, are expensed over the respective vesting periods based on the Black-Scholes value determined at period end.

The total compensation expense recognized for equity-based compensation, both our equity and liability awards, for the years ended December 31, was:

(millions)	2015		2014		2013
Pretax expense	$	66.2	$	51.4	$	64.9
Tax benefit	23.2		18.0		22.7

Net Income Per Share  Net income attributable to Progressive is used in our calculation of the per share amounts. Basic net income per share is computed using the weighted average number of common shares outstanding during the reporting period, excluding unvested time-based and performance-based restricted equity awards that are subject to forfeiture. Diluted net income per share includes common stock equivalents assumed outstanding during the period. Our common stock equivalents include the incremental shares assumed to be issued for:

• earned but unvested time-based restricted equity awards, and

• certain unvested performance-based restricted equity awards that satisfied contingency conditions for common stock equivalents during the period.

Supplemental Cash Flow InformationCash includes only bank demand deposits. Non-cash activity includes declared but unpaid dividends. For the years ended December 31, we paid the following:

(millions)	2015		2014		2013
Income taxes	$	701.8	$	515.0	$	497.0
Interest	132.0		116.0		122.3

New Accounting Standards In February 2016, the Financial Accounting Standards Board (FASB) released an accounting standards update (ASU) intended to eliminate the off-balance-sheet accounting for leases. The new guidance will require lessees to report their operating leases as both an asset and liability on the statement of financial position and disclose key information about leasing arrangements; the expense recognition will be consistent with existing guidance. The ASU, which is required to be applied on a modified retrospective basis, will be effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2018 (2019 for calendar-year companies). We are currently evaluating the impact the guidance will have on our financial statements.

In January 2016, the FASB released an ASU intended to improve the recognition and measurement of financial instruments. The new guidance will require the changes in fair value of equity securities to be recognized as a component of net income. The ASU is effective for fiscal years beginning after December 15, 2017 (the first quarter 2018 for calendar-year companies). The new guidance could create more volatility in net income, but will have no impact on comprehensive income.

In May 2015, the FASB issued an ASU related to disclosures about short-duration contracts. The disclosures are intended to provide users of financial statements with more transparent information about an insurance entity's initial claim estimates and

subsequent adjustments to those estimates, the methodologies and judgments used to estimate claims, and the timing, frequency, and severity of claims. This standard, which is required to be applied on a retrospective basis, is effective for fiscal years beginning after December 15, 2015 (2016 for calendar-year companies), except for those disclosures that require application only to the current period (e.g., information about significant changes in estimation methodologies and assumptions

App.-A-10

made in calculating the claim liability for short-duration contracts). We are currently evaluating the impact the guidance will have on our financial statements.

In May 2015, the FASB issued an ASU related to investments measured at net asset value (NAV). The intent is to exclude certain investments measured at NAV from the fair value hierarchy. This guidance is effective for annual and interim periods after December 15, 2015 (January 2016 for calendar-year companies). We did not hold any securities at December 31, 2015, that were priced at NAV. To the extent we acquire such securities, we will follow the guidance to determine the appropriate treatment in the fair value hierarchy table.

In April 2015, the FASB issued an ASU related to the balance sheet presentation of the cost of issuing debt. This standard requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. In August 2015, the FASB further amended this ASU to clarify the treatment of debt issuance costs related to lines-of-credit arrangements. Registrants can elect to defer and present debt issuance costs related to a line of credit as an asset and subsequently amortize the costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. This ASU, which is required to be applied on a retrospective basis, is effective for fiscal years beginning after December 15, 2015 (2016 for calendar-year companies). We have historically deducted the majority of our debt issuance costs from the carrying value of the debt; therefore, we do not expect this standard to have a significant impact on our financial condition, cash flows, or results of operations.

In April 2015, the FASB issued an ASU to clarify guidance around accounting for fees paid in a cloud computing arrangement. The standard prescribes when a cloud computing arrangement should be treated as software and when it should be treated as a service contract based on whether the arrangement includes a software license. This ASU, which allows for both prospective and retrospective methods of adoption, will be effective for annual periods (including interim periods within those annual periods) beginning after December 15, 2015 (2016 for calendar-year companies). We adopted this standard on January 1, 2016, on a prospective basis, and do not expect this standard to have a material impact on our financial condition, cash flows, or results of operations.

Reclassification For the period ended December 31, 2015, we reclassified goodwill and intangible assets out of “other assets” to be reported as separate line items to conform with the current-year presentation. There was no effect on total assets.

App.-A-11

2.  INVESTMENTS

Our securities are reported at fair value, with the changes in fair value of these securities (other than hybrid securities and derivative instruments) reported as a component of accumulated other comprehensive income, net of deferred income taxes. The changes in fair value of the hybrid securities and derivative instruments are recorded as a component of net realized gains (losses) on securities.

The following tables present the composition of our investment portfolio by major security type, consistent with our internal classification of how we manage, monitor, and measure the portfolio:

($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Net Realized Gains (Losses)1			Fair Value		% of Total Fair Value
December 31, 2015
Fixed maturities:
U.S. government obligations	$	2,425.4	$	4.4	$	(0.6	)	$	0		$	2,429.2	11.6	%
State and local government obligations	2,677.6		47.5		(3.7		)	0			2,721.4		13.0
Foreign government obligations	18.6		0		0			0			18.6		0.1
Corporate debt securities	3,713.2		11.3		(33.0		)	0.1			3,691.6		17.6
Residential mortgage-backed securities	1,726.0		22.1		(20.6		)	(0.8		)	1,726.7		8.3
Agency residential pass-through obligations	90.3		0.1		(1.1		)	0			89.3		0.4
Commercial mortgage-backed securities	2,665.7		16.9		(29.4		)	0			2,653.2		12.7
Other asset-backed securities	1,771.1		1.4		(5.1		)	0.5			1,767.9		8.4
Redeemable preferred stocks	260.0		17.6		(43.3		)	0			234.3		1.1
Total fixed maturities	15,347.9		121.3		(136.8		)	(0.2		)	15,332.2		73.2
Equity securities:
Nonredeemable preferred stocks	674.2		122.8		(15.7		)	1.3			782.6		3.7
Common equities	1,494.3		1,170.4		(14.2		)	0			2,650.5		12.7
Short-term investments	2,172.0		0		0			0			2,172.0		10.4
Total portfolio2,3	$	19,688.4	$	1,414.5	$	(166.7	)	$	1.1		$	20,937.3	100.0	%

App.-A-12

($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Net Realized Gains (Losses)1			Fair Value		% of Total Fair Value
December 31, 2014
Fixed maturities:
U.S. government obligations	$	2,641.1	$	27.3	$	(1.3	)	$	0		$	2,667.1	14.0	%
State and local government obligations	2,095.7		44.6		(1.1		)	0			2,139.2		11.2
Foreign government obligations	14.2		0		0			0			14.2		0.1
Corporate debt securities	2,813.9		32.9		(10.4		)	0.3			2,836.7		14.9
Residential mortgage-backed securities	1,635.5		34.5		(10.8		)	(0.7		)	1,658.5		8.7
Agency residential pass-through obligations	0		0		0			0			0		0
Commercial mortgage-backed securities	2,278.7		39.3		(2.6		)	0.2			2,315.6		12.2
Other asset-backed securities	1,634.9		3.8		(0.8		)	0.8			1,638.7		8.6
Redeemable preferred stocks	260.2		24.7		(5.7		)	0			279.2		1.5
Total fixed maturities	13,374.2		207.1		(32.7		)	0.6			13,549.2		71.2
Equity securities:
Nonredeemable preferred stocks	590.4		201.1		(6.4		)	42.4			827.5		4.4
Common equities	1,289.2		1,213.2		(10.1		)	0			2,492.3		13.1
Short-term investments	2,149.0		0		0			0			2,149.0		11.3
Total portfolio2,3	$	17,402.8	$	1,621.4	$	(49.2	)	$	43.0		$	19,018.0	100.0	%

¹ Represents net holding period gains (losses) on certain hybrid securities (discussed below).

² Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

³ The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

Short-Term Investments Our short-term investments may include commercial paper and other investments that are expected to mature within one year. At December 31, 2015 and 2014, we had $2.5 million and $5.7 million, respectively, in treasury bills issued by the Australian government, included in short-term investments. We did not hold any repurchase transactions where we lent collateral at December 31, 2015 or 2014. To the extent our repurchase transactions were with the same counterparty and subject to an enforceable master netting arrangement, we could elect to offset any such transactions. Consistent with past practice, we would expect to elect not to offset any such transactions and therefore to report these transactions on a gross basis on our balance sheets.

Also included in short-term investments are reverse repurchase commitment transactions, where we loan cash to approved counterparties and receive U.S. Treasury Notes pledged as collateral against the cash borrowed. Our exposure to credit risk is limited due to the nature of the collateral (i.e., U.S. Treasury Notes) received. We have counterparty exposure on these trades in the event of a counterparty default to the extent the general collateral security's value is below the amount of cash we delivered to acquire the collateral. The short-term duration of the transactions (primarily overnight) reduces that exposure.

We had no open reverse repurchase commitments at December 31, 2015 or December 31, 2014. During 2015, our largest outstanding balance of reverse repurchase commitments was $275.0 million, which was open for one day; the average daily balance of reverse repurchase commitments was $135.4 million.

App.-A-13

Hybrid Securities Included in our fixed-maturity and equity securities are hybrid securities, which are reported at fair value at December 31:

(millions)	2015		2014
Fixed maturities:
Corporate debt securities	$	49.1	$	139.8
Residential mortgage-backed securities	144.3		120.7
Commercial mortgage-backed securities	17.3		31.2
Other asset-backed securities	11.3		13.7
Total fixed maturities	222.0		305.4
Equity securities:
Nonredeemable preferred stocks	50.7		122.3
Total hybrid securities	$	272.7	$	427.7

Certain corporate debt securities are accounted for as hybrid securities since they were acquired at a substantial premium and contain a change-in-control put option (derivative) that permits the investor, at its sole option if and when a change in control is triggered, to put the security back to the issuer at a 1% premium to par. Due to this change-in-control put option and the substantial market premium paid to acquire these securities, there is the potential that the election to put, upon the change in control, would result in an acceleration of the recognition of the remaining premium paid on these securities in our results of operations. This would result in a loss of $1.5 million as of December 31, 2015, if all of these bonds experienced a simultaneous change in control and we elected to exercise all of our put options. The put feature limits the potential loss in value that could be experienced in the event a corporate action occurs that results in a change in control that materially diminishes the credit quality of the issuer. We are under no obligation to exercise the put option we hold if a change in control occurs.

The residential mortgage-backed securities accounted for as hybrid securities are obligations of the issuer with payments of principal based on the performance of a reference pool of loans. This embedded derivative results in the securities incorporating the risk of default from both the issuer and the related loan pool.

The commercial mortgage-backed securities in the table above contain fixed interest rate reset features that will increase the coupons in the event the securities are not fully paid off on the anticipated repayment date. These reset features have the potential to more than double our initial purchase yield for each security.

The other asset-backed security in the table above represents one hybrid security that was acquired at a deep discount to par due to a failing auction, and contains a put option that allows the investor to put that security back to the auction at par if the auction is restored. This embedded derivative had the potential to more than double our initial investment yield at acquisition.

The hybrid securities in our nonredeemable preferred stock portfolio are perpetual preferred stocks with fixed-rate coupons that have call features, whereby the change in value of the call features is a component of the overall change in value of the preferred stocks. In the second quarter 2015, we acquired a controlling interest in ARX and transferred our previous 5% preferred stock investment in ARX to a component of our total ownership interest (see Note 15 – Acquisition for further discussion).

At December 31, 2015, bonds and certificates of deposit in the principal amount of $184.8 million were on deposit to meet state insurance regulatory and/or rating agency requirements. We did not have any securities of any one issuer, excluding U.S. government obligations, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at December 31, 2015 or 2014. At December 31, 2015, we did not have any debt securities that were non-income producing during the preceding 12 months.

App.-A-14

Fixed Maturities  The composition of fixed maturities by maturity at December 31, 2015, was:

(millions)	Cost		Fair Value
Less than one year	$	4,532.3	$	4,530.9
One to five years	6,758.0		6,734.7
Five to ten years	3,934.1		3,940.3
Ten years or greater	119.1		121.9
Total1	$	15,343.5	$	15,327.8

¹ Excludes $4.4 million related to our open interest rate swap positions.

Asset-backed securities are classified in the maturity distribution table based upon their projected cash flows. All other securities that do not have a single maturity date are reported based upon expected average maturity. Contractual maturities may differ from expected maturities because the issuers of the securities may have the right to call or prepay obligations.

Gross Unrealized Losses  As of December 31, 2015, we had $152.5 million of gross unrealized losses in our fixed-income securities (i.e., fixed-maturity securities, nonredeemable preferred stocks, and short-term investments) and $14.2 million in our common equities. We currently do not intend to sell the fixed-income securities and determined that it is more likely than not that we will not be required to sell these securities for the period of time necessary to recover their cost bases. A review of our fixed-income securities indicated that the issuers were current with respect to their interest obligations and that there was no evidence of any deterioration of the current cash flow projections that would indicate we would not receive the remaining principal at maturity. For common equities, 96% of our common stock portfolio was indexed to the Russell 1000; as such, this portfolio may contain securities in a loss position for an extended period of time, subject to possible write-downs, as described below. We may retain these securities as long as the portfolio and index correlation remain similar. To the extent there is issuer-specific deterioration, we may write-down the securities of that issuer. The remaining 4% of our common stocks were part of a managed equity strategy selected and administered by an external investment advisor. If our review of loss position securities indicated there was a fundamental or market impairment on these securities that was determined to be other-than-temporary, we would recognize a write-down in accordance with our stated policy.

The following tables show the composition of gross unrealized losses by major security type and by the length of time that individual securities have been in a continuous unrealized loss position:

	Total No. of Sec.	Total Fair Value		Gross Unrealized Losses			Less than 12 Months						12 Months or Greater
($ in millions)							No. of Sec.	Fair Value		Unrealized Losses			No. of Sec.	Fair  Value		Unrealized Losses
December 31, 2015
Fixed maturities:
U.S. government obligations	22	$	897.1	$	(0.6	)	22	$	897.1	$	(0.6	)	0	$	0	$	0
State and local government obligations	290	606.7		(3.7		)	264	500.7		(2.6		)	26	106.0		(1.1		)
Corporate debt securities	215	2,580.6		(33.0		)	197	2,294.6		(25.2		)	18	286.0		(7.8		)
Residential mortgage-backed securities	188	1,294.7		(20.6		)	115	493.4		(3.7		)	73	801.3		(16.9		)
Agency residential pass-through obligations	61	84.9		(1.1		)	61	84.9		(1.1		)	0	0		0
Commercial mortgage-backed securities	207	2,046.5		(29.4		)	171	1,694.6		(25.8		)	36	351.9		(3.6		)
Other asset-backed securities	101	1,548.6		(5.1		)	92	1,472.0		(4.5		)	9	76.6		(0.6		)
Redeemable preferred stocks	9	199.4		(43.3		)	6	119.4		(14.5		)	3	80.0		(28.8		)
Total fixed maturities	1,093	9,258.5		(136.8		)	928	7,556.7		(78.0		)	165	1,701.8		(58.8		)
Equity securities:
Nonredeemable preferred stocks	10	301.8		(15.7		)	5	124.2		(1.7		)	5	177.6		(14.0		)
Common equities	64	164.8		(14.2		)	60	161.4		(14.2		)	4	3.4		0
Total equity securities	74	466.6		(29.9		)	65	285.6		(15.9		)	9	181.0		(14.0		)
Total portfolio	1,167	$	9,725.1	$	(166.7	)	993	$	7,842.3	$	(93.9	)	174	$	1,882.8	$	(72.8	)

App.-A-15

	Total No. of Sec.	Total Fair Value		Gross Unrealized Losses			Less than 12 Months						12 Months or Greater
($ in millions)							No. of Sec.	Fair Value		Unrealized Losses			No. of Sec.	Fair Value		Unrealized Losses
December 31, 2014
Fixed maturities:
U.S. government obligations	11	$	428.2	$	(1.3	)	5	$	150.7	$	(0.3	)	6	$	277.5	$	(1.0	)
State and local government obligations	46	234.2		(1.1		)	28	177.9		(0.4		)	18	56.3		(0.7		)
Corporate debt securities	53	843.2		(10.4		)	43	647.5		(6.1		)	10	195.7		(4.3		)
Residential mortgage-backed securities	70	844.2		(10.8		)	33	465.2		(3.1		)	37	379.0		(7.7		)
Agency residential pass-through obligations	0	0		0			0	0		0			0	0		0
Commercial mortgage-backed securities	63	723.4		(2.6		)	54	667.5		(1.4		)	9	55.9		(1.2		)
Other asset-backed securities	44	741.8		(0.8		)	42	715.7		(0.7		)	2	26.1		(0.1		)
Redeemable preferred stocks	3	103.0		(5.7		)	1	33.0		(1.0		)	2	70.0		(4.7		)
Total fixed maturities	290	3,918.0		(32.7		)	206	2,857.5		(13.0		)	84	1,060.5		(19.7		)
Equity securities:
Nonredeemable preferred stocks	8	231.4		(6.4		)	5	143.2		(3.6		)	3	88.2		(2.8		)
Common equities	20	68.4		(10.1		)	19	61.8		(9.6		)	1	6.6		(0.5		)
Total equity securities	28	299.8		(16.5		)	24	205.0		(13.2		)	4	94.8		(3.3		)
Total portfolio	318	$	4,217.8	$	(49.2	)	230	$	3,062.5	$	(26.2	)	88	$	1,155.3	$	(23.0	)

During 2015, the number of securities in our fixed-maturity portfolio with unrealized losses increased, primarily reflecting 492 securities that were added to the portfolio as a result of our acquisition of a controlling interest in ARX during the second quarter 2015, and that declined in value between the acquisition date and year-end. The decline in these securities averaged approximately 0.9% of their total cost. The remaining increase in the number of securities is the result of rising interest rates since December 31, 2014, reflected by the majority of the increase in the less than 12 month segment of the table. We had no material decreases in valuation as a result of credit rating downgrades on our fixed-maturity securities during the year. All of the fixed-maturity securities in an unrealized loss position at December 31, 2015 in the table above are current with respect to required principal and interest payments. Unrealized losses on our nonredeemable preferred stocks related to ten issues with unrealized losses, averaging approximately 5% of our total cost of those securities. A review of these securities concluded that the unrealized losses are market-related adjustments to the values, which were determined not to be other-than-temporary, and we continue to expect to recover our initial investments on these securities. The unrealized losses in our common stock portfolio in the less than 12 months category reflect losses that developed as a result of the decline in the equity market. A review of the securities in a loss position did not uncover fundamental issues with the issuers that would indicate other-than-temporary impairments existed. Additionally, market expectations for recovery in the next 12 months would put the fair values at or above our current book values. Lastly, we determined, as of the balance sheet date, that it was not likely these securities would be sold prior to that recovery.

Other-Than-Temporary Impairment (OTTI)  The following table shows the total non-credit portion of the OTTI recorded in accumulated other comprehensive income, reflecting the original non-credit loss at the time the credit impairment was determined:

	December 31,
(millions)	2015			2014
Fixed maturities:
Residential mortgage-backed securities	$	(43.3	)	$	(44.1	)
Commercial mortgage-backed securities	(0.6		)	(0.6		)
Total fixed maturities	$	(43.9	)	$	(44.7	)

App.-A-16

The following tables provide rollforwards of the amounts related to credit losses recognized in earnings for the periods ended December 31, 2015, 2014, and 2013, for which a portion of the OTTI losses were also recognized in accumulated other comprehensive income at the time the credit impairments were determined and recognized:

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed		Total
Balance at December 31, 2014	$	12.7		$	0.4	$	13.1
Credit losses for which an OTTI was previously recognized	0			0		0
Reductions for securities sold/matured	(1.4		)	0		(1.4		)
Change in recoveries of future cash flows expected to be collected1,2	1.1			0		1.1
Reductions for previously recognized credit impairments written-down to fair value3	0			0		0
Balance at December 31, 2015	$	12.4		$	0.4	$	12.8

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed		Total
Balance at December 31, 2013	$	19.2		$	0.4	$	19.6
Credit losses for which an OTTI was previously recognized	0			0		0
Reductions for securities sold/matured	(0.1		)	0		(0.1		)
Change in recoveries of future cash flows expected to be collected1,2	(6.4		)	0		(6.4		)
Reductions for previously recognized credit impairments written-down to fair value3	0			0		0
Balance at December 31, 2014	$	12.7		$	0.4	$	13.1

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed			Total
Balance at December 31, 2012	$	27.1		$	0.6		$	27.7
Credit losses for which an OTTI was previously recognized	0.1			0			0.1
Reductions for securities sold/matured	0			0			0
Change in recoveries of future cash flows expected to be collected1,2	(7.8		)	(0.2		)	(8.0		)
Reductions for previously recognized credit impairments written-down to fair value3	(0.2		)	0			(0.2		)
Balance at December 31, 2013	$	19.2		$	0.4		$	19.6

¹ Reflects expected recovery of prior period impairments that will be accreted into income over the remaining life of the security.

² Includes $2.9 million, $4.3 million, and $2.6 million at December 31, 2015, 2014, and 2013, respectively, recognized in income in excess of the cash flows expected to be collected at the time of the write-downs.

³ Reflects reductions of prior credit impairments where the current credit impairment requires writing securities down to fair value (i.e., no remaining non-credit loss).

Although we determined that it is more likely than not that we will not be required to sell the securities prior to the recovery of their respective cost bases (which could be maturity), we are required to measure the amount of credit losses on the securities that were determined to be other-than-temporarily impaired. In that process, we considered a number of factors and inputs related to the individual securities. The methodology and significant inputs used to measure the amount of credit losses in our portfolio included: current performance indicators on the underlying assets (e.g., delinquency rates, foreclosure rates, and default rates); credit support (via current levels of subordination); historical credit ratings; and updated cash flow expectations based upon these performance indicators. In order to determine the amount of credit loss, if any, the net present value of the cash flows expected (i.e., expected recovery value) was calculated using the current book yield for each security, and was compared to its current amortized value. In the event that the net present value was below the amortized value, a credit loss was deemed to exist, and the security was written down.

App.-A-17

Realized Gains (Losses)  The components of net realized gains (losses) for the years ended December 31, were:

(millions)	2015			2014			2013
Gross realized gains on security sales
Fixed maturities:
U.S. government obligations	$	17.5		$	24.0		$	8.5
State and local government obligations	7.8			9.3			7.7
Corporate and other debt securities	31.2			37.2			47.7
Residential mortgage-backed securities	4.9			2.7			3.0
Commercial mortgage-backed securities	15.7			17.0			10.0
Redeemable preferred stocks	0.1			2.7			0
Total fixed maturities	77.2			92.9			76.9
Equity securities:
Nonredeemable preferred stocks	65.3			90.0			126.3
Common equities	50.4			107.3			68.6
Subtotal gross realized gains on security sales	192.9			290.2			271.8
Gross realized losses on security sales
Fixed maturities:
U.S. government obligations	(0.9		)	(7.6		)	(3.7		)
State and local government obligations	(0.3		)	(0.5		)	0
Corporate and other debt securities	(5.0		)	(2.8		)	(6.2		)
Residential mortgage-backed securities	(0.4		)	(0.2		)	0
Agency residential pass-through obligations	(0.4		)	0			0
Commercial mortgage-backed securities	(1.3		)	(8.3		)	(1.8		)
Redeemable preferred stocks	0			(3.2		)	(0.1		)
Total fixed maturities	(8.3		)	(22.6		)	(11.8		)
Equity securities:
Nonredeemable preferred stocks	(3.2		)	0			(0.1		)
Common equities	(38.4		)	(7.3		)	(0.6		)
Subtotal gross realized losses on security sales	(49.9		)	(29.9		)	(12.5		)
Net realized gains (losses) on security sales
Fixed maturities:
U.S. government obligations	16.6			16.4			4.8
State and local government obligations	7.5			8.8			7.7
Corporate and other debt securities	26.2			34.4			41.5
Residential mortgage-backed securities	4.5			2.5			3.0
Agency residential pass-through obligations	(0.4		)	0			0
Commercial mortgage-backed securities	14.4			8.7			8.2
Redeemable preferred stocks	0.1			(0.5		)	(0.1		)
Total fixed maturities	68.9			70.3			65.1
Equity securities:
Nonredeemable preferred stocks	62.1			90.0			126.2
Common equities	12.0			100.0			68.0
Subtotal net realized gains (losses) on security sales	143.0			260.3			259.3
Other-than-temporary impairment losses
Fixed maturities:
Residential mortgage-backed securities	0			0			(0.6		)
Total fixed maturities	0			0			(0.6		)
Equity securities:
Common equities	(8.7		)	(7.2		)	(5.5		)
Subtotal other-than-temporary impairment losses	(8.7		)	(7.2		)	(6.1		)
Other gains (losses)
Hybrid securities	(1.3		)	30.5			6.4
Derivative instruments	(20.7		)	(64.1		)	56.6
Litigation settlements	0.4			4.7			2.2
Subtotal other gains (losses)	(21.6		)	(28.9		)	65.2
Total net realized gains (losses) on securities	$	112.7		$	224.2		$	318.4

Gross realized gains and losses were predominantly the result of sales transactions in our fixed-income portfolio related to

movements in credit spreads and interest rates and sales from our equity portfolios. In addition, gains and losses reflect recoveries from litigation settlements and holding period valuation changes on hybrids and derivatives. Also included are write-downs for securities determined to be other-than-temporarily impaired in our fixed-maturity and/or equity portfolios.

App.-A-18

Net Investment Income  The components of net investment income for the years ended December 31, were:

(millions)	2015			2014			2013
Fixed maturities:
U.S. government obligations	$	28.3		$	46.2		$	50.2
State and local government obligations	60.7			50.1			48.0
Foreign government obligations	0.4			0.4			0.2
Corporate debt securities	102.4			82.1			98.8
Residential mortgage-backed securities	52.2			44.9			28.1
Agency residential pass-through obligations	2.1			0			0
Commercial mortgage-backed securities	74.6			66.0			74.8
Other asset-backed securities	22.0			16.7			16.7
Redeemable preferred stocks	15.0			15.5			21.2
Total fixed maturities	357.7			321.9			338.0
Equity securities:
Nonredeemable preferred stocks	43.7			38.6			36.2
Common equities	51.0			46.6			45.8
Short-term investments	2.2			1.3			2.0
Investment income	454.6			408.4			422.0
Investment expenses	(22.8		)	(18.9		)	(18.8		)
Net investment income	$	431.8		$	389.5		$	403.2

The amount of investment income (interest and dividends) we recognize varies from year to year based on the average assets held during the year and the book yields of the securities in our portfolio. The increase in 2015 primarily reflects an increase in average assets, due in large part to profitable underwriting results and the acquisition of a controlling interest in ARX, while the decrease in 2014 was due in part to an increase in short-term investments held and lower yields on securities purchased during the year.

Trading Securities  At December 31, 2015 and 2014, we did not hold any trading securities and we did not have any net realized gains (losses) on trading securities for the years ended December 31, 2015, 2014, and 2013.

Derivative Instruments  For all derivative positions discussed below, realized holding period gains and losses are netted with any upfront cash that may be exchanged under the contract to determine if the net position should be classified either as an asset or liability. To be reported as a net derivative asset and a component of the available-for-sale portfolio, the inception-to-date holding period (realized) gain on the derivative position at period end would have to exceed any upfront cash received. On the other hand, a net derivative liability would include any inception-to-date holding period (realized) loss plus the amount of upfront cash received (or netted, if upfront cash was paid) and would be reported as a component of other liabilities. These net derivative assets/liabilities are not separately disclosed on the balance sheet due to their immaterial effect on our financial condition, cash flows, and results of operations.

App.-A-19

The following table shows the status of our derivative instruments at December 31, 2015 and 2014, and for the years ended December 31, 2015, 2014, and 2013:

(millions)								Balance Sheet2					Comprehensive Income Statement
	Notional Value1								Assets (Liabilities) Fair Value				Pretax Net Realized Gains (Losses)
													Years ended
	December 31,								December 31,				December 31,
Derivatives designated as:	2015		2014		2013		Purpose	Classification	2015		2014		2015			2014			2013
Hedging instruments
Closed:
Ineffective cash flow hedge	$	18	$	44	$	54	Manage interest rate risk	NA	$	0	$	0	$	0.2		$	0.5		$	0.8
Non-hedging instruments
Assets:
Interest rate swaps	750		750		750		Manage portfolio duration	Investments - fixed maturities	4.4		15.8		(23.4		)	(64.6		)	59.8
Closed:
Interest rate swaps	0		0		1,263		Manage portfolio duration	NA	0		0		0			0			(4.0		)
U.S. Treasury Note futures	691		0		0		Manage portfolio duration	NA	0		0		2.5			0			0
Total	NA		NA		NA				$	4.4	$	15.8	$	(20.7	)	$	(64.1	)	$	56.6

¹ The amounts represent the value held at year end for open positions and the maximum amount held during the year for closed positions.

² To the extent we hold both derivative assets and liabilities with the same counterparty that are subject to an enforceable master netting arrangement, we expect that we will report them on a gross basis on our balance sheets, consistent with our historical presentation.

NA = Not Applicable

CASH FLOW HEDGES

We entered into forecasted debt issuance hedges to hedge against a possible rise in interest rates in conjunction with the $400 million of 3.70% Senior Notes issued in January 2015 and the $350 million of 4.35% Senior Notes issued in April 2014. Upon issuance, we closed these hedges and recognized, as part of accumulated other comprehensive income, a pretax loss of $12.9 million in January 2015 and $1.6 million in April 2014.

Our ineffective cash flow hedge, which is reflected in the table above, resulted from the repurchase of a portion of our 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 during each of the last three years, and we reclassified the unrealized gain on forecasted transactions to net realized gains on securities.

During 2015, we recognized $1.8 million as a net decrease to interest expense on our closed debt issuance cash flow hedges, compared to $2.0 million during 2014 and $2.1 million during 2013.

See Note 4 – Debt for further discussion.

INTEREST RATE SWAPS and U.S. TREASURY FUTURES

We use interest rate swaps and treasury futures contracts to manage the fixed-income portfolio duration. At December 31, 2015, 2014, and 2013, we held interest rate swap positions for which we are paying a fixed rate and receiving a variable rate, effectively shortening the duration of our fixed-income portfolio. On the open positions, since inception, interest rates have increased; however, as interest rate swap rates fell during 2015, our fair value gain decreased by $11.4 million.

During 2013, we closed three interest rate swap positions including a 9-year interest rate swap position (opened in 2009) and

two5-year interest rate swap positions (opened in 2011); in each case, we were paying a fixed rate and receiving a variable

rate, effectively shortening the duration of our fixed-income portfolio.

App.-A-20

During the second quarter 2015, we entered into U.S. treasury futures by selling contracts, and we recognized a net realized gain of $2.5 million during the year; all positions were closed at December 31, 2015. The net realized gain was the result of overall rising interest rates during the period that the contracts were held.

As of December 31, 2015, 2014, and 2013, the balance of the cash collateral that we had received from the applicable counterparty on our open positions was $4.9 million, $16.1 million, and $62.7 million, respectively.

3. FAIR VALUE

We have categorized our financial instruments, based on the degree of subjectivity inherent in the method by which they are valued, into a fair value hierarchy of three levels, as follows:

• Level 1:  Inputs are unadjusted, quoted prices in active markets for identical instruments at the measurement date (e.g., U.S. government obligations, active exchange-traded equity securities, and certain short-term securities).

• Level 2:  Inputs (other than quoted prices included within Level 1) that are observable for the instrument either directly or indirectly (e.g., certain corporate and municipal bonds and certain preferred stocks). This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments, and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3:  Inputs that are unobservable. Unobservable inputs reflect our subjective evaluation about the assumptions market participants would use in pricing the financial instrument (e.g., certain structured securities and privately held investments).

Determining the fair value of the investment portfolio is the responsibility of management. As part of the responsibility, we evaluate whether a market is distressed or inactive in determining the fair value for our portfolio. We review certain market level inputs to evaluate whether sufficient activity, volume, and new issuances exist to create an active market. Based on this evaluation, we concluded that there was sufficient activity related to the sectors and securities for which we obtained valuations.

App.-A-21

The composition of the investment portfolio by major security type and our outstanding debt was:

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2015
Fixed maturities:
U.S. government obligations	$	2,429.2	$	0	$	0	$	2,429.2	$	2,425.4
State and local government obligations	0		2,721.4		0		2,721.4		2,677.6
Foreign government obligations	18.6		0		0		18.6		18.6
Corporate debt securities	0		3,691.6		0		3,691.6		3,713.2
Subtotal	2,447.8		6,413.0		0		8,860.8		8,834.8
Asset-backed securities:
Residential mortgage-backed	0		1,726.7		0		1,726.7		1,726.0
Agency residential pass-through obligations	0		89.3		0		89.3		90.3
Commercial mortgage-backed	0		2,643.3		9.9		2,653.2		2,665.7
Other asset-backed	0		1,767.9		0		1,767.9		1,771.1
Subtotal asset-backed securities	0		6,227.2		9.9		6,237.1		6,253.1
Redeemable preferred stocks:
Financials	0		92.0		0		92.0		76.8
Utilities	0		51.2		0		51.2		65.1
Industrials	0		91.1		0		91.1		118.1
Subtotal redeemable preferred stocks	0		234.3		0		234.3		260.0
Total fixed maturities	2,447.8		12,874.5		9.9		15,332.2		15,347.9
Equity securities:
Nonredeemable preferred stocks:
Financials	154.9		627.7		0		782.6		674.2
Subtotal nonredeemable preferred stocks	154.9		627.7		0		782.6		674.2
Common equities:
Common stocks	2,650.2		0		0		2,650.2		1,494.0
Other risk investments	0		0		0.3		0.3		0.3
Subtotal common equities	2,650.2		0		0.3		2,650.5		1,494.3
Total fixed maturities and equity securities	5,252.9		13,502.2		10.2		18,765.3		17,516.4
Short-term investments	2,056.3		115.7		0		2,172.0		2,172.0
Total portfolio	$	7,309.2	$	13,617.9	$	10.2	$	20,937.3	$	19,688.4
Debt	$	0	$	2,722.9	$	164.9	$	2,887.8	$	2,707.9

App.-A-22

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2014
Fixed maturities:
U.S. government obligations	$	2,667.1	$	0	$	0	$	2,667.1	$	2,641.1
State and local government obligations	0		2,139.2		0		2,139.2		2,095.7
Foreign government obligations	14.2		0		0		14.2		14.2
Corporate debt securities	0		2,836.7		0		2,836.7		2,813.9
Subtotal	2,681.3		4,975.9		0		7,657.2		7,564.9
Asset-backed securities:
Residential mortgage-backed	0		1,658.5		0		1,658.5		1,635.5
Agency residential pass-through obligations	0		0		0		0		0
Commercial mortgage-backed	0		2,304.0		11.6		2,315.6		2,278.7
Other asset-backed	0		1,638.7		0		1,638.7		1,634.9
Subtotal asset-backed securities	0		5,601.2		11.6		5,612.8		5,549.1
Redeemable preferred stocks:
Financials	0		97.9		0		97.9		77.3
Utilities	0		65.3		0		65.3		65.0
Industrials	0		116.0		0		116.0		117.9
Subtotal redeemable preferred stocks	0		279.2		0		279.2		260.2
Total fixed maturities	2,681.3		10,856.3		11.6		13,549.2		13,374.2
Equity securities:
Nonredeemable preferred stocks:
Financials	204.1		554.1		69.3		827.5		590.4
Subtotal nonredeemable preferred stocks	204.1		554.1		69.3		827.5		590.4
Common equities:
Common stocks	2,491.9		0		0		2,491.9		1,288.8
Other risk investments	0		0		0.4		0.4		0.4
Subtotal common equities	2,491.9		0		0.4		2,492.3		1,289.2
Total fixed maturities and equity securities	5,377.3		11,410.4		81.3		16,869.0		15,253.8
Short-term investments	1,937.0		212.0		0		2,149.0		2,149.0
Total portfolio	$	7,314.3	$	11,622.4	$	81.3	$	19,018.0	$	17,402.8
Debt	$	0	$	2,527.5	$	0	$	2,527.5	$	2,164.7

Our portfolio valuations, excluding short-term investments, classified as either Level 1 or Level 2 in the above tables are priced exclusively by external sources, including: pricing vendors, dealers/market makers, and exchange-quoted prices. During 2015, we did not have any transfers between Level 1 and Level 2. During 2014, we had two nonredeemable preferred stocks with a value of $41.7 million that were transferred from Level 2 to Level 1 due to the availability of a consistent exchange price; this was the only transfer during 2014. We recognize transfers between levels at the end of the reporting period.

Our short-term security holdings classified as Level 1 are highly liquid, actively marketed, and have a very short duration, primarily 30 days or less to redemption. These securities are held at their original cost, adjusted for any accretion of discount, since that value very closely approximates what an active market participant would be willing to pay for such securities. The remainder of our short-term securities are classified as Level 2 and are not priced externally since these securities continually trade at par value. These securities are classified as Level 2 since they are primarily longer-dated auction securities issued by municipalities that contain a redemption put feature back to the auction pool with a redemption period typically less than seven days. The auction pool is created by a liquidity provider and if the auction is not available at the end of the seven days, we have the right to put the security back to the issuer at par.

App.-A-23

At December 31, 2015, vendor-quoted prices represented 49% of our Level 1 classifications (excluding short-term investments), compared to 50% at December 31, 2014. The securities quoted by vendors in Level 1 primarily represent our holdings in U.S. Treasury Notes, which are frequently traded and the quotes are considered similar to exchange-traded quotes. The balance of our Level 1 pricing comes from quotes obtained directly from trades made on active exchanges. The year-over-year decline in vendor-quoted Level 1 prices was due to a reduction of U.S. Treasury Notes with the funds deployed primarily to short-term investments.

At both December 31, 2015 and 2014, vendor-quoted prices comprised 97% of our Level 2 classifications (excluding short-term investments), while dealer-quoted prices represented 3%. In our process for selecting a source (e.g., dealer, pricing service) to provide pricing for securities in our portfolio, we reviewed documentation from the sources that detailed the pricing techniques and methodologies used by these sources and determined if their policies adequately considered market activity, either based on specific transactions for the particular security type or based on modeling of securities with similar credit quality, duration, yield, and structure that were recently transacted. Once a source is chosen, we continue to monitor any changes or modifications to their processes by reviewing their documentation on internal controls for pricing and market reviews. We review quality control measures of our sources as they become available to determine if any significant changes have occurred from period to period that might indicate issues or concerns regarding their evaluation or market coverage.

As part of our pricing procedures, we obtain quotes from more than one source to help us fully evaluate the market price of securities. However, our internal pricing policy is to use a consistent source for individual securities in order to maintain the integrity of our valuation process. Quotes obtained from the sources are not considered binding offers to transact. Under our policy, when a review of the valuation received from our selected source appears to be outside of what is considered market level activity (which is defined as trading at spreads or yields significantly different than those of comparable securities or outside the general sector level movement without a reasonable explanation), we may use an alternate source’s price. To the extent we determine that it may be prudent to substitute one source’s price for another, we will contact the initial source to obtain an understanding of the factors that may be contributing to the significant price variance, which often leads the source to adjust their pricing input data for future pricing.

To allow us to determine if our initial source is providing a price that is outside of a reasonable range, we review our portfolio pricing on a weekly basis. We frequently challenge prices from our sources when a price provided does not match our expectations based on our evaluation of market trends and activity. Initially, we perform a review of our portfolio by sector to identify securities whose prices appear outside of a reasonable range. We then perform a more detailed review of fair values for securities disclosed as Level 2. We review dealer bids and quotes for these and/or similar securities to determine the market level context for our valuations. We then evaluate inputs relevant for each class of securities disclosed in the preceding hierarchy tables.

For our structured debt securities, including commercial, residential, and asset-backed securities, we evaluate available market-related data for these and similar securities related to collateral, delinquencies, and defaults for historical trends and reasonably estimable projections, as well as historical prepayment rates and current prepayment assumptions and cash flow estimates. We further stratify each class of our structured debt securities into more finite sectors (e.g., planned amortization class, first pay, second pay, senior, subordinated, etc.) and use duration, credit quality, and coupon to determine if the fair value is appropriate.

For our corporate debt and preferred stock (redeemable and nonredeemable) portfolios, as well as the notes and debentures issued by The Progressive Corporation (see Note 4-Debt), we review securities by duration, coupon, and credit quality, as well as changes in interest rate and credit spread movements within that stratification. The review also includes recent trades, including: volume traded at various levels that establish a market, issuer specific fundamentals, and industry specific economic news as it comes to light.

For our municipal securities (e.g., general obligations, revenue, and housing), we stratify the portfolio to evaluate securities by type, coupon, credit quality, and duration to review price changes relative to credit spread and interest rate changes. Additionally, we look to economic data as it relates to geographic location as an indication of price-to-call or maturity predictors. For municipal housing securities, we look to changes in cash flow projections, both historical and reasonably estimable projections, to understand yield changes and their effect on valuation.

Lastly, for our short-term securities, we look at acquisition price relative to the coupon or yield. Since our short-term securities are typically 90 days or less to maturity, with the majority listed in Level 2 being seven days or less to redemption, we believe that acquisition price is the best estimate of fair value.

App.-A-24

We also review data assumptions as supplied by our sources to determine if that data is relevant to current market conditions. In addition, we independently review each sector for transaction volumes, new issuances, and changes in spreads, as well as the overall movement of interest rates along the yield curve to determine if sufficient activity and liquidity exists to provide a credible source for our market valuations.

During each valuation period, we create internal estimations of portfolio valuation (performance returns), based on current market-related activity (i.e., interest rate and credit spread movements and other credit-related factors) within each major sector of our portfolio. We compare our internally generated portfolio results with those generated based on quotes we received externally and research material valuation differences. We compare our results to index returns for each major sector adjusting for duration and credit quality differences to better understand our portfolio’s results. Additionally, we review on a monthly basis our external sales transactions and compare the actual final market sales price to a previous market valuation price. This review provides us further validation that our pricing sources are providing market level prices, since we are able to explain significant price changes (i.e., greater than 2%) as known events occur in the marketplace and affect a particular security’s price at sale.

This analysis provides us with additional comfort regarding each source’s process, the quality of its review, and its willingness to improve its analysis based on feedback from clients. We believe this effort helps ensure that we are reporting the most representative fair values for our securities.

Except as described below, our Level 3 securities are also priced externally; however, due to several factors (e.g., nature of the securities, level of inactivity, and lack of similar securities trading to obtain observable market level inputs), these valuations are more subjective in nature. Certain private equity investments and fixed-income investments included in the Level 3 category are valued using external pricing supplemented by internal review and analysis.

After all the valuations are received and our review is complete, if the inputs used by vendors are determined to not contain sufficient observable market information, we will reclassify the affected security valuations to Level 3. At December 31, 2015 and 2014, securities in our fixed-maturity portfolio listed as Level 3 were comprised substantially of securities that were either: (i) private placements, (ii) thinly held and/or traded securities, or (iii) non-investment-grade or non-rated securities with little liquidity. Based on these factors, it was difficult to independently verify observable market inputs that were used to generate the external valuations we received. Despite the lack of sufficient observable market information for our Level 3 securities, we believe the valuations received, in conjunction with our procedures for evaluating third-party prices, support the fair values reported in the financial statements.

We did not hold any internally-priced securities at December 31, 2015. At December 31, 2014, we held one internally-priced security, a private preferred equity security (our 5% equity interest in ARX) with a value of $69.3 million.

We review the prices from our external sources for reasonableness using internally developed assumptions to derive prices for the securities, which are then compared to the prices we received. During 2015 or 2014, there were no material assets or liabilities measured at fair value on a nonrecurring basis. Based on our review, all the prices received from external sources remain unadjusted.

App.-A-25

The following tables provide a summary of changes in fair value associated with Level 3 assets for the years ended December 31, 2015 and 2014:

	Level 3 Fair Value
(millions)	Fair Value at Dec. 31, 2014		Calls/ Maturities/ Paydowns			Purchases		Sales		Net Realized (Gain)/Loss on Sales			Change in Valuation			Net Transfers In (Out)			Fair Value at Dec. 31, 2015
Fixed maturities:
Asset-backed securities:
Residential mortgage-backed	$	0	$	0		$	0	$	0	$	0		$	0		$	0		$	0
Commercial mortgage-backed	11.6		(1.3		)	0		0		0			(0.4		)	0			9.9
Total fixed maturities	11.6		(1.3		)	0		0		0			(0.4		)	0			9.9
Equity securities:
Nonredeemable preferred stocks:
Financials1	69.3		0			0		0		(39.4		)	(1.4		)	(28.5		)	0
Common equities:
Other risk investments	0.4		0			0		0		0			(0.1		)	0			0.3
Total Level 3 securities	$	81.3	$	(1.3	)	$	0	$	0	$	(39.4	)	$	(1.9	)	$	(28.5	)	$	10.2

¹ The $69.3 million decrease during the year reflects the reclassification of our 5% interest in ARX upon our acquisition of a controlling interest in ARX. The $39.4 million reflects our inception-to-date gain recognized, including the $1.4 million reduction in valuation that occurred during the first six months of 2015.

	Level 3 Fair Value
(millions)	Fair Value at Dec. 31, 2013		Calls/ Maturities/ Paydowns			Purchases		Sales			Net Realized (Gain)/Loss on Sales		Change in Valuation			Net Transfers In (Out)1			Fair Value at Dec. 31, 2014
Fixed maturities:
Asset-backed securities:
Residential mortgage-backed	$	0.2	$	0		$	0	$	(0.1	)	$	0.1	$	(0.2	)	$	0		$	0
Commercial mortgage-backed	29.0		(3.6		)	0		0			0		(0.2		)	(13.6		)	11.6
Total fixed maturities	29.2		(3.6		)	0		(0.1		)	0.1		(0.4		)	(13.6		)	11.6
Equity securities:
Nonredeemable preferred stocks:
Financials2	39.0		0			0		0			0		30.3			0			69.3
Common equities:
Other risk investments	0.5		(0.1		)	0		0			0		0			0			0.4
Total Level 3 securities	$	68.7	$	(3.7	)	$	0	$	(0.1	)	$	0.1	$	29.9		$	(13.6	)	$	81.3

¹ The $13.6 million was transferred out of Level 3 and into Level 2 due to an improvement in the security's underlying collateral and an increase in liquidity and market activity in comparable securities.

² The $30.3 million represents a net holding period gain on our investment in ARX, which is reflected in net realized gains (losses) on securities in the comprehensive income statement.

App.-A-26

The following table provides a summary of the quantitative information about Level 3 fair value measurements for our applicable securities at December 31:

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at Dec. 31, 2015		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Fixed maturities:
Asset-backed securities:
Commercial mortgage-backed	$	9.9	External vendor	Prepayment rate1	0
Total fixed maturities	9.9
Equity securities:
Nonredeemable preferred stocks:
Financials	0		NA	NA	NA
Subtotal Level 3 securities	9.9
Third-party pricing exemption securities2	0.3
Total Level 3 securities	$	10.2

NA= Not Applicable since we did not hold any nonredeemable preferred stock Level 3 securities at December 31, 2015.

¹ Assumes that one security has 0% of the principal amount of the underlying loans that will be paid off prematurely in each year.

² The fair values for these securities were obtained from non-binding external sources where unobservable inputs are not reasonably available to us.

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at Dec. 31, 2014		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Fixed maturities:
Asset-backed securities:
Commercial mortgage-backed	$	11.6	External vendor	Prepayment rate1	0
Total fixed maturities	11.6
Equity securities:
Nonredeemable preferred stocks:
Financials	69.3		Multiple of tangible net book value	Price to book ratio multiple	2.6
Subtotal Level 3 securities	80.9
Third-party pricing exemption securities2	0.4
Total Level 3 securities	$	81.3

¹ Assumes that one security has 0% of the principal amount of the underlying loans that will be paid off prematurely in each year.

² Thefair values for these securities were obtained from non-binding external sources where unobservable inputs are not reasonably available to us.

Due to the relative size of the Level 3 securities’ fair values compared to the total portfolio’s fair value, any changes in pricing methodology would not have a significant change in valuation that would materially impact net and comprehensive income.

App.-A-27

4.  DEBT

Debt at December 31 consisted of:

	2015				2014
(millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
3.75% Senior Notes due 2021 (issued: $500.0, August 2011)	$	498.1	$	528.7	$	497.8	$	535.6
6 5/8% Senior Notes due 2029 (issued: $300.0, March 1999)	295.7		376.0		295.5		400.6
6.25% Senior Notes due 2032 (issued: $400.0, November 2002)	395.0		490.6		394.8		527.9
4.35% Senior Notes due 2044 (issued: $350.0, April 2014)	346.4		352.8		346.3		378.9
3.70% Senior Notes due 2045 (issued: $400.0, January 2015)	395.0		362.0		0		0
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (issued: $1,000.0, June 2007; outstanding: $614.4 and $632.8)	612.8		612.8		630.3		684.5
Other debt instruments	164.9		164.9		0		0
Total	$	2,707.9	$	2,887.8	$	2,164.7	$	2,527.5

The other debt instruments reported in the table above represent ARX indebtedness and consist of:

Type of debt instrument	Number of Instruments	Carrying Value		Stated Maturity Date(s)
Term loans	2	$	87.1	December 2018 and 2019
Junior subordinated notes1	2	41.2		June 2036 and 2037
Senior notes	4	24.0		Various2
Surplus note	1	12.6		November 2021
Total		$	164.9

¹ ARX issued junior subordinated floating rate notes to trusts established by ARX in connection with issuances of trust preferred securities by the trust(discussed below).

² The senior notes mature in May 2033, April 2034, December 2034, and June 2035.

Aggregate required principal payments on debt outstanding at December 31, 2015, are as follows:

(millions)
Year	Payments
2016	$	27.2
2017	27.2
2018	27.2
2019	13.4
2020	3.0
Thereafter	2,631.3
Total	$	2,729.3

The Progressive Corporation Debt

Excluding the other debt instruments, all of the outstanding debt was issued by The Progressive Corporation, the ultimate holding company. The holding company debt includes amounts that were borrowed and contributed to the capital of its insurance subsidiaries or used, or made available for use, for other business purposes. Fair values for these debt instruments are obtained from external sources. There are no restrictive financial covenants or credit rating triggers on The Progressive Corporation debt.

Interest on all debt issued by The Progressive Corporation is payable semiannually at the stated rates. However, the 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (the “6.70% Debentures”) will only bear interest at this fixed annual rate through June 14, 2017. Thereafter, the 6.70% Debentures will bear interest at an annual rate equal to the three-month London Interbank Offered Rate (LIBOR) plus 2.0175%, and interest will be payable quarterly until the 6.70% Debentures are redeemed or retired.

App.-A-28

Except for the 6.70% Debentures, all remaining principal on the Senior Notes is due at the maturity stated in the tables above. The Senior Notes are redeemable, in whole or in part, at any time; however, the redemption price will equal the greater of the principal amount of the Senior Notes or a “make whole” amount calculated by reference to the present values of remaining scheduled principal and interest payments under the Senior Notes. Commencing on June 15, 2017, on each interest payment date, we have the right to redeem the 6.70% Debentures at par. If not previously redeemed, the 6.70% Debentures will become due on June 15, 2037, the scheduled maturity date, but only to the extent that we have received sufficient net proceeds from the sale of certain qualifying capital securities. The Progressive Corporation must use its commercially reasonable efforts, subject to certain market disruption events, to sell enough qualifying capital securities to permit repayment of the 6.70% Debentures in full on the scheduled maturity date or, if sufficient proceeds are not realized from the sale of such qualifying capital securities by such date, on each interest payment date thereafter. Any remaining outstanding principal will be due on June 15, 2067, the final maturity date.

The Progressive Corporation issued $400 million of 3.70% Senior Notes due 2045 in January 2015, and $350 million of 4.35% Senior Notes due 2044 in April 2014, in underwritten public offerings. We received proceeds, after deducting underwriter's discounts and commissions, of approximately $394.9 million and $346.3 million, respectively. In addition, we incurred expenses of approximately $0.8 million and $0.7 million, respectively, related to the issuances.

Prior to issuance of each of the Senior Notes and 6.70% Debentures, we entered into forecasted debt issuance hedges against possible rises in interest rates. Upon issuance of the applicable debt securities, the hedges were closed and we recognized unrealized gains (losses) as part of accumulated other comprehensive income. We recognize the gains and losses as an adjustment to interest expense and amortize them over the applicable life of the debt securities. The original unrealized gain (loss) at the time of each debt issuance and the unamortized balance at December 31, 2015, on a pretax basis, of these hedges, were as follows:

(millions)	Unrealized Gain (Loss) at Debt Issuance			Unamortized Balance at December 31, 2015
3.75% Senior Notes	$	(5.1	)	$	(3.1	)
6 5/8% Senior Notes	(4.2		)	(3.0		)
6.25% Senior Notes	5.1			3.9
4.35% Senior Notes	(1.6		)	(1.6		)
3.70% Senior Notes	(12.9		)	(12.6		)
6.70% Debentures	34.4			3.9

The gains (losses) on these hedges are deferred and are being amortized as adjustments to interest expense over the life of the related Senior Notes, and over the 10-year fixed interest rate term for the 6.70% Debentures. In addition to this amortization, during 2015 and 2014, we reclassified $0.2 million and $0.5 million, respectively, on a pretax basis, from accumulated other comprehensive income on the balance sheet to net realized gains on securities on the comprehensive income statement, reflecting the portion of the unrealized gain on forecasted transactions that was related to the portion of the 6.70% Debentures repurchased during the periods.

During 2015 and 2014, we repurchased, in the open market, $18.4 million and $44.3 million, respectively, in aggregate principal amount of the 6.70% Debentures. Since the amount paid exceeded the carrying value of the debt we repurchased, we recognized losses on these extinguishments of $0.9 million and $4.8 million, respectively.

ARX Debt (i.e., Other debt instruments)

The other debt instruments were issued by ARX, in which we acquired a controlling interest during the second quarter 2015. ARX, not The Progressive Corporation or any of its other subsidiaries, is responsible for the other debt, which includes amounts that were borrowed and contributed to the capital of ARX's insurance subsidiaries or used, or made available for use, for other business purposes.

In estimating the fair value of the other debt instruments, it was determined that the fair value of these notes is equal to the carrying value, based on the current rates offered for debt of similar maturities and interest rates.

The term loans require ARX and its subsidiaries to maintain specified debt leverage and fixed charge coverage ratios, as well as maintain a minimum risk-based capital ratio and minimum financial strength and credit ratings, as provided by A.M. Best Company, Inc. As of December 31, 2015, ARX was in compliance with these covenants. The surplus note requires ARX to maintain at least $50 million of surplus, which it met at December 31, 2015. There are no restrictive financial covenants or credit rating triggers on any of the remaining other debt instruments.

App.-A-29

Monthly interest and principal payments are made on the term loans, with interest calculated based on the 30-day LIBOR plus 2.25%. Principal payments of $25.0 million are required to be paid during the next twelve months on these term loans. The term loans are secured by 100% of the outstanding common stock of four subsidiaries of ARX.

Interest on the junior subordinated notes and the senior notes is paid quarterly at a floating rate tied to the three-month LIBOR rate. Principal and interest on the surplus note is payable pursuant to a schedule permitted by the Florida Office of Insurance Regulation, and interest is set quarterly based upon the 10-year U.S. treasury bond rate. Principal payments of $2.2 million are due during the next twelve months on the surplus note.

The junior subordinated notes and senior notes can be redeemed, in whole or in part, at the option of ARX at par, plus accrued and unpaid interest, on any interest payment date.

Pursuant to agreements entered into by ARX relating to the trust preferred securities transactions, ARX established trusts that are 100% owned by ARX. The trusts, which are the holders of the junior subordinated notes, issued trust preferred securities to third parties. The shares in the trusts are not transferable. The trusts are considered special purpose variable interest entities for which ARX is not the primary beneficiary and, therefore, they are accounted for under the equity method of accounting and not consolidated with ARX. Our ownership interest of $1.3 million in the variable interest entities is reported as a component of "other assets" on our consolidated balance sheets.

The Progressive Corporation Line of Credit

In March 2015, we renewed the unsecured, discretionary line of credit (the "Line of Credit") with PNC Bank, National Association (PNC) in the maximum principal amount of $100 million. The prior line of credit, entered into in March 2014, has expired. The Line of Credit is on substantially the same terms and conditions as the prior line of credit. Subject to the terms and conditions of the Line of Credit documents, advances under the Line of Credit (if any) will bear interest at a variable rate equal to the higher of PNC's Prime Rate or the sum of the Federal Funds Open Rate plus 50 basis points. Each advance must be repaid on the 30th day after the advance or, if earlier, on April 30, 2016, the expiration date of the Line of Credit. Prepayments are permitted without penalty. All advances under the Line of Credit are subject to PNC's discretion. We had no borrowings under the Line of Credit or the prior line of credit in 2015 or 2014.

5.  INCOME TAXES

The components of our income tax provision were as follows:

(millions)	2015			2014		2013
Current tax provision
Federal	$	655.3		$	594.4	$	460.2
State	14.7			0		0
Deferred tax expense (benefit)
Federal	(47.7		)	32.0		94.4
State	(11.2		)	0		0
Total income tax provision	$	611.1		$	626.4	$	554.6

App.-A-30

As a result of our acquisition of a controlling interest in ARX, state income taxes are now being included in the income tax provision. In prior years, state income taxes were not significant. The provision for income taxes in the accompanying consolidated statements of comprehensive income differed from the statutory rate as follows:

($ in millions)	2015					2014					2013
Income before income taxes	$	1,911.6				$	1,907.4				$	1,720.0
Tax at statutory federal rate	$	669.1		35	%	$	667.6		35	%	$	602.0		35	%
Tax effect of:
Dividends received deduction	(19.8		)	(1	)	(18.3		)	(1	)	(17.6		)	(1	)
Exempt interest income	(17.8		)	(1	)	(13.8		)	(1	)	(13.1		)	(1	)
Non-taxable gain1	(13.8		)	(1	)	0			0		0			0
Tax-deductible dividends	(7.9		)	0		(6.5		)	0		(13.6		)	(1	)
State income taxes, net of federal taxes	2.3			0		0			0		0			0
Other items, net	(1.0		)	0		(2.6		)	0		(3.1		)	0
Total income tax provision	$	611.1		32	%	$	626.4		33	%	$	554.6		32	%

¹ Represents the tax effect of holding period gains on the 5% interest in ARX we owned prior to acquisition of a controlling interest on April 1, 2015.

Deferred income taxes reflect the effect for financial statement reporting purposes of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. At December 31, 2015 and 2014, the components of the net deferred tax asset (liability) were as follows:

(millions)	2015			2014
Federal deferred tax assets:
Unearned premiums reserve	$	453.3		$	378.8
Investment basis differences	40.5			60.6
Non-deductible accruals	231.4			208.0
Loss and loss adjustment expense reserves	75.3			76.9
Hedges on forecasted transactions	4.4			0
Other	9.6			7.5
Federal deferred tax liabilities:
Net unrealized gains on securities	(436.7		)	(550.3		)
Hedges on forecasted transactions	0			(0.8		)
Deferred acquisition costs	(197.4		)	(160.0		)
Property and equipment	(110.7		)	(100.9		)
Prepaid expenses	(11.9		)	(11.4		)
Intangible assets-ARX acquisition	(166.4		)	0
Deferred gain on extinguishment of debt	(2.2		)	(3.0		)
Other	(7.0		)	(4.3		)
Net federal deferred tax liability	(117.8		)	(98.9		)
Net state deferred tax asset	8.5			0
Net deferred tax liability	$	(109.3	)	$	(98.9	)

Although realization of the deferred tax assets is not assured, management believes that it is more likely than not that the deferred tax assets will be realized based on our expectation that we will be able to fully utilize the deductions that are ultimately recognized for tax purposes and, therefore, no valuation allowance was needed at December 31, 2015 or 2014.

At December 31, 2015 and 2014, we had $25.1 million and $49.4 million, respectively, of net taxes payable (included in other liabilities on the balance sheet).

App.-A-31

The Progressive Corporation and its wholly-owned subsidiaries file a consolidated income tax return. This group has been a participant in the Compliance Assurance Program (CAP) since 2007. Under CAP, the Internal Revenue Service (IRS) begins its examination process for the tax year before the tax return is filed, by examining significant transactions and events as they occur. The goal of the CAP program is to expedite the exam process and to reduce the level of uncertainty regarding a taxpayer's tax filing positions.

All federal income tax years prior to 2012 are closed. The IRS exams for 2012-2014 have been completed. We consider these years to be effectively settled.

ARX and its wholly owned subsidiaries file their own consolidated income tax return since we own less than 80% of their outstanding stock. This group was last examined by the IRS for the 2011 and 2012 tax years, which we consider to be effectively settled. The 2013-2015 tax years remain open to examination.

The statute of limitations for state income tax purposes generally remains open for three to four years from the return filing date, depending upon the jurisdiction. There has been no significant state income tax audit activity.

We recognize interest and penalties, if any, as a component of income tax expense. For the year ended December 31, 2015, $0.1 million of interest and penalties expense has been recorded in the tax provision. For the year ended December 31, 2013, $0.2 million of interest benefit has been recorded in the tax provision. We have not recorded any unrecognized tax benefits, or any related interest and penalties, as of December 31, 2015 and 2014.

6.  LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

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

(millions)	2015			2014			2013
Balance at January 1	$	8,857.4		$	8,479.7		$	7,838.4
Less reinsurance recoverables on unpaid losses	1,185.9			1,045.9			862.1
Net balance at January 1	7,671.5			7,433.8			6,976.3
Net loss and loss adjustment reserves acquired1	222.4			0			0
Total beginning reserves	7,893.9			7,433.8			6,976.3
Incurred related to:
Current year	14,657.1			13,330.3			12,427.3
Prior years	(315.1		)	(24.1		)	45.1
Total incurred	14,342.0			13,306.2			12,472.4
Paid related to:
Current year	9,577.3			8,831.5			8,095.0
Prior years	4,062.3			4,237.0			3,919.9
Total paid	13,639.6			13,068.5			12,014.9
Net balance at December 31	8,596.3			7,671.5			7,433.8
Plus reinsurance recoverables on unpaid losses	1,442.7			1,185.9			1,045.9
Balance at December 31	$	10,039.0		$	8,857.4		$	8,479.7

¹Net reserves acquired in ARX acquisition.

We experienced favorable reserve development of $315.1 million in 2015 and $24.1 million in 2014, compared to unfavorable reserve development of $45.1 million in 2013, which is reflected as “Incurred related to prior years” in the table above.

2015

•The favorable prior year reserve development was primarily attributable to accident year 2014.

• Favorable reserve development occurred in all segments; personal auto businesses experienced approximately 65% of total development, with the remainder split between our Commercial Lines business and Property business.

• In our personal auto and Commercial Lines businesses, we incurred favorable case loss reserve development primarily in bodily injury and uninsured motorist bodily injury coverages due to lower than anticipated severity.

• In our Property business, development was favorable due to lower than anticipated severity and frequency, primarily in accident years 2014 and 2013.

App.-A-32

2014

•The favorable prior year reserve development was primarily attributable to accident year 2010.

• Favorable reserve development in our Commercial Lines business was partially offset by unfavorable development in our Agency auto business. Our Direct auto business experienced slightly favorable development.

• The favorable reserve development in our Commercial Lines business was primarily related to favorable case reserve development on our high limit policies.

• In Agency auto, the unfavorable development was primarily attributable to personal injury protection (PIP) loss reserves and to the adjusting and other loss adjustment expense reserves.

2013

• Approximately 80% of the unfavorable reserve development was attributable to accident year 2011, while the remaining 20% was related to accident year 2012. The aggregate reserve development for accident years 2010 and prior was slightly favorable.

• About 55% of our unfavorable reserve development was in our Commercial Lines business, with the remainder split about equally between our Personal Lines business and our run-off businesses. In our Personal Lines business, unfavorable development in our Agency auto channel was offset in large part by favorable development in our Direct auto channel.

• The unfavorable reserve development in our Agency auto business was in our IBNR reserves due to higher frequency and severity on late emerging claims, as primarily reflected in the “all other development.”

• Lower than anticipated severity costs on case reserves were the primary contributor to the favorable development in our Direct auto business.

• In our Commercial Lines business, we experienced unfavorable development due to higher frequency and severity on late emerging claims primarily in our bodily injury coverage for our truck business.

• In our other businesses, we experienced unfavorable development primarily due to reserve increases in our run-off professional liability group business based on internal actuarial reviews of our claims history.

Because we are primarily an insurer of motor vehicles, we have limited exposure to environmental, asbestos, and general liability claims. We have established reserves for such exposures, in amounts that we believe to be adequate based on information currently known. These claims are not expected to have a material effect on our liquidity, financial condition, cash flows, or results of operations.

We write personal and commercial auto and property insurance throughout the United States and could be exposed to hurricanes or other catastrophes. We maintain catastrophic reinsurance coverage on our Property business to help mitigate this risk. Although the occurrence of a major catastrophe could have a significant effect on our monthly or quarterly results, we believe that, based on historical experience, such an event would not be so material as to disrupt the overall normal operations of Progressive. We are unable to predict the frequency or severity of any such events that may occur in the near term or thereafter.

7.  REINSURANCE

The effect of reinsurance on premiums written and earned for the years ended December 31, was as follows:

	2015						2014						2013
(millions)	Written			Earned			Written			Earned			Written			Earned
Direct premiums	$	21,086.5		$	20,454.1		$	18,914.8		$	18,648.4		$	17,562.8		$	17,317.9
Ceded:
Regulated Plans	(358.0		)	(362.6		)	(251.9		)	(241.4		)	(216.2		)	(205.4		)
Non-Regulated Plans	(164.5		)	(192.4		)	(8.3		)	(8.5		)	(6.9		)	(9.1		)
Total Ceded	(522.5		)	(555.0		)	(260.2		)	(249.9		)	(223.1		)	(214.5		)
Net premiums	$	20,564.0		$	19,899.1		$	18,654.6		$	18,398.5		$	17,339.7		$	17,103.4

App.-A-33

Regulated plans include the following:

• Federal reinsurance plan

◦ National Flood Insurance Program (NFIP)

• State-provided reinsurance facilities

◦ Michigan Catastrophic Claims Association (MCCA)

◦ North Carolina Reinsurance Facility (NCRF)

◦ Florida Hurricane Catastrophe Fund (FHCF)

• State-mandated involuntary plans

◦ Commercial Auto Insurance Procedures/Plans (CAIP)

The Non-Regulated plans primarily include amounts ceded on Property business under catastrophic and quota share reinsurance agreements. 

The increase in the amount of premiums ceded in 2015, compared to the prior years, primarily reflects ARX's reinsurance programs.

Losses and loss adjustment expenses were net of reinsurance ceded of $457.3 million in 2015, $322.7 million in 2014, and $347.0 million in 2013. The increase in losses and loss adjustment expenses is related to the Property business.

Our prepaid reinsurance premiums and reinsurance recoverables were comprised of the following at December 31:

	Prepaid Reinsurance Premiums								Reinsurance Recoverables
($ in millions)	2015				2014				2015				2014
Regulated Plans:
MCCA	$	31.4	16	%	$	32.8	38	%	$	1,217.6	82	%	$	1,018.8	83	%
CAIP	37.1		19		26.5		31		134.0		9		110.1		9
NCRF	25.6		13		21.9		26		56.7		4		51.1		4
NFIP	45.0		22		0		0		10.4		1		0		0
Other	0		0		0		0		2.8		0		2.0		0
Total Regulated Plans	139.1		70		81.2		95		1,421.5		96		1,182.0		96
Non-Regulated Plans:
Property	52.6		26		0		0		35.5		2		0		0
Other	7.6		4		4.1		5		31.8		2		49.9		4
Total Non-Regulated Plans	60.2		30		4.1		5		67.3		4		49.9		4
Total	$	199.3	100	%	$	85.3	100	%	$	1,488.8	100	%	$	1,231.9	100	%

Reinsurance contracts do not relieve us from our obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to us. Our exposure to losses from the failure of Regulated Plans is minimal, since these plans are funded by the federal government or by mechanisms supported by the insurance companies in the applicable state. We evaluate the financial condition of our other reinsurers and monitor concentrations of credit risk to minimize our exposure to significant losses from reinsurer insolvencies.

8.  STATUTORY FINANCIAL INFORMATION

Consolidated statutory surplus was $7,575.5 million and $6,442.8 million at December 31, 2015 and 2014, respectively. Statutory net income was $1,333.1 million, $1,289.5 million, and $1,086.3 million for the years ended December 31, 2015, 2014, and 2013, respectively.

At December 31, 2015, $637.6 million of consolidated statutory surplus represented net admitted assets of our insurance subsidiaries and affiliates that are required to meet minimum statutory surplus requirements in such entities’ states of domicile. The companies may be licensed in states other than their states of domicile, which may have higher minimum statutory surplus requirements. Generally, the net admitted assets of insurance companies that, subject to other applicable insurance laws and regulations, are available for transfer to the parent company cannot include the net admitted assets required to meet the minimum statutory surplus requirements of the states where the companies are licensed.

During 2015, the insurance subsidiaries paid aggregate cash dividends of $886.5 million to their parent company. Based on the dividend laws currently in effect, the insurance subsidiaries could pay aggregate dividends of $1,325.0 million in 2016 without prior approval from regulatory authorities, provided the dividend payments are not made within 12 months of previous dividends paid by the applicable subsidiary.

App.-A-34

9.  EMPLOYEE BENEFIT PLANS

Except to the extent specifically included, references in this Note 9 to Progressive refer to The Progressive Corporation and its subsidiaries other than ARX and its subsidiaries, and references to ARX refer to ARX and its subsidiaries. ARX and its subsidiaries maintain employee benefit plans that are separate from the plans that cover employees of The Progressive Corporation's other subsidiaries.

Retirement Plans  Progressive has a defined contribution pension plan (401(k) Plan) that covers most of its employees who are United States residents and have been employed with the company for at least 30 days. Under Progressive's 401(k) Plan, we match up to a maximum of 6% of an employee’s eligible compensation contributed to the plan. Employee and company matching contributions are invested, at the direction of the employee, in a number of investment options available under the plan, including various mutual funds, a self-directed brokerage option, and a Progressive common stock fund. Progressive's common stock fund is an employee stock ownership program (ESOP) within the 401(k) Plan. At December 31, 2015, the ESOP held 25.2 million of our common shares, all of which are included in shares outstanding. Dividends on these shares are reinvested in common shares or paid out in cash, at the election of the participant, and the related tax benefit is recorded as part of our tax provision.

Matching contributions made by Progressive for its 401(k) Plan were $78.4 million, $74.8 million, and $69.9 million for the years ended December 31, 2015, 2014, and 2013, respectively.

ARX employees are covered by separate qualified defined contribution plans.  Matching contributions of up to 6% of each eligible employee’s compensation are made each pay period.  Contributions to these plans, from April 1, 2015, the date The Progressive Corporation acquired a controlling interest in ARX, were $0.7 million.

Postemployment BenefitsProgressive provides various postemployment benefits to former or inactive employees who meet eligibility requirements, and to their beneficiaries and covered dependents. Postemployment benefits include salary continuation and disability-related benefits, including workers’ compensation and, if elected, continuation of health-care benefits for specified limited periods. The liability for these benefits was $22.6 million and $22.5 million at December 31, 2015 and 2014, respectively.

Postretirement BenefitsProgressive provides postretirement health and life insurance benefits to all employees who met requirements as to age and length of service at December 31, 1988. There are approximately 100 people who are eligible for these postretirement benefits. Progressive's funding policy for these benefits is to contribute annually, to a 501(c)(9) trust, the maximum amount that can be deducted for federal income tax purposes.

Incentive Compensation Plans – EmployeesProgressive's incentive compensation programs include both non-equity incentive plans (cash) and equity incentive plans. Progressive's cash incentive compensation includes a cash bonus program for a limited number of senior executives and Progressive's Gainsharing program for other employees; the structures of these programs are similar in nature. Progressive's equity incentive compensation plans provide for the granting of restricted stock awards and restricted stock unit awards (collectively, “restricted equity awards”) to key members of management.

ARX provides cash bonuses to its employees, both annual and periodic, and has an equity compensation plan under which it has granted stock option awards, exercisable for shares of ARX common stock, to certain of its key employees. These stock option awards include both nonqualified and incentive stock options; all such stock options are subject to the put and call provisions of the ARX stockholders’ agreement. See Note 16 - Redeemable Noncontrolling Interest. As a result of these provisions, and the determination that the ultimate settlement of these awards would be in cash, the ARX stock options are treated for accounting purposes as liability awards.

The amounts charged to income for Progressive and ARX incentive compensation plans for the years ended December 31, were:

	2015				2014				2013
(millions)	Pretax		After Tax		Pretax		After Tax		Pretax		After Tax
Non-equity incentive plans - cash	$	337.7	$	219.5	$	266.2	$	173.0	$	234.5	$	152.4
Equity incentive plans:
Equity awards	64.5		41.9		51.4		33.4		64.9		42.2
Liability awards	1.7		1.1		0		0		0		0

The decrease in expense for 2014 reflected adjustments recorded to our performance-based equity awards based on estimates, as of December 31, 2014, of the level of performance expected to be reached.

App.-A-35

Progressive's 2003 Incentive Plan has expired, and no new awards may be made under this plan; all awards granted prior to the plan’s expiration have vested, been forfeited, or expired, and no awards remain outstanding at December 31, 2015. Progressive's 2010 Equity Incentive Plan, which provides for the granting of equity-based compensation to officers and other key employees, originally authorized awards for up to 18.0 million shares. Progressive's 2015 Equity Incentive Plan, which provides for the granting of equity-based compensation to officers and other key employees, originally authorized awards for up to 13.0 million shares.

Since 2010, Progressive has issued restricted stock units as the form of equity awards to Progressive management. The restricted equity awards are issued as either time-based or performance-based awards. The time-based awards vest in equal installments upon the lapse of specified periods of time, typically three, four, and five years. All restricted stock units are settled at or after vesting in Progressive common shares from existing treasury shares on a one-to-one basis.

The performance-based awards were granted to our Chief Executive Officer as his sole equity award in each of the last five years, and to approximately 45 other Progressive executives and senior managers in 2015 in addition to their time-based awards, to provide additional incentive to achieve pre-established profitability and growth targets or relative investment performance.

Vesting of performance-based awards is contingent upon the achievement of predetermined performance goals within specified time periods. The targets for the performance-based awards, as well as the number of units that ultimately may vest, vary by grant. All performance-based awards include a specified number of shares or units that will vest if performance meets a specified target and minimum performance goals that must be achieved for any shares or units to vest. If at least the minimum performance goals are achieved, the range at which an award can vest is determined by the type of measurement goals included in the award, as follows:

Performance Measurement	Year of Grant	Vesting range, expressed as a percentage of target
Growth of our personal and commercial auto businesses, compared to market	2013-2015	0-250%
	2012 and Prior	0-200%
Investment results relative to peer group	2012-2015	0-200%
Growth in percentage of auto policies bundled with other specified types of policies (granted to two senior executive officers)	2015	0% or 100-200%

Generally, time-based and performance-based equity awards are expensed pro rata over their respective vesting periods based on the market value of the awards at the time of grant. Performance-based equity awards that contain variable vesting criteria are expensed based on management’s expectation of the percentage of the award, if any, that will ultimately vest. These estimates can change periodically throughout the measurement period.

App.-A-36

A summary of all employee restricted equity award activity during the years ended December 31, follows:

	2015				2014				2013
Restricted Equity Awards	Number of Shares1		Weighted Average Grant Date Fair Value		Number of Shares1		Weighted Average Grant Date Fair Value		Number of Shares1		Weighted Average Grant Date Fair Value
Beginning of year	9,051,564		$	21.27	9,918,575		$	20.13	11,625,981		$	17.80
Add (deduct):
Granted2	2,489,976		25.20		3,542,984		19.32		2,738,809		22.73
Vested	(3,682,644	)	19.53		(4,228,673	)	16.99		(4,293,605	)	15.54
Forfeited	(133,669	)	21.63		(181,322	)	20.75		(152,610	)	18.28
End of year3,4	7,725,227		$	23.37	9,051,564		$	21.27	9,918,575		$	20.13

¹ Includes both restricted stock units and restricted stock. Upon vesting, all units will be converted on a one-for-one basis into Progressive common shares funded from existing treasury shares. All performance-based awards are included at their target amounts.

² We reinvest dividend equivalents on restricted stock units. For 2015, 2014, and 2013, the number of units "granted" shown in the table above includes 196,947, 538,749, and 161,077 of dividend equivalent units, respectively, at a weighted average grant date fair value of $0, since the dividends were factored into the grant date fair value of the original grant.

³ At December 31, 2015, the number of shares included 2,025,871 performance-based awards at their target amounts. We expect 1,946,565 of these performance-based awards to vest, based upon our current estimate of the likelihood of achieving these pre-determined performance goals.

⁴ At December 31, 2015, the total unrecognized compensation cost related to unvested equity awards was $78.3 million, which includes performance-based awards at their currently estimated vesting value. This compensation expense will be recognized into the income statement over the weighted average vesting period of 2.3 years.

The aggregate fair value of the restricted equity awards that vested during the years ended December 31, 2015, 2014, and 2013, was $105.4 million, $109.6 million, and $98.3 million, respectively, based on the actual stock price on the vesting date.

As a result of the put and call rights described in Note 16 - Redeemable Noncontrolling Interest, all outstanding stock options awarded to ARX employees prior to April 1, 2015, are treated as liability awards for accounting purposes; however, the awards maintain the specific features per the original award agreements. The value of each option is based upon our good faith estimate of the fair market value as of the end of the reporting period and the pro-rata expense is recognized.

A summary of all ARX employee stock option activity since acquisition, follows:

	2015
Options Outstanding	Number of Shares		Weighted Average Exercise Price
At acquisition	26,000		$	513.72
Add (deduct):
Exercised1	(1,005	)	197.01
End of year	24,995		$	526.46
Exercisable, end of year	12,995		$	386.69

¹ At the time of exercise, the value earned by the option holders was $1.1 million.

	2015
Non-Vested Options Outstanding	Number of Shares		Weighted Average Exercise Price
At acquisition	14,800		$	675.55
Add (deduct):
Vested	(2,800	)	665.85
End of year1	12,000		$	677.81

¹ At December 31, 2015, the remaining unrecognized compensation cost related to unvested options was $2.9 million and the remaining weighted average vesting period on the unvested awards is 1.72 years.

Since the acquisition, we recognized $1.7 million, or $1.1 million after tax, of compensation expense related to ARX's outstanding stock options.

App.-A-37

Incentive Compensation Plans – Directors  Progressive's 2003 Directors Equity Incentive Plan, which provides for the granting of equity-based awards, including restricted stock awards, to non-employee directors, originally authorized awards for up to 1.4 million shares.

Through 2015, The Progressive Corporation granted restricted stock awards to its non-employee directors as their sole compensation for serving as members of the Board of Directors. The restricted stock awards are issued as time-based awards. The vesting period (i.e., requisite service period) must be a minimum of six months and one day. The time-based awards granted to date have typically included vesting periods of 11 months from the date of each grant. To the extent a director is newly appointed during the year, or a director's committee assignments change, the vesting period may be shorter, but always at least equal to six months and one day as required by the terms of the plan. The restricted stock awards are expensed pro rata over their respective vesting periods based on the market value of the awards at the time of grant.

A summary of all directors’ restricted stock activity during the years ended December 31, follows:

	2015				2014				2013
Restricted Stock	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Beginning of year	81,579		$	25.45	93,254		$	26.19	92,957		$	21.41
Add (deduct):
Granted	89,427		27.23		90,649		25.44		93,254		26.19
Vested	(81,579	)	25.45		(93,254	)	26.19		(92,957	)	21.41
Forfeited	0		0		(9,070	)	25.36		0		0
End of year	89,427		$	27.23	81,579		$	25.45	93,254		$	26.19

The aggregate fair value of the restricted stock vested, during the years ended December 31, 2015, 2014, and 2013, was $2.2 million, $2.2 million, and $2.3 million, respectively, based on the actual stock price at time of exercise/vesting.

Deferred CompensationThe Progressive Corporation Executive Deferred Compensation Plan (Deferral Plan) permits eligible Progressive executives to defer receipt of some or all of their annual bonuses and all of their annual equity awards. Deferred cash compensation is deemed invested in one or more investment funds, including Progressive common shares, offered under the Deferral Plan and elected by the participant. All Deferral Plan distributions attributable to deferred cash compensation will be paid in cash.

For all equity awards granted in or after March 2005, and deferred pursuant to the Deferral Plan, the deferred amounts are deemed invested in our common shares and are ineligible for transfer to other investment funds in the Deferral Plan; distributions of these deferred awards will be made in Progressive common shares. For all restricted stock awards granted prior to that date, the deferred amounts are eligible to be transferred to any of the investment funds in the Deferral Plan; distributions of these deferred awards will be made in cash. We reserved 11.1 million of our common shares for issuance under the Deferral Plan. An irrevocable grantor trust has been established to provide a source of funds to assist us in meeting our liabilities under the Deferral Plan.

The Deferral Plan Irrevocable Grantor Trust account held the following assets at December 31:

(millions)	2015		2014
Progressive common shares1	$	108.5	$	83.2
Other investment funds2	124.8		123.9
Total	$	233.3	$	207.1

¹Includes 4.4 million and 3.6 million common shares as of December 31, 2015 and 2014, respectively, to be distributed in common shares.

² Amount is included in other assets on the balance sheet.

App.-A-38

10.  SEGMENT INFORMATION

We write personal and commercial auto and property insurance and other specialty property-casualty insurance and provide related services. Our Personal Lines segment writes insurance for personal autos and recreational vehicles. The Personal Lines segment is comprised of both the Agency and Direct businesses. The Agency business includes business written by our network of more than 35,000 independent insurance agencies, including brokerages in New York and California, and strategic alliance business relationships (other insurance companies, financial institutions, and national agencies). The Direct business includes business written directly by us online, by phone, or on mobile devices. We operate our personal auto businesses throughout the United States and sell personal auto physical damage and auto property damage liability insurance in Australia. For the years ended December 31, 2015, 2014, and 2013, net premiums earned on our Australian business were $15.9 million, $17.1 million, and $13.0 million, respectively.

Our Commercial Lines segment writes primary liability and physical damage insurance for automobiles and trucks owned and/or operated predominantly by small businesses in the business auto, for-hire transportation, contractor, for-hire specialty, tow, and for-hire livery markets. This segment operates in 49 states and is distributed through both the independent agency and direct channels.

Our Property segment writes insurance for homeowners, other property owners, and renters primarily through the independent agency channel in 31 states and the District of Columbia for personal property and in 4 states for commercial property as of December 31, 2015 (flood insurance is written in 37 states and D.C.). Our Property business primarily consists of the operations of ARX, in which we acquired a controlling interest in the second quarter of 2015.

Our other indemnity businesses manage our run-off businesses, including the run-off of our professional liability insurance for community banks.

Our service businesses provide insurance-related services, including processing CAIP business, and serving as an agent for homeowners, general liability, and workers’ compensation insurance through our programs with American Strategic Insurance and other subsidiaries of ARX (ASI), and unaffiliated insurance companies.

All segment revenues are generated from external customers and we do not have a reliance on any major customer.

We evaluate profitability based on pretax underwriting profit (loss) for the Personal Lines, Commercial Lines, and Property segments and for the other indemnity businesses. Pretax underwriting profit (loss) is calculated as net premiums earned plus fees and other revenues, less: (i) losses and loss adjustment expenses; (ii) policy acquisition costs; and (iii) other underwriting expenses. Service business pretax profit (loss) is the difference between service business revenues and service business expenses.

Expense allocations are based on certain assumptions and estimates primarily related to revenue and volume; stated segment operating results would change if different methods were applied. We do not allocate assets or income taxes to operating segments. In addition, we do not separately identify depreciation expense by segment, and such allocation would be impractical. Companywide depreciation expense was $103.7 million in 2015, $97.1 million in 2014, and $101.3 million in 2013. The accounting policies of the operating segments are the same as those described in Note 1 - Reporting and Accounting Policies.

App.-A-39

Following are the operating results for the years ended December 31:

	2015						2014						2013
(millions)	Revenues			Pretax Profit (Loss)			Revenues			Pretax Profit (Loss)			Revenues			Pretax Profit (Loss)
Personal Lines
Agency	$	9,108.6		$	713.2		$	9,087.0		$	683.0		$	8,601.5		$	542.9
Direct	8,185.9			403.4			7,474.0			423.4			6,740.1			473.9
Total Personal Lines1	17,294.5			1,116.6			16,561.0			1,106.4			15,341.6			1,016.8
Commercial Lines	1,995.9			318.3			1,837.5			315.8			1,761.6			114.1
Property2	609.1			61.3			0			0			0			0
Other indemnity3	(0.4		)	(1.0		)	0			(11.9		)	0.2			(10.8		)
Total underwriting operations	19,899.1			1,495.2			18,398.5			1,410.3			17,103.4			1,120.1
Fees and other revenues4	302.0			NA			309.1			NA			291.8			NA
Service businesses	86.3			8.8			56.0			5.1			39.6			0.8
Investments5	567.3			544.5			632.6			613.7			740.4			721.6
Gains (losses) on extinguishment of debt	(0.9		)	(0.9		)	(4.8		)	(4.8		)	(4.3		)	(4.3		)
Interest expense	NA			(136.0		)	NA			(116.9		)	NA			(118.2		)
Consolidated total	$	20,853.8		$	1,911.6		$	19,391.4		$	1,907.4		$	18,170.9		$	1,720.0

NA = Not Applicable

¹ Personal auto insurance accounted for 92% of the total Personal Lines segment net premiums earned in 2015, compared to 92% in 2014 and 91% in 2013; insurance for our special lines products (e.g., motorcycles, ATVs, RVs, manufactured homes, watercraft, and snowmobiles) accounted for the balance of the Personal Lines net premiums earned.

² We began reporting our Property business as a segment on April 1, 2015, when we acquired a controlling interest in ARX; Property business written prior to that date was negligible. During 2015, amounts include $45.2 million of amortization/depreciation expense associated with the acquisition of a controlling interest in ARX. Although this expense is included in our Property segment, it is not reported in the consolidated results of ARX Holding Corp. and, therefore, will not affect the value of the noncontrolling interest.

³ Our professional liability group recognized $0.4 million of reinstatement premiums paid to our reinsurers pursuant to their reinsurance contracts during 2015. This premium reduction is reflected in our companywide total results. In total, our run-off businesses generated an underwriting loss of $1.0 million in 2015.

⁴ Pretax profit (loss) for fees and other revenues are allocated to operating segments.

⁵ Revenues represent recurring investment income and total net realized gains (losses) on securities; pretax profit is net of investment expenses.

Our management uses underwriting margin and combined ratio as primary measures of underwriting profitability. Underwriting profitability is calculated by subtracting losses and loss adjustment expenses, policy acquisition costs, and other underwriting expenses from the total of net premiums earned and fees and other revenues. The underwriting margin is the pretax underwriting profit (loss) expressed as a percentage of net premiums earned (i.e., revenues from underwriting operations). Combined ratio is the complement of the underwriting margin. Following are the underwriting margins/combined ratios for our underwriting operations for the years ended December 31:

	2015			2014			2013
	Underwriting Margin		Combined Ratio	Underwriting Margin		Combined Ratio	Underwriting Margin		Combined Ratio
Personal Lines
Agency	7.8	%	92.2	7.5	%	92.5	6.3	%	93.7
Direct	4.9		95.1	5.7		94.3	7.0		93.0
Total Personal Lines	6.5		93.5	6.7		93.3	6.6		93.4
Commercial Lines	15.9		84.1	17.2		82.8	6.5		93.5
Property1	10.1		89.9	0		0	0		0
Other indemnity2	NM		NM	NM		NM	NM		NM
Total underwriting operations	7.5		92.5	7.7		92.3	6.5		93.5

¹Included is 7.4 points of amortization/depreciation expense associated with the acquisition of a controlling interest in ARX.

² Underwriting margins/combined ratios are not meaningful (NM) for our other indemnity businesses due to the low level of premiums earned by, and the variability of loss costs in, such businesses.

App.-A-40

11.  OTHER COMPREHENSIVE INCOME (LOSS)

The components of other comprehensive income (loss), including reclassification adjustments by income statement line item, for the years ended December 31, were as follows:

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2014	$	1,574.0		$	(550.9	)	$	1,023.1		$	1,021.9		$	1.5		$	(0.3	)	$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	(198.7		)	67.5			(131.2		)	(131.2		)	0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0			0			0			0			0			0			0
Forecasted transactions	(12.9		)	4.5			(8.4		)	0			(8.4		)	0			0
Foreign currency translation adjustment	(1.8		)	0.6			(1.2		)	0			0			(1.2		)	0
Loss attributable to noncontrolling interest	1.6			(0.5		)	1.1			0			0			0			1.1
Total other comprehensive income (loss) before reclassifications	(211.8		)	72.1			(139.7		)	(131.2		)	(8.4		)	(1.2		)	1.1
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(23.8		)	8.4			(15.4		)	(15.4		)	0			0			0
Net realized gains (losses) on securities	149.7			(52.5		)	97.2			97.1			0.1			0			0
Interest expense	1.8			(0.6		)	1.2			0			1.2			0			0
Total reclassification adjustment for amounts realized in net income	127.7			(44.7		)	83.0			81.7			1.3			0			0
Total other comprehensive income (loss)	(339.5		)	116.8			(222.7		)	(212.9		)	(9.7		)	(1.2		)	1.1
Balance at December 31, 2015	$	1,234.5		$	(434.1	)	$	800.4		$	809.0		$	(8.2	)	$	(1.5	)	$	1.1

App.-A-41

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2013	$	1,464.1		$	(512.4	)	$	951.7		$	947.0		$	4.1		$	0.6		$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	362.1			(126.7		)	235.4			235.4			0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0			0			0			0			0			0			0
Forecasted transactions	(1.6		)	0.6			(1.0		)	0			(1.0		)	0			0
Foreign currency translation adjustment	(1.3		)	0.4			(0.9		)	0			0			(0.9		)	0
Loss attributable to noncontrolling interest	0			0			0			0			0			0			0
Total other comprehensive income (loss) before reclassifications	359.2			(125.7		)	233.5			235.4			(1.0		)	(0.9		)	0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(7.7		)	2.7			(5.0		)	(5.0		)	0			0			0
Net realized gains (losses) on securities	255.0			(89.2		)	165.8			165.5			0.3			0			0
Interest expense	2.0			(0.7		)	1.3			0			1.3			0			0
Total reclassification adjustment for amounts realized in net income	249.3			(87.2		)	162.1			160.5			1.6			0			0
Total other comprehensive income (loss)	109.9			(38.5		)	71.4			74.9			(2.6		)	(0.9		)	0
Balance at December 31, 2014	$	1,574.0		$	(550.9	)	$	1,023.1		$	1,021.9		$	1.5		$	(0.3	)	$	0

App.-A-42

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2012	$	1,340.0		$	(469.0	)	$	871.0		$	862.7		$	6.1		$	2.2		$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	368.2			(128.9		)	239.3			239.3			0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0.4			(0.1		)	0.3			0.3			0			0			0
Forecasted transactions	0			0			0			0			0			0			0
Foreign currency translation adjustment	(2.5		)	0.9			(1.6		)	0			0			(1.6		)	0
Loss attributable to noncontrolling interest	0			0			0			0			0			0			0
Total other comprehensive income (loss) before reclassifications	366.1			(128.1		)	238.0			239.6			0			(1.6		)	0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(5.7		)	2.0			(3.7		)	(3.7		)	0			0			0
Net realized gains (losses) on securities	245.5			(86.0		)	159.5			159.0			0.5			0			0
Interest expense	2.2			(0.7		)	1.5			0			1.5			0			0
Total reclassification adjustment for amounts realized in net income	242.0			(84.7		)	157.3			155.3			2.0			0			0
Total other comprehensive income (loss)	124.1			(43.4		)	80.7			84.3			(2.0		)	(1.6		)	0
Balance at December 31, 2013	$	1,464.1		$	(512.4	)	$	951.7		$	947.0		$	4.1		$	0.6		$	0

In an effort to manage interest rate risk, we entered into forecasted transactions on each of The Progressive Corporation's outstanding debt issuances. Upon issuing the debt, the gains (losses) recognized on these cash flow hedges are recorded as unrealized gains (losses) in accumulated other comprehensive income and amortized into interest expense over the term of the related debt issuance. We expect to reclassify $1.9 million (pretax) into income during the next 12 months, related to net unrealized gains on forecasted transactions.

To the extent we repurchased any of our outstanding debt, a portion of the unrealized gain (loss) would need to be recognized as a realized gain (loss) since the cash flow hedge is deemed ineffective. During 2015, 2014, and 2013, we repurchased in the open market a portion of our 6.70% Debentures and reclassified $0.2 million, $0.5 million, and $0.8 million, respectively, on a pretax basis, from accumulated other comprehensive income on the balance sheet to net realized gains on securities on the comprehensive income statement (see Note 4 - Debt for further discussion).

12.  LITIGATION

The Progressive Corporation and/or its insurance subsidiaries are named as defendants in various lawsuits arising out of claims made under insurance policies written by our insurance subsidiaries in the ordinary course of business. We consider all legal actions relating to such claims in establishing our loss and loss adjustment expense reserves.

In addition, The Progressive Corporation and/or its insurance subsidiaries are named as defendants in a number of class action or individual lawsuits arising out of the operations of the insurance subsidiaries. Other insurance companies face many of these same issues. The lawsuits discussed below are in various stages of development. We plan to contest these suits vigorously, but may pursue settlement negotiations in some cases, if appropriate. The outcomes of pending cases are uncertain at this time.

We establish accruals for lawsuits when it is probable that a loss has been or will be incurred and we can reasonably estimate its potential exposure, which may include a range of loss (referred to as a loss that is both “probable and estimable” in the discussion below). As to lawsuits in which the loss is not considered both probable and estimable, or is considered probable but not estimable, we do not establish an accrual in accordance with current accounting guidance. It is generally not possible to determine the exposure associated with our lawsuits for a number of reasons, including, without limitation, one or more of the

App.-A-43

following: liability appears to be remote; putative class action lawsuits generally pose immaterial exposure until a class is actually certified, which, historically, has not been granted by the courts in the vast majority of our cases in which certification has been sought; class definitions are often indefinite and preclude detailed exposure analysis; and complaints rarely state an amount sought as relief, and when such amount is stated, it is often a function of pleading requirements and may be unrelated to the potential exposure. The following is a discussion of potentially significant pending cases at December 31, 2015, and certain cases resolved during the three-year period then ended.

As to the pending cases, although their outcomes are uncertain, in each case we do not believe that the outcome will have a material impact on our consolidated financial condition, cash flows, or results of operations. In addition, we do not consider the losses from the pending cases to be both probable and estimable (except as noted below), and we are unable to estimate a range of loss, if any, at this time, due to the factors discussed above. In the event that any one or more of these cases results in a substantial judgment against, or settlement by us, or if our accruals (if any) prove to be inadequate, the resulting liability could have a material effect on our consolidated financial condition, cash flows, and/or results of operations.

Pending cases at December 31, 2015 that challenge certain of our vehicle insurance subsidiaries' practices, include:

• One putative class action alleging we sell personal injury protection (PIP) coverage and pay-related claims at levels lower than allowed by law.

• Two patent matters alleging that we infringed on patented technology.

• Two putative class action lawsuits alleging that we steer customers to Service Centers and network body shops to have their vehicles repaired.

• Six putative class action lawsuits challenging our practice in Florida of adjusting PIP and first-party medical payments.

• Three putative class action lawsuits challenging our adjustment of medical bills submitted by insureds in bodily injury claims.

• One putative class action lawsuit challenging the manner in which we grant a discount for anti-theft devices.

• One putative class action lawsuit alleging that we charged insureds for illusory uninsured motorist/underinsured motorist coverage.

• One certified class action lawsuit alleging that we undervalued total loss claims through the use of certain valuation tools.

• One conditionally certified collective class action lawsuit alleging we did not pay certain employees for work performed during meal periods.

• Four qui tam lawsuits alleging we did not comply with its purported obligation to reimburse Medicare for medical payments made to Medicare beneficiaries.

• Thirteen individual lawsuits and one putative class action lawsuit pending as multi-district litigation alleging Progressive and other insurers conspire to suppress body repair shop labor rates.

For cases that have settled, but for which settlement is not complete, an accrual has been established at our best estimate of the exposure. Settlements that are complete are fully reflected in our financial statements. The amounts accrued or paid for these settlements were not material to our consolidated financial condition, cash flows, or results of operations.

Cases settled during 2015 include:

• Two conditionally certified collective class action lawsuits challenging our exempt employee classification for certain claims employees under applicable wage and hour laws. These matters were settled and paid during the year.

• One certified class action lawsuit alleging that Progressive’s website did not adequately disclose sufficient information concerning the PIP deductibles when customers indicated they are covered by private health insurance. This matter was settled on a class-wide basis and an accrual established.

• One putative class action lawsuit challenging the labor rates our insurance subsidiaries pay to auto body repair shops. This matter was settled on an individual basis and an accrual established.

• One putative class action lawsuit challenging our policy form with regard to rejecting uninsured motorist coverage. We established an accrual for this matter in 2014 when it was probable that a loss had been incurred on this lawsuit and we were able to estimate a loss. This matter was settled on a class-wide basis in 2015 for the amount which was accrued.

• One putative class action lawsuit alleging that our claims representatives reduced lost wages when settling uninsured and underinsured motorist claims. This matter was settled on a class-wide basis and an accrual was established.

App.-A-44

Cases settled during 2014 include:

• One putative class action lawsuit alleging that Progressive steers customers to Service Centers and network shops to have their vehicles repaired. This matter was settled on an individual basis.

• One putative class action lawsuit alleging that Progressive negligently designed, manufactured, and deceptively advertised Snapshot^® in that it purportedly drains a vehicle's battery to the point that the battery is non-functional or diminished in value. This matter was settled on an individual basis.

• One putative class action lawsuit alleging that Progressive violated the Telephone Consumer Protection Act in making cell phone calls to insureds. This matter was settled on an individual basis.

Cases settled during 2013 include:

• One putative class action lawsuit alleging that Progressive did not reimburse any of its insureds who incurred legal fees to recover money from another Progressive insured. This case was accrued for, settled, and paid in 2013.

• One putative class action lawsuit alleging that Progressive improperly applies a preferred provider discount to medical payment claims. This case was accrued for and settled in 2013.

• One putative class action lawsuit challenging the manner in which Progressive charges premium and assesses total loss claims for commercial vehicle stated amount policies. This case was accrued for, settled, and paid in 2013.

• Two putative class action lawsuits challenging Progressive’s practice in Florida of adjusting PIP and first-party medical payments. Both cases were settled on an individual basis.

• One putative class action lawsuit that challenged Progressive’s use of certain automated database vendors or software to assist in the adjustment of bodily injury claims where the plaintiffs alleged that these databases or software systematically undervalued the claims; an accrual was established during 2012, and the case was paid in 2013.

13.  COMMITMENTS AND CONTINGENCIES

We have certain noncancelable operating lease commitments with lease terms greater than one year for property and computer equipment. The minimum commitments under these agreements at December 31, 2015, were as follows:

(millions)	Commitments
2016	$	50.4
2017	47.8
2018	37.3
2019	24.7
2020	9.6
Thereafter	1.8
Total	$	171.6

Some of the leases have options to renew at the end of the lease periods. The expense we incurred for the leases disclosed above, as well as other operating leases that may be cancelable or have terms less than one year, was:

(millions)	Expense
2015	$	66.6
2014	63.4
2013	64.6

We also have certain noncancelable purchase obligations. The minimum commitment under these agreements at December 31, 2015, was $408.0 million.

During 2015, the insurance operations of ARX entered into several multiple-layer property catastrophe excess of loss reinsurance contracts with various reinsurers with terms ranging from one to two years. The minimum commitment under these contracts was $82.4 million at December 31, 2015.

As of December 31, 2015, we had no open investment funding commitments; we had no uncollateralized lines or letters of credit as of December 31, 2015 or 2014.

App.-A-45

14. DIVIDENDS

We maintain a policy of paying an annual variable dividend that, if declared, would be payable shortly after the close of the year. This annual variable dividend is based on a target percentage of after-tax underwriting income multiplied by a performance factor (Gainshare factor), determined by reference to the Agency auto, Direct auto, special lines, and Commercial Lines business units, subject to the limitations discussed below. The target percentage is determined by our Board of Directors on an annual basis and announced to shareholders and the public. In December 2014, the Board determined the target percentage for 2015 to be 33-1/3% of annual after-tax underwriting income, which is unchanged from the target percentage in both 2014 and 2013.

The Gainshare factor can range from zero to two and is determined by comparing our operating performance for the Agency auto, Direct auto, special lines, and Commercial Lines business units for the year to certain predetermined profitability and growth objectives approved by the Compensation Committee of the Board. This Gainshare factor is also used in the annual cash bonus program currently in place for our employees (our “Gainsharing program”). Although reviewed every year, the structure of the Gainsharing program generally remains the same. For 2015, the Gainshare factor was 1.60, compared to 1.32 in 2014 and 1.21 in 2013.

Our annual dividend program will result in a variable payment to shareholders each year, subject to certain limitations. If the Gainshare factor is zero or if our comprehensive income is less than after-tax underwriting income, no dividend would be payable under our annual variable dividend policy. In addition, the ultimate decision on whether or not a dividend will be paid is in the discretion of the Board of Directors. The Board could decide to alter our policy, or not to pay the annual variable dividend, at any time prior to the declaration of the dividend for the year. Such an action by the Board could result from, among other reasons, changes in the insurance marketplace, changes in our performance or capital needs, changes in federal income tax laws, disruptions of national or international capital markets, or other events affecting our business, liquidity, or financial position.

Following is a summary of our shareholder dividends, both variable and special, that were declared in the last three years:

(millions, except per share amounts)			Amount
Dividend Type	Declared	Paid	Per Share		Total1
Annual – Variable	December 2015	February 2016	$	0.8882	$	519.2
Annual – Variable	December 2014	February 2015	0.6862		404.1
Annual – Variable	December 2013	February 2014	0.4929		293.9
Special	December 2013	February 2014	1.0000		596.3

¹ Based on shares outstanding as of the record date.

App.-A-46

15. ACQUISITION

On April 1, 2015, The Progressive Corporation acquired approximately 63.2% of the outstanding capital stock of ARX, the parent company of ASI, primarily from non-management shareholders. Subsequently, in 2015, we purchased an additional 1.0% of ARX capital stock from certain employee shareholders and option holders. The total cost to acquire these shares was $890.1 million and was funded with available cash. Prior to the acquisition, Progressive held a 5% interest in ARX as part of our investment portfolio. During 2015, we recognized a $2.0 million loss to reflect the net acquisition cost attributable to this holding. This loss was reported in net realized gains (losses) on securities in the comprehensive income statement. At December 31, 2015, Progressive's total ownership interest in ARX was 69.2%. The minority shareholders of ARX retain a30.8%interest in the operating results of ARX. These interests are reflected in our comprehensive income statements as "Net income/Other comprehensive income attributable to noncontrolling interest (NCI)."

The property business written by ASI accounted for approximately 3% of our total net premiums written during 2015. As part of the acquisition, we recorded approximately $470 million of goodwill. Goodwill was calculated as the excess of the purchase price over the estimated fair values of the assets and liabilities acquired, and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. As a result of the ARX acquisition, we are able to build on the pre-existing relationship we had with ASI, which began in 2009, to expand on our bundling strategy in the Agency channel. The goodwill has been allocated equally between the ASI property business and our personal auto Agency business.

During 2015, subsequent to the date of acquisition, we completed our analysis related to the fair value of the loss and loss adjustment expense reserves recorded as of the acquisition date and we obtained additional information about the state and federal deferred tax liabilities that were recorded as of the acquisition date. As a result, we recognized a $42.0 million fair value reduction to loss and loss adjustment expense reserves acquired, and a related $16.7 million fair value increase in state and federal deferred taxes acquired, resulting in a net decrease of $25.3 million to the carrying value of goodwill. No goodwill impairment charges were recognized during the year. As of December 31, 2015, goodwill associated with the acquisition was $446.0 million.

In 2015, we adopted the newly issued accounting standard update related to business combinations, which simplifies the accounting for measurement-period adjustments by allowing us to record any goodwill adjustment prospectively, rather than retrospectively adjusting our previously issued financial statements.

As part of the acquisition, we recorded $520.4 million of other intangible assets; the other intangible assets will be amortized over an average life of about 9 years. The following table reports the intangible assets by asset category as of December 31, 2015:

($ in millions)
Category	Value at Acquisition		Accumulated Amortization		Useful Life
Policies in force	$	256.2	$	27.5	7 years
Agency relationships	159.2		8.5		14 years
Software	69.1		6.5		8 years
Trade name	34.8		2.6		10 years
Agent licenses	1.1		0		Indefinite
Total	$	520.4	$	45.1

All assets and liabilities are recorded at fair value at the date of acquisition, as adjusted during 2015. If additional new information is obtained within 12 months from the date of acquisition about facts and circumstances that existed at the acquisition date, we will adjust the amounts previously recorded. For income tax purposes, the historical tax bases of the acquired assets and assumed liabilities were carried over and were not recorded at fair value; therefore, no tax-basis goodwill was created.

At the date of acquisition, ARX had total fair value assets of $1.8 billion, including investment securities of $1.2 billion, cash and cash equivalents of $183 million, and prepaid reinsurance premiums of $146 million, and fair value liabilities of $1.2 billion, including unearned premiums of $550 million, loss and loss adjustment expense reserves of $264 million, and debt of $185 million. All of ARX's known contingencies were recognized as of the acquisition date. Subsequent to the date of acquisition, our consolidated 2015 results included total revenue and net income from ARX of $636.3 million and $106.8 million, respectively.

App.-A-47

16. REDEEMABLE NONCONTROLLING INTEREST

In connection with the acquisition of a controlling interest in ARX, The Progressive Corporation entered into a stockholders’ agreement with the other ARX stockholders. The stockholders’ agreement provides the non-Progressive shareholders with rights to put all of their shares to us in two installments, one in early 2018 and one in early 2021. The Progressive Corporation likewise will have the right to call shares from the other ARX shareholders in each of 2018 and 2021. If these rights are exercised in full when available, our ownership stake in ARX capital stock will exceed 80% in 2018 and will reach 100% in 2021. The purchase prices for shares to be purchased by Progressive pursuant to these put or call rights will be determined by adding (A) the price per share paid at the closing on April 1, 2015, to (B) the product of the change in the fully diluted net tangible book value per share of ARX between December 31, 2014 and December 31, 2017 (for the 2018 put or call purchases) or December 31, 2020 (for the 2021 put or call purchases) times a multiple of between 1.0 and 2.0. The multiple will be determined based on the growth and profitability of ARX’s business over the applicable time period, pursuant to criteria included in the stockholders’ agreement. Among other provisions, the stockholders’ agreement also prohibits ARX from taking a number of actions, including the payment of dividends, without the consent of The Progressive Corporation and two other stockholders.

Since the ARX shares are redeemable upon the occurrence of an event that is not solely within the control of Progressive, we have recorded the redeemable noncontrolling interest as mezzanine equity on our consolidated balance sheets. The redeemable noncontrolling interest was initially recorded at a fair value of $411.5 million, representing the minority shares at the net acquisition price adjusted for the fair value of the put and call rights. The value of the put and call rights on the acquisition date was based on an internally developed modified binomial model. Subsequent changes to the redeemable noncontrolling interest are based on the maximum redemption value at the end of the reporting period, as determined in accordance with the stockholders' agreement.

The components of redeemable noncontrolling interest (NCI) at December 31, 2015, were:

(millions)
Balance at March 31, 2015	$	0
Fair value at date of acquisition	411.5
Net income attributable to NCI	32.9
Other comprehensive loss attributable to NCI	(1.1		)
Purchase of shares from NCI	(12.6		)
Change in redemption value of NCI	34.2
Balance at December 31, 2015	$	464.9

App.-A-48

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of The Progressive Corporation

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows, present fairly, in all material respects, the financial position of The Progressive Corporation and its subsidiaries at December 31, 2015 and December 31, 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded ARX Holding Corp. from its assessment of internal control over financial reporting as of December 31, 2015 because it was acquired by the Company in a purchase business combination during 2015. We have also excluded ARX Holding Corp. from our audit of internal control over financial reporting. ARX Holding Corp. is a consolidated subsidiary whose total assets and total revenues represent 6.1% and 3.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2015.

/s/ PricewaterhouseCoopers LLP

Cleveland, Ohio

February 29, 2016

App.-A-49

Management’s Report on Internal Control over Financial Reporting

Progressive’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our internal control structure was designed under the supervision of our Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of assets; provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our financial statements.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our evaluation under the framework in Internal Control – Integrated Framework (2013), management concluded that our internal control over financial reporting was effective as of December 31, 2015.

Management's assessment of the effectiveness of internal control over financial reporting excluded from its scope the assessment of internal control over financial reporting related to ARX Holding Corp., which was acquired during 2015. ARX and its subsidiaries represented about 3% of our consolidated revenues for the year ended December 31, 2015 and accounted for about 6% of total consolidated assets at December 31, 2015. SEC guidelines permit companies to omit an acquired business's internal controls over financial reporting from management's assessment during the first year after the acquisition.

During the fourth quarter 2015, there were no changes in our internal control over financial reporting identified in the internal control review process that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PricewaterhouseCoopers LLP, an independent registered public accounting firm that audited the financial statements included in this Annual Report, has audited, and issued an attestation report on the effectiveness of, our internal control over financial reporting as of December 31, 2015; such report appears herein.

CEO and CFO Certifications

Glenn M. Renwick, President and Chief Executive Officer of The Progressive Corporation, and John P. Sauerland, Vice President and Chief Financial Officer of The Progressive Corporation, have issued the certifications required by Sections 302 and 906 of The Sarbanes-Oxley Act of 2002 and applicable SEC regulations with respect to Progressive’s 2015 Annual Report on Form 10-K, including the financial statements provided in this Report. Among other matters required to be included in those certifications, Mr. Renwick and Mr. Sauerland have each certified that, to the best of his knowledge, the financial statements, and other financial information included in the Annual Report on Form 10-K, fairly present in all material respects the financial condition, results of operations, and cash flows of Progressive as of, and for, the periods presented. See Exhibits 31 and 32 to Progressive’s Annual Report on Form 10-K for the complete Section 302 and 906 certifications, respectively.

App.-A-50

The Progressive Corporation and Subsidiaries

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our consolidated financial statements and the related notes, together with the supplemental information, should be read in conjunction with the following discussion and analysis of our consolidated financial condition and results of operations.

I. OVERVIEW

The Progressive Corporation is a holding company that does not have any revenue producing operations, physical property, or employees of its own. The Progressive Group of Insurance Companies consists of our insurance subsidiaries and other affiliates. The Progressive Group of Insurance Companies, together with our holding company and other subsidiaries and affliates, comprise what we refer to as Progressive.

On April 1, 2015, The Progressive Corporation acquired a controlling interest in ARX Holding Corp. (ARX), parent company of American Strategic Insurance Corp., and other subsidiaries and affiliates (ASI). ASI writes homeowners and other property insurance. Our consolidated results include the results of ARX and its subsidiaries and affiliates, since the date of acquisition. As a result, some of our year-over-year comparisons are impacted by this acquisition. ASI, which represented about 3% of our net premiums written and earned for 2015, comprises the substantial majority of our Property segment in the discussion below. At December 31, 2015, we owned about 69.2% of the outstanding capital stock of ARX.

We have been offering insurance to consumers since 1937 and are estimated to remain the country’s fourth largest private passenger auto insurer based on net premiums written during 2015. Our insurance companies offer personal and commercial auto and property insurance, other specialty property-casualty insurance and related services throughout the United States, as well as personal auto physical damage and auto property damage liability insurance in Australia. Our Personal Lines segment writes insurance for private passenger automobiles and recreational vehicles through more than 35,000 independent insurance agencies and directly to consumers online, on mobile devices, and over the phone. Our Commercial Lines segment offers insurance for cars and trucks owned and/or operated predominantly by small businesses through both the independent agency and direct channels. Our Property segment writes personal and commercial property insurance for homeowners, other property owners, and renters predominantly in the independent agency channel. Our underwriting operations, combined with our service and investment operations, make up the consolidated group.

The Progressive Corporation is a holding company and receives cash through subsidiary dividends, security sales, borrowings, and other transactions, and uses these funds to contribute to its subsidiaries (e.g., to support growth), to make payments to shareholders and debt holders (e.g., dividends and interest, respectively), and to repurchase its common shares and debt, as well as for acquisitions and other business purposes that might arise.

During the year, The Progressive Corporation received cash from the following sources:

• Subsidiary dividends - received $821 million of dividends, net of capital contributions, from our insurance and non-insurance subsidiaries, and

• Debt issuances - issued $400 million of 3.70% Senior Notes due 2045 in January 2015, to take advantage of the low interest rate environment and to increase our financial flexibility.

Consistent with our policy to deploy underleveraged capital for share repurchases and shareholder dividends, as well as for potential acquisitions, and in light of our strong capital position, during 2015, we took the following actions:

• ARX acquisition - acquired ARX capital stock in several transactions during the year, for a total cash outlay of $890.1 million,

• Dividends - declared an $0.8882 per share annual variable dividend, which returned $519.2 million of capital to our shareholders, and

• Repurchases - repurchased both our common shares and debt securities

◦ Shares - bought back 7.3 million of our common shares at a total cost of $208.5 million

◦ Debt - repurchased $18.4 million principal amount of our 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067.

We ended 2015 with $10 billion of total capital (debt and equity). We continue to manage our investing and financing activities in order to maintain sufficient capital to support all the insurance we can profitably write and service, while deploying underleveraged capital to shareholders.

App.-A-51

A. Operating Results

Our multi-year trend of crossing another billion dollar threshold continued in 2015. We ended the year with $20.6 billion of net premiums written, $1.9 billion more than we wrote in 2014. Our policies in force, excluding our Property business, grew 4% year-over-year, with Personal Lines growing 4% and Commercial Lines growing 8%. At year-end 2015, we had a total of 15.4 million policies in force, including nearly 1.1 million from our Property business. Although new policies are necessary to maintain a growing book of business, we continue to recognize the importance of retaining our current customers as a critical component of our continued growth. We have seen retention lengthening in Personal Lines on a trailing 3-month basis and in Commercial Lines on a trailing 12-month basis.

On a year-over-year basis, the net income attributable to Progressive was flat, while comprehensive income was down 23%. Net income was $1.3 billion, or $2.15 per share, in 2015. Underwriting profitability for the year of 7.5%, or $1.5 billion on a pretax basis, was 0.2 points lower than last year, but still exceeded our targeted profitability objective of at least 4%. Exceptionally strong profitability in our Commercial Lines business, special lines products, and Property business contributed to this strong outperformance against our target underwriting profitability of 4%. We experienced an 11% increase on a year-over-year basis in our recurring investment income and a 50% decrease in net realized gains in our investment portfolio. The increase in investment income was due in part to an increase in our average invested assets, which includes $1.3 billion of fixed-income and short-term securities from ARX. Comprehensive income was $1.0 billion, a decrease of $307.5 million from last year, primarily due to unrealized losses on investments, reflecting a general decline in the equity markets and a widening of credit spreads on most fixed-maturity securities.

B. Insurance Operations

For 2015, our companywide underwriting profit margin was 7.5%. Our Personal Lines business reported an underwriting profit of 6.5%, with 41 states and the District of Columbia meeting or exceeding their profitability target and no states generating an underwriting loss for 2015. Our special lines products had a very profitable year, in part reflecting the absence of significant storms, favorably impacting our total Personal Lines combined ratio by about 1.2 points. Underwriting profitability in our Commercial Lines business was exceptional at 15.9%, with 48 states generating an underwriting profit. The significant underwriting profitability in our Commercial Lines business reflects prior rate actions and favorable case reserve development during 2015, primarily due to lower than anticipated severity. Our Property business, which also had favorable reserve development, reported underwriting profitability of 10.1%, which included approximately 7.4 points of amortization/depreciation expense related to the acquisition.

Overall, we recognized $315.1 million of favorable prior accident year development. Nearly 70% of the favorable development was in our Personal Lines business and was almost evenly split between our Agency and Direct businesses. Approximately 20% of the development was in our Commercial Lines business, while just over 10% was in our Property segment. For the year, our overall incurred severity in our auto businesses increased about 1.5%, while frequency increased 2.2%, compared to the prior year.

On a year-over-year basis, net premiums written and earned increased 7% and 5%, respectively, excluding the Property segment. Changes in net premiums written are a function of new business applications, premium per policy, and retention.

During 2015, total new personal auto applications increased 8% on a year-over-year basis, reflecting a 13% increase in our Direct auto business and a 2% increase in our Agency auto business. Agency auto application growth was spurred by the roll out of our latest product model, while the growth in our Direct business was due in part to an increase in our advertising spend, creative marketing, and competitor rate increases. Our Direct auto business ended 2015 with over 400,000 additional policies in force and surpassed Agency auto policies in force for the first time.

Our special lines products (e.g., motorcycles, ATVs, RVs, manufactured homes, watercraft, and snowmobiles) new applications increased 2%, compared to 2014. New applications for our Commercial Lines business increased 15% for the year, due to a combination of us lowering rates and lifting some of the underwriting restrictions we had placed on new business, while some of our competitors were doing just the opposite.

App.-A-52

We continue to look for ways to help stimulate growth and provide consumers with distinctive insurance options. We believe that Progressive is positioned to meaningfully address the lifetime needs of customers with bonafide solutions to meet their needs beyond the initial auto insurance product. Through ASI and unaffiliated insurance providers, we have a product line-up that encourages customers to stay with us, including insurance products such as homeowners, umbrella, flood, classic car, special event, travel, pet, life, ID protection, and more. In addition:

• We continued to roll out "Platinum," which provides agents with a single offering that combines home insurance from ASI and auto insurance from Progressive.

• Our most recent product design, which introduced improved segmentation and more attractive pricing and features for our "Robinsons" (i.e., bundled auto and homeowners) customers, continued to be rolled out nationwide.

• We are also continuing to roll out our most recent program in Snapshot^®, our usage-based approach to rating, which:

◦ affords more customers discounts for their good driving behavior, while increasing rates at renewal for a small number of drivers based on their driving behavior, and

◦ offers a Snapshot enrollment discount that varies at the customer-segment level, such as a higher discount for more preferred drivers.

During 2015, on a year-over-year basis, our written premium per policy for both our Agency and Direct auto businesses increased 4%, reflecting both rate increases taken during the year and an increase in the number of vehicles per policy. Written premium per policy for our special lines products increased 2%, compared to last year. Commercial Lines experienced an 8% increase in written premium per policy, which resulted from rate changes and shifts in our mix of business toward our truck product tiers.

On a companywide basis, year-over-year policies in force, excluding the Property business, grew 4%, reflecting a 4% increase in our Personal Lines business and an 8% increase in our Commercial Lines business. The biggest contributor to the Personal Lines growth was our Direct auto business, where policies in force grew 9%. Our special lines products grew slightly at 2%, while Agency auto policies in force remained flat. Our newly acquired Property business reported nearly 1.1 million policies in force at year end.

To further grow policies in force, it is critical that we retain our customers for longer periods. Consequently, increasing retention is one of our most important priorities, and our efforts to increase the number of multi-product households continues to be a key initiative to support that goal. Policy life expectancy, which is our actuarial estimate of the average length of time that a policy will remain in force before cancellation or lapse in coverage, is one measure of customer retention. We have historically disclosed our changes in policy life expectancy using a trailing 12-month period since we believe this measure is indicative of recent experience, mitigates the effects of month-to-month variability, and addresses seasonality. Using a trailing 12-month measure, policy life expectancy decreased about 2% for our Agency auto business and remained flat for our Direct auto business, compared to last year. The policy life expectancy for our Commercial Lines business increased about 13% and special lines products remained flat, compared to last year.

We also review our customer retention for our personal auto products using a trailing 3-month period. Although using a trailing 3-month measure does not address seasonality and can reflect more volatility, this measure is more responsive to current experience and can be an indicator of how our retention rates are moving. Our trailing 3-month policy life expectancy, on a year-over-year basis, was up about 5% in both Direct auto and Agency auto, resulting from shifts in the mix of business and more stable rates as compared to 2014. We will maintain our focus on providing customers with more stable rates and other insurance-related products and services they may need over time in our ongoing efforts to increase retention.

C. Investments

The fair value of our investment portfolio was $20.9 billion at December 31, 2015, which includes $1.3 billion of securities held by ARX. Our asset allocation strategy is to maintain 0-25% of our portfolio in Group I securities, with the balance (75%-100%) of our portfolio in Group II securities. We define Group I securities to include:

• common equities,

• nonredeemable preferred stocks,

• redeemable preferred stocks, except for 50% of investment-grade redeemable preferred stocks with cumulative dividends, which are included in Group II, and

• all other non-investment-grade fixed-maturity securities.

Group II securities include:

• short-term securities, and

• all other fixed-maturity securities, including 50% of investment-grade redeemable preferred stocks with cumulative dividends.

App.-A-53

We use the credit ratings from models provided by the National Association of Insurance Commissioners (NAIC), when available, for classifying our residential and commercial mortgage-backed securities (excluding interest-only securities), and credit ratings from nationally recognized statistical rating organizations (NRSRO) for all other debt securities, in determining whether securities should be classified as Group I or Group II. At December 31, 2015, 20% of our portfolio was allocated to Group I securities and 80% to Group II securities, compared to 23% and 77%, respectively, at December 31, 2014.

Our recurring investment income generated a pretax book yield of 2.4% for both 2015 and 2014. Our investment portfolio produced a fully taxable equivalent (FTE) total return of 1.6% for 2015, compared to 4.5% for 2014. Our fixed-income and common stock portfolios had FTE total returns of 1.7% and 0.8%, respectively, for 2015, and 3.2% and 12.6%, for 2014. The returns decreased in 2015 compared to 2014 as a result of lower equity market returns and increasing interest rates and credit spreads, which affected our fixed-income valuations.

At December 31, 2015, the fixed-income portfolio had a weighted average credit quality of A+ and a duration of 1.9 years, compared to A+ and 1.6 years at December 31, 2014. The 2015 amounts include ARX’s fixed-income securities with an average credit quality of AA and a duration of 2.9 years. We maintain our fixed-income portfolio strategy of investing in high-quality, liquid securities. The increase in duration during 2015 reflects both the addition of ARX and our decision to increase the fixed-income portfolio duration.  We remain confident in our preference for shorter duration positioning during times of low interest rates as a means to limit any decline in portfolio value from an increase in rates, and we expect long-term benefits from any return to more substantial yields.

App.-A-54

II.  FINANCIAL CONDITION

A. Holding Company

In 2015, The Progressive Corporation received $821 million of dividends, net of capital contributions, from its subsidiaries and, for the three-year period ended December 31, 2015, received $2.9 billion of dividends from its subsidiaries, net of capital contributions. Regulatory restrictions on subsidiary dividends are described in Note 8 – Statutory Financial Information.

In 2015, we issued $400 million of our 3.70% Senior Notes due 2045 (the “3.70% Senior Notes”), and in 2014, we issued $350 million of our 4.35% Senior Notes due 2044 (the "4.35% Senior Notes"); no debt was issued in 2013. We issued this debt to take advantage of attractive terms in the market and provide additional financial flexibility. During the last three years, we repurchased, in the open market, a portion of our 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures for a total cost of $126.3 million, when management believed that the securities were attractively priced and there was adequate capital available for such purpose. As a result of these repurchases, we have also been able to reduce our future interest expense. See Note 4 – Debt and the Liquidity and Capital Resources section below for a further discussion of our debt activity. In addition, during 2013, we retired all $150 million of our 7% Senior Notes at maturity. Our debt-to-total capital (debt plus shareholders' equity, and excluding the redeemable noncontrolling interest) ratios at December 31, 2015, 2014, and 2013 were 27.1%, 23.8%, and 23.1%, respectively, and were below our financial policy of maintaining a ratio of less than 30%.

During 2015, we acquired an additional 64.2% ownership interest in ARX, bringing our total ownership percentage to about 69.2%; prior to acquiring a controlling interest in ARX, we held a 5% interest in the company. As part of a related stockholders' agreement, Progressive has the ability to achieve 100% ownership of ARX by the end of the second quarter of 2021. In addition, the minority ARX shareholders have the right to “put” their ARX shares to Progressive by that date. The total cost of the ARX acquisitions during 2015 was approximately $890.1 million, which we funded with available cash. Through this acquisition, we were able to solidify the pre-existing relationship we had with ASI as our homeowners insurance provider in the Agency channel. We believe this transaction will advance both companies and attract a market segment of bundled customers that is currently under-penetrated by both our vehicle and property businesses.

We continued our practice of repurchasing our common shares and paying dividends to our shareholders in accordance with our financial policies.

As of December 31, 2015, we had 12.7 million shares remaining under our 2011 Board repurchase authorization. The following table shows our share repurchase activity during the last three years:

(millions, except per share amounts)	2015		2014		2013
Total number of shares purchased	7.3		11.1		11.0
Total cost	$	208.5	$	271.4	$	273.4
Average price paid per share	$	28.41	$	24.56	$	24.80

We maintain a policy of paying an annual variable dividend that, if declared, would be payable shortly after the close of the year. See Note 14 - Dividends for a further discussion of our annual variable dividend policy.

Following is a summary of our shareholder dividends, both variable and special, that were either declared or paid in the last three years:

(millions, except per share amounts)			Amount
Dividend Type	Declared	Paid	Per Share		Total1
Annual – Variable	December 2015	February 2016	$	0.8882	$	519.2
Annual – Variable	December 2014	February 2015	$	0.6862	$	404.1
Annual – Variable	December 2013	February 2014	$	0.4929	$	293.9
Special	December 2013	February 2014	$	1.0000	$	596.3

¹ Based on an estimate of shares outstanding as of the record date; paid $519.0 million in February 2016 based on actual shares outstanding on the record date.

App.-A-55

B. Liquidity and Capital Resources

Progressive’s insurance operations create liquidity by collecting and investing premiums from new and renewal business in advance of paying claims. As primarily an auto insurer, our claims liabilities are generally short in duration. Typically, at any point in time, approximately 50% of our outstanding loss and LAE reserves are paid within the following twelve months and about 15% are still outstanding after three years. See Claims Payment Patterns, a supplemental disclosure provided in this Annual Report, for further discussion of the timing of personal auto claims payments.

For the three years ended December 31, 2015, operations generated positive cash flows of about $5.9 billion, and cash flows are expected to remain positive in both the short-term and reasonably foreseeable future. In 2015, including the addition of the ARX operations in the second quarter, our operating cash flows increased $567.3 million, compared to 2014, primarily due to an increase in premiums collected and investment income received partially offset by an increase in paid losses, taxes paid, and advertising expenses, as well as greater employee related costs.

As of December 31, 2015, our consolidated statutory surplus was $7.6 billion, compared to $6.4 billion at December 31, 2014. Our net premiums written-to-surplus ratio was 2.7 to 1 at year-end 2015, compared to 2.9 to 1 at the end of both 2014 and 2013, reflecting a lower premiums-to-surplus ratio maintained on our Property business. At year-end 2015, we also had access to $1.3 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. We used $519.0 million of available funds to pay the annual variable dividend in February 2016.

Our insurance subsidiaries' risk-based capital ratios, which are a series of dynamic surplus-related formulas required by the laws of various states that contain a variety of factors that are applied to financial balances based on the degree of certain risks (e.g., asset, credit, and underwriting), are well in excess of minimum regulatory requirements. Nonetheless, the payment of dividends by our insurance subsidiaries may be subject to certain limitations. See Note 8 – Statutory Financial Information for additional information on insurance subsidiary dividends and Note 16 - Redeemable Noncontrolling Interest for information on the dividend restriction per the ARX stockholders' agreement.

As of December 31, 2015, 80% of our portfolio was invested in Group II securities, as defined above. In addition, our fixed-income portfolio duration was 1.9 years, with a weighted average credit quality of A+. At year end, we held $4.6 billion in short-term investments and U.S. Treasury securities. Based on our portfolio allocation and investment strategies, we believe that we have sufficient readily available marketable securities to cover our claims payments in the event our cash flow from operations was negative. See Item 1A, “Risk Factors,” in our Form 10-K filed with the Securities and Exchange Commission (SEC) for a discussion of certain matters that may affect our portfolio and capital position.

As noted above, we issued, in January 2015, $400 million of our 3.70% Senior Notes due 2045 and, in 2014, $350 million of our 4.35% Senior Notes due 2044, in underwritten public offerings. We received net proceeds, after deducting underwriter's discounts and commissions and other expenses related to the issuances, of approximately $394.1 million and $345.6 million, respectively, which were added to our investment portfolios. We plan to use these funds for general corporate purposes, which may include the repurchase of our outstanding securities and repayment or redemption of outstanding indebtedness, among other uses.

During the last three years, we retired the entire $150 million of our 7% Senior Notes due 2013 at maturity. We expect to make principal payments of $27.2 million on ARX indebtedness in each of the next three years, through operating cash flow.

Based upon our capital planning and forecasting efforts, we believe that we have sufficient capital resources, cash flows from operations, and borrowing capacity to support our current and anticipated business, scheduled principal and interest payments on our debt, any declared dividends, and other expected capital requirements. The covenants on The Progressive Corporation's existing debt securities do not include any rating or credit triggers that would require an adjustment of the interest rate or an acceleration of principal payments in the event our securities are downgraded by a rating agency.

We seek to deploy capital in a prudent manner and use multiple data sources and modeling tools to estimate the frequency, severity, and correlation of identified exposures, including, but not limited to, catastrophic and other insured losses, natural disasters, and other significant business interruptions, to estimate our potential capital needs.

App.-A-56

Management views our capital position as consisting of three layers, each with a specific size and purpose:

• The first layer of capital, which we refer to as “regulatory capital,” is the amount of capital we need to satisfy state insurance regulatory requirements and support our objective of writing all the business we can write and service, consistent with our underwriting discipline of achieving a combined ratio of 96 or better. This capital is held by our various insurance entities.

• The second layer of capital we call “extreme contingency.” While our regulatory capital is, by definition, a cushion for absorbing financial consequences of adverse events, such as loss reserve development, litigation, weather catastrophes, and investment market corrections, we view that as a base and hold additional capital for even more extreme conditions. The modeling used to quantify capital needs for these conditions is extensive, including tens of thousands of simulations, representing our best estimates of such contingencies based on historical experience. This capital is held either at a non-insurance subsidiary of the holding company or in our insurance entities, where it is potentially eligible for a dividend up to the holding company. Regulatory restrictions on subsidiary dividends are discussed in Note 8 – Statutory Financial Information.

• The third layer of capital is capital in excess of the sum of the first two layers and provides maximum flexibility to repurchase stock or other securities, satisfy acquisition-related commitments, and pay dividends to shareholders, among other purposes. This capital is largely held at a non-insurance subsidiary of the holding company.

At all times during the last two years, our total capital exceeded the sum of our regulatory capital layer plus our self-constructed extreme contingency layer. At December 31, 2015, we held total capital (debt plus shareholders' equity) of $10.0 billion, compared to $9.1 billion at December 31, 2014.

Short-Term Borrowings

During the last three years, we did not engage in short-term borrowings to fund our operations or for liquidity purposes. As discussed above, our insurance operations create liquidity by collecting and investing insurance premiums in advance of paying claims. Information concerning our insurance operations can be found below under Results of Operations – Underwriting, and details about our investment portfolio can be found below under Results of Operations – Investments.

During 2015, we renewed the unsecured, discretionary line of credit (the "Line of Credit") with PNC Bank, National Association (PNC) in the maximum principal amount of $100 million. The prior line of credit, which was entered into during 2014, had expired. The Line of Credit is on substantially the same terms and conditions as the prior line of credit. All advances under this agreement are subject to PNC’s discretion, would bear interest at a variable daily rate, and must be repaid on the earlier of the 30th day after the advance or the expiration date of the facility, April 30, 2016. We incurred no debt issuance costs and had no borrowings under either line of credit throughout 2015 or 2014.

During 2015, we entered into repurchase commitment transactions, which were open for a total of four days. In these transactions, we loaned U.S. Treasury securities to internally approved counterparties in exchange for cash equal to the fair value of the securities. These transactions were entered into as overnight arrangements, and we had no open repurchase commitments at December 31, 2015. On the days that we invested in repurchase transactions, the largest single outstanding balance was $40.4 million, which was open for one day; the average daily balance was $29.0 million. These investment transactions were entered into to enhance the yield from our fixed-income portfolio and not as a source of liquidity or funding for our operations. We did not enter into any repurchase commitment transactions during 2014.

App.-A-57

C. Commitments and Contingencies

Contractual Obligations

A summary of our noncancelable contractual obligations as of December 31, 2015, follows:

	Payments due by period
(millions)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Debt	$	2,729.3	$	27.2	$	54.4	$	16.4	$	2,631.3
Interest payments on debt1	1,822.0		141.2		218.6		196.1		1,266.1
Operating leases	171.6		50.4		85.1		34.3		1.8
Purchase obligations	408.0		290.9		95.7		13.2		8.2
Catastrophe excess of loss reinsurance contracts2	82.4		76.1		6.3		0.0		0.0
Loss and loss adjustment expense reserves	10,039.0		5,252.5		3,166.3		881.6		738.6
Total	$	15,252.3	$	5,838.3	$	3,626.4	$	1,141.6	$	4,646.0

¹ Includes interest on the 6.70% Debentures at the fixed annual rate through, but excluding, June 15, 2017. Amounts also include variable rate interest on the ARX debt for which we made assumptions in calculating the amount of future interest payments. We used the rates in effect as of December 31, 2015, for all future periods. See Note 4 – Debt for further discussion on the interest rates and maturity dates.

² During 2015, the insurance operations of ARX entered into several multiple-layer property catastrophe excess of loss reinsurance contracts with various reinsurers with terms ranging from one to two years.

Purchase obligations represent our noncancelable commitments for goods and services (e.g., software licenses, maintenance on information technology equipment, and media placements). Unlike many other forms of contractual obligations, loss and loss adjustment expense (LAE) reserves do not have definitive due dates and the ultimate payment dates are subject to a number of variables and uncertainties. As a result, the total loss and LAE reserve payments to be made by period, as shown above, are estimates based on our recent payment patterns. To further understand our personal auto claims payments, see Claims Payment Patterns, a supplemental disclosure provided in this Annual Report. In addition, we annually publish a comprehensive Report on Loss Reserving Practices, which was most recently filed with the SEC on a Form 8-K on August 26, 2015, that further discusses our claims payment development patterns, primarily related to our vehicle businesses. The majority of the loss and LAE reserves in our Property business are paid in less than one year.

During the last three years, the only other significant new contractual commitments we entered outside the ordinary course of business were the issuance of $400 million of our 3.70% Senior Notes in 2015 and $350 million of our 4.35% Senior Notes in 2014, and the put and call rights included in the ARX stockholders' agreement, as discussed in more detail in Note 16 - Redeemable Noncontrolling Interest.

As discussed in the Liquidity and Capital Resources section above, we believe that we have sufficient liquid investments, borrowing capability, cash flows, and other capital resources to satisfy these contractual obligations.

Off-Balance-Sheet Arrangements

Our off-balance-sheet leverage includes derivative positions (as disclosed in Note 2 – Investments and the Derivative Instruments section of this Management’s Discussion and Analysis), operating leases, and purchase obligations (disclosed in the table above). During 2015, we entered into futures contracts on both 5-year and 10-year Treasury notes as a means to manage the overall duration of our fixed-income portfolio. These positions were closed during the fourth quarter 2015 and we recorded a net $2.5 million realized gain on these positions for the period they were open. We did not have any open futures contracts at December 31, 2015.

App.-A-58

III.  RESULTS OF OPERATIONS – UNDERWRITING

A. Growth

($ in millions)	2015			2014			2013
NET PREMIUMS WRITTEN
Personal Lines
Agency	$	9,230.1		$	9,102.8		$	8,702.6
Direct	8,473.5			7,656.4			6,866.6
Total Personal Lines	17,703.6			16,759.2			15,569.2
Commercial Lines	2,171.2			1,895.4			1,770.5
Property1	689.6			0			0
Other indemnity2	(0.4		)	0			0
Total underwriting operations	$	20,564.0		$	18,654.6		$	17,339.7
Growth over prior year	10		%	8		%	6		%
NET PREMIUMS EARNED
Personal Lines
Agency	$	9,108.6		$	9,087.0		$	8,601.5
Direct	8,185.9			7,474.0			6,740.1
Total Personal Lines	17,294.5			16,561.0			15,341.6
Commercial Lines	1,995.9			1,837.5			1,761.6
Property1	609.1			0			0
Other indemnity2	(0.4		)	0			0.2
Total underwriting operations	$	19,899.1		$	18,398.5		$	17,103.4
Growth over prior year	8		%	8		%	7		%
1We began reporting our Property business as a segment on April 1, 2015, upon acquisition of a controlling interest in ARX; Property business written prior to that date was negligible.
2Negative written and earned premiums represent reinstatement premiums paid to the reinsurers of our professional liability group business pursuant to reinsurance contracts.

Net premiums written represent the premiums from policies written during the period less any premiums ceded to reinsurers. Net premiums earned, which are a function of the premiums written in the current and prior periods, are earned as revenue over the life of the policy using a daily earnings convention.

We generated an increase in total written and earned premiums during each of the last three years. The increase in our Personal Lines premiums is due to our increased competitive position, as well as our continued work on several initiatives aimed at providing consumers with distinctive new insurance options (discussed below) and our marketing efforts. The premium increase in our Commercial Lines business is primarily a function of a shift in business mix, modest rate reductions, and increased competitive position.

App.-A-59

Policies in force, our preferred measure of growth, represents all policies under which coverage was in effect as of the end of the period specified. As of December 31, our policies in force were:

(thousands)	2015		2014		2013
POLICIES IN FORCE
Vehicle businesses:
Agency auto	4,737.1		4,725.5		4,841.9
Direct auto	4,916.2		4,505.5		4,224.2
Total auto	9,653.3		9,231.0		9,066.1
Special lines1	4,111.4		4,030.9		3,990.3
Total Personal Lines	13,764.7		13,261.9		13,056.4
Growth over prior year	4	%	2	%	3	%
Commercial Lines	555.8		514.7		514.6
Growth over prior year	8	%	0	%	(1	)%
Property	1,076.5		--		--

¹ Includes insurance for motorcycles, ATVs, RVs, manufactured homes, watercraft, snowmobiles, and similar items, as well as personal umbrella products.

To analyze growth in our vehicle businesses, we review new policies, rate levels, and the retention characteristics of our books of business. The following table shows our year-over-year changes in new and renewal applications (i.e., issued policies):

	Growth Over Prior Year
	2015		2014		2013
APPLICATIONS
Personal Lines
New	7	%	1	%	(1	)%
Renewal	1	%	5	%	3	%
Commercial Lines
New	15	%	1	%	(6	)%
Renewal	0	%	1	%	0	%

In our Personal Lines business, for 2015, new applications increased in both our Agency and Direct auto and special lines businesses. In the Agency channel, the increase in new applications gained momentum in the second half of 2015 due in part to the continued roll out of our current product model, which improved our competitive position in the marketplace, along with an improved bundling option. In the Direct channel, our advertising expenditures and consumer messaging produced quotes in record numbers driving the increase in new applications. Our auto and special lines renewal applications increased; however, the Agency auto renewal applications decreased, while the Direct auto increased 5%.

The significant increase in our Commercial Lines new application growth reflected strong demand and improved competitiveness in all of our business market targets. We believe that the growth was due to both internal actions (e.g., modest rate reductions and the removal of underwriting restrictions) and competitors' actions (e.g., rate increases and implementation of underwriting restrictions).

We continue to refine our personal auto segmentation and underwriting models. Our current model features more competitive preferred pricing, more sophisticated pricing for households that insure more than one product through Progressive, and enhancements to Snapshot^®, our usage-based insurance program. Snapshotprovides customers the opportunity to improve their auto insurance rates based on their personal driving behavior. Snapshot is currently available to our Agency and Direct auto customers in 48 states plus the District of Columbia; Snapshot is not available in California and North Carolina due to the regulatory environment. During 2015, we saw an increased use of our Snapshot program. In our current Snapshot program, which we began rolling out late last year, we are affording more customers discounts for their good driving behavior, while increasing rates at renewal for a small number of drivers based on their driving behavior. We are also offering a Snapshot enrollment discount that varies at the customer-segment level, such as a higher discount for more preferred drivers.

We are continuing to focus on our Destination Era strategy to form a deeper relationship with our customers as their insurance needs evolve and on our efforts to further penetrate customer households through cross-selling auto policies with other

App.-A-60

products, including through our Progressive Home Advantage^® (PHA) program, to meet a broad range of customer needs. PHA is the program in which we “bundle” our auto product with property insurance provided by ASI, primarily in the Agency channel, or unaffiliated insurance carriers in the Direct channel. Bundled products are becoming an integral part of our consumer offerings and an important part of our strategic agenda. These customers represent a sizable segment of the market, and our experience is that they tend to stay with us longer and generally have lower claims costs. An increasing number of our customers, especially Direct auto customers, are now multi-product customers combining their auto insurance with special lines, homeowners, or renters insurance products. As of December 31, 2015, PHA was available to Direct customers nationwide and Agency customers in 31 states and the District of Columbia, including five states added during 2015. In the Direct channel, PHA is provided by 10 active, unaffiliated insurance providers, as well as by ASI.

During 2015, we introduced a new product in our Agency channel called "Platinum." The Platinum product is a home and auto insurance combined offering that provides the agents a single offering with compensation, coordinated policy periods, single event deductible, and other features that meet the needs and desires that our agents have expressed. Platinum is targeted to those agents who have the appropriate customers and believe our bundled offering is a "must have" for their agency. At year-end 2015, there were about 450 agents throughout 12 states that have the Platinum program available to them. We plan to continue to roll out Platinum throughout 2016.

Expanding our capabilities in the mobile space also remains an important initiative. Consumers want the ability to transact all forms of business when and where they want and on whatever device best suits their needs (e.g., smartphone, tablet). For our auto insurance products, we provide consumers with the direct capability to quote and buy auto insurance, comparison shop, make payments and endorsements, store digital ID cards, report claims, view Snapshot progress, and request roadside assistance, among other things. In addition, much of our Agency-dedicated website, which includes quote/buy, servicing, and reporting capabilities, is accessible to agents through tablet computers.

Through our Progressive Commercial Advantage^SM program, we offer our commercial auto customers general liability and business owners policies and workers' compensation coverage written by unaffiliated insurance companies or agencies. The workers' compensation coverage is offered in 44 states, while the other products are offered throughout the continental United States.

We experienced the following changes in written premium per policy:

	Change Over Prior Year
	2015		2014		2013
WRITTEN PREMIUM PER POLICY
Personal Lines – auto	4	%	3	%	4	%
Commercial Lines	8	%	4	%	5	%

The increased written premium per policy in our personal auto business included higher written premium per policy in both our Agency and Direct auto businesses, reflecting rate increases taken during the last year, as well as an increase in the number of vehicles per policy. For our Commercial Lines business, the increase in written premium per policy primarily reflected rate increases and a shift in a mix of business toward our truck product tiers. Adjusting rates is a continuous process and we will continue to evaluate future rate needs and react quickly as we recognize changing trends at the state level.

Another important element affecting growth is customer retention. One measure of retention is policy life expectancy, which is our actuarial estimate of the average length of time that a policy (including any renewals) will remain in force before cancellation or lapse in coverage. The following table shows our year-over-year changes in policy life expectancy using both 3-month and 12-month measures. In addition, we are disclosing our year-over-year change in our renewal ratio in our personal auto business. The renewal ratio is the percent of policies that came up for renewal during the year that actually renewed.

App.-A-61

	Change Over Prior Year
	2015		2014		2013
RETENTION MEASURES
Personal Lines - auto
Policy life expectancy
Trailing 3-months	5	%	(6	)%	4	%
Trailing 12-months	(1	)%	0	%	(4	)%
Renewal ratio	0	%	0.2	%	0.1	%
Commercial Lines - policy life expectancy (trailing 12-months)	13	%	0	%	(3	)%

Although the trailing 3-month measure for personal auto does not address seasonality and can reflect more volatility, this measure is more responsive to current experience and can be an indicator of how our retention rates are moving. During the latter part of 2015, the year-over-year growth turned positive. In our Commercial Lines business, the increase in policy life expectancy primarily reflects more rate stability and an improved competitive position.

Recognizing the importance that retention has on our ability to continue to grow profitably, we emphasize competitive pricing for a given risk, quality service, and having the products and services available for our customers as their needs change during their insurable life.

B. Profitability

Profitability for our underwriting operations is defined by pretax underwriting profit, which is calculated as net premiums earned plus fees and other revenues less losses and loss adjustment expenses, policy acquisition costs, and other underwriting expenses. We also use underwriting profit margin, which is underwriting profit expressed as a percentage of net premiums earned, to analyze our results. For the three years ended December 31, our underwriting profitability results were as follows:

	2015					2014					2013
	Underwriting Profit (Loss)					Underwriting Profit (Loss)					Underwriting Profit (Loss)
($ in millions)	$			Margin		$			Margin		$			Margin
Personal Lines
Agency	$	713.2		7.8	%	$	683.0		7.5	%	$	542.9		6.3	%
Direct	403.4			4.9		423.4			5.7		473.9			7.0
Total Personal Lines	1,116.6			6.5		1,106.4			6.7		1,016.8			6.6
Commercial Lines	318.3			15.9		315.8			17.2		114.1			6.5
Property1	61.3			10.1		0			0		0			0
Other indemnity2	(1.0		)	NM		(11.9		)	NM		(10.8		)	NM
Total underwriting operations	$	1,495.2		7.5	%	$	1,410.3		7.7	%	$	1,120.1		6.5	%

¹We began reporting our Property business as a segment on April 1, 2015, when we acquired a controlling interest of ARX. For the year ended December 31, 2015, amounts include $45.2 million of amortization/depreciation expense associated with the ARX acquisition. Although this expense is included in our Property segment, it is not reported in the consolidated results of ARX and, therefore, does not affect the value of the noncontrolling interest and will not affect amounts payable pursuant to the put and call rights under the ARX stockholders' agreement.

²Underwriting 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.

Our companywide underwriting margin met or exceeded our long-term profitability target of at least 4% for each of the last three years. Pricing and market conditions are always significant drivers of underwriting margins over any defined period.

App.-A-62

Further underwriting results for our Personal Lines business, including results by distribution channel, the Commercial Lines business, the Property business, and our underwriting operations in total, as defined in Note 10 – Segment Information, were as follows:

Underwriting Performance1	2015	2014	2013
Personal Lines – Agency
Loss & loss adjustment expense ratio	72.6	72.8	73.5
Underwriting expense ratio	19.6	19.7	20.2
Combined ratio	92.2	92.5	93.7
Personal Lines – Direct
Loss & loss adjustment expense ratio	75.0	74.2	72.3
Underwriting expense ratio	20.1	20.1	20.7
Combined ratio	95.1	94.3	93.0
Total Personal Lines
Loss & loss adjustment expense ratio	73.7	73.4	73.0
Underwriting expense ratio	19.8	19.9	20.4
Combined ratio	93.5	93.3	93.4
Commercial Lines
Loss & loss adjustment expense ratio	62.4	61.7	71.9
Underwriting expense ratio	21.7	21.1	21.6
Combined ratio	84.1	82.8	93.5
Property
Loss & loss adjustment expense ratio	57.3	—	—
Underwriting expense ratio2	32.6	—	—
Combined ratio2	89.9	—	—
Total Underwriting Operations3
Loss & loss adjustment expense ratio	72.1	72.3	73.0
Underwriting expense ratio	20.4	20.0	20.5
Combined ratio	92.5	92.3	93.5
Accident year-Loss & loss adjustment expense ratio4	73.7	72.4	72.7

¹ Ratios are expressed as a percentage of net premiums earned; fees and other revenues are deducted from underwriting expenses in the ratio calculations.

² Included in year ended December 31, 2015, is $45.2 million, or 7.4 points, of amortization/depreciation expense associated with our acquisition of a controlling interest in ARX. Excluding this additional expense, the Property business would have reported an expense ratio and a combined ratio of 25.2 and 82.5, respectively.

³Combined ratios for the other indemnity businesses are not presented separately due to the low level of premiums earned by, and the variability of loss costs in, such businesses. For the years ended December 31, 2015, 2014, and 2013, these businesses generated an underwriting loss of $1.0 million, $11.9 million, and $10.8 million, respectively.

⁴The accident year ratios include only the losses that occurred during the period noted. As a result, accident period results will change over time, either favorably or unfavorably, as we revise our estimates of loss costs when payments are made or reserves for that accident period are reviewed.

App.-A-63

Losses and Loss Adjustment Expenses (LAE)

(millions)	2015		2014		2013
Change in net loss and LAE reserves	$	702.4	$	237.7	$	457.5
Paid losses and LAE	13,639.6		13,068.5		12,014.9
Total incurred losses and LAE	$	14,342.0	$	13,306.2	$	12,472.4

Claims costs, our most significant expense, represent payments made, and estimated future payments to be made, to or on behalf of our policyholders, including expenses needed to adjust or settle claims. Claims costs are a function of loss severity and frequency and are influenced by inflation and driving patterns, among other factors, some of which are discussed below. In our Property business, claim severity is primarily a function of construction costs and the age of the structure. Accordingly, anticipated changes in these factors are taken into account when we establish premium rates and loss reserves. Loss reserves are estimates of future costs and our reserves are adjusted as underlying assumptions change and information develops. See Critical Accounting Policies for a discussion of the effect of changing estimates.

Our total loss and loss adjustment expense ratio decreased 0.2 points and 0.7 points in 2015 and 2014, respectively, compared to the prior year. Our accident year loss and LAE ratio, which excludes the impact of prior accident year reserve development during each calendar year, increased 1.3 points in 2015 and decreased 0.3 points in 2014. The increase in 2015 primarily reflects an increase in expected severity and frequency, partially offset by an increase in average net premiums earned per policy on a year-over-year basis.

The following discussion of our severity and frequency trends excludes comprehensive coverage because of its inherent volatility, as it is typically linked to catastrophic losses generally resulting from adverse weather. Comprehensive coverage insures against damage to a customer’s vehicle due to various causes other than collision, such as windstorm, hail, theft, falling objects, and glass breakage.

Total personal auto incurred severity (i.e., average cost per claim, including both paid losses and the change in case reserves) on a calendar-year basis was up over the prior-year periods in the 1% to 4% range for the last three years.

• 2015 – Severity increased about 1% for our personal injury protection (PIP) coverage, about 3% for our property damage coverage, and about 4% for collision coverage, while severity in our bodily injury coverage was down about 2%.

• 2014 – Severity increased about 7% for our PIP coverage, about 5% for our property damage coverage, and approximately 3%-4% for our bodily injury and collision coverages.

• 2013 – Severity for our collision coverage increased about 5%, and severity for both our bodily injury and property damage coverages increased about 3%, while severity in our PIP coverage was down about 4%.

It is a challenge to estimate future severity, especially for bodily injury and PIP claims, but we continue to monitor changes in the underlying costs, such as medical costs, health care reform, and jury verdicts, along with regulatory changes and other factors that may affect severity.

Our incurred frequency of auto accidents, on a calendar-year basis, was up over the prior-year periods about 2% in both 2015 and 2013 and was relatively flat in 2014.

• 2015 – Our property damage and collision coverages had an increase in frequency of about 1%, and approximately 2%-3% for our bodily injury and PIP coverages.

• 2014 – Our bodily injury coverage had a decline in frequency of about 2%. Frequency in our PIP coverage was down about 1%. Our property damage coverage frequency was relatively flat, while our collision coverage experienced an increase in frequency of about 1%.

• 2013 – Increases in frequency for our collision and property damage coverages contributed to the overall increase while frequency for our bodily injury and PIP coverages was relatively flat.

We closely monitor the changes in frequency, but the degree or direction of near-term frequency change is not something that we are able to predict with any certainty. We analyze trends to distinguish changes in our experience from external factors, such as changes in the number of vehicles per household, miles driven, gasoline prices, greater vehicle safety, and unemployment rates, versus those resulting from shifts in the mix of our business, to allow us to reserve more accurately for our loss exposure.

App.-A-64

We experienced severe weather conditions in several areas of the country during each of the last three years. Hail storms, tornadoes, wind, and flooding contributed to catastrophe losses each year. The following table shows catastrophe losses incurred for the years ended December 31:

($ in millions)	2015			2014			2013
Catastrophe losses incurred	$	254.5		$	192.2		$	175.1
Increase to combined ratio	1.3		pts.	1.0		pts.	1.0		pts.

Included in our results for the year-ended December 31, 2015, were $101.9 million, or 0.5 points on a consolidated basis, of catastrophe losses related to our Property business. We respond promptly to catastrophic storms when they occur in order to provide exemplary claims service to our customers.

The table below presents the actuarial adjustments implemented and the loss reserve development experienced in the years ended December 31:

($ in millions)	2015			2014			2013
ACTUARIAL ADJUSTMENTS
Reserve decrease (increase)
Prior accident years	$	95.1		$	90.9		$	62.4
Current accident year	97.0			(81.3		)	22.0
Calendar year actuarial adjustments	$	192.1		$	9.6		$	84.4
PRIOR ACCIDENT YEARS DEVELOPMENT
Favorable (Unfavorable)
Actuarial adjustments	$	95.1		$	90.9		$	62.4
All other development	220.0			(66.8		)	(107.5		)
Total development	$	315.1		$	24.1		$	(45.1	)
(Increase) decrease to calendar year combined ratio	1.6		pts.	0.1		pts.	(0.3		) pts.

Total development consists both of actuarial adjustments and “all other development.” The actuarial adjustments represent the net changes made by our actuarial department to both current and prior accident year reserves based on regularly scheduled reviews. Through these reviews, our actuaries identify and measure variances in the projected frequency and severity trends, which allows them to adjust the reserves to reflect the current costs. We report the prior accident years actuarial adjustments separately to reflect these adjustments as part of the total prior accident years’ development.

“All other development” represents claims settling for more or less than reserved, emergence of unrecorded claims at rates different than anticipated in our incurred but not recorded (IBNR) reserves, and changes in reserve estimates on specific claims. Although we believe that the development from both the actuarial adjustments and “all other development” generally results from the same factors, as discussed below, we are unable to quantify the portion of the reserve development that might be applicable to any one or more of those underlying factors.

Our objective is to establish case and IBNR reserves that are adequate to cover all loss costs, while incurring minimal variation from the date that the reserves are initially established until losses are fully developed. As reflected in the table above, we experienced favorable reserve development in 2015, with minor development in 2014 and 2013.

2015

•The favorable prior year reserve development was primarily attributable to accident year 2014.

• Favorable reserve development occurred in all segments; our combined Agency auto business and Direct auto business experienced approximately 65% of total development, with the remainder split between our Commercial Lines business and Property businesses.

• In our personal auto and Commercial Lines businesses, we incurred favorable case loss reserve development primarily in bodily injury and uninsured motorist bodily injury coverages, due to lower than anticipated severity.

• Our Property business development was favorable due to lower than anticipated severity and frequency across all products, primarily in accident years 2014 and 2013.

App.-A-65

2014

•The favorable prior year reserve development was primarily attributable to accident year 2010.

• Favorable reserve development in our Commercial Lines business was partially offset by unfavorable development in our Agency auto business. Our Direct auto business experienced slight favorable development.

• The favorable reserve development in our Commercial Lines business was primarily related to favorable case reserve development on our high limit policies.

• In Agency auto, the unfavorable development was primarily attributable to PIP loss reserves and adjusting and other LAE reserves.

2013

• Approximately 80% of the unfavorable reserve development was attributable to accident year 2011, while the remaining 20% was related to accident year 2012. The aggregate reserve development for accident years 2010 and prior was slightly favorable.

• About 55% of our unfavorable reserve development was in our Commercial Lines business, with the remainder split about equally between our Personal Lines business and our run-off businesses. In our Personal Lines business, unfavorable development in our Agency auto channel was offset in large part by favorable development in our Direct auto channel.

• The unfavorable reserve development in our Agency auto business was in our IBNR reserves due to higher frequency and severity on late emerging claims, as primarily reflected in the “all other development.”

• Lower than anticipated severity costs on case reserves were the primary contributor to the favorable development in our Direct auto business.

• In our Commercial Lines business, we experienced unfavorable development due to higher frequency and severity on late emerging claims primarily in our bodily injury coverage for our truck business.

• In our other businesses, we experienced unfavorable development primarily due to reserve increases in our run-off professional liability group business based on internal actuarial reviews of our claims history.

We continue to focus on our loss reserve analysis, attempting to enhance accuracy and to further our understanding of our loss costs. A detailed discussion of our loss reserving practices, primarily related to our vehicle businesses, can be found in our Report on Loss Reserving Practices, which was filed in a Form 8-K on August 26, 2015.

Because we are primarily an insurer of motor vehicles, our exposure as an insurer of environmental, asbestos, and general liability claims is limited. We have established reserves for these exposures, in amounts that we believe to be adequate based on information currently known. These exposures have not had and are not expected to have a material effect on our liquidity, financial condition, cash flows, or results of operations.

Underwriting Expenses

Our underwriting expense ratio (i.e., policy acquisition costs and other underwriting expenses, less fees and other revenues, expressed as a percentage of net premiums earned) was higher on a year-over-year basis for 2015, primarily reflecting the additional expenses associated with ARX and greater advertising spend during 2015. For 2014, our underwriting expenses grew at a slower rate than net premiums earned, due in part to an increase in earned premium per policy.

C. Personal Lines

	Growth Over Prior Year
	2015		2014		2013
Net premiums written	6	%	8	%	6	%
Net premiums earned	4	%	8	%	7	%
Policies in force	4	%	2	%	3	%

Our Personal Lines business writes insurance for personal autos and recreational vehicles and represented 86% of our total net premiums written for 2015 and 90% in both 2014 and 2013. The decrease primarily resulted from the acquisition of a controlling interest in ARX, which in 2015 represented about 3% of our total net premiums written. We currently write our Personal Lines products in all 50 states. We also offer our personal auto product (not special lines products) in the District of Columbia and Australia.

App.-A-66

Personal auto represented 92% of our total Personal Lines net premiums written in 2015 and 2014, and 91% in 2013. These auto policies are primarily written for 6-month terms. The remaining Personal Lines business is comprised of special lines products (e.g., motorcycles, watercraft, and RVs), which are written for 12-month terms, primarily in our Agency channel. Net premiums written for personal auto increased 6% in 2015, 8% in 2014, and 7% in 2013; special lines net premiums written grew 3%, 4%, and 5% in 2015, 2014, and 2013, respectively. Personal auto policies in force increased 5% for 2015, 2% for 2014, and 3% for 2013; policies in force for the special lines products increased 2% in 2015 and 1% in both 2014 and 2013.

Our total Personal Lines business generated a 6.5% underwriting profit margin in 2015, which was widely distributed by product and state. In 2015, all jurisdictions were profitable. The special lines products had a favorable effect on the total Personal Lines combined ratio of 1.2 points in 2015, 1.3 points in 2014, and 1.0 point in 2013.

We report our Agency and Direct business results separately as components of our Personal Lines segment to provide further understanding of our products by distribution channel.

The Agency Business

	Growth Over Prior Year
	2015		2014		2013
Net premiums written	1	%	5	%	6	%
Net premiums earned	0	%	6	%	6	%
Auto: policies in force	0	%	(2	)%	1	%
new applications	2	%	(7	)%	(3	)%
renewal applications	(4	)%	3	%	2	%
written premium per policy	4	%	4	%	5	%
Auto: retention measures:
policy life expectancy - trailing 3-months	5	%	(7	)%	1	%
trailing 12-months	(2	)%	(2	)%	(5	)%
renewal ratio	(0.1	)%	0.1	%	(0.1	)%

The Agency business includes business written by more than 35,000 independent insurance agencies that represent Progressive, as well as brokerages in New York and California. The increase in new application growth for 2015, compared to 2014, was due in part to an increased competitive position in the marketplace this year, generated by the roll out of our current product model, which features more preferred pricing along with more sophisticated pricing for customers who insure more than one product through Progressive. In 2015, we generated new Agency auto application growth in 27 states and the District of Columbia, compared to 18 states in 2014, and 19 states in 2013, including eight of our top 10 Agency auto states in 2015.

Rate increases were the primary factor in the year-over-year increase in written premium per policy in each of the last three years. In 2015, written premium per policy for new and renewal Agency auto business increased about 3% and 4%, respectively, compared to 2014.

We are starting to see our retention metrics improve, including our trailing 3-month measure. With our inflow of new business growing during the course of the year, it would appear that our auto product is attractive in the marketplace and we believe that, with our loss results, the rate level is currently sustainable. We continue to pursue efforts to build upon this momentum.

On a year-over-year basis, Agency auto quotes were relatively flat for 2015. Our Agency auto rate of conversion (i.e., converting a quote to a sale) increased for 2015, compared to 2014, as we saw an increase in conversion rates on a year-over-year basis much higher toward the latter part of 2015.

App.-A-67

The Direct Business

	Growth Over Prior Year
	2015		2014		2013
Net premiums written	11	%	12	%	7	%
Net premiums earned	10	%	11	%	8	%
Auto: policies in force	9	%	7	%	6	%
new applications	13	%	10	%	6	%
renewal applications	5	%	8	%	4	%
written premium per policy	4	%	3	%	3	%
Auto: retention measures:
policy life expectancy - trailing 3-months	5	%	(4	)%	8	%
trailing 12-months	0	%	3	%	(2	)%
renewal ratio	0	%	0.5	%	0.3	%

The Direct business includes business written directly by Progressive on the Internet, through mobile devices, and over the phone. We experienced new application growth in our Direct auto business for 2015, due to greater demand by consumers to shop and buy on mobile devices and the Internet, increased advertising spend, creative marketing, and competitors raising rates. Out of our top 10 Direct auto states, nine states experienced an increase in new auto applications in 2015, compared to eight states in 2014 and nine states in 2013.

Written premium per policy for our Direct auto business increased in each of the last three years, primarily due to rate increases. In 2015, the increases in written premium per policy for both new and renewal businesses were about the same.

Our policy life expectancy using a trailing 3-month measure increased on a year-over-year basis, reflecting a shift in our mix of business to preferrred customers and increased competitive position in the market.

In 2015, the total number of quotes in our Direct auto business reached new highs and increased 13% on a year-over-year basis, driven by an increase in advertising, as well as increased quoting from mobile devices. However, the total Direct auto business conversion rate for 2015 was relatively flat compared to 2014.

The underwriting expense ratio for our Direct business remained flat compared to 2014, despite a 10% increase in total advertising spend on a year-over-year basis, due to higher earned premiums in 2015. We continue to remain focused on maintaining a well-respected brand and will continue to spend on advertising as long as we achieve our profitability targets.

D. Commercial Lines

	Growth Over Prior Year
	2015		2014		2013
Net premiums written	15	%	7	%	2	%
Net premiums earned	9	%	4	%	7	%
Policies in force	8	%	0	%	(1	)%
New applications	15	%	1	%	(6	)%
Renewal applications	0	%	1	%	0	%
Written premium per policy	8	%	4	%	5	%
Policy life expectancy - trailing 12-months	13	%	0	%	(3	)%

Our Commercial Lines business writes primary liability, physical damage, and other auto-related insurance for automobiles and trucks owned and/or operated predominantly by small businesses, with the majority of our customers insuring approximately two vehicles. Our Commercial Lines business represented 11% of our total net premiums written in 2015, and 10% in both 2014 and 2013. While we continue to write over 90% of our Commercial Lines business through the Agency channel, net premiums written through the Direct channel increased by 12% in 2015.

App.-A-68

We currently write our Commercial Lines business in 49 states; we do not write Commercial Lines in Hawaii or the District of Columbia. We are planning to start writing in Hawaii in late 2016. The majority of our policies in this business are written for 12-month terms.

Our Commercial Lines business operates in the business auto, for-hire transportation, contractor, for-hire specialty, tow, and for-hire livery markets. Commercial Lines experienced a significant increase in new applications year-over-year, reflecting strong demand and improved competitiveness in our for-hire transportation, for-hire specialty, and business auto market targets. The actions we took during the last several years to raise rates and restrict business were ahead of our competition, and we are now seeing our competitors following suit.

Rate increases and a shift to new business with higher average written premiums contributed to the increase in written premium per policy in our Commercial Lines business for 2015. Written premium per policy for new Commercial Lines business was up approximately 22% as a result of these actions, while renewal business was flat from 2014.

Our Commercial Lines business policy life expectancy increased in 2015, reflecting rate decreases throughout 2015 versus increases taken in 2014, as well as our increased competitive position.

Although Commercial Lines differs from Personal Lines auto in its customer base and products written, both businesses require the same fundamental skills, including disciplined underwriting and pricing, as well as excellent claims service. Since the Commercial Lines policies have higher limits than Personal Lines auto, we analyze Commercial Lines' large loss trends and reserving in more detail to allow us to react quickly to changes in this exposure.

E. Property

Our Property business writes personal and commercial property insurance for homeowners, other property owners, and renters. Our Property business primarily consists of the operations of the ARX organization, in which we acquired a controlling interest in the second quarter 2015. ARX wholly owns or controls the insurance companies that we refer to in the aggregate as “ASI.” ASI writes homeowners and renters insurance, principally in the Agency channel, in 31 states and the District of Columbia for personal property and in 4 states for commercial property; flood insurance is written in 37 states and D.C. Property policies are generally written on a 12-month basis.

Since April 1, 2015, our Property business generated $689.6 million of net premiums written and $609.1 million of net premiums earned, representing about 3% of our companywide premiums. Approximately 97% of the Property net premiums written during the year were for policies covering personal residential property (single family homes, condominium unit owners, rental coverage, etc.), with the remaining 3% covering commercial property and other coverages. The commercial business principally includes insurance covering real estate owned by condominium and homeowners associations and similar entities, as well as apartment complexes. Texas and Florida together comprise just over half of our Property business based on premium volume.

The Property business produced a combined ratio of 89.9 since the date of acquisition. These results include 16.7 points in catastrophe losses (mainly due to hail storms in Texas and Colorado) and 7.4 points relating to the amortization of certain intangible assets arising from our acquisition of a controlling interest in ARX.

ASI has exposure to losses from catastrophes and other severe storms. To help mitigate these risks, ASI purchases reinsurance from unaffiliated reinsurance companies (most of which are “A” rated by A.M. Best) and from a reinsurance company established as part of a catastrophe bond transaction. In addition, ASI purchases state-mandated hurricane reinsurance in Florida. During 2015, ASI ceded approximately 10% of the direct premiums written by it under these catastrophe reinsurance programs, and about 16% through its other reinsurance programs, including 7% of direct premiums written ceded to the National Flood Insurance Program.

E. Other Indemnity

Our other indemnity businesses consist of managing our run-off businesses, including the run-off of our professional liability businesses. We only had five professional liability policies in force as of December 31, 2015, although we continue to process claims on expired policies.

Our other indemnity businesses generated operating losses of $1.0 million, $11.9 million, and $10.8 million in 2015, 2014, and 2013, respectively. The losses primarily reflect actuarial reserve increases and adverse loss development on our run-off businesses, to the extent not reinsured.

App.-A-69

F. Service Businesses

Our service businesses, which represent less than 1% of our total revenues and do not have a material effect on our overall operations, primarily include commercial auto insurance procedures/plans (CAIP) and commission-based businesses. 

G. Litigation

The Progressive Corporation and/or its insurance subsidiaries are named as defendants in various lawsuits arising out of claims made under insurance policies issued by the subsidiaries in the ordinary course of business. We consider all legal actions relating to such claims in establishing our loss and loss adjustment expense reserves.

In addition, various Progressive entities are named as defendants in a number of class action or individual lawsuits arising out of the operations of the insurance subsidiaries. These cases include those alleging damages as a result of our practices in evaluating or paying medical or injury claims or benefits, including, but not limited to, personal injury protection, medical payments, uninsured motorist/underinsured motorist (UM/UIM), and bodily injury benefits; rating practices at policy renewal; the utilization, content, or appearance of UM/UIM rejection forms; labor rates paid to auto body repair shops; employment related practices, including federal wage and hour claims; alleged patent infringement; and cases challenging other aspects of our claims or marketing practices or other business operations. Other insurance companies face many of these same issues. During the last three years, we have settled several class action and individual lawsuits. These settlements did not have a material effect on our financial condition, cash flows, or results of operations. See Note 12 – Litigation for a more detailed discussion.

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H. Income Taxes

A deferred tax asset or liability is a tax benefit or expense that is expected to be realized in a future tax return. At both December 31, 2015 and 2014, we determined that we did not need a valuation allowance on our gross deferred tax assets. Although realization of the gross deferred tax assets is not assured, management believes it is more likely than not that the gross deferred tax assets will be realized based on our expectation that we will be able to fully utilize the deductions that are ultimately recognized for tax purposes.

At both December 31, 2015 and 2014, we reported net deferred tax liabilities. During 2015, we recorded a deferred tax liability related to the intangible assets recorded in conjunction with the acquisition of a controlling interest in ARX.

At December 31, 2015 and 2014, we had net current income taxes payable of $25.1 million and $49.4 million, respectively, which were reported as part of "other liabilities."

There were no material changes in our uncertain tax positions during 2015.

See Note 5 – Income Taxes for further information.

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IV.   RESULTS OF OPERATIONS – INVESTMENTS

A. Portfolio Summary

At year-end 2015, the fair value of our investment portfolio was $20.9 billion, approximately 10% greater than at year-end 2014, reflecting the addition of ARX investments, operating and investment returns, and our debt issuance that more than offset our capital expenditures during the year, including the ARX stock purchases, share repurchases, debt servicing and retirement, and shareholder dividends. Our investment income (interest and dividends) increased 11% in 2015 and decreased 3% in 2014, as compared to the prior years, reflecting the addition of investment income from ARX's portfolio and lower yields in the portfolio for 2014. In 2015, we recognized $112.7 million in net realized gains, compared to $224.2 million and $318.4 million in 2014 and 2013, respectively.

B. Investment Results

We report total return to reflect more accurately our management philosophy governing the portfolio and our evaluation of investment results. The fully taxable equivalent (FTE) total return includes recurring investment income, adjusted to a fully taxable amount for certain securities that receive preferential tax treatment (e.g., municipal securities), net realized gains (losses) on securities, and changes in unrealized gains (losses) on investments.

Our investment portfolio produced a FTE total return of 1.6% for 2015, compared to 4.5% for 2014. Our fixed-income and common stock portfolios had FTE total returns of 1.7% and 0.8%, respectively, for 2015, and 3.2% and 12.6%, for 2014. The lower fixed-income returns in 2015, as compared to 2014, reflect a general rise in interest rates and widening of credit spreads, reducing security valuations. Our lower equity returns in 2015, compared to 2014, reflected a much lower overall equity market return in 2015.

The following summarizes investment results for the years ended December 31:

	2015		2014		2013
Pretax recurring investment book yield	2.4	%	2.4	%	2.6	%
Weighted average FTE book yield	2.7	%	2.7	%	2.9	%
FTE total return:
Fixed-income securities	1.7	%	3.2	%	1.7	%
Common stocks	0.8	%	12.6	%	32.8	%
Total portfolio	1.6	%	4.5	%	5.4	%

A further break-down of our FTE total returns for our portfolio, including the net gains (losses) on our derivative positions, for the years ended December 31, follows:

	2015		2014		2013
Fixed-income securities:
U.S. Treasury Notes	0	%	(0.3	)%	1.6	%
Municipal bonds	4.2	%	6.0	%	2.3	%
Corporate bonds	2.7	%	3.8	%	1.8	%
Commercial mortgage-backed securities	1.7	%	5.1	%	0.1	%
Collateralized mortgage obligations	1.9	%	2.6	%	3.6	%
Asset-backed securities	1.2	%	2.8	%	2.2	%
Agency residential pass-through obligations	0.6	%	NA		NA
Agency debt	0.2	%	NA		NA
Preferred stocks	0.4	%	11.3	%	3.7	%
Common stocks:
Indexed	1.8	%	14.3	%	33.8	%
Actively managed	(7.0	)%	2.9	%	27.1	%

 NA=Not Applicable, since we did not hold these security types during 2014 and 2013.

App.-A-72

C. Portfolio Allocation

The composition of the investment portfolio at December 31, was:

($ in millions)	Fair Value		% of Total Portfolio		Duration (years)	Rating1
2015
Fixed maturities	$	15,332.2	73.2	%	2.1	A+
Nonredeemable preferred stocks	782.6		3.7		2.6	BBB-
Short-term investments	2,172.0		10.4		<0.1	A+
Total fixed-income securities	18,286.8		87.3		1.9	A+
Common equities	2,650.5		12.7		na	na
Total portfolio2,3	$	20,937.3	100.0	%	1.9	A+
2014
Fixed maturities	$	13,549.2	71.2	%	1.8	A+
Nonredeemable preferred stocks	827.5		4.4		2.8	BB+
Short-term investments	2,149.0		11.3		<0.1	AA
Total fixed-income securities	16,525.7		86.9		1.6	A+
Common equities	2,492.3		13.1		na	na
Total portfolio2,3	$	19,018.0	100.0	%	1.6	A+
na = not applicable

¹ Represents ratings at December 31, 2015 and 2014. Credit quality ratings are assigned by nationally recognized statistical rating organizations. To calculate the weighted average credit quality ratings, we weight individual securities based on fair value and assign a numeric score of 0-5, with non-investment-grade and non-rated securities assigned a score of 0-1. To the extent the weighted average of the ratings falls between AAA and AA+, we would assign an internal rating of AAA-.

² Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

³ The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

Our asset allocation strategy is to maintain 0-25% of our portfolio in Group I securities, with the balance (75%-100%) of our portfolio in Group II securities, as defined in the Overview – Investments section and as reflected in the following tables. We believe this asset allocation strategy allows us to appropriately assess the risks associated with these securities for capital purposes and is in line with the treatment by our regulators.

App.-A-73

The following tables show the composition of our Group I and Group II securities at December 31, 2015 and 2014:

($ in millions)	Fair Value		% of Total Portfolio
2015
Group I securities:
Non-investment-grade fixed maturities	$	611.7	2.9	%
Redeemable preferred stocks1	155.1		0.7
Nonredeemable preferred stocks	782.6		3.7
Common equities	2,650.5		12.7
Total Group I securities	4,199.9		20.0
Group II securities:
Other fixed maturities2	14,565.4		69.6
Short-term investments	2,172.0		10.4
Total Group II securities	16,737.4		80.0
Total portfolio	$	20,937.3	100.0	%
2014
Group I securities:
Non-investment-grade fixed maturities	$	842.2	4.4	%
Redeemable preferred stocks1	178.6		0.9
Nonredeemable preferred stocks	827.5		4.4
Common equities	2,492.3		13.1
Total Group I securities	4,340.6		22.8
Group II securities:
Other fixed maturities2	12,528.4		65.9
Short-term investments	2,149.0		11.3
Total Group II securities	14,677.4		77.2
Total portfolio	$	19,018.0	100.0	%

¹ Includes non-investment-grade redeemable preferred stocks of $75.9 million and $78.0 million at December 31, 2015 and 2014, respectively.

² Includes investment-grade redeemable preferred stocks, with cumulative dividends, of $79.2 million at December 31, 2015 and $100.6 million at December 31, 2014.

To determine the allocation between Group I and Group II, we use the credit ratings from models provided by the National Association of Insurance Commissioners (NAIC), when available, for classifying our residential and commercial mortgage-backed securities, excluding interest-only securities, and the credit ratings from nationally recognized statistical rating organizations (NRSROs) for all other debt securities. NAIC ratings are based on a model that considers the book price of our securities when assessing the probability of future losses in assigning a credit rating. As a result, NAIC ratings can vary from credit ratings issued by NRSROs. Management believes NAIC ratings more accurately reflect our risk profile when determining the asset allocation between Group I and II securities. All of the fixed-maturity securities held by ARX at December 31, 2015, met the qualifications for Group II classification.

Unrealized Gains and Losses

As of December 31, 2015, our portfolio had pretax net unrealized gains, recorded as part of accumulated other comprehensive income, of $1,247.8 million, compared to $1,572.2 million at December 31, 2014.

During the year, the net unrealized gains in our fixed-income portfolio decreased$277.5 million, the result of valuation declines in most fixed-income sectors as interest rates and credit spreads (additional yield on non-treasury bonds relative to comparable maturity treasury securities) increased, in addition to sales of fixed-income securities with net realized gains of $131.0 million primarily in our U.S. Treasury, corporate, commercial mortgage-backed, and nonredeemable preferred stock portfolios. The contributions by individual sectors to the fixed-income portfolio change in net unrealized gains are discussed below. The net unrealized gains in our common stock portfolio decreased$46.9 million during 2015, reflecting the decline in the broad equity market during the year, adjusting for net gains recognized on security sales.

See Note 2 – Investments for a further break-out of our gross unrealized gains and losses.

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Other-Than-Temporary Impairment (OTTI)

Realized losses may include write-downs of securities determined to have had other-than-temporary declines in fair value. The write-down activity recorded in the comprehensive income statements for the years ended December 31, was as follows:

(millions)	Total Write-downs		Write-downs on Securities Sold			Write-downs on Securities Held at Period End
2015
Common equities	$	23.8	$	(15.1	)	$	8.7
Total portfolio	$	23.8	$	(15.1	)	$	8.7
2014
Common equities	$	7.9	$	(0.7	)	$	7.2
Total portfolio	$	7.9	$	(0.7	)	$	7.2
2013
Prime collateralized mortgage obligations	$	0.1	$	0		$	0.1
Home equity (sub-prime bonds)	0.5		0			0.5
Total residential mortgage-backed securities	0.6		0			0.6
Total fixed income	0.6		0			0.6
Common equities	5.5		0			5.5
Total portfolio	$	6.1	$	0		$	6.1

See Critical Accounting Policies, Other-Than-Temporary Impairment, for a complete discussion on our analysis regarding our treatment of OTTI.

Fixed-Income Securities

The fixed-income portfolio is managed internally, with the exception of the ARX portfolio which was managed externally during 2015, and includes fixed-maturity securities, short-term investments, and nonredeemable preferred stocks. The fixed-maturity securities and short-term investments, as reported on the balance sheets at December 31, were comprised of the following:

($ in millions)	2015				2014
Investment-grade fixed maturities:1
Short/intermediate term	$	16,136.0	92.2	%	$	14,006.7	89.2	%
Long term	109.3		0.6		43.9		0.3
Non-investment-grade fixed maturities:1,2
Short/intermediate term	1,246.3		7.1		1,625.6		10.4
Long term	12.6		0.1		22.0		0.1
Total	$	17,504.2	100.0	%	$	15,698.2	100.0	%

¹Long term includes securities with expected liquidation dates of 10 years or greater. Asset-backed securities are reported at their weighted average maturity based upon their projected cash flows, with the cash flows expected in periods of 10 years or greater reported as part of the long-term category. All other securities that do not have a single expected maturity date are reported at average maturity.

²Non-investment-grade fixed-maturity securities are non-rated or have a credit quality rating of an equivalent BB+ or lower, classified by ratings from NRSROs. The non-investment-grade securities based upon NAIC ratings and our Group I modeling were $687.6 million and $920.2 million at December 31, 2015 and 2014, respectively.

A primary exposure for the fixed-income portfolio is interest rate risk, which includes the change in value resulting from movements in the underlying market rates of debt securities held. We manage this risk by maintaining the portfolio’s duration (a measure of the portfolio's exposure to changes in interest rates) between 1.5 and 5 years. The duration of the fixed-income

portfolio was 1.9 years at December 31, 2015, compared to 1.6 years at December 31, 2014, reflecting our preference for shorter duration positioning during times of low interest rates. The increase includes $1.3 billion of fixed-income securities held by ARX with a duration of 2.9 years at December 31, 2015, and a decision to increase our fixed-income portfolio duration. The distribution of duration and convexity (i.e., a measure of the speed at which the duration of a security is expected to change based on a rise or fall in interest rates) is monitored on a regular basis.

The duration distribution of our fixed-income portfolio, represented by the interest rate sensitivity of the comparable benchmark U.S. Treasury Notes, was:

Duration Distribution	2015		2014
1 year	28.4	%	36.1	%
2 years	15.6		19.4
3 years	18.1		15.0
5 years	27.7		23.8
10 years	10.4		5.7
20 years	0.1		NA
30 years	(0.3	)	NA
Total fixed-income portfolio	100.0	%	100.0	%

NA = Not Applicable

The negative duration in the 30-year category arises from the variable rate nature of the dividends on some of our preferred stocks. If not called at their call dates, the dividends on these securities will reset from a fixed rate to a lower floating rate, which could cause them to trade at a discount with a negative duration.

Another primary exposure related to the fixed-income portfolio is credit risk. This risk is managed by maintaining an A+ minimum average portfolio credit quality rating, as defined by NRSROs.

The credit quality distribution of the fixed-income portfolio was:

Rating	2015		2014
AAA	37.2	%	45.5	%
AA	14.2		13.2
A	15.3		10.2
BBB	24.7		18.4
Non-investment grade/non-rated1	8.6		12.7
Total fixed-income portfolio	100.0	%	100.0	%

¹The ratings in the table above are assigned by NRSROs. The non-investment grade fixed-income securities based upon our Group I classification represented 3.8% of the total fixed-income portfolio at December 31, 2015, compared to 8.3% at December 31, 2014.

The changes in credit quality profile from December 31, 2014 were the result of investments held by ARX, as well as transactions in our portfolio that shifted the mix within the various credit categories.

Our portfolio is also exposed to concentration risk. Our investment constraints limit investment in a single issuer, other than U.S. Treasury Notes or a state’s general obligation bonds, to 2.5% of shareholders’ equity, while the single issuer guideline on preferred stocks and/or non-investment-grade debt is 1.25% of shareholders’ equity. Additionally, the guideline applicable to any state’s general obligation bonds is 6% of shareholders’ equity. Our credit risk guidelines limit single issuer exposure; however, we also consider sector concentration a risk, and we frequently evaluate the portfolio’s sector allocation with regard to internal requirements and external market factors. We consider concentration risk both overall and in the context of individual asset classes, including but not limited to common equities, residential and commercial mortgage-backed securities, municipal bonds, and high-yield bonds. At December 31, 2015, we were within all of the constraints described above.

We monitor prepayment and extension risk, especially in our structured product and preferred stock portfolios. Prepayment risk includes the risk of early redemption of security principal that may need to be reinvested at less attractive rates. Extension risk includes the risk that a security will not be redeemed when anticipated, and that the security that is extended has a lower yield than a security we might be able to obtain by reinvesting the expected redemption principal. Our holdings of different types of structured debt and preferred securities help minimize this risk. During 2015, we did not experience significant prepayment or extension of principal relative to our cash flow expectations in the portfolio.

App.-A-75

Liquidity risk is another risk factor we monitor. Our overall portfolio remains very liquid and is structured to meet expected liquidity requirements. The short-to-intermediate duration of our portfolio provides an additional source of liquidity, as we expect approximately $3.0 billion, or 22%, of principal repayment from our fixed-income portfolio, excluding U.S. Treasury Notes and short-term investments, during 2016. Cash from interest and dividend payments provides an additional source of recurring liquidity.

Included in the fixed-income portfolio are U.S. government obligations, which include U.S. Treasury Notes and interest rate swaps. Although the interest rate swaps are not obligations of the U.S. government, they are recorded in this portfolio as the change in fair value is correlated to movements in the U.S. Treasury market. The duration of these securities was comprised of the following at December 31, 2015:

($ in millions)	Fair Value		Duration (years)
U.S. Treasury Notes
Less than two years	$	1,831.4	0.3
Two to five years	4.9		2.7
Five to ten years	588.5		7.3
Total U.S. Treasury Notes	2,424.8		2.0
Interest Rate Swaps
Five to ten years ($750 notional value)	4.4		(7.1	)
Total U.S. government obligations	$	2,429.2	(0.2	)

The interest rate swap positions had a fair value of $4.4 million at December 31, 2015 as they were in an overall asset position, which is fully collateralized by cash payments received from the counterparty. The liability associated with the cash collateral received is reported in the “other liabilities” section of the consolidated balance sheets. As of December 31, 2015, we had no treasury futures. During February 2016, we entered into new treasury future positions as an additional means to manage the portfolio duration. The negative duration of the interest rate swaps is due to the positions being short interest-rate exposure (i.e., receiving a variable-rate coupon on the interest rate swaps). In determining duration, we add the interest rate sensitivity of our interest rate swap positions to that of our Treasury holdings, but do not add the notional value of the swaps to our Treasury holdings in order to calculate an unlevered duration for the portfolio.

App.-A-76

ASSET-BACKED SECURITIES

Included in the fixed-income portfolio are asset-backed securities, which were comprised of the following at December 31:

($ in millions)	Fair Value		Net Unrealized Gains (Losses)			% of Asset- Backed Securities		Duration (years)	Rating (at period end)
2015
Residential mortgage-backed securities:
Prime collateralized mortgage obligations	$	583.2	$	(3.1	)	9.4	%	0.9	A-
Alt-A collateralized mortgage obligations1	269.2		0.2			4.3		1.2	BBB
Collateralized mortgage obligations	852.4		(2.9		)	13.7		1.0	A-
Home equity (sub-prime bonds)	874.3		4.4			14.0		<0.1	BBB-
Residential mortgage-backed securities	1,726.7		1.5			27.7		0.4	BBB
Agency residential pass-through obligations	89.3		(1.0		)	1.4		4.8	AAA
Commercial mortgage-backed securities:
Commercial mortgage-backed securities	2,476.7		(13.8		)	39.7		3.4	A+
Commercial mortgage-backed securities: interest only	176.5		1.3			2.9		2.6	AAA-
Commercial mortgage-backed securities	2,653.2		(12.5		)	42.6		3.3	A+
Other asset-backed securities:
Automobile	925.4		(2.2		)	14.8		1.0	AAA-
Credit card	140.0		(0.2		)	2.2		0.5	AAA
Other2	702.5		(1.3		)	11.3		0.7	AA+
Other asset-backed securities	1,767.9		(3.7		)	28.3		0.8	AAA-
Total asset-backed securities	$	6,237.1	$	(15.7	)	100.0	%	1.8	A+
2014
Residential mortgage-backed securities:
Prime collateralized mortgage obligations	$	499.8	$	1.3		8.9	%	0.8	A-
Alt-A collateralized mortgage obligations1	224.1		2.4			4.0		1.0	BBB
Collateralized mortgage obligations	723.9		3.7			12.9		0.9	BBB+
Home equity (sub-prime bonds)	934.6		20.0			16.7		<0.1	BBB-
Residential mortgage-backed securities	1,658.5		23.7			29.6		0.3	BBB
Commercial mortgage-backed securities:
Commercial mortgage-backed securities	2,139.6		30.3			38.1		3.2	AA -
Commercial mortgage-backed securities: interest only	176.0		6.4			3.1		2.8	AAA-
Commercial mortgage-backed securities	2,315.6		36.7			41.2		3.2	AA-
Other asset-backed securities:
Automobile	815.7		0.6			14.5		0.9	AAA
Credit card	284.2		0.5			5.1		0.8	AAA
Other2	538.8		1.9			9.6		1.1	AAA-
Other asset-backed securities	1,638.7		3.0			29.2		0.9	AAA-
Total asset-backed securities	$	5,612.8	$	63.4		100.0	%	1.7	AA-

¹ Represents structured securities with primary residential loans as collateral for which documentation standards for loan approval were less stringent than conventional loans; the collateral loans are often referred to as low documentation or no documentation loans.

²Includes equipment leases, manufactured housing, and other types of structured debt.

The increase in asset-backed securities since December 31, 2014, was partially due to investments held by ARX, which were $308.9 million, or 5.0%, of our total asset-backed securities at December 31, 2015, including $102.3 million in collateralized mortgage obligations, $89.3 million in agency residential pass-through obligations (Freddie Mac, Fannie Mae, and Ginnie Mae issued), and $117.3 million in commercial mortgage-backed securities. The remaining asset-backed securities added during the year were primarily acquired in our commercial mortgage-backed and other asset-backed sectors, and are of high credit quality.

App.-A-77

Collateralized Mortgage Obligations (CMO) The following table details the credit quality rating and fair value of our CMOs, along with the loan classification and a comparison of the fair value at December 31, 2015, to our original investment value (adjusted for returns of principal, amortization, and write-downs):

Collateralized Mortgage Obligations (at December 31, 2015)
($ in millions) Rating1	Non-agency prime			Alt-A			Government/GSE2			Total			% of Total
AAA	$	47.2		$	25.8		$	107.4		$	180.4		21.2	%
AA	38.0			46.8			19.4			104.2			12.2
A	83.3			15.0			28.9			127.2			14.9
BBB	72.6			94.6			97.4			264.6			31.0
Non-investment grade	89.0			87.0			0			176.0			20.7
Total	$	330.1		$	269.2		$	253.1		$	852.4		100.0	%
Increase (decrease) in value	(0.9		)%	0.1		%	(0.4		)%	(0.4		)%

¹ The credit quality ratings in the table above are assigned by NRSROs; when we assign the NAIC ratings for our CMOs, $139.6 million are rated investment grade and classified as Group II and $36.4 million, or 4.3%, of the total are not rated by the NAIC and are classified as Group I.

² The securities in this category are insured by a Government Sponsored Entity (GSE) and/or collateralized by mortgage loans insured by the Federal Housing Administration (FHA) or the U.S. Department of Veteran Affairs (VA).

The majority of our CMO portfolio is composed of non-GSE/FHA/VA mortgage securities. In the largest part of this portfolio, we took advantage of the securitization structure to have an underlying bond split into senior and subordinated classes. We own the senior classes, which provide extra credit support to our position. We chose how much credit support we felt was necessary to attempt to protect our position from potential credit losses. The substantial increase during the year in securities insured by a GSE resulted from the investments held by ARX.

Home-Equity Securities The following table shows the credit quality rating of our home-equity securities, along with a comparison of the fair value at December 31, 2015, to our original investment value (adjusted for returns of principal, amortization, and write-downs):

Home Equity Securities (at December 31, 2015)
($ in millions) Rating1	Total			% of Total
AAA	$	26.9		3.1	%
AA	28.3			3.2
A	153.0			17.5
BBB	214.3			24.5
Non-investment grade	451.8			51.7
Total	$	874.3		100.0	%
Increase (decrease) in value	0.5		%

¹ The credit quality ratings in the table above are assigned by NRSROs; when we assign the NAIC ratings for our home equity securities, $403.8 million are rated investment grade and classified as Group II and $48.0 million, or 5.5%, of the total are not rated by the NAIC and are classified as Group I.

We feel that the market for home-equity loan-backed bonds continued to trade during the year with greater return potential than other sectors with comparable risk characteristics. We look to add securities where we feel there is a very low potential for losses given the substantial credit support. The market shrinkage in 2015, due to amortization and pay downs of the underlying loans, made it difficult to add to our portfolio.

App.-A-78

Commercial Mortgage-Backed Securities (CMBS) The following table details the credit quality rating and fair value of our CMBS bond and interest only (IO) portfolios:

Commercial Mortgage-Backed Securities (at December 31, 2015)1
($ in millions) Category	AAA			AA			A			BBB			Non-Investment Grade			Total			% of Total
Multi-borrower	$	372.5		$	24.0		$	21.8		$	10.9		$	9.9		$	439.1		16.5	%
Single-borrower	567.9			420.4			404.2			627.1			18.0			2,037.6			76.8
Total CMBS bonds	940.4			444.4			426.0			638.0			27.9			2,476.7			93.3
IO	174.0			0			0			0			2.5			176.5			6.7
Total fair value	$	1,114.4		$	444.4		$	426.0		$	638.0		$	30.4		$	2,653.2		100.0	%
% of Total fair value	42.0		%	16.8		%	16.1		%	24.0		%	1.1		%	100.0		%

¹The credit quality ratings in the table above are assigned by NRSROs; when we assign the NAIC ratings, all of our CMBS bonds are rated investment grade and classified as Group II.

We continue to focus on single-borrower CMBS because we believe these transactions provide an opportunity to select investments based on real estate and underwriting criteria that fit our preferred credit risk and duration profile. Our multi-borrower, fixed-rate CMBS portfolio is concentrated in vintages with conservative underwriting. During the year, we added $381.5 million to the CMBS bond portfolio through the addition of the ARX investments and security purchases. The purchases during the year increased our allocation of single borrower CMBS from 67.5% to 76.8%, while reducing our allocation to multi-borrower CMBS from 24.9% to 16.5%. Duration increased from 3.2 to 3.4 years during the year. The average credit quality was A+ at December 31, 2015, compared to AA- at December 31, 2014, reflecting security purchases made in the AA to BBB- range and an overall reduction of AAA securities.

With the exception of $170.4 million in Freddie Mac senior multi-family IOs, we have no multi-borrower deal IOs originated after 2006.

MUNICIPAL SECURITIES

Included in the fixed-income portfolio at December 31, 2015 and 2014, were $2,721.4 million and $2,139.2 million, respectively, of state and local government obligations. These securities had a duration of 3.2 years and an overall credit quality rating of AA (excluding the benefit of credit support from bond insurance) at December 31, 2015, compared to 3.0 years and AA at December 31, 2014. These securities had net unrealized gains of $43.8 million and $43.5 million at December 31, 2015 and 2014, respectively.

The following table details the credit quality rating of our municipal securities at December 31, 2015, without the benefit of credit or bond insurance:

Municipal Securities (at December 31, 2015)
(millions) Rating	General Obligations		Revenue Bonds		Total
AAA	$	347.9	$	500.2	$	848.1
AA	427.2		903.4		1,330.6
A	3.4		514.2		517.6
BBB	5.8		19.3		25.1
Non-investment grade/non-rated	0		0		0
Total	$	784.3	$	1,937.1	$	2,721.4

Included in revenue bonds were $776.2 million of single family housing revenue bonds issued by state housing finance agencies, of which $507.8 million were supported by individual mortgages held by the state housing finance agencies and $268.4 million were supported by mortgage-backed securities. Of the programs supported by mortgage-backed securities, approximately 25% were collateralized by Fannie Mae and Freddie Mac mortgages; the remaining 75% were collateralized by Ginnie Mae loans, which are fully guaranteed by the U.S. government. Of the programs supported by individual mortgages held by the state housing finance agencies, the overall credit quality rating was AA+. Most of these mortgages were supported by FHA, VA, or private mortgage insurance providers.

App.-A-79

The increase in municipal securities since December 31, 2014 was the result of the addition of the ARX securities, which accounts for $626.2 million, or 23.0%, of our total municipal securities at December 31, 2015. The ARX portfolio is approximately 50% municipal securities, both taxable and tax-free, with the majority tax-free.

CORPORATE SECURITIES

Included in our fixed-income securities at December 31, 2015 and 2014, were $3,691.6 million and $2,836.7 million, respectively, of corporate securities. These securities had a duration of 3.5 years and 3.3 years at December 31, 2015 and 2014, respectively, and an overall credit quality rating of BBB and BBB- at December 31, 2015 and 2014, respectively. These securities had net unrealized losses of $21.7 million and net unrealized gains of $22.5 million at December 31, 2015 and 2014, respectively.

We have increased our allocation to corporate securities throughout 2015 due to attractive valuations and the addition of the ARX portfolio, which accounts for $230.3 million, or 6.2%, of our total corporate securities at December 31, 2015. The combination of many large acquisition-related financings in the investment-grade market, along with an increase in overall market volatility, has given us the opportunity to add securities with a strong risk/return profile. The high-yield market continued to experience turbulence throughout the year with much of it centered in areas where we do not have exposure (e.g., the energy and metals/mining industries). New funds entering the high-yield market have been attracted to industries that are perceived to be safer investments and that has allowed us to reduce our high-yield exposure at attractive levels this year.

The table below shows the exposure break-down by sector and rating at year-end:

Corporate Securities (at December 31, 2015)
(millions) Sector	AAA		AA		A		BBB		Non-Investment Grade/Non-Rated		Total
Consumer	$	0	$	2.1	$	182.3	$	863.3	$	152.5	$	1,200.2
Industrial	0		0		103.9		663.8		185.0		952.7
Communications	0		0		44.4		336.0		76.2		456.6
Financial Services	50.0		9.8		238.5		279.1		111.1		688.5
Agency	32.1		2.2		0		0		0		34.3
Technology	5.5		13.3		41.3		42.0		0		102.1
Basic Materials	0		0		4.9		48.4		0		53.3
Energy	3.5		38.6		115.2		46.6		0		203.9
Total	$	91.1	$	66.0	$	730.5	$	2,279.2	$	524.8	$	3,691.6

We held $652.8 million of U.S. dollar-denominated corporate bonds issued by companies that are domiciled, or whose parent companies are domiciled, in the U.K. and other European countries, primarily in the consumer, financial, and communications industries at December 31, 2015. We had no direct exposure to southern European-domiciled companies at December 31, 2015.

PREFERRED STOCKS – REDEEMABLE AND NONREDEEMABLE

We hold both redeemable (i.e., mandatory redemption dates) and nonredeemable (i.e., perpetual with call dates) preferred stocks. At December 31, 2015, we held $234.3 million in redeemable preferred stocks and $782.6 million in nonredeemable preferred stocks, compared to $279.2 million and $827.5 million, respectively, at December 31, 2014. Our preferred stock portfolio had net unrealized gains of $81.4 million and $213.7 million at December 31, 2015 and 2014, respectively.

Preferred returns were positive, but weak in 2015. Because of their higher risk, preferred stocks offer a higher yield than the majority of the fixed-income portfolio. Prices dropped during the year, almost enough to completely offset dividends and coupon payments.  In some cases, the price drops were due to wider credit spreads, while in other cases they were due to a lower probability of a call on certain securities with low floating rate back-end coupons.  We continue to view preferred stocks as an attractive sector.  During the year, we added selectively in the new issue market and also added some as the sector dropped in price.

App.-A-80

Approximately 70% of our preferred stock securities are fixed-rate securities, and 30% are floating-rate securities. All of our preferred securities have call or mandatory redemption features. Of our fixed-rate securities, approximately 97% will convert to floating-rate dividend payments if not called at their initial call date, providing some protection against extension risk in the event the issuer elects not to call such securities at their initial call date.

Our preferred stock portfolio had a duration of 2.1 years at December 31, 2015, compared to 2.3 years at December 31, 2014. The interest rate duration of our preferred securities is calculated to reflect the call, floor, and floating rate features. Although a preferred security may remain outstanding if not called, its interest rate duration will reflect the variable nature of the dividend. The overall credit quality rating was BBB- at December 31, 2015, compared to BB+ at December 31, 2014. Our non-investment-grade preferred stocks were primarily with issuers that maintain investment-grade senior debt ratings. The table below shows the exposure break-down by sector and rating at year-end:

Preferred Stocks (at December 31, 2015)
(millions) Sector	A		BBB		Non-Investment Grade/ Non- Rated		Total
Financial Services
U.S. banks	$	48.8	$	362.5	$	243.8	$	655.1
Foreign banks	0		28.8		37.8		66.6
Insurance	0		30.3		54.3		84.6
Other financial institutions	34.8		11.5		22.0		68.3
Total Financial Services	83.6		433.1		357.9		874.6
Industrials	0		57.3		33.8		91.1
Utilities	0		51.2		0		51.2
Total	$	83.6	$	541.6	$	391.7	$	1,016.9

We also face the risk that dividend payments on our preferred stock holdings could be deferred for one or more periods or skipped entirely. As of December 31, 2015, all of our preferred securities continued to pay their dividends in full and on time. Approximately 68% of our preferred stock securities pay dividends that have tax preferential characteristics, while the balance pay dividends that are fully taxable.

We held $66.6 million of U.S. dollar-denominated nonredeemable preferred stocks issued by financial institutions that are domiciled, or whose parent companies are domiciled, in the U.K. and other European countries. We had no direct exposure to southern European-domiciled companies at December 31, 2015. We also held $91.1 million of preferred stock issued by energy pipeline companies at December 31, 2015.

Common Equities

Common equities, as reported on the balance sheets at December 31, were comprised of the following:

($ in millions)	2015				2014
Indexed common stocks	$	2,532.3	95.5	%	$	2,192.1	87.9	%
Managed common stocks	117.9		4.4		299.8		12.0
Total common stocks	2,650.2		99.9		2,491.9		99.9
Other risk investments	0.3		0.1		0.4		0.1
Total common equities	$	2,650.5	100.0	%	$	2,492.3	100.0	%

In our indexed common stock portfolio, our individual holdings are selected based on their contribution to the correlation with the index. For both periods reported in the table above, the GAAP basis total return was within the desired tracking error when compared to the Russell 1000 Index. We held 716 out of 1,033, or 69%, of the common stocks comprising the Russell 1000 Index at December 31, 2015, which made up 91% of the total market capitalization of the index. During 2015, we reallocated about $100 million from our fixed-income portfolio into our indexed portfolio.

The actively managed common stock portfolio is currently managed by one external investment manager. At December 31, 2015, the fair value of the actively managed portfolio was $117.9 million, compared to a cost basis of $101.0 million. In October 2015, we terminated our agreement with a second external investment manager and reinvested the proceeds into our

App.-A-81

indexed common stock portfolio, which reduced the fair value of our actively managed equities by $161.2 million and the cost basis by $158.4 million based on the September 30, 2015 valuation.

Other risk investments include private equity investments and limited partnership interests in private equity and mezzanine investment funds, which have no off-balance-sheet exposure or contingent obligations.

The following is a summary of our indexed common stock portfolio holdings by sector compared to the Russell 1000 Index composition:

Sector	Equity Portfolio Allocation at December 31, 2015		Russell 1000 Allocation at December 31, 2015		Russell 1000 Sector Return in 2015
Consumer discretionary	14.9	%	15.5	%	6.4	%
Consumer staples	7.7		8.7		8.2
Financial services	18.2		19.4		0.7
Health care	14.7		14.3		7.1
Materials and processing	3.2		3.6		(7.6	)
Other energy	6.5		6.1		(22.3	)
Producer durable	9.7		10.3		(2.4	)
Technology	18.0		16.9		4.3
Utilities	5.2		5.2		(1.8	)
Other equity	1.9		NA		NA
Total common stocks	100.0	%	100.0	%	0.9	%

NA = Not Applicable

Derivative Instruments

CASH FLOW HEDGES

We issued $400 million of 3.70% Senior Notes in January 2015 and $350 million of 4.35% Senior Notes in April 2014. Upon issuance, we closed forecasted debt issuance hedges, which were entered into to hedge against a possible rise in interest rates, and recognized a $12.9 million and a $1.6 million pretax loss, respectively, as part of accumulated other comprehensive income (loss). The losses will be recognized as an adjustment to interest expense and amortized over the applicable lives of the Senior Notes.

We repurchased a portion of our 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 during 2015 and 2014, and we reclassified $0.2 million and $0.5 million, respectively, of unrealized gains on forecasted transactions to net realized gains on securities.

See Note 2 – Investments for further discussion.

INTEREST RATE SWAPS

We use interest rate swaps to manage the fixed-income portfolio duration. The $750 million notional value swaps reflected a loss for 2015 and 2014, as interest rate swap rates fell during each of these periods. The $750 million notional value swaps reflected a gain for 2013, as interest rate swap rates rose after the positions were opened. The losses on the $1,263 million notional value swaps during 2013 reflected a decline in interest rate swap rates during the period. The following table summarizes our interest rate swap activity:

App.-A-82

										Net Realized Gains (Losses)
										Years ended
(millions)	Date			Notional Value						December 31,
Term	Effective	Maturity	Coupon	2015		2014		2013		2015			2014			2013
Open:
10-year	04/2013	04/2023	Receive variable	$	150	$	150	$	150	$	(4.7	)	$	(12.9	)	$	11.9
10-year	04/2013	04/2023	Receive variable	185		185		185		(5.8		)	(15.9		)	14.8
10-year	04/2013	04/2023	Receive variable	415		415		415		(12.9		)	(35.8		)	33.1
Total open positions				$	750	$	750	$	750	$	(23.4	)	$	(64.6	)	$	59.8
Closed:
5-year	NA	NA	Receive variable	$	0	$	0	$	400	$	0		$	0		$	(1.0	)
5-year	NA	NA	Receive variable	0		0		500		0			0			(1.6		)
9-year	NA	NA	Receive variable	0		0		363		0			0			(1.4		)
Total closed positions				$	0	$	0	$	1,263	$	0		$	0		$	(4.0	)
Total interest rate swaps										$	(23.4	)	$	(64.6	)	$	55.8

NA = Not Applicable

During January 2016, we closed our $185 million notional value interest rate swap position and recognized a loss of $1.9 million for the month.

U.S. TREASURY FUTURES

During 2015, we used treasury futures to manage the fixed-income portfolio duration. The contracts were opened during the second quarter 2015 and closed prior to December 31, 2015. The positions reflect a net gain, as rates rose overall during the period held. We did not hold any treasury futures during 2014 or 2013. The following table summarizes our treasury futures activity:

(millions)	Date		Bought/Sold	Notional Value						Net Realized Gains (Losses)
										Years ended
										December 31,
Term	Effective	Maturity		2015		2014		2013		2015		2014		2013
Closed:
10-year	Various	Various	Sold	$	221.5	$	0	$	0	$	1.7	$	0	$	0
5-year	Various	Various	Sold	469.0		0		0		0.8		0		0
Total treasury futures				$	690.5	$	0	$	0	$	2.5	$	0	$	0

App.-A-83

V. CRITICAL ACCOUNTING POLICIES

Progressive is required to make certain estimates and assumptions when preparing its financial statements and accompanying notes in conformity with GAAP. Actual results could differ from those estimates in a variety of areas. The three areas that we view as most critical with respect to the application of estimates and assumptions are the establishment of our loss reserves, the method of determining impairments in our investment portfolio, and our analysis of goodwill for impairment.

A. Loss and LAE Reserves

Loss and loss adjustment expense (LAE) reserves represent our best estimate of our ultimate liability for losses and LAE relating to events that occurred prior to the end of any given accounting period but have not yet been paid. At December 31, 2015, we had $8.6 billion of net loss and LAE reserves, which included $6.9 billion of case reserves and $1.7 billion of incurred but not recorded (IBNR) reserves. Personal auto liability and commercial auto liability reserves represent approximately 95% of our total carried net reserves. For this reason, the following discussion focuses on our vehicle businesses.

For our vehicle businesses, Progressive’s actuarial staff reviews over 400 subsets of business data, which are at a combined state, product, and line coverage level (the “products”), to calculate the needed loss and LAE reserves. We begin our review of a set of data by producing multiple estimates of needed reserves, using both paid and incurred data, to determine if a reserve change is required. In the event of a wide variation among results generated by the different projections, our actuarial group will further analyze the data using additional quantitative analysis. Each review develops a point estimate for a relatively small subset of the business, which allows us to establish meaningful reserve levels for that subset. In addition, the actuarial staff completes separate projections of needed case and IBNR reserves.

We do not review loss reserves on a macro level and, therefore, do not derive a companywide range of reserves to compare to a standard deviation. Instead, we review a large majority of our reserves by product/state combination on a quarterly time frame, with the remaining reserves generally reviewed on a semiannual basis. A change in our scheduled reviews of a particular subset of the business depends on the size of the subset or emerging issues relating to the product or state. By reviewing the reserves at such a detailed level, we have the ability to identify and measure variances in the trends by state, product, and line coverage that otherwise would not be seen on a consolidated basis. We believe our comprehensive process of reviewing at a subsegment level provides us more meaningful estimates of our aggregate loss reserves.

In analyzing the ultimate accident year loss and LAE experience, our actuarial staff reviews in detail, at the subset level, frequency (number of losses per earned car year), severity (dollars of loss per each claim), and average premium (dollars of premium per earned car year) of loss, as well as the frequency and severity of our LAE costs. The loss ratio, a primary measure of loss experience, is equal to the product of frequency times severity divided by the average premium. The average premium for personal and commercial auto businesses is not estimated. The actual frequency experienced will vary depending on the change in mix of class of drivers insured by Progressive, but the frequency projections for these lines of business are generally stable in the short term, because a large majority of the parties involved in an accident report their claims within a short time period after the occurrence. The severity experienced by Progressive is much more difficult to estimate, especially for injury claims, since severity is affected by changes in underlying costs, such as medical costs, jury verdicts, and regulatory changes. In addition, severity will vary relative to the change in our mix of business by limit.

Assumptions regarding needed reserve levels made by the actuarial staff take into consideration influences on available historical data that reduce the predictiveness of our projected future loss costs. Internal considerations that are process-related, which generally result from changes in our claims organization’s activities, include claim closure rates, the number of claims that are closed without payment, and the level of the claims representatives’ estimates of the needed case reserve for each claim. These changes and their effect on the historical data are studied at the state level versus on a larger, less indicative, countrywide basis.

External items considered include the litigation atmosphere, state-by-state changes in medical costs, and the availability of services to resolve claims. These also are better understood at the state level versus at a more macro, countrywide level.

Similar to our vehicle businesses, our actuarial staff, including the staff of ARX, analyzes loss and LAE property data on an accident period basis. Many of the methodologies and key parameters reviewed are similar. Unlike our vehicle businesses, primarily due to the size of the business, data is reviewed at a macro level and a range of reserves are generated to determine a reasonable range. 

The manner in which we consider and analyze the multitude of influences on the historical data, as well as how loss reserves affect our financial results, is discussed in more detail in our Report on Loss Reserving Practices, which was filed on August 26, 2015 via Form 8-K. There have been no significant changes to our reserving practices since this report was filed.

App.-A-84

At December 31, 2015, Progressive had $10.0 billion of carried gross reserves and $8.6 billion of net reserves (net of reinsurance recoverables on unpaid losses). Our net reserve balance implicitly assumes that the loss and LAE severity for accident year 2015 over accident year 2014 would be 4.2% higher for personal auto liability and 9.2% higher for commercial auto liability. As discussed above, the severity estimates are influenced by many variables that are difficult to precisely quantify and which influence the final amount of claims settlement. That, coupled with changes in internal claims practices, the legal environment, and state regulatory requirements, requires significant judgment in the estimate of the needed reserves to be carried.

The following table highlights what the effect would be to our carried loss and LAE reserves, on a net basis, as of December 31, 2015, if during 2016 we were to experience the indicated change in our estimate of severity for the 2015 accident year (i.e., claims that occurred in 2015):

	Estimated Changes in Severity for Accident Year 2015
(millions)	-4%		-2%		As Reported		+2%		+4%
Personal auto liability	$	6,398.5	$	6,560.3	$	6,722.1	$	6,883.9	$	7,045.7
Commercial auto liability	1,405.4		1,425.2		1,445.0		1,464.8		1,484.6
Other1	429.2		429.2		429.2		429.2		429.2
Total	$	8,233.1	$	8,414.7	$	8,596.3	$	8,777.9	$	8,959.5

¹ Includes reserves for personal and commercial auto physical damage claims and our non-auto lines of business; no change in estimates is presented due to the immaterial level of these reserves.

Note: Every percentage point change in our estimate of severity for the 2015 accident year would affect our personal auto liability reserves by $80.9 million and our commercial auto reserves by $9.9 million.

Our 2015 year-end loss and LAE reserve balance also includes claims from prior years. Claims that occurred in 2015, 2014, and 2013, in the aggregate, accounted for approximately 92% of our reserve balance. If during 2016 we were to experience the indicated change in our estimate of severity for the total of the prior three accident years (i.e., 2015, 2014, and 2013), the effect to our year-end 2015 reserve balances would be as follows:

	Estimated Changes in Severity for Accident Years 2015, 2014, and 2013
(millions)	-4%		-2%		As Reported		+2%		+4%
Personal auto liability	$	5,824.1	$	6,273.1	$	6,722.1	$	7,171.1	$	7,620.1
Commercial auto liability	1,332.2		1,388.6		1,445.0		1,501.4		1,557.8
Other1	429.2		429.2		429.2		429.2		429.2
Total	$	7,585.5	$	8,090.9	$	8,596.3	$	9,101.7	$	9,607.1

¹ Includes reserves for personal and commercial auto physical damage claims and our non-auto lines of business; no change in estimates is presented due to the immaterial level of these reserves.

Note: Every percentage point change in our estimate of severity for the 2015, 2014, and 2013 accident years would affect our personal auto liability reserves by $224.5 million and our commercial auto reserves by $28.2 million.

App.-A-85

Our best estimate of the appropriate amount for our reserves as of year-end 2015 is included in our financial statements for the year. Our goal is to ensure that total reserves are adequate to cover all loss costs, while sustaining minimal variation from the time reserves are initially established until losses are fully developed. At the point in time when reserves are set, we have no way of knowing whether our reserve estimates will prove to be high or low, or whether one of the alternative scenarios discussed above is “reasonably likely” to occur. The above tables show the possible favorable or unfavorable development we will realize if our estimates miss by 2% or 4%. During 2015, our estimate of the needed reserves at the end of 2014 decreased 4.0%. The following table shows how we have performed against this goal over the last ten years:

($ in millions)
For the years ended December 31,	2005		2006			2007		2008		2009		2010		2011		2012			2013		2014		2015
Loss and LAE Reserves-net1	$	5,313.1	$	5,363.6		$	5,655.2	$	5,932.9	$	6,123.6	$	6,366.9	$	6,460.1	$	6,976.3		$	7,433.8	$	7,671.5	$	8,596.3
Loss and LAE Reserves acquired-net2																					222.4
Total Loss and LAE Reserves-net																					7,893.9
Re-estimated reserves as of:
One year later	5,066.2		5,443.9			5,688.4		5,796.9		5,803.2		6,124.9		6,482.1		7,021.4			7,409.7		7,578.8
Two years later	5,130.5		5,469.8			5,593.8		5,702.1		5,647.7		6,074.4		6,519.6		6,994.7			7,402.4		—
Three years later	5,093.6		5,381.9			5,508.0		5,573.8		5,575.0		6,075.9		6,495.4		6,983.2			—		—
Four years later	5,046.7		5,336.5			5,442.1		5,538.5		5,564.6		6,050.6		6,459.8		—			—		—
Five years later	5,054.6		5,342.8			5,452.8		5,580.0		5,605.6		6,097.4		—		—			—		—
Six years later	5,060.8		5,352.8			5,475.6		5,609.1		5,638.8		—		—		—			—		—
Seven years later	5,070.2		5,369.7			5,501.3		5,634.9		—		—		—		—			—		—
Eight years later	5,081.7		5,391.2			5,527.1		—		—		—		—		—			—		—
Nine years later	5,100.6		5,406.4			—		—		—		—		—		—			—		—
Ten years later	5,110.2		—			—		—		—		—		—		—			—		—
Cumulative Development:
Favorable(Unfavorable)	$	202.9	$	(42.8	)	$	128.1	$	298.0	$	484.8	$	269.5	$	0.3	$	(6.9	)	$	31.4	$	315.1
Percentage3	3.8		(0.8		)	2.3		5.0		7.9		4.2		0		(0.1		)	0.4		4.0

¹ Represents loss and LAE reserves net of reinsurance recoverables on net unpaid losses at the balance sheet date for Progressive prior to the acquisition of a controlling interest in ARX and its subsidiaries.

² Represents the net reserves acquired as part of the ARX acquisition.

³ Cumulative development ÷ loss and LAE reserves.

Note: The chart above represents the development of the property-casualty loss and LAE reserves for 2005 through 2014. The last line in the triangle for each year represents the following:

Re-estimated reserves = Total amount paid to date + Re-estimated liability for unpaid losses and LAE-net

Changes in the estimated severity and the actual number of late reported claims are the cause of the change in our re-estimated reserves from year to year. The cumulative development represents the aggregate change in our estimates over all years.

The favorable reserve development for 2005 and 2007 through 2010 was about 2% to 8% of our original carried reserves, which primarily reflects the decreases in severity between our original estimate and what we experienced in both our personal auto and commercial auto businesses during that period. For 2011 through 2013, we experienced very minimal development, or less than 1% of our original estimate. For 2014, the favorable development primarily reflects lower than anticipated severity than we initially estimated in all segments.

Because Progressive is primarily an insurer of motor vehicles, we have minimal exposure as an insurer of environmental, asbestos, and general liability claims.

App.-A-86

B. Other-Than-Temporary Impairment (OTTI)

Realized losses may include write-downs of securities determined to have had other-than-temporary declines in fair value. We routinely monitor our portfolio for pricing changes that might indicate potential impairments and perform detailed reviews of securities with unrealized losses based on predetermined guidelines. In such cases, changes in fair value are evaluated to determine the extent to which such changes are attributable to: (i) fundamental factors specific to the issuer, such as financial conditions, business prospects, or other factors; (ii) market-related factors, such as interest rates or equity market declines (e.g., negative return at either a sector index level or at the broader market level); or (iii) credit-related losses, where the present value of cash flows expected to be collected is lower than the amortized cost basis of the security.

Fixed-income securities and common equities with declines attributable to issuer-specific fundamentals are reviewed to identify available evidence, circumstances, and influences to estimate the potential for, and timing of, recovery of the investment’s impairment. An OTTI loss is deemed to have occurred when the potential for recovery does not satisfy the criteria set forth in the current accounting guidance.

For fixed-income investments with unrealized losses due to market- or sector-related declines, the losses are not deemed to qualify as other-than-temporary if we do not have the intent to sell the investments, and it is more likely than not that we will not be required to sell the investments, prior to the period of time that we anticipate to be necessary for the investments to recover their cost bases. In general, our policy for common equity securities with market- or sector-related declines is to recognize impairment losses on individual securities with losses we cannot reasonably conclude will recover in the near term under historical conditions when: (i) we are able to objectively determine that the loss is other-than-temporary; or (ii) the security has been in a significant loss position for three consecutive quarters.

When a security in our fixed-maturity portfolio has an unrealized loss and we intend to sell the security, or it is more likely than not that we will be required to sell the security, we write down the security to its current fair value and recognize the entire unrealized loss through the comprehensive income statement as a realized loss. If a fixed-maturity security has an unrealized loss and it is more likely than not that we will hold the debt security until recovery (which could be maturity), then we determine if any of the decline in value is due to a credit loss (i.e., where the present value of cash flows expected to be collected is lower than the amortized cost basis of the security) and, if so, we will recognize that portion of the impairment in net income as part of the comprehensive income statement as a realized loss; any remaining unrealized loss on the security is considered to be due to other factors (e.g., interest rate and credit spread movements) and is reflected in other comprehensive income as part of shareholders’ equity, along with unrealized gains or losses on securities that are not deemed to be other-than-temporarily impaired.

The following table stratifies the gross unrealized losses in our fixed-income and common equity portfolios at December 31, 2015, by the duration in a loss position and magnitude of the loss as a percentage of the cost of the security:

	Fair Value		Total Gross Unrealized Losses		Decline of Investment Value
(millions)					>15%		>25%		>35%		>45%
Fixed income:
Unrealized loss for less than 12 months	$	7,680.9	$	79.7	$	11.3	$	3.8	$	0	$	0
Unrealized loss for 12 months or greater	1,879.4		72.8		32.7		9.2		0		0
Total	$	9,560.3	$	152.5	$	44.0	$	13.0	$	0	$	0
Common equity:
Unrealized loss for less than 12 months	$	161.4	$	14.2	$	4.1	$	0.7	$	0.5	$	0.5
Unrealized loss for 12 months or greater	3.4		0		0		0		0		0
Total	$	164.8	$	14.2	$	4.1	$	0.7	$	0.5	$	0.5

We completed a thorough review of the existing securities in these loss categories and determined that, applying the procedures and criteria discussed above, these securities were not other-than-temporarily impaired. We currently do not intend to sell these securities. We also determined that it is more likely than not that we will not be required to sell these securities, for the periods of time necessary to recover the cost bases of these securities, and that there is no additional credit-related impairment on our debt securities.

Since total unrealized losses are already a component of other comprehensive income and included in shareholders’ equity, any recognition of these losses as additional OTTI losses would have no effect on our comprehensive income, book value, or reported investment total return.

App.-A-87

C. Goodwill

Substantially all of our goodwill relates to the April 1, 2015, acquisition of a controlling interest in ARX. We test our goodwill balance for impairment at the reporting unit level annually as of October 1, or more frequently if indicators of impairment exist. Below our reportable segment level, we have identified reporting units that are expected to receive the future economic benefits created through this acquisition. These reporting units represent the lowest operational level of our business for which management regularly reviews discrete financial operating results.

To test for impairment, we may elect to perform a qualitative or quantitative analysis, based on our judgment of the relevant qualitative factors that exist at the time we perform the valuation. For 2015, we performed a qualitative analysis to test for impairment of the goodwill allocated to our Agency auto and ARX reporting units. The analysis was performed by assessing certain trends and factors, actual and forecasted operating information (including growth rates and profitability), industry and macroeconomic data, and other relevant qualitative factors. The results of the qualitative analysis did not indicate a need to perform an additional quantitative analysis. As of the evaluation date, we concluded that there were no indicators of impairment to goodwill. We believe the amount of goodwill recorded is recoverable for both of the reporting units; however, this does not provide assurance that goodwill will not be impaired in future periods. For additional information on goodwill, see Note 15 - Acquisition.

App.-A-88

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Statements in this report that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. These risks and uncertainties include, without limitation, uncertainties related to estimates, assumptions, and projections generally; inflation and changes in general economic conditions (including changes in interest rates and financial markets); the possible failure of one or more governmental, corporate, or other entities to make scheduled debt payments or satisfy other obligations; the potential or actual downgrading by one or more rating agencies of our securities or governmental, corporate, or other securities we hold; the financial condition of, and other issues relating to the strength of and liquidity available to, issuers of securities held in our investment portfolios and other companies with which we have ongoing business relationships, including reinsurers and other counterparties to certain financial transactions; the accuracy and adequacy of our pricing, loss reserving, and claims methodologies; the competitiveness of our pricing and the effectiveness of our initiatives to attract and retain more customers; initiatives by competitors and the effectiveness of our response; our ability to obtain regulatory approval for the introduction of products to new jurisdictions, for requested rate changes and the timing thereof and for any proposed acquisitions; the effectiveness of our brand strategy and advertising campaigns relative to those of competitors; legislative and regulatory developments at the state and federal levels, including, but not limited to, matters relating to vehicle and homeowners insurance, health care reform and tax law changes; the outcome of disputes relating to intellectual property rights; the outcome of litigation or governmental investigations that may be pending or filed against us; severe weather conditions and other catastrophe events; the effectiveness of our reinsurance programs; changes in driving and residential occupancy patterns; our ability to accurately recognize and appropriately respond in a timely manner to changes in loss frequency and severity trends; technological advances; acts of war and terrorist activities; our ability to maintain the uninterrupted operation of our facilities, systems (including information technology systems), and business functions, and safeguard personal and sensitive information in our possession; our continued access to and functionality of third-party systems that are critical to our business; restrictions on our subsidiaries' ability to pay dividends to The Progressive Corporation; possible impairment of our goodwill or intangible assets if future results do not adequately support either, or both, of these items; court decisions, new theories of insurer liability or interpretations of insurance policy provisions and other trends in litigation; changes in health care and auto and property repair costs; and other matters described from time to time in our releases and publications, and in our periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding claims activity becomes known. Reported results, therefore, may be volatile in certain accounting periods.

App.-A-89

Supplemental Information

The Progressive Corporation and Subsidiaries

Ten Year Summary – Selected Financial Information

(unaudited)

(millions – except ratios, policies in force, per share amounts, and number of people employed)	2015			2014			2013			2012			2011
Net premiums written	$	20,564.0		$	18,654.6		$	17,339.7		$	16,372.7		$	15,146.6
Growth	10		%	8		%	6		%	8		%	5		%
Net premiums earned	$	19,899.1		$	18,398.5		$	17,103.4		$	16,018.0		$	14,902.8
Growth	8		%	8		%	7		%	7		%	4		%
Policies in force (thousands):
Personal Lines	13,764.7			13,261.9			13,056.4			12,735.3			12,283.8
Growth	4		%	2		%	3		%	4		%	5		%
Commercial Lines	555.8			514.7			514.6			519.6			509.1
Growth	8		%	0		%	(1		)%	2		%	0		%
Property1	1,076.5			—			—			—			—
Total revenues	$	20,853.8		$	19,391.4		$	18,170.9		$	17,083.9		$	15,774.6
Underwriting margins:2
Personal Lines	6.5		%	6.7		%	6.6		%	4.4		%	6.8		%
Commercial Lines	15.9		%	17.2		%	6.5		%	5.2		%	9.1		%
Property1	10.1		%	—			—			—			—
Total underwriting operations	7.5		%	7.7		%	6.5		%	4.4		%	7.0		%
Net income (loss) attributable to Progressive	$	1,267.6		$	1,281.0		$	1,165.4		$	902.3		$	1,015.5
Per share3	2.15			2.15			1.93			1.48			1.59
Average equivalent shares3	589.2			594.8			603.6			607.8			636.9
Comprehensive income (loss) attributable to Progressive	$	1,044.9		$	1,352.4		$	1,246.1		$	1,080.8		$	924.3
Total assets	$	29,819.3		$	25,787.6		$	24,408.2		$	22,694.7		$	21,844.8
Debt outstanding	2,707.9			2,164.7			1,860.9			2,063.1			2,442.1
Redeemable noncontrolling interest	464.9			—			—			—			—
Total shareholders’ equity	7,289.4			6,928.6			6,189.5			6,007.0			5,806.7
Statutory surplus	7,575.5			6,442.8			5,991.0			5,605.2			5,269.2
Common shares outstanding	583.6			587.8			595.8			604.6			613.0
Common share price:
High	$	33.95		$	27.52		$	28.54		$	23.41		$	22.08
Low	25.23			22.53			21.36			19.01			16.88
Close (at December 31)	31.80			26.99			27.27			21.10			19.51
Market capitalization	$	18,558.5		$	15,864.7		$	16,247.5		$	12,757.1		$	11,959.6
Book value per common share	12.49			11.79			10.39			9.94			9.47
Ratios:
Return on average shareholders’ equity:
Net income (loss) attributable to Progressive	17.2		%	19.1		%	17.7		%	14.5		%	16.5		%
Comprehensive income (loss) attributable to Progressive	14.2		%	20.1		%	19.0		%	17.4		%	15.0		%
Debt to total capital4	27.1		%	23.8		%	23.1		%	25.6		%	29.6		%
Price to earnings	14.8			12.6			14.1			14.3			12.3
Price to book	2.5			2.3			2.6			2.1			2.1
Earnings to fixed charges	14.2		x	16.4		x	14.7		x	11.0		x	11.6		x
Net premiums written to statutory surplus	2.7			2.9			2.9			2.9			2.9
Statutory combined ratio	91.8			92.1			93.4			95.2			92.9
Dividends declared per share5	$	0.8882		$	0.6862		$	1.4929		$	1.2845		$	0.4072
Number of people employed1	28,580			26,501			26,145			25,889			25,007

All share and per share amounts were adjusted for the May 18, 2006, 4-for-1 stock split.

¹ We began reporting our Property business as a segment on April 1, 2015, when we acquired a controlling interest in ARX. The number of people employed includes 620 ARX employees.

²Underwriting margins are calculated as pretax underwriting profit (loss), as defined in Note 10 – Segment Information, as a percentage of net premiums earned.

³Amounts reflect basic net income per share and basic average equivalent shares for 2008 since we reported a net loss; all other periods are presented on a diluted basis.

App.-A-90

(millions – except ratios, policies in force, per share amounts, and number of people employed)	2010			2009			2008			2007			2006
Net premiums written	$	14,476.8		$	14,002.9		$	13,604.3		$	13,772.5		$	14,132.0
Growth	3		%	3		%	(1		)%	(3		)%	1		%
Net premiums earned	$	14,314.8		$	14,012.8		$	13,631.4		$	13,877.4		$	14,117.9
Growth	2		%	3		%	(2		)%	(2		)%	3		%
Policies in force (thousands):
Personal Lines	11,702.7			10,940.6			10,464.9			10,115.6			9,741.1
Growth	7		%	5		%	3		%	4		%	3		%
Commercial Lines	510.4			512.8			539.4			539.2			503.2
Growth	0		%	(5		)%	0		%	7		%	7		%
Property1	—			—			—			—			—
Total revenues	$	15,215.5		$	14,791.1		$	13,049.0		$	14,902.9		$	15,008.5
Underwriting margins:2
Personal Lines	7.0		%	7.6		%	5.4		%	7.0		%	12.3		%
Commercial Lines	12.5		%	14.2		%	5.3		%	10.1		%	19.8		%
Property1	—			—			—			—			—
Total underwriting operations	7.6		%	8.4		%	5.4		%	7.4		%	13.3		%
Net income (loss) attributable to Progressive	$	1,068.3		$	1,057.5		$	(70.0	)	$	1,182.5		$	1,647.5
Per share3	1.61			1.57			(0.10		)	1.65			2.10
Average equivalent shares3	663.3			672.2			668.0			718.5			783.8
Comprehensive income (loss) attributable to Progressive	$	1,398.8		$	1,752.2		$	(614.7	)	$	1,071.0		$	1,853.1
Total assets	$	21,150.3		$	20,049.3		$	18,250.5		$	18,843.1		$	19,482.1
Debt outstanding	1,958.2			2,177.2			2,175.5			2,173.9			1,185.5
Redeemable noncontrolling interest	—			—			—			—			—
Total shareholders’ equity	6,048.9			5,748.6			4,215.3			4,935.5			6,846.6
Statutory surplus	5,073.0			4,953.6			4,470.6			4,587.3			4,963.7
Common shares outstanding	662.4			672.6			676.5			680.2			748.0
Common share price:
High	$	22.13		$	18.10		$	21.31		$	25.16		$	30.09
Low	16.18			9.76			10.29			17.26			22.18
Close (at December 31)	19.87			17.99			14.81			19.16			24.22
Market capitalization	$	13,161.9		$	12,100.1		$	10,019.0		$	13,032.6		$	18,116.6
Book value per common share	9.13			8.55			6.23			7.26			9.15
Ratios:
Return on average shareholders’ equity:
Net income (loss) attributable to Progressive	17.1		%	21.4		%	(1.5		)%	19.5		%	25.3		%
Comprehensive income (loss) attributable to Progressive	22.3		%	35.5		%	(13.3		)%	17.7		%	28.4		%
Debt to total capital4	24.5		%	27.5		%	34.0		%	30.6		%	14.8		%
Price to earnings	12.3			11.5			NA			11.6			11.5
Price to book	2.2			2.1			2.4			2.6			2.6
Earnings to fixed charges	11.9		x	11.3		x	NA			13.5		x	24.7		x
Net premiums written to statutory surplus	2.9			2.8			3.0			3.0			2.8
Statutory combined ratio	92.5			91.6			94.6			92.7			86.5
Dividends declared per share5	$	1.3987		$	0.1613		$	0		$	2.1450		$	0.0325
Number of people employed1	24,638			24,661			25,929			26,851			27,778

⁴Ratio reflects debt as a percent of debt plus shareholders' equity; redeemable noncontrolling interest is not part of this calculation.

⁵Progressive transitioned to an annual variable dividend policy beginning in 2007. In accordance with this policy, no dividend was declared in 2008 since our comprehensive income was less than after-tax underwriting income. In addition to the annual variable dividend, Progressive’s Board declared special cash dividends of $1.00 per common share in 2013, 2012, and 2010, and $2.00 per common share in 2007. Progressive paid quarterly dividends prior to 2007.

NA = Not applicable due to the net loss reported for 2008.

App.-A-91

The Progressive Corporation and Subsidiaries

Quarterly Financial and Common Share Data

(unaudited)

(millions – except per share amounts)
									Stock Price1
Quarter	Total Revenues		Net Income		Net Income Attributable to Progressive2		Per Share3		High		Low		Close		Rate of Return4		Dividends Declared Per Share5
2015
1	$	4,895.3	$	295.6	$	295.6	$	0.50	$	27.90	$	25.23	$	27.20			$	0
2	5,283.3		368.5		363.3		0.62		28.50		26.44		27.83				0
3	5,273.8		286.5		278.3		0.47		31.70		27.23		30.64				0
4	5,401.4		349.9		330.4		0.56		33.95		30.09		31.80				0.8882
	$	20,853.8	$	1,300.5	$	1,267.6	$	2.15	$	33.95	$	25.23	$	31.80	20.9	%	$	0.8882
2014
1	$	4,707.6	$	321.3	$	321.3	$	0.54	$	27.30	$	22.53	$	24.22			$	0
2	4,741.5		293.4		293.4		0.49		26.03		23.40		25.36				0
3	4,766.1		296.1		296.1		0.50		25.63		23.20		25.28				0
4	5,176.2		370.2		370.2		0.63		27.52		24.16		26.99				0.6862
	$	19,391.4	$	1,281.0	$	1,281.0	$	2.15	$	27.52	$	22.53	$	26.99	5.3	%	$	0.6862
2013
1	$	4,437.2	$	308.6	$	308.6	$	0.51	$	25.38	$	21.36	$	25.27			$	0
2	4,593.6		324.6		324.6		0.54		26.39		23.99		25.42				0
3	4,521.3		232.4		232.4		0.39		27.55		24.86		27.23				0
4	4,618.8		299.8		299.8		0.50		28.54		25.81		27.27				1.4929
	$	18,170.9	$	1,165.4	$	1,165.4	$	1.93	$	28.54	$	21.36	$	27.27	30.9	%	$	1.4929

¹ Prices are as reported on the consolidated transaction reporting system. Progressive’s common shares are listed on the New York Stock Exchange under the symbol PGR.

² Prior to the April 1, 2015 acquisition of a controlling interest in ARX, net income attributable to Progressive was equivalent to net income.

³ Based on net income attributable to Progressive. The sum may not equal the total because the average equivalent shares differ in the quarterly and annual periods.

⁴ Represents annual rate of return, assuming dividend reinvestment.

⁵ Progressive maintains an annual variable dividend policy under which a dividend is typically declared each December and paid early the following year. In addition to the annual variable dividend, in December 2013, Progressive's Board declared a special cash dividend of $1.00 per common share. The December 2013 special dividend was paid in February 2014.

App.-A-92

The Progressive Corporation and Subsidiaries

Performance Graph

(unaudited)

The following performance graph compares the performance of Progressive’s Common Shares (“PGR”) to the Standard & Poor’s Index (“S&P Index”) and the Value Line Property/Casualty Industry Group (“P/C Group”) for the last five years.

Cumulative Five-Year Total Return*

PGR, S&P Index, P/C Group (Performance Results through 12/31/15)

(Assumes $100 was invested at the close of trading on December 31, 2010)
	2011		2012		2013		2014		2015
PGR	$	100.16	$	115.70	$	151.41	$	159.51	$	192.91
S&P Index	102.11		118.45		156.82		178.28		180.78
P/C Group	107.28		128.63		173.49		198.73		220.63

*Assumes reinvestment of dividends

Source: Value Line Publishing LLC

App.-A-93

The Progressive Corporation and Subsidiaries

Claims Payment Patterns

(unaudited)

The Progressive Group of Insurance Companies is primarily an insurer of automobiles and recreational vehicles owned by individuals, and cars and trucks owned and/or operated predominantly by small businesses. As such, our claims liabilities are generally short in duration. Since our incurred losses consist of both payments and changes in the reserve estimates, it is important to understand our paid development patterns. The charts below show our claims payment patterns, reflecting both dollars and claims counts paid, for personal auto physical damage and bodily injury claims, as well as on a total personal auto basis, in each case calculated from the date of loss. Since physical damage claims pay out so quickly, the chart is calibrated on a monthly basis, as compared to a quarterly basis for the bodily injury and total auto payments.

App.-A-94

Note: The above graphs are presented for our personal auto products on an accident period basis and are based on three years of actual experience for physical damage and nine years for bodily injury and total personal auto.

App.-A-95

The Progressive Corporation and Subsidiaries

Quantitative Market Risk Disclosures

(unaudited)

Quantitative market risk disclosures are only presented for market risk categories when risk is considered material. Materiality is determined based on the fair value of the financial instruments at December 31, 2015, and the potential for near-term losses from reasonably possible near-term changes in market rates or prices. We had no trading financial instruments at December 31, 2015 and 2014. See Management’s Discussion and Analysis of Financial Condition and Results of Operations for our discussion of the qualitative information about market risk.

OTHER-THAN-TRADING FINANCIAL INSTRUMENTS

Financial instruments subject to interest rate risk were:

	Fair Value
	-200 bps		-100 bps				+100 bps		+200 bps
(millions)	Change1		Change1		Actual		Change		Change
U.S. government obligations2	$	2,416.6	$	2,424.4	$	2,429.2	$	2,430.2	$	2,431.2
State and local government obligations	2,855.9		2,812.0		2,721.4		2,633.0		2,549.7
Foreign government obligations	18.6		18.6		18.6		18.6		18.6
Asset-backed securities	6,430.3		6,350.2		6,237.1		6,123.5		6,013.7
Corporate securities	3,915.0		3,821.3		3,691.6		3,565.1		3,449.5
Nonredeemable preferred stocks	793.2		793.1		782.6		771.0		759.6
Redeemable preferred stocks	237.5		237.5		234.3		230.8		227.4
Short-term investments	2,172.0		2,172.0		2,172.0		2,172.0		2,172.0
Balance at December 31, 2015	$	18,839.1	$	18,629.1	$	18,286.8	$	17,944.2	$	17,621.7
Balance at December 31, 2014	$	16,898.9	$	16,772.8	$	16,525.7	$	16,243.7	$	15,970.1

¹ The amounts reflect an interest rate of 1 basis point (bps) when the hypothetical decline in interest rates would have pushed yields to a negative level.

² The U.S. government obligations have a negative return in the -100bps and -200bps scenarios due to the negative duration for that portfolio.  The duration for our cash holdings in U.S. government obligations was 2.0, and the duration for our interest swap positions, where we are paying fixed rate on a notional value of $750 million with a maturity of April 2023, was -7.1.  The duration for the U.S. government obligations, which includes the impact of the interest rate swap positions, was -0.2.

Exposure to risk is represented in terms of changes in fair value due to selected hypothetical movements in market rates. Bonds and preferred stocks are individually priced to yield to the worst case scenario, which includes any issuer-specific features, such as a call option. Asset-backed securities and state and local government housing securities are priced assuming deal specific prepayment scenarios, considering the deal structure, prepayment penalties, yield maintenance agreements, and the underlying collateral.

Financial instruments subject to equity market risk were:

	Fair Value
(millions)	-10%		Actual		+10%
Common equities at December 31, 2015	$	2,387.7	$	2,650.5	$	2,913.3
Common equities at December 31, 2014	$	2,240.6	$	2,492.3	$	2,744.0

The model represents the estimated value of our common equity portfolio given a +/-10% change in the market, based on the common stock portfolio’s weighted average beta of .99 for 2015 and 1.01 for 2014. The beta is derived from recent historical experience, using the S&P 500 as the market surrogate. The historical relationship of the common stock portfolio’s beta to the S&P 500 is not necessarily indicative of future correlation, as individual company or industry factors may affect price movements. Betas are not available for all securities. In such cases, the change in fair value reflects a direct +/-10% change; the portion of our securities without betas is 0.1%.

App.-A-96

The Progressive Corporation and Subsidiaries

Net Premiums Written by State

(unaudited)

($ in millions)	2015				2014				2013				2012				2011
Florida	$	2,839.6	13.8	%	$	2,399.0	12.9	%	$	2,188.1	12.6	%	$	2,000.1	12.2	%	$	1,683.1	11.1	%
Texas	1,941.5		9.4		1,664.6		8.9		1,560.7		9.0		1,536.6		9.4		1,403.8		9.3
California	1,173.6		5.7		1,080.6		5.8		996.0		5.7		954.4		5.8		935.8		6.2
New York	1,095.6		5.3		1,000.7		5.4		882.8		5.1		782.3		4.8		713.4		4.7
Ohio	820.8		4.0		807.7		4.3		757.4		4.4		725.8		4.4		689.0		4.5
New Jersey	820.2		4.0		754.6		4.0		697.4		4.0		600.1		3.7		496.3		3.3
Georgia	813.2		4.0		774.0		4.1		771.6		4.5		757.1		4.6		738.2		4.9
Michigan	812.5		4.0		659.6		3.5		539.5		3.1		488.5		3.0		471.7		3.1
Pennsylvania	787.3		3.8		718.6		3.9		663.8		3.8		644.2		3.9		623.1		4.1
Louisiana	614.9		3.0		552.5		3.0		540.1		3.1		515.9		3.2		496.1		3.3
All other	8,844.8		43.0		8,242.7		44.2		7,742.3		44.7		7,367.7		45.0		6,896.1		45.5
Total	$	20,564.0	100.0	%	$	18,654.6	100.0	%	$	17,339.7	100.0	%	$	16,372.7	100.0	%	$	15,146.6	100.0	%

App.-A-97

Principal Office

The Progressive Corporation

6300 Wilson Mills Road

Mayfield Village, Ohio 44143

440-461-5000

progressive.com

24-Hour Insurance Quotes, Claims Reporting, and Customer Service

	Personal autos, motorcycles, and recreational vehicles	Commercial autos/trucks
To receive a quote	1-800-PROGRESSIVE (1-800-776-4737) progressive.com	1-888-806-9598 progressivecommercial.com
To report a claim	1-800-PROGRESSIVE (1-800-776-4737) progressive.com1	1-800-PROGRESSIVE (1-800-776-4737)
For customer service:
If you bought your policy through an independent agent or broker	1-800-925-2886 (1-800-300-3693 in California) progressiveagent.com	1-800-444-4487 progressivecommercial.com
If you bought your policy directly through Progressive online or by phone	1-800-PROGRESSIVE (1-800-776-4737) progressive.com	1-800-895-2886 progressivecommercial.com
If you have a complaint or concern regarding any claim handling or other claims-related issue2	1-800-274-4641 email: claims@email.progressive.com	1-800-274-4641 email: claims@email.progressive.com
Homeowners - to receive a quote, report a claim, or speak to a customer service representative, please call 1-800-PROGRESSIVE or visit progressive.com and your inquiry will be routed to the appropriate contact center.
In addition, iPhone® and Android® users can download the Progressive App to start a quote, report a claim, or service a policy.
1Claims reporting via the website is currently only available for personal auto policies.
2Any policyholder, claimant, or other interested party who has any complaint or concern regarding any claim handling or other claims-related issue may report such complaint or concern using the contact information above. The complaint or concern will be promptly forwarded to the appropriate management personnel in our claims organization for review and response.

Annual Meeting  The Annual Meeting of Shareholders will be held at the offices of The Progressive Corporation, Studio 96, 6671 Beta Drive, Mayfield Village, Ohio 44143 on May 13, 2016, at 10 a.m. eastern time. There were 2,255 shareholders of record on December 31, 2015.

Common Shares and Dividends  The Progressive Corporation’s common shares are traded on the New York Stock Exchange (symbol PGR). Progressive currently has an annual variable dividend policy. We expect the Board to declare the next annual variable dividend, subject to policy limitations, in December 2016, with a record date in early 2017 and payment shortly thereafter. A complete description of our annual variable dividend policy can be found at: progressive.com/dividend.

Shareholder/Investor Relations  Progressive does not maintain a mailing list for distribution of shareholders’ reports. To view Progressive’s publicly filed documents, shareholders can access our website: progressive.com/sec. To view our earnings and other releases, access: progressive.com/investors.

For financial-related information or to request copies of Progressive’s publicly filed documents free of charge, write to: The Progressive Corporation, Investor Relations, 6300 Wilson Mills Road, Box W33, Mayfield Village, Ohio 44143, email: investor_relations@progressive.com, or call: 440-395-2222.

App.-A-98

For all other company information, call: 440-461-5000 or access our website at: progressive.com/contactus.

Transfer Agent and Registrar

Registered Shareholders:  If you have questions or changes to your account and your Progressive shares are registered in your name, write to: American Stock Transfer & Trust Company, Attn: Operations Center, 6201 15th Avenue, Brooklyn, NY 11219; phone: 1-866-709-7695; email: info@amstock.com; or visit their website at: amstock.com.

Beneficial Shareholders:  If your Progressive shares are held in a brokerage or other financial institution account, contact your broker or financial institution directly regarding questions or changes to your account.

Contact Non-Management Directors  Interested parties have the ability to contact the non-management directors as a group by sending a written communication clearly addressed to the non-management directors to either of the following:

* Stephen R. Hardis, Lead Independent Director, The Progressive Corporation, email: stephen_hardis@progressive.com

Charles E. Jarrett, Secretary, The Progressive Corporation, 6300 Wilson Mills Road, Mayfield Village, Ohio 44143 or email: chuck_jarrett@progressive.com.

The recipient will forward communications so received to the non-management directors.

Accounting Complaint Procedure  Any employee or other interested party with a complaint or concern regarding accounting, internal accounting controls, or auditing matters relating to Progressive may report such complaint or concern directly to the Chairman of the Audit Committee, as follows: Patrick H. Nettles, Ph.D., Chairman of the Audit Committee, patrick_nettles@progressive.com.

Any such complaint or concern also may be reported anonymously over the following toll-free Alert Line: 1-800-683-3604 or online at: www.progressivealertline.com. Progressive will not retaliate against any individual by reason of his or her having made such a complaint or reported such a concern in good faith. View the complete procedures at: progressive.com/governance.

Whistleblower Protections  Progressive will not retaliate against any officer or employee of Progressive because of any lawful act done by the officer or employee to provide information or otherwise assist in investigations regarding conduct that the officer or employee reasonably believes to be a violation of federal securities laws or of any rule or regulation of the Securities and Exchange Commission. View the complete Whistleblower Protections at: progressive.com/governance.

Corporate Governance  Progressive’s Corporate Governance Guidelines and Board Committee Charters are available at: progressive.com/governance.

Counsel  Baker & Hostetler LLP, Cleveland, Ohio

Charitable Contributions  We contribute annually to: (i) The Insurance Institute for Highway Safety to further its work in reducing the human trauma and economic costs of auto accidents; and (ii) The Progressive Insurance Foundation, which provides matching funds to eligible 501(c)(3) charitable organizations to which Progressive employees, other than ARX employees, contribute.

Social Responsibility  Progressive uses an interactive online format to communicate our social responsibility efforts. This report can be found at: progressive.com/socialresponsibility.

Online Annual Report and Proxy Statement  Our 2015 Annual Report to Shareholders can be found at: progressive.com/annualreport.

We have also posted copies of our 2016 Proxy Statement and 2015 Annual Report to Shareholders, in a PDF format, at: progressiveproxy.com.

App.-A-99

Directors
Stuart B. Burgdoerfer1,6	Patrick H. Nettles, Ph.D.1,6	1 Audit Committee Member
Executive Vice President and	Executive Chairman,	2 Executive Committee Member
Chief Financial Officer,	Ciena Corporation	3 Compensation Committee Member
L Brands, Inc.	(telecommunications)	4 Investment and Capital Committee
(retailing)		Member
	Glenn M. Renwick2	5 Nominating and Governance
Charles A. Davis4,5,6	Chairman of the Board, President,	Committee Member
Chief Executive Officer,	and Chief Executive Officer,	6 Independent Director
Stone Point Capital LLC	The Progressive Corporation
(private equity investing)
	Bradley T. Sheares, Ph.D.3,6	* In May 2016, Stephen R. Hardis will retire after 28 years of service, in accordance with the Board’s retirement policy. Progressive would like to thank Mr. Hardis for his dedicated service and the many contributions he made during his tenure on the Board. It is expected that a new Lead Independent Director will be appointed at that time.
Roger N. Farah3,5,6	Former Chief Executive Officer,
Co-Chief Executive Officer,	Reliant Pharmaceuticals, Inc.
Tory Burch LLC	(pharmaceuticals)
(retailing)
	Barbara R. Snyder1,6
Lawton W. Fitt2,4,5,6	President,
Retired Partner,	Case Western Reserve University
Goldman Sachs Group	(higher education)
(financial services)
* Stephen R. Hardis2,4,5,6
Lead Independent Director,
The Progressive Corporation
Jeffrey D. Kelly1,6
Chief Operating Officer and
Chief Financial Officer,
RenaissanceRe Holdings Ltd.
(reinsurance services)

App.-A-100

Corporate Officers	Other Executive Officers
Glenn M. Renwick	John F. Auer
Chairman of the Board, President,	President and Chief Executive Officer
and Chief Executive Officer	ARX Holding Corp.
John P. Sauerland	John A. Barbagallo
Vice President	Commercial Lines President
and Chief Financial Officer
	Steven A. Broz
Susan Patricia Griffith	Chief Information Officer
Vice President
and Personal Lines Chief Operating Officer	Patrick K. Callahan
	Personal Lines President
Charles E. Jarrett
Vice President, Secretary,	M. Jeffrey Charney
and Chief Legal Officer	Chief Marketing Officer
Jeffrey W. Basch	William M. Cody
Vice President	Chief Investment Officer
and Chief Accounting Officer
	Valerie Krasowski
Thomas A. King	Chief Human Resource Officer
Vice President
	John Murphy
Patrick S. Brennan	Customer Relationship Management
Treasurer	President
Mariann Wojtkun Marshall	Michael D. Sieger
Assistant Secretary	Claims President
©2016 The Progressive Corporation

App.-A-101

EX-21

Exhibit 21

SUBSIDIARIES OF THE PROGRESSIVE CORPORATION

	Jurisdiction
Name of Subsidiary	of Incorporation
ARX Holding Corp. (owns 69.2% of outstanding capital stock)	Delaware
American Capital Assurance Corp.	Florida
ASI Home Insurance Corp.	Florida
American Strategic Insurance Corp.	Florida
ASI RE, LLC*	Florida
ASI Assurance Corp.	Florida
ASI Lloyds, Inc.	Texas
ASI Preferred Insurance, Corp.*	Florida
ASI Select Insurance Corp.	Delaware
ASI Services, Inc.	Florida
ASI Underwriters Corp.	Florida
ASI Underwriters of Texas, Inc.	Texas
e-Ins. LLC*	Florida
PropertyPlus Insurance Agency, Inc.	Delaware
Safe Harbour Underwriters, LLC	Florida
Sunshine Security Insurance Agency, Inc.	Florida
Drive Insurance Holdings, Inc.	Delaware
Drive New Jersey Insurance Company	New Jersey
Progressive American Insurance Company	Ohio
Progressive Bayside Insurance Company	Ohio
Progressive Casualty Insurance Company	Ohio
PC Investment Company	Delaware
Progressive Gulf Insurance Company	Ohio
Progressive Specialty Insurance Company	Ohio
Trussville/Cahaba, AL, LLC	Ohio
Progressive Classic Insurance Company	Wisconsin
Progressive Commercial Advantage Agency, Inc.	Ohio
Progressive Commercial Casualty Company	Ohio
Progressive Hawaii Insurance Corp.	Ohio
Progressive Michigan Insurance Company	Michigan
Progressive Mountain Insurance Company	Ohio
Progressive Northern Insurance Company	Wisconsin
Progressive Northwestern Insurance Company	Ohio
Progressive Preferred Insurance Company	Ohio
Progressive Security Insurance Company	Louisiana
Progressive Southeastern Insurance Company	Indiana
Progressive West Insurance Company	Ohio
Garden Sun Insurance Services, Inc.	Hawaii
Pacific Motor Club	California
Progny Agency, Inc.	New York
Progressive Adjusting Company, Inc.	Ohio

	Jurisdiction
Name of Subsidiary	of Incorporation
Progressive Capital Management Corp.	New York
Progressive Commercial Holdings, Inc.	Delaware
Artisan and Truckers Casualty Company	Wisconsin
National Continental Insurance Company	New York
Progressive Express Insurance Company	Ohio
United Financial Casualty Company	Ohio
Progressive Direct Holdings, Inc.	Delaware
Mountain Laurel Assurance Company	Ohio
Progressive Advanced Insurance Company	Ohio
Progressive Auto Pro Insurance Agency, Inc.	Florida
Progressive Choice Insurance Company	Ohio
Progressive Direct Insurance Company	Ohio
Gadsden, AL, LLC	Ohio
Progressive Freedom Insurance Company	New Jersey
Progressive Garden State Insurance Company	New Jersey
Progressive Marathon Insurance Company	Michigan
Progressive Max Insurance Company	Ohio
Progressive Paloverde Insurance Company	Indiana
Progressive Premier Insurance Company of Illinois	Ohio
Progressive Select Insurance Company	Ohio
Progressive Specialty Insurance Agency, Inc.	Ohio
Progressive Universal Insurance Company	Wisconsin
Progressive Investment Company, Inc.	Delaware
Progressive Premium Budget, Inc.	Ohio
Progressive RSC, Inc.	Ohio
Progressive Vehicle Service Company	Ohio
Village Transport Corp.	Delaware
Wilson Mills Land Co.	Ohio
*Wholly owned by ARX Holding Corp.; however, ownership is shared by one or more ARX Holding Corp. subsidiary. Subsidiary is reported under the majority owned parent.

EX-24

Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 15th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

Vice President and

/s/Jeffrey W. BaschChief Accounting Officer

Jeffrey W. Basch

1

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 13th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

Vice President and

/s/John P. Sauerland Chief Financial Officer

John P. Sauerland

2

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 17th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

Director, Chairman of the Board,

/s/Glenn M. RenwickPresident and Chief Executive Officer

Glenn M. Renwick

3

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 16 day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Stuart B. BurgdoerferDirector

Stuart B. Burgdoerfer

4

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 17th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Charles A. DavisDirector

Charles A. Davis

5

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 16th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Roger N. FarahDirector

Roger N. Farah

6

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 11th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Lawton W. FittDirector

Lawton W. Fitt

7

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 15 day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Stephen R. HardisLead Independent Director

Stephen R. Hardis

8

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 16th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Jeffrey D. KellyDirector

Jeffrey D. Kelly

9

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 16th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Patrick H. Nettles, Ph.D.Director

Patrick H. Nettles, Ph.D.

10

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 16th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Bradley T. Sheares, Ph.D.Director

Bradley T. Sheares, Ph.D.

11

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that I hereby constitute and appoint Charles E. Jarrett, Dane A. Shrallow, David M. Coffey and Laurie F. Humphrey, and each of them, my true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for me and in my name, place and stead, in any and all capacities, to sign and file with the Securities and Exchange Commission the Annual Report on Form 10-K of The Progressive Corporation for the year ended December 31, 2015, and any and all amendments relating thereto and other documents in connection therewith, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary and requisite to be done in connection with the foregoing, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their respective substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, I have hereunto subscribed my name in the capacity(ies) set forth below this 17th day of February, 2016.

Position(s) with

SignatureThe Progressive Corporation

/s/Barbara R. SnyderDirector

Barbara R. Snyder

12

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Glenn M. Renwick, certify that:

1. I have reviewed this annual report on Form 10-K of The Progressive Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 29, 2016	/s/ Glenn M. Renwick
		Glenn M. Renwick
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, John P. Sauerland, certify that:

1. I have reviewed this annual report on Form 10-K of The Progressive Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 29, 2016	/s/ John P. Sauerland
		John P. Sauerland
		Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 1350 CERTIFICATION

I, Glenn M. Renwick, President and Chief Executive Officer of The Progressive Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Annual Report on Form 10-K of the Company for the period ended December 31, 2015 (the “Report”), which this certification accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Glenn M. Renwick

Glenn M. Renwick

President and Chief Executive Officer

February 29, 2016

EX-32.2

Exhibit 32.2

SECTION 1350 CERTIFICATION

I, John P. Sauerland, Vice President and Chief Financial Officer of The Progressive Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1) the Annual Report on Form 10-K of the Company for the period ended December 31, 2015 (the “Report”), which this certification accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John P. Sauerland

John P. Sauerland

Vice President and Chief Financial Officer

February 29, 2016

EX-99

Exhibit 99

Letter to Shareholders

Marketers aspire to coin catch phrases that capture great emotion and expand brand influence into welcomed but untargeted domains -“Where’s the beef?” Reality suggests they defy an engineered approach and resonate or not much like a viral video. In some small way we may have created a contender in 2015 with “Sprinkles are for Winners,” a pithy ending to one of our commercials where the character Jamie has been unable to present Progressive as the lowest price option to a customer, recognizing an alternative was for the moment lower. As Flo consoles his disappointed state, but recognizes the transparency of our approach, he’s offered ice cream; when sprinkles are requested the reality sets in that certain spoils do in fact go to the victor and hence “Sprinkles are for Winners” took on a life of its own. Used in everything from song lyrics to sports team mantras, we found an accidental host of untargeted but welcome extensions. Equally welcome is the opportunity to describe Progressive’s business year as deserving of Sprinkles, and I’ll enjoy breaking that down in some detail in this letter, along with our efforts and outlook to ensure the accolade remains relevant for a long time to come.

Highlight Reel

We added $1.9 billion in net premiums written to top $20 billion in 2015-a 10% growth rate over 2014, with net premiums earned just short of that mark. Operating profitability reflected in our combined ratio was a very solid 92.5, comfortably ahead of our 96 target and comparable to last year’s performance. Together these results produced a pretax operating income of $1.5 billion, about 6% ahead of similarly strong results last year. Investment returns were less notable on an absolute basis, but within our design parameters represent a considerably stronger relative performance-ice cream, perhaps no sprinkles. We added $455 million of interest and dividend income, up 11% from last year, $113 million in realized gains, half of last year’s, and a less exciting $324 million unrealized loss for the year, reflecting about a 1.6% total return on our $21 billion portfolio.

Combined, these results produced net income for the year of $1.3 billion, or $2.15 per share, both comparable to 2014, and represent a return on shareholders’ equity of 17.2%. The unrealized loss, in part, pressured our more preferred measure of comprehensive income and we lagged last year by some 50 cents per share on that basis.

The $20 billion threshold, deservedly so, had special meaning within the company and for many we re-experienced the same pride when passing both the $1 and $10 billion marks and now immediately set our sights on the next significant round number. To be fair, the growth this year, while very solid from year-over-year organic expansion, was aided by the inclusion of nine months of the property premium from ASI-the controlling interest acquisition we closed in April.

I’ve stated before that we would welcome an improved investment environment with interest rates and valuations more comfortably matching our longer-term investment income preference, and perhaps a little less volatility for good measure, but by design we are not dependent on it and our commitment to an investment strategy that supports and enhances the primary asset of the operating company remains central to our long-term thinking.

Gainshare, our best measure of companywide operating performance, valued in a range between 0 and 2, completed the year at 1.6, the highest in some time, and for me a fair and accurate reflection of the year with notable strengthening in the second half and, even more importantly, carrying attractive momentum forward into 2016. Gainshare is the basis for variable compensation for Progressive people and shareholders. Our variable dividend formulation met all criteria required to be declared and based on our post-tax underwriting income and the Gainshare score, we declared a dividend of 89 cents per share, or an approximate yield of 2.8% at year end.

We enter 2016 with a strong, well-structured capital position, bolstered by the $400 million debt offering we completed earlier in the year. Our debt-to-total capital ratio ended the year around 27%, below our self-imposed guideline of not to exceed 30% for any extended period of time and thus preserving significant debt capacity should we need or choose to use it. Our capital management philosophy remains consistent with our long-standing view that capital in excess of regulatory requirements and any contingencies we can envision is available for share

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repurchases, acquisitions, or shareholder dividends. Our share repurchases during the year were somewhat modest, at 7.3 million shares, in part due to a stronger performance of our stock. The ARX transaction, discussed in greater detail in last year’s letter, consumed $877 million, and the shareholder dividend for 2015 performance happily returned $519 million to our shareholders.

A synopsis of our business model in a little more detail is provided in the Objectives, Policies and Operations Summary section of this report.

Tale of the Tape

Now we know the aggregate results worked out well, it is worth a moment to dissect our primary product offerings and provide a little color commentary.

With no great joy, at this time last year, I characterized our Agency auto growth as flat-out disappointing and suggested it had our full attention and that our commitment to winning in the channel should not be underestimated. More so after such a statement, it’s rewarding when planned actions and results align to tell a more favorable story. Our Agency business found a higher gear in the second half of the year and has sustained momentum through year-end with expectations of continuing into 2016. What changed? We executed on a multi-point agenda to address opportunities, much of which we outlined in our Investor meeting in May. The details are not for now, but headlines include a significant advance in product design as we continually use our best data and knowledge to meet competitive market demands and a demonstrably improved bundling option for agents as we deepen our relationship with our ASI property solution. We’ve reversed the erosion in policy counts we’d not enjoyed reporting during the year, while advancing premium growth. Our new business inflow developed during the course of the year into some of the strongest we have seen in recent times, suggesting that in the incredibly price efficient agency market our product is attractive, and our loss results provide support that the rate level is for now sustainable-a considerably stronger positioning we look forward to building upon.

While not yet a massive contribution to the Agency results, strategically a highlight of 2015 was the market introduction of Platinum. Platinum, in its simplest form, is the integration at the market level of ASI and Progressive’s product lines. The multi-provider approach to homeowners that works so well for us in our Direct business is simply not an option within the Agency channel, and with ASI we have the perfect combination. The product provides agents a single offering, with compensation and coordinated policy periods, along with other features, that reflect the needs and desires of agents that we are now very well suited to address. The product is by design focused on those agents who have the target customers and are prepared to accept the proposition that ASI and Progressive, with this introduction and what is sure to follow, will be a “must have” bundled offering in their agency. Our excitement is obvious for the growth potential, and the engagement we can have with agents in our development of the Destination Era, outlined more fully in this communication last year. However, perhaps most importantly for those of us who enjoy the science of rating, this will provide a data set of customers for whom we have had limited prior auto history and thus presents an incredible opportunity as we do what we do best-use that data to refine and improve our offering over the years ahead. Early results are just that, but very encouraging would be a fair assessment.

This paints a much brighter picture in the Agency space and deservedly so, but direction and early responses need to be supported with continued execution, higher customer retention, and consistent economic performance. All the pieces look to be in place to offer even greater value in a channel we enjoy serving.

Building on a strong 2014, our Direct channel had what might be described in sports terms as back-to-back winning years. With low double-digit premium growth rates, and just short of double-digit unit growth, there is little to be upset about-not suggesting that outside the scope of this letter we don’t have our wish list. Taking advantage of market opportunities to grow also means we will run our combined ratio, reflecting new business loss costs and front loaded acquisition costs, much closer to our acceptable maximum and the combination of a 95.1 combined ratio with 11% written premium growth proved to be a strong combination of profit and growth for the year and one I would readily sign-up for again.

Our Direct to the consumer delivery channel has been built, in part, on skills developed from the Agency business

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that is at our core. We have, however, developed considerable expertise in marketing creative and placement, consumer experience and presentation, along with the economics of acquisition and customer life expectancy. Less by any designed outcome, but more a reflection of consumer choice and technology, our Direct channel and Agency channel for auto are now about equally balanced. Metrics of premium and units will produce slightly different allocations, but an equal split of the auto business is a reasonable way to think, and we’re confident we can continue to grow in both distributions. Our Special Lines and Commercial Lines businesses are considerably more agent favored, but are well positioned for any similar trends.

Special Lines had a great year with loss costs slightly lower than expectation, absent a major storm or hurricane to cause havoc with our boats or even recreational vehicles. Given our significant market share in motorcycle and the other products within this grouping, we don’t expect outsized growth and enjoyed the 3% or so growth in the product line and look forward to any effects of a recovering economy and reduced gas prices to fuel additional discretionary “toy” purchases in future years.

Our Commercial Lines business gets the award for outsized performance this year. Strong mid-teen growth and a combined ratio of 84 certainly is a rare combination and contributed significantly to our aggregate results for the year. Now just north of $2 billion in written premium, Commercial is fully 10% of the enterprise and, at that premium, we’re expecting when industrywide results are tabulated that we may be adding commercial auto to the list of products with a #1 market share designation. While the story leading to these results has played out over several years, the essential message is when results are not what you want, act with purpose and ensure profitability before growth. The Commercial group did exactly that and by the time we were operating with rate levels that were more reflective of market conditions, we found that others having less comfort with their rates were limiting their market involvement and our extraordinary results followed. Market dynamics and competition are our constant gravity, and we expect these results to become more consistent with our long-term targets over time, but appreciate when opportunity knocks, to expand our influence in this important part of our business.

Regardless of the specific product, our organizational imperative is to continuously improve our ability to segment customers into smaller homogeneous groups and advance our ability to best match expected loss costs to those groupings. Over time those groupings have become more and more complex and may now be defined, in part, by driving behaviors, such as hard braking, or technology preferences for policy quoting or servicing. The ability to do this well is at the heart of any success we may have had and made possible with people who enjoy doing so and finding relationships in data that could provide yet marginal improvements to an age old concept. Data is our central asset, and our ability to analyze data, now in some cases in massive quantities, and find correlations and causal relationships, is the Progressive statistics factory I often describe to those outside our industry.

Consumer sensitivity to changes in their insurance premium is for many very high. Consistent with our desire to keep customers a long time, we want to be sure that any rate change is needed, surgical, and, where possible, smaller in magnitude, even to the point of several smaller changes over time, which are appreciated more than a singular adjustment. As illustrative examples of our commitment to advancing rating science and achieving that objective, we have developed significant ability, by ingesting weather data from hundreds of monitoring stations around the U.S. several times an hour, to help recognize the difference between an observed weather influence and an expected weather influence in an attempt to ensure we do not let a more obvious rationale for elevated loss costs disguise a more substantial trend that needs to be addressed, or equally important resist reacting to a false positive for rate need. An accurate historical perspective has come into play more than once in this El Niño year. Similarly, with a longer-term trend toward lower frequency, intermittent increases in frequency trends need to be explained in some detail to respond appropriately. This year we experienced much more favorable pricing for gasoline and numerous sources confirmed increased mileage resulted. We were in a position to use a significant sample of our Snapshot^® users to more accurately understand the types of mileage increases and associated frequency, effectively in real-time versus delayed and aggregated reporting sources. The specifics here are less the point to be made and much more so the value of data and an ability to have that data be converted into a commercial advantage. We don’t intend to stop looking for opportunities anytime soon and expect to carry that forward into our Destination Era product line up.

Progressive and ASI’s Technology, Claims, Marketing, and Customer Relationship Management groups all had very successful years and, while their specific accomplishments deserve greater recognition, suffice it to say that each

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group is focusing on the types of issues that will advance the company versus fixing in-place processes, and that’s a foundation that makes all we expect to achieve possible. Our expense ratio of 20% is an attractive position relative to the industry and in no small way contributes to our success, without restricting the ability of each group to create experiences that foster long-term promoters with confidence in us. Accepting that, we see opportunities for yet greater leverage, in large part through longer customer relationships.

Where to from here?

Forces of change are all around us, and almost any industry will have challenges and opportunities advanced usually through technology and consumer behavior. Our industry will not be immune and, while some will have longer enactment periods, they will present real and exciting opportunities for those prepared to embrace them.

Media consumption, and a shift to more addressable media in forums other than network television, will both attract more of our acquisition budget and provide far greater ability to analyze yield and spending effectiveness for those suited to the newer models. Advancing our brand, more so to the right audiences, is critical to the future we see for Progressive in the Destination Era and we’re excited by the prospects.

Car ownership or temporary vehicle use options, headlined by names like Zipcar to Uber, will challenge the foundations of driver-to-car matching, which, while not perfect in current schemas, is not as widely variant as we must accept as possible in the future. We enjoy embracing change and the potential for new products and will look for ways to avoid putting square pegs in rounds holes, rather taking opportunities available for us to lead in designing solutions more responsive to contemporary realities.

Vehicle technology is certain to challenge the notion of driving we’ve held for the last hundred years or so and, as such, we must position Progressive to be advantaged in the product shifts and opportunities that will surely follow. Recognizing vehicles as moving IP addresses and being in the data flow was an early and remains an ongoing objective, and our Snapshot offering is exactly that. We remain very excited by our Snapshot program and have even higher hopes in 2016 of reaching a greater proportion of our policyholder base, with the introduction of a smartphone application capable of meeting the data integrity standards we have been seeking for several years. Long-term accident frequency reduction has been a fact of life for our industry for the last 30 plus years, with great societal value. The outlook with current and expected vehicle technology features, up to and including autonomous features, is for continued reductions. We must be intensely focused on our segmentation science and assigning pricing accurately during what will be a long period of mixed-mode technology vehicles on the road. Disruptive change we believe will play well to our strengths for a long time to come.

Accepting change can be a catalyst for Progressive to grow; it’s equally rational to accept that premium per vehicle could decline, potentially materially-interestingly enough that has not been the case to date with claims costs more than offsetting the frequency declines over many years; however, I’m only prepared to accept that outcome as one of several that seem possible. I do, however, sense that new “insurance” products will develop alongside the changes in vehicle technology (who might have envisioned a sizable market in cell phone insurance 15 years ago or the need for cyber insurance?). Progressive will be true to its name in managing change to our immediate advantage and positioning for longer-term shifts as they eventuate.

A feature of this report and last year’s letter was the evolution of Progressive through eras described as Manufacturing/Wholesaling, to Retail, and now to the consumer centric Destination Era. The substance of the Destination Era gained additional and significant institutional energy in 2015 with every area of the company examining in greater depth the operating and systems implications needed to execute in that model with the same intensity we’ve attained in our core products. Now, with bonafide solutions to meet consumer needs beyond the initial auto insurance product, we have positioned Progressive to meaningfully address the lifetime needs of customers. They can now look to us for protection products including all property needs, umbrella, flood, classic car, special event, travel, pet, life, ID protection, and more. Historically, we didn’t have these assets and thus were less well positioned to keep the continuity of relationship that so often starts with an auto insurance purchase, but develops into a broader product array. Simple models are just that, but the customer label of “Robinsons” for us is reflective of the customer with home and auto insurance, and often a selection of one or more other products suited to their life style. Referenced internally as Auto+, our nomenclature is a fitting designation for the positioning and

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one we’re finding can also start with a non-auto relationship.

We’ve reported that we under index on Robinsons and over index, relative to our aggregate market share, on those in life stages leading toward a more Robinson-like status. Graduating the future Robinsons, we believe, is highly rational given our advantaged position of a brand that has shown appeal to new buyers, the positive first product experience we provide, and now a product line-up that encourages continuity of relationship as their needs expand. Again a simple model, but highly reflective of our positioning, is to think: Acquire, Anchor, Bundle, and Extend. Acquire-enhance the brand appeal in every way we do business; Anchor-a great first product experience often through auto; Bundle-be responsive to individual life lanes and add product needs seamlessly; Extend-an optimal state for both the customer and Progressive. By retaining customers for decades and attracting those Robinsons who find our proposition compelling, implies for us a significant addition to our addressable market, perhaps as much as 50% for just the auto product, and more so with our entry into the property market and recognition of the Commercial Lines analogue to the Destination Era. Auto and Property are the lion’s share of the personal lines property and casualty insurance premium base, but other products are important complements when needed for long-term retention. Our focus on auto insurance and the skills we have honed will certainly be central to our business model for as far forward as anyone can reasonably see, but our business model is without question evolving toward being a contemporary solution for our customers with a wider aperture and greater diversification of insurance products.

Our product requirements to execute effectively in the Destination Era are expansive and we don’t intend to manufacture them all, but rather “rent” both the capital and expertise from those who are leaders in their field. In some cases a single product provider will be the desired solution-ASI in the Agency channel for Property is a perfect example, along with our classic car solution for Direct customers with Hagerty Insurance, in our minds the leader in the space-or we may seek diversification within a product line to meet the broadest range of situations, such as the line-up of homeowners providers in the Direct channel. We have marketing opportunities through our agents, our online presence, and a greatly expanded in-house agency to offer customers greater access to the products they seek and have opportunities for presentation, relationship building, and “just-in-time” marketing, all expanding our repertoire of customer experiences. We will take indemnity risk and use our capital where it makes sense to do so and receive commission income on other products where that's more appealing. As time and experience develops, we may offer other combinations that are also mutually appealing. Noted last year and worth reinforcing, Progressive is becoming a consumer company with auto insurance at its core and the currency of success is customer life expectancy (an appropriate restatement of the earlier positioning of policy life expectancy).

The times they are a-changin-not quite “Sprinkles are for Winners,” but a Dylan lyric no one would readily reject-and Progressive’s adaption to those changes embodied in our Destination Era’s positioning provides for us a gamut of challenges, but equally, for me, the feeling of never being more optimistic about what lies ahead. (A feeling I’ve been lucky enough to experience more than a few times in Progressive’s evolution as a company).

Our People and Culture

The artistic theme visually complementing this year’s report is continuity and while its selection was primarily to amplify the positioning of Progressive as a continuous and contemporary solution to a range of consumer insurance needs over time, it applies equally well to the continuity of the cultural foundation of Progressive.

Our Vision, Values, and Objectives are the bedrock of the Progressive culture. The Vision and Mission affirm our benefit to society and drive our aspiration to be consumers’ number one choice for auto and other insurance needs. Our Values unambiguously guide behavior. Demanding Objectives attract and retain special people who enjoy working hard, performing well, being rewarded competitively, and growing constantly.

Our people, culture, and aspirations are what make us special.

Nothing we have achieved has been without the efforts of so many-Progressive and ASI people, our agents, customers, and shareholders.

To those who make Progressive, progressive-Thank you; definitely add sprinkles!

5

/s/ Glenn M. Renwick

Glenn M. Renwick

President and Chief Executive Officer

6

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2015	Jan. 31, 2016	Jun. 30, 2015
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Trading Symbol	PGR
Entity Registrant Name	PROGRESSIVE CORP/OH/
Entity Central Index Key	0000080661
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		584,328,057
Entity Public Float			$ 16,089,731,768

XML

Consolidated Statements of Comprehensive Income - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenues
Net premiums earned	$ 19,899.1	$ 18,398.5	$ 17,103.4
Investment income	454.6	408.4	422.0
Other-than-temporary impairment (OTTI) losses:
Total OTTI losses	(23.8)	(7.9)	(6.0)
Non-credit losses, net of credit losses recognized on previously recorded non-credit OTTI losses	0.0	0.0	(0.1)
Net impairment losses recognized in earnings	(23.8)	(7.9)	(6.1)
Net realized gains (losses) on securities	136.5	232.1	324.5
Total net realized gains (losses) on securities	112.7	224.2	318.4
Fees and other revenues	302.0	309.1	291.8
Service revenues	86.3	56.0	39.6
Gains (losses) on extinguishment of debt	(0.9)	(4.8)	(4.3)
Total revenues	20,853.8	19,391.4	18,170.9
Expenses
Losses and loss adjustment expenses	14,342.0	13,306.2	12,472.4
Policy acquisition costs	1,651.8	1,524.0	1,451.8
Other underwriting expenses	2,712.1	2,467.1	2,350.9
Investment expenses	22.8	18.9	18.8
Service expenses	77.5	50.9	38.8
Interest expense	136.0	116.9	118.2
Total expenses	18,942.2	17,484.0	16,450.9
Net Income
Income before income taxes	1,911.6	1,907.4	1,720.0
Provision for income taxes	611.1	626.4	554.6
Cash flow hedge gain reclassification from accumulated other comprehensive income to net realized gains/losses on securities	1,300.5	1,281.0	1,165.4
Net Income (Loss) Attributable to Noncontrolling Interest	32.9	0.0	0.0
Net income attributable to Progressive	1,267.6	1,281.0	1,165.4
Net unrealized gains (losses) on securities:
Net non-credit related OTTI losses, adjusted for valuation changes	0.0	0.0	0.3
Other net unrealized gains (losses) on securities	(212.9)	74.9	84.0
Total net unrealized gains (losses) on securities	(212.9)	74.9	84.3
Net unrealized gains on forecasted transactions	(9.7)	(2.6)	(2.0)
Foreign currency translation adjustment	(1.2)	(0.9)	(1.6)
Other comprehensive income (loss)	(223.8)	71.4	80.7
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest	(1.1)	0.0	0.0
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	$ 1,044.9	$ 1,352.4	$ 1,246.1
Computation of Net Income Per Share
Average shares outstanding - Basic (shares)	585.5	590.6	599.1
Net effect of dilutive stock-based compensation (shares)	3.7	4.2	4.5
Total equivalent shares - Diluted (shares)	589.2	594.8	603.6
Basic: Net income per share (USD per share)	$ 2.16	$ 2.17	$ 1.95
Diluted: Net income per share (USD per share)	$ 2.15	$ 2.15	$ 1.93

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Consolidated Balance Sheets - USD ($) $ in Millions		Dec. 31, 2015	Dec. 31, 2014
Investments - Available-for-sale, at fair value:
Fixed maturities (amortized cost: $15,347.9 and $13,374.2)		$ 15,332.2	$ 13,549.2
Equity securities:
Nonredeemable preferred stocks (cost: $674.2 and $590.4)		782.6	827.5
Common equities (cost: $1,494.3 and $1,289.2)		2,650.5	2,492.3
Short-term investments (amortized cost: $2,172.0 and $2,149.0)		2,172.0	2,149.0
Total investments at fair value	[1],[2]	20,937.3	19,018.0
Cash		224.4	108.4
Accrued investment income		102.2	87.3
Premiums receivable, net of allowance for doubtful accounts of $164.8 and $152.2		3,987.7	3,537.5
Reinsurance recoverables, including $46.1 and $46.0 on paid losses and loss adjustment expenses		1,488.8	1,231.9
Prepaid reinsurance premiums		199.3	85.3
Deferred acquisition costs		564.1	457.2
Property and equipment, net of accumulated depreciation of $778.3 and $731.0		1,037.2	960.6
Intangible Assets, Net (Excluding Goodwill)		494.9	11.3
Other assets		335.8	288.5
Goodwill		447.6	1.6
Total assets		29,819.3	25,787.6
Liabilities and Shareholders' Equity
Unearned premiums		6,621.8	5,440.1
Loss and loss adjustment expense reserves		10,039.0	8,857.4
Net deferred income taxes		109.3	98.9
Dividends payable		519.2	404.1
Accounts payable, accrued expenses, and other liabilities		2,067.8	1,893.8
Debt, Long-term and Short-term, Combined Amount		2,707.9	2,164.7
Total liabilities		22,065.0	18,859.0
Redeemable Noncontrolling Interest, Equity, Carrying Amount		464.9	0.0
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 214.0 and 209.8)		583.6	587.8
Paid-in capital		1,218.8	1,184.3
Retained earnings		4,686.6	4,133.4
Accumulated other comprehensive income, net of tax:
Total net unrealized gains (losses) on securities		809.0	1,021.9
Net unrealized gains on forecasted transactions		(8.2)	1.5
Foreign currency translation adjustment		(1.5)	(0.3)
Stockholders' Equity Attributable to Noncontrolling Interest		1.1	0.0
Total accumulated other comprehensive income		800.4	1,023.1
Total shareholders' equity		7,289.4	6,928.6
Total liabilities and shareholders' equity		$ 29,819.3	$ 25,787.6

[1] Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

[2] The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

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Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Millions	Dec. 31, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Fixed maturities, amortized cost	$ 7,289,400,000	$ 6,928,600,000
Nonredeemable preferred stocks, cost	0
Common equities, cost	$ 29,819,300,000	$ 25,787,600,000
Short Term Investments Amortized Cost
Premiums receivable, allowance for doubtful accounts	$ 0
Reinsurance recoverables, paid losses and loss adjustment expenses	2,100,000	$ 0
Finite-Lived Intangible Assets, Accumulated Amortization	47.4	0.6
Property and equipment, accumulated depreciation	$ 46,100,000	$ 46,000,000
Common Shares, par value (USD per share)	$ 1.00	$ 1.00
Common Shares, authorized (shares)	900.0	900.0
Common Shares, issued (shares)	797.6	797.6
Common Shares, treasury shares (shares)	214.0	209.8

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Consolidated Statements of Changes in Shareholders' Equity - USD ($) shares in Millions, $ in Millions		Total	Common Shares, $1.00 Par Value	Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income, Net of Tax
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest		$ 0.0				$ 0.0
Balance, Beginning of year at Dec. 31, 2012			$ 604.6	$ 1,077.0	$ 3,454.4	871.0
Net income attributable to Progressive		1,165.4			1,165.4
Other comprehensive income (loss)		80.7				80.7
Tax benefit from exercise/vesting of equity-based compensation				10.3
Treasury shares purchased	[1]		(11.0)	(20.4)	(242.0)
Net restricted equity awards (issued) (vested) forfeited			2.2	(2.2)
Cash dividends declared on common shares ($0.8882, $0.6862, and $1.4929 per share)					(889.2)
Amortization of equity-based compensation				64.9
Reinvested dividends on restricted stock units				12.4	(12.4)
Other					23.8
Balance, End of year at Dec. 31, 2013		6,189.5	595.8	1,142.0	3,500.0	951.7
Redeemable Noncontrolling Interest, Equity, Carrying Amount				0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest		0.0				0.0
Net income attributable to Progressive		1,281.0			1,281.0
Other comprehensive income (loss)		71.4				71.4
Tax benefit from exercise/vesting of equity-based compensation				12.8
Treasury shares purchased	[1]		(11.1)	(21.6)	(238.7)
Net restricted equity awards (issued) (vested) forfeited			3.1	(3.1)
Cash dividends declared on common shares ($0.8882, $0.6862, and $1.4929 per share)					(402.6)
Amortization of equity-based compensation				51.4
Reinvested dividends on restricted stock units				2.8	(2.8)
Other					(3.5)
Balance, End of year at Dec. 31, 2014		6,928.6	587.8	1,184.3	4,133.4	1,023.1
Redeemable Noncontrolling Interest, Equity, Carrying Amount		0.0		0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest		(1.1)				1.1
Net income attributable to Progressive		1,267.6			1,267.6
Other comprehensive income (loss)		(223.8)				(223.8)
Tax benefit from exercise/vesting of equity-based compensation				16.8
Treasury shares purchased	[1]		(7.3)	(15.2)	(186.0)
Net restricted equity awards (issued) (vested) forfeited			3.1	(3.1)
Cash dividends declared on common shares ($0.8882, $0.6862, and $1.4929 per share)					(520.5)
Amortization of equity-based compensation				64.5
Reinvested dividends on restricted stock units				5.7	(5.7)
Other					(2.2)
Balance, End of year at Dec. 31, 2015		$ 7,289.4	$ 583.6	1,218.8	$ 4,686.6	$ 800.4
Preferred Stock, Shares Authorized		20.0
Redeemable Noncontrolling Interest, Equity, Carrying Amount		$ 464.9		$ (34.2)
voting preference shares authorized		$ 5.0

[1] In December 2013, we purchased 4.0 million shares at a price of $25.50 per share in a privately negotiated transaction with the "Peter B. Lewis Trust under Agreement dated December 21, 1994, as modified." Mr. Lewis was our non-executive Chairman of the Board until his death in November 2013.

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Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Preference Shares authorized	20,000,000
Number of shares acquired in a privately negotiated transaction		4,000,000
Treasury Stock Acquired Cost per Share Privately Negotiated Transaction		$ 25.50
Retained Earnings
Cash dividends declared on common shares, per share	$ 0.8882	$ 0.6862	$ 1.4929
Serial Preferred Stock
Preference Shares authorized	20,000,000
Preference Shares issued	0
Preferred Shares outstanding	0
Voting Preferred Stock
Preference Shares authorized	5,000,000
Preference Shares issued	0

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Cash Flows [Abstract]
Cash flow hedge gain reclassification from accumulated other comprehensive income to net realized gains/losses on securities	$ 1,300.5	$ 1,281.0	$ 1,165.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	103.7	97.1	101.3
Amortization of Intangible Assets	46.8	0.0	0.0
Amortization of fixed-income securities	98.4	78.2	134.0
Amortization of equity-based compensation	66.2	51.4	64.9
Net realized (gains) losses on securities	(112.7)	(224.2)	(318.4)
Net (gains) losses on disposition of property and equipment	2.0	5.4	5.6
(Gains) losses on extinguishment of debt	0.9	4.8	4.3
Changes in:
Premiums receivable	(421.1)	(227.1)	(127.4)
Reinsurance recoverables	(202.6)	(141.7)	(189.2)
Prepaid reinsurance premiums	32.5	(10.4)	(8.6)
Deferred acquisition costs	(42.3)	(9.6)	(13.1)
Income taxes	(107.2)	97.5	57.8
Unearned premiums	632.4	266.4	244.8
Loss and loss adjustment expense reserves	(917.7)	(378.0)	(641.6)
Accounts payable, accrued expenses, and other liabilities	37.9	92.0	165.0
Other, net	(60.2)	(13.2)	(28.1)
Net cash provided by operating activities	2,292.9	1,725.6	1,899.9
Purchases:
Fixed maturities	(9,311.1)	(7,967.5)	(7,100.6)
Equity securities	(647.1)	(369.7)	(322.2)
Sales:
Fixed maturities	4,913.5	5,637.5	3,083.9
Equity securities	402.4	560.1	369.2
Maturities, paydowns, calls, and other:
Fixed maturities	3,579.5	2,296.6	1,859.6
Equity securities	12.0	14.3	21.5
Net sales (purchases) of short-term investments	20.5	(876.0)	716.6
Net unsettled security transactions	(8.2)	(30.0)	152.2
Purchases of property and equipment	(130.7)	(108.1)	(140.4)
Sales of property and equipment	10.6	5.9	3.7
Payments to Acquire Businesses, Net of Cash Acquired	(752.7)	0.0	0.0
Payments to Acquire Additional Interest in Subsidiaries	(12.6)	0.0	0.0
Net cash used in investing activities	(1,923.9)	(836.9)	(1,356.5)
Cash Flows From Financing Activities
Proceeds from exercise of equity options	0.2	0.0	0.0
Tax benefit from exercise/vesting of equity-based compensation	16.8	12.8	10.3
Net proceeds from debt issuance	382.0	344.7	0.0
Payment of debt	(20.4)	0.0	(150.0)
Reacquisition of debt	(19.3)	(48.9)	(58.1)
Dividends paid to shareholders	(403.6)	(892.6)	(175.6)
Acquisition of treasury shares	(208.5)	(271.4)	(273.4)
Net cash used in financing activities	(252.8)	(855.4)	(646.8)
Effect of exchange rate changes on cash	(0.2)	0.0	(0.6)
Increase (decrease) in cash	116.0	33.3	(104.0)
Cash, Beginning of year	108.4	75.1	179.1
Cash, End of year	$ 224.4	$ 108.4	$ 75.1

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SCHEDULE I - Summary Of Investments - Other Than Investments in Related Parties

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

SCHEDULE I - Summary Of Investments - Other Than Investments In Related Parties

SCHEDULE I — SUMMARY OF INVESTMENTS — OTHER THAN INVESTMENTS IN RELATED PARTIES

THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

(millions)

	December 31, 2015
Type of Investment	Cost		Fair Value		Amount At Which Shown In The Balance Sheet
Available-for-sale
Fixed maturities:
Bonds:
United States Government and government agencies and authorities	$	2,425.4	$	2,429.2	$	2,429.2
States, municipalities, and political subdivisions	2,677.6		2,721.4		2,721.4
Foreign government obligations	18.6		18.6		18.6
Public utilities	140.3		139.7		139.7
Corporate and other debt securities	3,572.9		3,551.9		3,551.9
Asset-backed securities	6,253.1		6,237.1		6,237.1
Redeemable preferred stocks	260.0		234.3		234.3
Total fixed maturities	15,347.9		15,332.2		15,332.2
Equity securities:
Common stocks:
Public utilities	113.1		151.8		151.8
Banks, trusts, and insurance companies	264.1		484.2		484.2
Industrial, miscellaneous, and all other	1,117.1		2,014.5		2,014.5
Nonredeemable preferred stocks	674.2		782.6		782.6
Total equity securities	2,168.5		3,433.1		3,433.1
Short-term investments1	2,172.0		2,172.0		2,172.0
Total investments	$	19,688.4	$	20,937.3	$	20,937.3

¹ Includes $2.5 million in treasury bills issued by the Australian government.

Progressive did not have any securities of any one issuer, excluding U.S. government obligations, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at December 31, 2015.

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SCHEDULE II - Condensed Financial Information Of Registrant

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

SCHEDULE II - Condensed Financial Information Of Registrant

SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

THE PROGRESSIVE CORPORATION (PARENT COMPANY)

(millions)

	Years Ended December 31,
	2015			2014			2013
Revenues
Dividends from subsidiaries	$	852.5		$	1,000.2		$	1,119.7
Undistributed income (loss) from subsidiaries	500.0			358.3			117.5
Equity in net income of subsidiaries*	1,352.5			1,358.5			1,237.2
Intercompany investment income*	3.9			2.4			2.8
Gains (losses) on extinguishment of debt	(0.9		)	(4.8		)	(4.3		)
Other income1	0			0			2.6
Total revenues	1,355.5			1,356.1			1,238.3
Expenses
Interest expense	136.1			120.2			121.2
Deferred compensation2	5.3			2.8			9.5
Other operating costs and expenses	5.4			4.4			4.0
Total expenses	146.8			127.4			134.7
Income before income taxes	1,208.7			1,228.7			1,103.6
Benefit for income taxes	(58.9		)	(52.3		)	(61.8		)
Net income attributable to Progressive	1,267.6			1,281.0			1,165.4
Other comprehensive income (loss)	(222.7		)	71.4			80.7
Comprehensive income attributable to Progressive	$	1,044.9		$	1,352.4		$	1,246.1

* Eliminated in consolidation.

¹ Represents gain on net death benefit received on life insurance policies.

² See Note 4 – Employee Benefit Plans in these condensed financial statements.

See notes to condensed financial statements.

CONDENSED BALANCE SHEETS

THE PROGRESSIVE CORPORATION (PARENT COMPANY)

(millions)

	December 31,
	2015		2014
Assets
Investment in affiliate	$	5.0	$	5.0
Investment in subsidiaries*	9,192.3		7,423.5
Receivable from investment subsidiary*	1,200.5		1,677.5
Intercompany receivable*	406.0		413.0
Net deferred income taxes	90.6		74.5
Other assets	124.8		123.9
Total Assets	$	11,019.2	$	9,717.4
Liabilities and Shareholders’ Equity
Accounts payable, accrued expenses, and other liabilities	$	202.7	$	220.0
Dividend payable	519.2		404.1
Debt	2,543.0		2,164.7
Total liabilities	3,264.9		2,788.8
Redeemable noncontrolling interest (NCI)	464.9		0
Shareholders' Equity
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 214.0 and 209.8)	583.6		587.8
Paid-in capital	1,218.8		1,184.3
Retained earnings	4,686.6		4,133.4
Total accumulated other comprehensive income	800.4		1,023.1
Total shareholders’ equity	7,289.4		6,928.6
Total Liabilities, Redeemable NCI, and Shareholders’ Equity	$	11,019.2	$	9,717.4

*Eliminated in consolidation.

See notes to condensed financial statements.

CONDENSED STATEMENTS OF CASH FLOWS

THE PROGRESSIVE CORPORATION (PARENT COMPANY)

(millions)

	Years Ended December 31,
	2015			2014			2013
Cash Flows From Operating Activities:
Net income attributable to Progressive	$	1,267.6		$	1,281.0		$	1,165.4
Adjustments to reconcile net income attributable to Progressive to net cash provided by operating activities:
Undistributed (income) loss from subsidiaries	(500.0		)	(358.3		)	(117.5		)
Amortization of equity-based compensation	2.4			2.2			2.1
(Gains) losses on extinguishment of debt	0.9			4.8			4.3
Changes in:
Intercompany receivable	7.0			(105.4		)	(11.4		)
Accounts payable, accrued expenses, and other liabilities	(46.2		)	18.2			19.4
Income taxes	12.3			61.1			(55.8		)
Other, net	(3.1		)	0.4			(16.3		)
Net cash provided by operating activities	740.9			904.0			990.2
Cash Flows From Investing Activities:
Additional investments in equity securities of consolidated subsidiaries	(40.2		)	(21.1		)	(13.9		)
Investment in affiliate	0.0			0			(4.0		)
Acquisition of ARX	(890.1		)	0			0
(Paid to) received from investment subsidiary	409.1			(29.1		)	(325.5		)
Net cash used in investing activities	(521.2		)	(50.2		)	(343.4		)
Cash Flows From Financing Activities:
Tax benefit from exercise/vesting of equity-based compensation	16.8			12.8			10.3
Net proceeds from debt issuance	394.9			346.3			0
Payment of debt	0			0			(150.0		)
Reacquisition of debt	(19.3		)	(48.9		)	(58.1		)
Dividends paid to shareholders	(403.6		)	(892.6		)	(175.6		)
Acquisition of treasury shares	(208.5		)	(271.4		)	(273.4		)
Net cash used in financing activities	(219.7		)	(853.8		)	(646.8		)
Change in cash	0			0			0
Cash, beginning of year	0			0			0
Cash, end of year	$	0		$	0		$	0

See notes to condensed financial statements.

NOTES TO CONDENSED FINANCIAL STATEMENTS

The accompanying condensed financial statements of The Progressive Corporation (parent company) should be read in conjunction with the consolidated financial statements and notes thereto in the Annual Report to Shareholders of The Progressive Corporation and its subsidiaries, which is included as Exhibit 13 to this Form 10-K.

Note 1. Statements of Cash Flows — For the purpose of the Statements of Cash Flows, cash includes only bank demand deposits. The Progressive Corporation does not hold any cash but has unrestricted access to funds maintained in a non-insurance, investment subsidiary to meet its holding company obligations; at year-end 2015 and 2014, $1.3 billion and $1.9 billion, respectively, of marketable securities were available in this subsidiary. Non-cash activity includes declared but unpaid dividends, the transfer of the previous 5% ownership interest in ARX to The Progressive Corporation from an investment subsidiary, and the change in redemption value of the redeemable NCI. For the years ended December 31, The Progressive Corporation paid the following:

(millions)	2015		2014		2013
Income taxes	$	625.0	$	515.0	$	497.0
Interest	128.2		116.0		122.3

Note 2. Income Taxes — The Progressive Corporation files a consolidated federal income tax return with all eligible subsidiaries and acts as an agent for the consolidated tax group when making payments to the Internal Revenue Service. Since The Progressive Corporation owns less than 80% of ARX's outstanding stock, ARX and its subsidiaries are not eligible to file on a consolidated basis with The Progressive Corporation. The Progressive Corporation consolidated group’s net income taxes currently payable/recoverable are included in other liabilities/assets, respectively, in the accompanying Condensed Balance Sheets based on the balance at the end of the year. The Progressive Corporation and its eligible subsidiaries have adopted, pursuant to a written agreement, a method of allocating consolidated federal income taxes. Amounts allocated to the eligible subsidiaries under the written agreement are included in “Intercompany Receivable” in the accompanying Condensed Balance Sheets.

Note 3. Debt — The information relating to debt is incorporated by reference from Note 4 – Debt in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

Note 4. Employee Benefit Plans — The information relating to incentive compensation plans and deferred compensation is incorporated by reference from Note 9 – Employee Benefit Plans in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

Note 5. Other Comprehensive Income — On the condensed Statements of Comprehensive Income, other comprehensive income represents activity of the subsidiaries of The Progressive Corporation and includes net unrealized gains (losses) on securities, net unrealized gains on forecasted transactions, and foreign currency translation adjustments.

Note 6. Dividends — The information relating to our dividend policy is incorporated by reference from Note 14 – Dividends in our Annual Report, which is included as Exhibit 13 to this Form 10-K.

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SCHEDULE III - Supplementary Insurance Information

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

SCHEDULE III - Supplementary Insurance Information

SCHEDULE III — SUPPLEMENTARY INSURANCE INFORMATION

THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

(millions)

Segment	Deferred policy acquisition costs1		Future policy benefits, losses, claims, and loss expenses1		Unearned premiums1		Other policy claims and benefits payable1		Premium revenue			Net investment income1,2		Benefits, claims, losses, and settlement expenses			Amortization of deferred policy acquisition costs		Other operating expenses		Net premiums written
Year ended December 31, 2015:
Personal Lines									$	17,294.5				$	12,748.7		$	1,331.3	$	2,379.9	$	17,703.6
Commercial Lines									1,995.9					1,244.5			219.4		232.6		2,171.2
Property									609.1					349.0			101.1		98.8		689.6
Other indemnity									(0.4		)			(0.2		)	0		0.8		(0.4		)
Total	$	564.1	$	10,039.0	$	6,621.8	$	0	$	19,899.1		$	431.8	$	14,342.0		$	1,651.8	$	2,712.1	$	20,564.0
Year ended December 31, 2014:
Personal Lines									$	16,561.0				$	12,161.2		$	1,322.9	$	2,262.6	$	16,759.2
Commercial Lines									1,837.5					1,133.4			201.1		204.2		1,895.4
Property									0					0			0		0		0
Other indemnity									0					11.6			0		0.3		0
Total	$	457.2	$	8,857.4	$	5,440.1	$	0	$	18,398.5		$	389.5	$	13,306.2		$	1,524.0	$	2,467.1	$	18,654.6
Year ended December 31, 2013:
Personal Lines									$	15,341.6				$	11,194.6		$	1,257.5	$	2,149.2	$	15,569.2
Commercial Lines									1,761.6					1,267.3			194.3		201.2		1,770.5
Property									0					0			0		0		0
Other indemnity									0.2					10.5			0		0.5		0
Total	$	447.6	$	8,479.7	$	5,174.5	$	0	$	17,103.4		$	403.2	$	12,472.4		$	1,451.8	$	2,350.9	$	17,339.7

¹ Progressive does not allocate assets, liabilities, or investment income to operating segments.

² Excludes total net realized gains (losses) on securities.

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SCHEDULE IV - Reinsurance

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

SCHEDULE IV - Reinsurance

SCHEDULE IV — REINSURANCE

THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

(millions)

Year Ended:	Gross Amount		Ceded to Other Companies		Assumed From Other Companies		Net Amount		Percentage of Amount Assumed to Net
December 31, 2015
Premiums earned:
Property and liability insurance	$	20,454.1	$	555.0	$	0	$	19,899.1	0
December 31, 2014
Premiums earned:
Property and liability insurance	$	18,648.4	$	249.9	$	0	$	18,398.5	0
December 31, 2013
Premiums earned:
Property and liability insurance	$	17,317.9	$	214.5	$	0	$	17,103.4	0

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SCHEDULE VI-Supplemental Information Concerning Property - Casualty Insurance Operations

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

SCHEDULE VI-Supplemental Information Concerning Property - Casualty Insurance Operations

SCHEDULE VI — SUPPLEMENTAL INFORMATION CONCERNING PROPERTY - CASUALTY INSURANCE OPERATIONS

THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

(millions)

	Losses and Loss Adjustment Expenses Incurred Related to
Year Ended	Current Year		Prior Years			Paid Losses and Loss Adjustment Expenses
December 31, 2015	$	14,657.1	$	(315.1	)	$	13,639.6
December 31, 2014	$	13,330.3	$	(24.1	)	$	13,068.5
December 31, 2013	$	12,427.3	$	45.1		$	12,014.9

Pursuant to Rule 12-18 of Regulation S-X. See Schedule III for the additional information required in Schedule VI.

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Reporting And Accounting Policies

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Reporting And Accounting Policies

REPORTING AND ACCOUNTING POLICIES

Nature of OperationsThe Progressive insurance organization began business in 1937. The Progressive Corporation, an insurance holding company was formed in 1965. The financial results of The Progressive Corporation include its subsidiaries and affiliates (references to “subsidiaries” in these notes include affiliates as well). Our insurance subsidiaries (collectively the Progressive Group of Insurance Companies) provide personal and commercial automobile and property insurance, other specialty property-casualty insurance and related services. Our Personal Lines segment writes insurance for personal autos and recreational vehicles through both an independent insurance agency channel and a direct channel. Our Commercial Lines segment writes primary liability and physical damage insurance for automobiles and trucks owned and/or operated predominantly by small businesses through both the independent agency and direct channels. Our Property segment writes personal and commercial property insurance for homeowners, other property owners, and renters, primarily through the independent insurance agency channel. We operate our businesses throughout the United States; we also sell personal auto physical damage and auto property damage liability insurance in Australia.

Basis of Consolidation and Reporting The accompanying consolidated financial statements include the accounts of The Progressive Corporation and ARX Holding Corp. (ARX), and their respective wholly owned insurance and non-insurance subsidiaries and affiliates, in which Progressive or ARX has a controlling financial interest.  The Progressive Corporation owned 69.2% of the outstanding capital stock of ARX at December 31, 2015. All intercompany accounts and transactions are eliminated in consolidation.

EstimatesWe are required to make estimates and assumptions when preparing our financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (GAAP). As estimates develop into fact (e.g., losses are paid), results may, and will likely, differ from those estimates.

InvestmentsOur fixed-maturity securities, equity securities, and short-term investments are accounted for on an available-for-sale basis. See Note 2 – Investments for details regarding the composition of our investment portfolio.

Fixed-maturity securities include debt securities and redeemable preferred stocks, which may have fixed or variable principal payment schedules, may be held for indefinite periods of time, and may be used as a part of our asset/liability strategy or sold in response to changes in interest rates, anticipated prepayments, risk/reward characteristics, liquidity needs, or other economic factors. These securities are carried at fair value with the corresponding unrealized gains (losses), net of deferred income taxes, reported in accumulated other comprehensive income. Fair values are obtained from recognized pricing services or are quoted by market makers and dealers, with limited exceptions discussed in Note 3 – Fair Value.

Included in the fixed-maturity portfolio are asset-backed securities. The asset-backed securities are generally accounted for under the retrospective method. The retrospective method recalculates yield assumptions (based on changes in interest rates or cash flow expectations) historically to the inception of the investment holding period, and applies the required adjustment, if any, to the cost basis, with the offset recorded to investment income. The prospective method is used primarily for interest-only securities, non-investment-grade asset-backed securities, and certain asset-backed securities with sub-prime loan exposure or where there is a greater risk of non-performance and where it is possible the initial investment may not be substantially recovered. The prospective method requires a calculation of expected future repayments and resets the yield to allow for future period adjustments; no current period impact to investment income or the security’s cost is made based on the cash flow update. Prepayment assumptions are based on market expectations and are updated quarterly.

Equity securities include common stocks, nonredeemable preferred stocks, and other risk investments, and are reported at fair values. Changes in fair value of these securities, net of deferred income taxes, are reflected as unrealized gains (losses) in accumulated other comprehensive income. To the extent we hold any foreign equities or foreign currency hedges, any change in value due to exchange rate fluctuations would be limited by foreign currency hedges, if any, and would be recognized in income in the current period.

Short-term investments may include Eurodollar deposits, commercial paper, repurchase transactions, and other securities expected to mature within one year. In addition, short-term investments can include auction rate securities (i.e., certain municipal bonds and preferred stocks). Due to the nature of auction rate securities, these securities are classified as short-term based upon their expected auction date (generally 7-49 days) rather than on their contractual maturity date (which is greater than one year at original issuance). In the event that an auction fails, the security may need to be reclassified from short-term. Changes in fair value of these securities, net of deferred income taxes, are reflected as unrealized gains (losses) in accumulated other comprehensive income.

Trading securities are securities bought principally for the purpose of sale in the near term. To the extent we have trading securities, changes in fair value would be recognized in income in the current period. Derivative instruments, which may be used for trading purposes or classified as trading derivatives due to the characteristics of the transaction, are discussed below.

Derivative instruments may include futures, options, forward positions, foreign currency forwards, interest rate swap agreements, and credit default swaps and may be used in the portfolio for general investment purposes or to hedge the exposure to:

• Changes in fair value of an asset or liability (fair value hedge),

• Foreign currency of an investment in a foreign operation (foreign currency hedge), or

• Variable cash flows of a forecasted transaction (cash flow hedge).

To the extent we have derivatives held for general investment purposes, these derivative instruments are recognized as either assets or liabilities and measured at fair value, with changes in fair value recognized in income as a component of net realized gains (losses) on securities during the period of change.

Derivatives designated as hedges are required to be evaluated on established criteria to determine the effectiveness of their correlation to, and ability to reduce the designated risk of, specific securities or transactions. Effectiveness is required to be reassessed regularly. Hedges that are deemed to be effective would be accounted for as follows:

• Fair value hedge:  changes in fair value of the hedge, as well as the hedged item, would be recognized in income in the period of change while the hedge is in effect.

• Foreign currency hedge:  changes in fair value of the hedge, as well as the hedged item, would be reflected as a change in translation adjustment as part of accumulated other comprehensive income. Gains and losses on the foreign currency hedge would offset the foreign exchange gains and losses on the foreign investment as they are recognized into income.

• Cash flow hedge:  changes in fair value of the hedge would be reported as a component of accumulated other comprehensive income and subsequently amortized into earnings over the life of the hedged transaction.

If a hedge is deemed to become ineffective or discontinued, the following accounting treatment would be applied:

• Fair value hedge:  the derivative instrument would continue to be adjusted through income, while the adjustment in the change in value of the hedged item would be reflected as a change in unrealized gains (losses) as part of accumulated other comprehensive income.

• Foreign currency hedge:  changes in the value of the hedged item would continue to be reflected as a change in translation adjustment as part of accumulated other comprehensive income, but the derivative instrument would be adjusted through income for the current period.

• Cash flow hedge:  changes in fair value of the derivative instrument would be reported in income for the current period.

For all derivative positions, net cash requirements are limited to changes in fair values, which may vary resulting from changes in interest rates, currency exchange rates, and other factors. Exposure to credit risk is limited to the carrying value; collateral may be required to limit credit risk. We have elected not to offset fair value amounts that arise from derivative positions with the same counterparty under a master netting arrangement.

Investment securities are exposed to various risks such as interest rate, market, credit, and liquidity risk. Fair values of securities fluctuate based on the nature and magnitude of changing market conditions; significant changes in market conditions could materially affect the portfolio’s value in the near term. We regularly monitor our portfolio for price changes, which might indicate potential impairments, and perform detailed reviews of securities with unrealized losses. In such cases, changes in fair value are evaluated to determine the extent to which such changes are attributable to: (i) fundamental factors specific to the issuer, such as financial condition, business prospects, or other factors, (ii) market-related factors, such as interest rates or equity market declines, or (iii) credit-related losses, where the present value of cash flows expected to be collected are lower than the amortized cost basis of the security.

We analyze our debt securities that are in a loss position to determine if we intend to sell, or if it is more likely than not that we will be required to sell, the security prior to recovery and, if so, we write down the security to its current fair value, with the entire amount of the write-down recorded to earnings. To the extent that it is more likely than not that we will hold the debt security until recovery (which could be maturity), we determine if any of the decline in value is due to a credit loss (i.e., where the present value of future cash flows expected to be collected is lower than the amortized cost basis of the security) and, if so, we recognize that portion of the impairment as a component of net realized gains (losses) in the comprehensive income statement, with the difference (i.e., non-credit related impairment) recognized as part of our net unrealized gains (losses) in accumulated other comprehensive income. When an equity security (common equity and nonredeemable preferred stock) in our investment portfolio has an unrealized loss in fair value that is deemed to be other-than-temporary, we reduce the book value of such security to its current fair value, recognizing the decline as a realized loss in the comprehensive income statement. Any future changes in fair value, either increases or decreases, are reflected as changes in unrealized gains (losses) as part of accumulated other comprehensive income.

Investment income consists of interest, dividends, and amortization. In addition to the discussion above for asset-backed securities, interest is recognized on an accrual basis using the effective yield method. Depending on the nature of the equity instruments, dividends are recorded at either the ex-dividend date or on an accrual basis.

Realized gains (losses) on securities are computed based on the first-in first-out method and include write-downs on available-for-sale securities considered to have other-than-temporary declines in fair value (excluding non-credit related impairments), as well as holding period valuation changes on derivatives, trading securities, and hybrid instruments (e.g., securities with embedded options, where the option is a feature of the overall change in the value of the instrument).

Insurance Premiums and Receivables  Insurance premiums written are earned into income on a pro rata basis over the period of risk, based on a daily earnings convention. Accordingly, unearned premiums represent the portion of premiums written that are applicable to the unexpired risk. We provide insurance and related services to individuals and small commercial accounts and offer a variety of payment plans. Generally, premiums are collected prior to providing risk coverage, minimizing our exposure to credit risk. For our vehicle businesses, we perform a policy level evaluation to determine the extent to which the premiums receivable balance exceeds the unearned premiums balance. We then age this exposure to establish an allowance for doubtful accounts based on prior experience. For our Property business, we do not establish an allowance for doubtful accounts since the risk of uncollectibility is relatively low. If premiums are unpaid by the policy due date, we provide advance notice of cancellation in accordance with each state's requirements and cancel the policy if the premiums remain unpaid after receipt of notice and write off any remaining balance.

Deferred Acquisition CostsDeferred acquisition costs include commissions, premium taxes, and other variable underwriting and direct sales costs incurred in connection with the successful acquisition or renewal of insurance contracts. These acquisition costs, net of ceding allowances, are deferred and amortized over the policy period in which the related premiums are earned. We consider anticipated investment income in determining the recoverability of these costs. Management believes that these costs will be fully recoverable in the near term.

We do not defer any advertising costs. Total advertising costs, which are expensed as incurred, for the years ended

December 31, were:

(millions)	Advertising Costs
2015	$	748.3
2014	681.8
2013	619.3

Loss and Loss Adjustment Expense ReservesLoss reserves represent the estimated liability on claims reported to us, plus reserves for losses incurred but not recorded (IBNR). These estimates are reported net of amounts estimated to be recoverable from salvage and subrogation. Loss adjustment expense reserves represent the estimated expenses required to settle these claims and losses. The methods of making estimates and establishing these reserves are reviewed regularly, and resulting adjustments are reflected in income in the current period. Such loss and loss adjustment expense reserves are susceptible to change in the near term.

Reinsurance  Our reinsurance transactions include premium ceded to “Regulated” plans and “Non-Regulated” plans.  Regulated plans are plans in which we are required to participate by insurance regulations and include the Michigan Catastrophic Claims Association, Florida Hurricane Catastrophe Fund, North Carolina Reinsurance Facility, state-mandated involuntary plans for commercial vehicles (Commercial Auto Insurance Procedures/Plans - “CAIP”), and federally regulated plans for flood (National Flood Insurance Program). Non-Regulated plans are voluntary contractual arrangements and primarily relate to our Property business.  Prepaid reinsurance premiums are earned on a pro rata basis over the period of risk, based on a daily earnings convention, which is consistent with premiums written.  See Note 7 - Reinsurance for further discussion.

Income Taxes  The income tax provision is calculated under the balance sheet approach. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal items giving rise to such differences are investment securities (e.g., net unrealized gains (losses), write-downs on securities determined to be other-than-temporarily impaired, and derivative instruments), loss and loss adjustment expense reserves, unearned premiums reserves, deferred acquisition costs, property and equipment, intangible assets, and non-deductible accruals. We review our deferred tax assets regularly for recoverability. See Note 5 – Income Taxes for further discussion.

Property and Equipment  Property and equipment are recorded at cost, less accumulated depreciation, and include capitalized software developed or acquired for internal use. Depreciation is recognized over the estimated useful lives of the assets using accelerated methods for computer equipment and the straight-line method for all other fixed assets. The useful life for computer equipment and laptop computers is 3 years. The useful lives range from 7 to 40 years for buildings, improvements, and integrated components, and 3 to 15 years for all other property and equipment. We evaluate impairment of our property and equipment at least annually and expense any item determined to be impaired. Land and buildings comprised 75% and 77% of total property and equipment at December 31, 2015 and 2014, respectively.

During 2014, the decision was made to sell one property originally purchased for a future Service Center site. At December 31, 2015 and 2014, included in other assets in the consolidated balance sheets is $8.7 million of "held for sale" property, which represents the fair value of this property less the estimated costs to sell.

Total capitalized interest, which primarily relates to capitalized software projects, for the years ended December 31, was:

(millions)	Capitalized Interest
2015	$	2.4
2014	1.3
2013	0.8

Goodwill and Intangible Assets Goodwill is the excess of the purchase price over the estimated fair value of the assets and liabilities acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Substantially all of the goodwill recorded as of December 31, 2015, relates to the April 1, 2015 acquisition of a controlling interest in ARX.

Intangible assets primarily arose through the acquisition of ARX and mainly represent the future premiums that will be recognized from the existing policies and current agency relationships, the value of software acquired, and the value of its trade name, "American Strategic Insurance," in the marketplace. The majority of the intangible assets have finite lives ranging from 7 to 14 years. See Note 15 - Acquisition for further discussion.

We evaluate our goodwill for impairment at least annually. If events or changes in circumstances indicate that the carrying value of goodwill or intangible assets may not be recoverable, we will evaluate such items for impairment.

Guaranty Fund Assessments  We are subject to state guaranty fund assessments, which provide for the payment of covered claims or other insurance obligations of insurance companies deemed insolvent. These assessments are accrued after a formal determination of insolvency has occurred, and we have written the premiums on which the assessments will be based. Assessments that are available for recoupment from policyholders or to offset against future premium taxes are capitalized when incurred; all other assessments are expensed.

Fees and Other Revenues  Fees and other revenues primarily represent fees collected from policyholders relating to installment charges in accordance with our bill plans, as well as late payment and insufficient funds fees. Other revenues may include revenue from the sale of tax credits, rental income, and other revenue transactions.

Service Revenues and ExpensesOur service businesses provide insurance-related services. Service revenues and expenses from our commission-based businesses are recorded in the period in which they are earned or incurred. Service revenues generated from processing business for involuntary CAIP plans are earned on a pro rata basis over the term of the related policies. Service expenses related to these CAIP plans are expensed as incurred.

Equity-Based Compensation  We currently issue time-based and performance-based restricted stock unit awards to key members of management (other than management of ARX and its subsidiaries) as our form of equity compensation, and time-based restricted stock awards to non-employee directors. Collectively, we refer to these awards as “restricted equity awards.” Compensation expense for time-based restricted equity awards with installment vesting is recognized over each respective vesting period. For performance-based restricted equity awards, compensation expense is recognized over the respective estimated vesting periods. Dividend equivalent units are credited to outstanding restricted unit awards, both time-based and performance-based, at the time a dividend is paid to shareholders.

We record an estimate for expected forfeitures of restricted equity awards based on our historical forfeiture rates. In addition, we shorten the vesting periods of certain time-based restricted equity awards based on the “qualified retirement” provisions in our equity compensation plans, under which (among other provisions) if the participant is 55 years of age or older and satisfies certain years-of-service requirements, the vesting and distribution of 50% of outstanding time-based restricted equity awards accelerates upon reaching eligibility for a qualified retirement and shortly after the grant date for each subsequent award. For awards granted before March 2013, awards held by an individual who satisfies the "qualified retirement" provisions vest in part upon separation from the company if earlier than the contractual vesting date.

ARX has nonqualified and incentive stock options outstanding that were issued prior to April 2015 as a form of equity compensation to certain of the officers and employees of ARX and its subsidiaries. These outstanding stock options are subject to the put/call features contained in the current stockholders' agreement, pursuant to which The Progressive Corporation has the right, and can be required, to purchase a portion or all of the shares underlying these awards in 2018 and 2021. See Note 16 - Redeemable Noncontrolling Interest. These stock options, which are treated for accounting purposes as liability awards, are expensed over the respective vesting periods based on the Black-Scholes value determined at period end.

The total compensation expense recognized for equity-based compensation, both our equity and liability awards, for the years ended December 31, was:

(millions)	2015		2014		2013
Pretax expense	$	66.2	$	51.4	$	64.9
Tax benefit	23.2		18.0		22.7

Net Income Per Share  Net income attributable to Progressive is used in our calculation of the per share amounts. Basic net income per share is computed using the weighted average number of common shares outstanding during the reporting period, excluding unvested time-based and performance-based restricted equity awards that are subject to forfeiture. Diluted net income per share includes common stock equivalents assumed outstanding during the period. Our common stock equivalents include the incremental shares assumed to be issued for:

• earned but unvested time-based restricted equity awards, and

• certain unvested performance-based restricted equity awards that satisfied contingency conditions for common stock equivalents during the period.

Supplemental Cash Flow InformationCash includes only bank demand deposits. Non-cash activity includes declared but unpaid dividends. For the years ended December 31, we paid the following:

(millions)	2015		2014		2013
Income taxes	$	701.8	$	515.0	$	497.0
Interest	132.0		116.0		122.3

New Accounting Standards In February 2016, the Financial Accounting Standards Board (FASB) released an accounting standards update (ASU) intended to eliminate the off-balance-sheet accounting for leases. The new guidance will require lessees to report their operating leases as both an asset and liability on the statement of financial position and disclose key information about leasing arrangements; the expense recognition will be consistent with existing guidance. The ASU, which is required to be applied on a modified retrospective basis, will be effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2018 (2019 for calendar-year companies). We are currently evaluating the impact the guidance will have on our financial statements.

In January 2016, the FASB released an ASU intended to improve the recognition and measurement of financial instruments. The new guidance will require the changes in fair value of equity securities to be recognized as a component of net income. The ASU is effective for fiscal years beginning after December 15, 2017 (the first quarter 2018 for calendar-year companies). The new guidance could create more volatility in net income, but will have no impact on comprehensive income.

In May 2015, the FASB issued an ASU related to disclosures about short-duration contracts. The disclosures are intended to provide users of financial statements with more transparent information about an insurance entity's initial claim estimates and

subsequent adjustments to those estimates, the methodologies and judgments used to estimate claims, and the timing, frequency, and severity of claims. This standard, which is required to be applied on a retrospective basis, is effective for fiscal years beginning after December 15, 2015 (2016 for calendar-year companies), except for those disclosures that require application only to the current period (e.g., information about significant changes in estimation methodologies and assumptions made in calculating the claim liability for short-duration contracts). We are currently evaluating the impact the guidance will have on our financial statements.

In May 2015, the FASB issued an ASU related to investments measured at net asset value (NAV). The intent is to exclude certain investments measured at NAV from the fair value hierarchy. This guidance is effective for annual and interim periods after December 15, 2015 (January 2016 for calendar-year companies). We did not hold any securities at December 31, 2015, that were priced at NAV. To the extent we acquire such securities, we will follow the guidance to determine the appropriate treatment in the fair value hierarchy table.

In April 2015, the FASB issued an ASU related to the balance sheet presentation of the cost of issuing debt. This standard requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. In August 2015, the FASB further amended this ASU to clarify the treatment of debt issuance costs related to lines-of-credit arrangements. Registrants can elect to defer and present debt issuance costs related to a line of credit as an asset and subsequently amortize the costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. This ASU, which is required to be applied on a retrospective basis, is effective for fiscal years beginning after December 15, 2015 (2016 for calendar-year companies). We have historically deducted the majority of our debt issuance costs from the carrying value of the debt; therefore, we do not expect this standard to have a significant impact on our financial condition, cash flows, or results of operations.

In April 2015, the FASB issued an ASU to clarify guidance around accounting for fees paid in a cloud computing arrangement. The standard prescribes when a cloud computing arrangement should be treated as software and when it should be treated as a service contract based on whether the arrangement includes a software license. This ASU, which allows for both prospective and retrospective methods of adoption, will be effective for annual periods (including interim periods within those annual periods) beginning after December 15, 2015 (2016 for calendar-year companies). We adopted this standard on January 1, 2016, on a prospective basis, and do not expect this standard to have a material impact on our financial condition, cash flows, or results of operations.

Reclassification For the period ended December 31, 2015, we reclassified goodwill and intangible assets out of “other assets” to be reported as separate line items to conform with the current-year presentation. There was no effect on total assets.

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Investments

12 Months Ended

Dec. 31, 2015

Investments Schedule [Abstract]

Investments

INVESTMENTS

Our securities are reported at fair value, with the changes in fair value of these securities (other than hybrid securities and derivative instruments) reported as a component of accumulated other comprehensive income, net of deferred income taxes. The changes in fair value of the hybrid securities and derivative instruments are recorded as a component of net realized gains (losses) on securities.

The following tables present the composition of our investment portfolio by major security type, consistent with our internal classification of how we manage, monitor, and measure the portfolio:

($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Net Realized Gains (Losses)1			Fair Value		% of Total Fair Value
December 31, 2015
Fixed maturities:
U.S. government obligations	$	2,425.4	$	4.4	$	(0.6	)	$	0		$	2,429.2	11.6	%
State and local government obligations	2,677.6		47.5		(3.7		)	0			2,721.4		13.0
Foreign government obligations	18.6		0		0			0			18.6		0.1
Corporate debt securities	3,713.2		11.3		(33.0		)	0.1			3,691.6		17.6
Residential mortgage-backed securities	1,726.0		22.1		(20.6		)	(0.8		)	1,726.7		8.3
Agency residential pass-through obligations	90.3		0.1		(1.1		)	0			89.3		0.4
Commercial mortgage-backed securities	2,665.7		16.9		(29.4		)	0			2,653.2		12.7
Other asset-backed securities	1,771.1		1.4		(5.1		)	0.5			1,767.9		8.4
Redeemable preferred stocks	260.0		17.6		(43.3		)	0			234.3		1.1
Total fixed maturities	15,347.9		121.3		(136.8		)	(0.2		)	15,332.2		73.2
Equity securities:
Nonredeemable preferred stocks	674.2		122.8		(15.7		)	1.3			782.6		3.7
Common equities	1,494.3		1,170.4		(14.2		)	0			2,650.5		12.7
Short-term investments	2,172.0		0		0			0			2,172.0		10.4
Total portfolio2,3	$	19,688.4	$	1,414.5	$	(166.7	)	$	1.1		$	20,937.3	100.0	%

($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Net Realized Gains (Losses)1			Fair Value		% of Total Fair Value
December 31, 2014
Fixed maturities:
U.S. government obligations	$	2,641.1	$	27.3	$	(1.3	)	$	0		$	2,667.1	14.0	%
State and local government obligations	2,095.7		44.6		(1.1		)	0			2,139.2		11.2
Foreign government obligations	14.2		0		0			0			14.2		0.1
Corporate debt securities	2,813.9		32.9		(10.4		)	0.3			2,836.7		14.9
Residential mortgage-backed securities	1,635.5		34.5		(10.8		)	(0.7		)	1,658.5		8.7
Agency residential pass-through obligations	0		0		0			0			0		0
Commercial mortgage-backed securities	2,278.7		39.3		(2.6		)	0.2			2,315.6		12.2
Other asset-backed securities	1,634.9		3.8		(0.8		)	0.8			1,638.7		8.6
Redeemable preferred stocks	260.2		24.7		(5.7		)	0			279.2		1.5
Total fixed maturities	13,374.2		207.1		(32.7		)	0.6			13,549.2		71.2
Equity securities:
Nonredeemable preferred stocks	590.4		201.1		(6.4		)	42.4			827.5		4.4
Common equities	1,289.2		1,213.2		(10.1		)	0			2,492.3		13.1
Short-term investments	2,149.0		0		0			0			2,149.0		11.3
Total portfolio2,3	$	17,402.8	$	1,621.4	$	(49.2	)	$	43.0		$	19,018.0	100.0	%

¹ Represents net holding period gains (losses) on certain hybrid securities (discussed below).

² Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

³ The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

Short-Term Investments Our short-term investments may include commercial paper and other investments that are expected to mature within one year. At December 31, 2015 and 2014, we had $2.5 million and $5.7 million, respectively, in treasury bills issued by the Australian government, included in short-term investments. We did not hold any repurchase transactions where we lent collateral at December 31, 2015 or 2014. To the extent our repurchase transactions were with the same counterparty and subject to an enforceable master netting arrangement, we could elect to offset any such transactions. Consistent with past practice, we would expect to elect not to offset any such transactions and therefore to report these transactions on a gross basis on our balance sheets.

Also included in short-term investments are reverse repurchase commitment transactions, where we loan cash to approved counterparties and receive U.S. Treasury Notes pledged as collateral against the cash borrowed. Our exposure to credit risk is limited due to the nature of the collateral (i.e., U.S. Treasury Notes) received. We have counterparty exposure on these trades in the event of a counterparty default to the extent the general collateral security's value is below the amount of cash we delivered to acquire the collateral. The short-term duration of the transactions (primarily overnight) reduces that exposure.

We had no open reverse repurchase commitments at December 31, 2015 or December 31, 2014. During 2015, our largest outstanding balance of reverse repurchase commitments was $275.0 million, which was open for one day; the average daily balance of reverse repurchase commitments was $135.4 million.

Hybrid Securities Included in our fixed-maturity and equity securities are hybrid securities, which are reported at fair value at December 31:

(millions)	2015		2014
Fixed maturities:
Corporate debt securities	$	49.1	$	139.8
Residential mortgage-backed securities	144.3		120.7
Commercial mortgage-backed securities	17.3		31.2
Other asset-backed securities	11.3		13.7
Total fixed maturities	222.0		305.4
Equity securities:
Nonredeemable preferred stocks	50.7		122.3
Total hybrid securities	$	272.7	$	427.7

Certain corporate debt securities are accounted for as hybrid securities since they were acquired at a substantial premium and contain a change-in-control put option (derivative) that permits the investor, at its sole option if and when a change in control is triggered, to put the security back to the issuer at a 1% premium to par. Due to this change-in-control put option and the substantial market premium paid to acquire these securities, there is the potential that the election to put, upon the change in control, would result in an acceleration of the recognition of the remaining premium paid on these securities in our results of operations. This would result in a loss of $1.5 million as of December 31, 2015, if all of these bonds experienced a simultaneous change in control and we elected to exercise all of our put options. The put feature limits the potential loss in value that could be experienced in the event a corporate action occurs that results in a change in control that materially diminishes the credit quality of the issuer. We are under no obligation to exercise the put option we hold if a change in control occurs.

The residential mortgage-backed securities accounted for as hybrid securities are obligations of the issuer with payments of principal based on the performance of a reference pool of loans. This embedded derivative results in the securities incorporating the risk of default from both the issuer and the related loan pool.

The commercial mortgage-backed securities in the table above contain fixed interest rate reset features that will increase the coupons in the event the securities are not fully paid off on the anticipated repayment date. These reset features have the potential to more than double our initial purchase yield for each security.

The other asset-backed security in the table above represents one hybrid security that was acquired at a deep discount to par due to a failing auction, and contains a put option that allows the investor to put that security back to the auction at par if the auction is restored. This embedded derivative had the potential to more than double our initial investment yield at acquisition.

The hybrid securities in our nonredeemable preferred stock portfolio are perpetual preferred stocks with fixed-rate coupons that have call features, whereby the change in value of the call features is a component of the overall change in value of the preferred stocks. In the second quarter 2015, we acquired a controlling interest in ARX and transferred our previous 5% preferred stock investment in ARX to a component of our total ownership interest (see Note 15 – Acquisition for further discussion).

At December 31, 2015, bonds and certificates of deposit in the principal amount of $184.8 million were on deposit to meet state insurance regulatory and/or rating agency requirements. We did not have any securities of any one issuer, excluding U.S. government obligations, with an aggregate cost or fair value exceeding 10% of total shareholders’ equity at December 31, 2015 or 2014. At December 31, 2015, we did not have any debt securities that were non-income producing during the preceding 12 months.

Fixed Maturities  The composition of fixed maturities by maturity at December 31, 2015, was:

(millions)	Cost		Fair Value
Less than one year	$	4,532.3	$	4,530.9
One to five years	6,758.0		6,734.7
Five to ten years	3,934.1		3,940.3
Ten years or greater	119.1		121.9
Total1	$	15,343.5	$	15,327.8

¹ Excludes $4.4 million related to our open interest rate swap positions.

Asset-backed securities are classified in the maturity distribution table based upon their projected cash flows. All other securities that do not have a single maturity date are reported based upon expected average maturity. Contractual maturities may differ from expected maturities because the issuers of the securities may have the right to call or prepay obligations.

Gross Unrealized Losses  As of December 31, 2015, we had $152.5 million of gross unrealized losses in our fixed-income securities (i.e., fixed-maturity securities, nonredeemable preferred stocks, and short-term investments) and $14.2 million in our common equities. We currently do not intend to sell the fixed-income securities and determined that it is more likely than not that we will not be required to sell these securities for the period of time necessary to recover their cost bases. A review of our fixed-income securities indicated that the issuers were current with respect to their interest obligations and that there was no evidence of any deterioration of the current cash flow projections that would indicate we would not receive the remaining principal at maturity. For common equities, 96% of our common stock portfolio was indexed to the Russell 1000; as such, this portfolio may contain securities in a loss position for an extended period of time, subject to possible write-downs, as described below. We may retain these securities as long as the portfolio and index correlation remain similar. To the extent there is issuer-specific deterioration, we may write-down the securities of that issuer. The remaining 4% of our common stocks were part of a managed equity strategy selected and administered by an external investment advisor. If our review of loss position securities indicated there was a fundamental or market impairment on these securities that was determined to be other-than-temporary, we would recognize a write-down in accordance with our stated policy.

The following tables show the composition of gross unrealized losses by major security type and by the length of time that individual securities have been in a continuous unrealized loss position:

	Total No. of Sec.	Total Fair Value		Gross Unrealized Losses			Less than 12 Months						12 Months or Greater
($ in millions)							No. of Sec.	Fair Value		Unrealized Losses			No. of Sec.	Fair  Value		Unrealized Losses
December 31, 2015
Fixed maturities:
U.S. government obligations	22	$	897.1	$	(0.6	)	22	$	897.1	$	(0.6	)	0	$	0	$	0
State and local government obligations	290	606.7		(3.7		)	264	500.7		(2.6		)	26	106.0		(1.1		)
Corporate debt securities	215	2,580.6		(33.0		)	197	2,294.6		(25.2		)	18	286.0		(7.8		)
Residential mortgage-backed securities	188	1,294.7		(20.6		)	115	493.4		(3.7		)	73	801.3		(16.9		)
Agency residential pass-through obligations	61	84.9		(1.1		)	61	84.9		(1.1		)	0	0		0
Commercial mortgage-backed securities	207	2,046.5		(29.4		)	171	1,694.6		(25.8		)	36	351.9		(3.6		)
Other asset-backed securities	101	1,548.6		(5.1		)	92	1,472.0		(4.5		)	9	76.6		(0.6		)
Redeemable preferred stocks	9	199.4		(43.3		)	6	119.4		(14.5		)	3	80.0		(28.8		)
Total fixed maturities	1,093	9,258.5		(136.8		)	928	7,556.7		(78.0		)	165	1,701.8		(58.8		)
Equity securities:
Nonredeemable preferred stocks	10	301.8		(15.7		)	5	124.2		(1.7		)	5	177.6		(14.0		)
Common equities	64	164.8		(14.2		)	60	161.4		(14.2		)	4	3.4		0
Total equity securities	74	466.6		(29.9		)	65	285.6		(15.9		)	9	181.0		(14.0		)
Total portfolio	1,167	$	9,725.1	$	(166.7	)	993	$	7,842.3	$	(93.9	)	174	$	1,882.8	$	(72.8	)

	Total No. of Sec.	Total Fair Value		Gross Unrealized Losses			Less than 12 Months						12 Months or Greater
($ in millions)							No. of Sec.	Fair Value		Unrealized Losses			No. of Sec.	Fair Value		Unrealized Losses
December 31, 2014
Fixed maturities:
U.S. government obligations	11	$	428.2	$	(1.3	)	5	$	150.7	$	(0.3	)	6	$	277.5	$	(1.0	)
State and local government obligations	46	234.2		(1.1		)	28	177.9		(0.4		)	18	56.3		(0.7		)
Corporate debt securities	53	843.2		(10.4		)	43	647.5		(6.1		)	10	195.7		(4.3		)
Residential mortgage-backed securities	70	844.2		(10.8		)	33	465.2		(3.1		)	37	379.0		(7.7		)
Agency residential pass-through obligations	0	0		0			0	0		0			0	0		0
Commercial mortgage-backed securities	63	723.4		(2.6		)	54	667.5		(1.4		)	9	55.9		(1.2		)
Other asset-backed securities	44	741.8		(0.8		)	42	715.7		(0.7		)	2	26.1		(0.1		)
Redeemable preferred stocks	3	103.0		(5.7		)	1	33.0		(1.0		)	2	70.0		(4.7		)
Total fixed maturities	290	3,918.0		(32.7		)	206	2,857.5		(13.0		)	84	1,060.5		(19.7		)
Equity securities:
Nonredeemable preferred stocks	8	231.4		(6.4		)	5	143.2		(3.6		)	3	88.2		(2.8		)
Common equities	20	68.4		(10.1		)	19	61.8		(9.6		)	1	6.6		(0.5		)
Total equity securities	28	299.8		(16.5		)	24	205.0		(13.2		)	4	94.8		(3.3		)
Total portfolio	318	$	4,217.8	$	(49.2	)	230	$	3,062.5	$	(26.2	)	88	$	1,155.3	$	(23.0	)

During 2015, the number of securities in our fixed-maturity portfolio with unrealized losses increased, primarily reflecting 492 securities that were added to the portfolio as a result of our acquisition of a controlling interest in ARX during the second quarter 2015, and that declined in value between the acquisition date and year-end. The decline in these securities averaged approximately 0.9% of their total cost. The remaining increase in the number of securities is the result of rising interest rates since December 31, 2014, reflected by the majority of the increase in the less than 12 month segment of the table. We had no material decreases in valuation as a result of credit rating downgrades on our fixed-maturity securities during the year. All of the fixed-maturity securities in an unrealized loss position at December 31, 2015 in the table above are current with respect to required principal and interest payments. Unrealized losses on our nonredeemable preferred stocks related to ten issues with unrealized losses, averaging approximately 5% of our total cost of those securities. A review of these securities concluded that the unrealized losses are market-related adjustments to the values, which were determined not to be other-than-temporary, and we continue to expect to recover our initial investments on these securities. The unrealized losses in our common stock portfolio in the less than 12 months category reflect losses that developed as a result of the decline in the equity market. A review of the securities in a loss position did not uncover fundamental issues with the issuers that would indicate other-than-temporary impairments existed. Additionally, market expectations for recovery in the next 12 months would put the fair values at or above our current book values. Lastly, we determined, as of the balance sheet date, that it was not likely these securities would be sold prior to that recovery.

Other-Than-Temporary Impairment (OTTI)  The following table shows the total non-credit portion of the OTTI recorded in accumulated other comprehensive income, reflecting the original non-credit loss at the time the credit impairment was determined:

	December 31,
(millions)	2015			2014
Fixed maturities:
Residential mortgage-backed securities	$	(43.3	)	$	(44.1	)
Commercial mortgage-backed securities	(0.6		)	(0.6		)
Total fixed maturities	$	(43.9	)	$	(44.7	)

The following tables provide rollforwards of the amounts related to credit losses recognized in earnings for the periods ended December 31, 2015, 2014, and 2013, for which a portion of the OTTI losses were also recognized in accumulated other comprehensive income at the time the credit impairments were determined and recognized:

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed		Total
Balance at December 31, 2014	$	12.7		$	0.4	$	13.1
Credit losses for which an OTTI was previously recognized	0			0		0
Reductions for securities sold/matured	(1.4		)	0		(1.4		)
Change in recoveries of future cash flows expected to be collected1,2	1.1			0		1.1
Reductions for previously recognized credit impairments written-down to fair value3	0			0		0
Balance at December 31, 2015	$	12.4		$	0.4	$	12.8

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed		Total
Balance at December 31, 2013	$	19.2		$	0.4	$	19.6
Credit losses for which an OTTI was previously recognized	0			0		0
Reductions for securities sold/matured	(0.1		)	0		(0.1		)
Change in recoveries of future cash flows expected to be collected1,2	(6.4		)	0		(6.4		)
Reductions for previously recognized credit impairments written-down to fair value3	0			0		0
Balance at December 31, 2014	$	12.7		$	0.4	$	13.1

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed			Total
Balance at December 31, 2012	$	27.1		$	0.6		$	27.7
Credit losses for which an OTTI was previously recognized	0.1			0			0.1
Reductions for securities sold/matured	0			0			0
Change in recoveries of future cash flows expected to be collected1,2	(7.8		)	(0.2		)	(8.0		)
Reductions for previously recognized credit impairments written-down to fair value3	(0.2		)	0			(0.2		)
Balance at December 31, 2013	$	19.2		$	0.4		$	19.6

¹ Reflects expected recovery of prior period impairments that will be accreted into income over the remaining life of the security.

² Includes $2.9 million, $4.3 million, and $2.6 million at December 31, 2015, 2014, and 2013, respectively, recognized in income in excess of the cash flows expected to be collected at the time of the write-downs.

³ Reflects reductions of prior credit impairments where the current credit impairment requires writing securities down to fair value (i.e., no remaining non-credit loss).

Although we determined that it is more likely than not that we will not be required to sell the securities prior to the recovery of their respective cost bases (which could be maturity), we are required to measure the amount of credit losses on the securities that were determined to be other-than-temporarily impaired. In that process, we considered a number of factors and inputs related to the individual securities. The methodology and significant inputs used to measure the amount of credit losses in our portfolio included: current performance indicators on the underlying assets (e.g., delinquency rates, foreclosure rates, and default rates); credit support (via current levels of subordination); historical credit ratings; and updated cash flow expectations based upon these performance indicators. In order to determine the amount of credit loss, if any, the net present value of the cash flows expected (i.e., expected recovery value) was calculated using the current book yield for each security, and was compared to its current amortized value. In the event that the net present value was below the amortized value, a credit loss was deemed to exist, and the security was written down.

Realized Gains (Losses)  The components of net realized gains (losses) for the years ended December 31, were:

(millions)	2015			2014			2013
Gross realized gains on security sales
Fixed maturities:
U.S. government obligations	$	17.5		$	24.0		$	8.5
State and local government obligations	7.8			9.3			7.7
Corporate and other debt securities	31.2			37.2			47.7
Residential mortgage-backed securities	4.9			2.7			3.0
Commercial mortgage-backed securities	15.7			17.0			10.0
Redeemable preferred stocks	0.1			2.7			0
Total fixed maturities	77.2			92.9			76.9
Equity securities:
Nonredeemable preferred stocks	65.3			90.0			126.3
Common equities	50.4			107.3			68.6
Subtotal gross realized gains on security sales	192.9			290.2			271.8
Gross realized losses on security sales
Fixed maturities:
U.S. government obligations	(0.9		)	(7.6		)	(3.7		)
State and local government obligations	(0.3		)	(0.5		)	0
Corporate and other debt securities	(5.0		)	(2.8		)	(6.2		)
Residential mortgage-backed securities	(0.4		)	(0.2		)	0
Agency residential pass-through obligations	(0.4		)	0			0
Commercial mortgage-backed securities	(1.3		)	(8.3		)	(1.8		)
Redeemable preferred stocks	0			(3.2		)	(0.1		)
Total fixed maturities	(8.3		)	(22.6		)	(11.8		)
Equity securities:
Nonredeemable preferred stocks	(3.2		)	0			(0.1		)
Common equities	(38.4		)	(7.3		)	(0.6		)
Subtotal gross realized losses on security sales	(49.9		)	(29.9		)	(12.5		)
Net realized gains (losses) on security sales
Fixed maturities:
U.S. government obligations	16.6			16.4			4.8
State and local government obligations	7.5			8.8			7.7
Corporate and other debt securities	26.2			34.4			41.5
Residential mortgage-backed securities	4.5			2.5			3.0
Agency residential pass-through obligations	(0.4		)	0			0
Commercial mortgage-backed securities	14.4			8.7			8.2
Redeemable preferred stocks	0.1			(0.5		)	(0.1		)
Total fixed maturities	68.9			70.3			65.1
Equity securities:
Nonredeemable preferred stocks	62.1			90.0			126.2
Common equities	12.0			100.0			68.0
Subtotal net realized gains (losses) on security sales	143.0			260.3			259.3
Other-than-temporary impairment losses
Fixed maturities:
Residential mortgage-backed securities	0			0			(0.6		)
Total fixed maturities	0			0			(0.6		)
Equity securities:
Common equities	(8.7		)	(7.2		)	(5.5		)
Subtotal other-than-temporary impairment losses	(8.7		)	(7.2		)	(6.1		)
Other gains (losses)
Hybrid securities	(1.3		)	30.5			6.4
Derivative instruments	(20.7		)	(64.1		)	56.6
Litigation settlements	0.4			4.7			2.2
Subtotal other gains (losses)	(21.6		)	(28.9		)	65.2
Total net realized gains (losses) on securities	$	112.7		$	224.2		$	318.4

Gross realized gains and losses were predominantly the result of sales transactions in our fixed-income portfolio related to

movements in credit spreads and interest rates and sales from our equity portfolios. In addition, gains and losses reflect recoveries from litigation settlements and holding period valuation changes on hybrids and derivatives. Also included are write-downs for securities determined to be other-than-temporarily impaired in our fixed-maturity and/or equity portfolios.

Net Investment Income  The components of net investment income for the years ended December 31, were:

(millions)	2015			2014			2013
Fixed maturities:
U.S. government obligations	$	28.3		$	46.2		$	50.2
State and local government obligations	60.7			50.1			48.0
Foreign government obligations	0.4			0.4			0.2
Corporate debt securities	102.4			82.1			98.8
Residential mortgage-backed securities	52.2			44.9			28.1
Agency residential pass-through obligations	2.1			0			0
Commercial mortgage-backed securities	74.6			66.0			74.8
Other asset-backed securities	22.0			16.7			16.7
Redeemable preferred stocks	15.0			15.5			21.2
Total fixed maturities	357.7			321.9			338.0
Equity securities:
Nonredeemable preferred stocks	43.7			38.6			36.2
Common equities	51.0			46.6			45.8
Short-term investments	2.2			1.3			2.0
Investment income	454.6			408.4			422.0
Investment expenses	(22.8		)	(18.9		)	(18.8		)
Net investment income	$	431.8		$	389.5		$	403.2

The amount of investment income (interest and dividends) we recognize varies from year to year based on the average assets held during the year and the book yields of the securities in our portfolio. The increase in 2015 primarily reflects an increase in average assets, due in large part to profitable underwriting results and the acquisition of a controlling interest in ARX, while the decrease in 2014 was due in part to an increase in short-term investments held and lower yields on securities purchased during the year.

Trading Securities  At December 31, 2015 and 2014, we did not hold any trading securities and we did not have any net realized gains (losses) on trading securities for the years ended December 31, 2015, 2014, and 2013.

Derivative Instruments  For all derivative positions discussed below, realized holding period gains and losses are netted with any upfront cash that may be exchanged under the contract to determine if the net position should be classified either as an asset or liability. To be reported as a net derivative asset and a component of the available-for-sale portfolio, the inception-to-date holding period (realized) gain on the derivative position at period end would have to exceed any upfront cash received. On the other hand, a net derivative liability would include any inception-to-date holding period (realized) loss plus the amount of upfront cash received (or netted, if upfront cash was paid) and would be reported as a component of other liabilities. These net derivative assets/liabilities are not separately disclosed on the balance sheet due to their immaterial effect on our financial condition, cash flows, and results of operations.

The following table shows the status of our derivative instruments at December 31, 2015 and 2014, and for the years ended December 31, 2015, 2014, and 2013:

(millions)								Balance Sheet2					Comprehensive Income Statement
	Notional Value1								Assets (Liabilities) Fair Value				Pretax Net Realized Gains (Losses)
													Years ended
	December 31,								December 31,				December 31,
Derivatives designated as:	2015		2014		2013		Purpose	Classification	2015		2014		2015			2014			2013
Hedging instruments
Closed:
Ineffective cash flow hedge	$	18	$	44	$	54	Manage interest rate risk	NA	$	0	$	0	$	0.2		$	0.5		$	0.8
Non-hedging instruments
Assets:
Interest rate swaps	750		750		750		Manage portfolio duration	Investments - fixed maturities	4.4		15.8		(23.4		)	(64.6		)	59.8
Closed:
Interest rate swaps	0		0		1,263		Manage portfolio duration	NA	0		0		0			0			(4.0		)
U.S. Treasury Note futures	691		0		0		Manage portfolio duration	NA	0		0		2.5			0			0
Total	NA		NA		NA				$	4.4	$	15.8	$	(20.7	)	$	(64.1	)	$	56.6

¹ The amounts represent the value held at year end for open positions and the maximum amount held during the year for closed positions.

² To the extent we hold both derivative assets and liabilities with the same counterparty that are subject to an enforceable master netting arrangement, we expect that we will report them on a gross basis on our balance sheets, consistent with our historical presentation.

NA = Not Applicable

CASH FLOW HEDGES

We entered into forecasted debt issuance hedges to hedge against a possible rise in interest rates in conjunction with the $400 million of 3.70% Senior Notes issued in January 2015 and the $350 million of 4.35% Senior Notes issued in April 2014. Upon issuance, we closed these hedges and recognized, as part of accumulated other comprehensive income, a pretax loss of $12.9 million in January 2015 and $1.6 million in April 2014.

Our ineffective cash flow hedge, which is reflected in the table above, resulted from the repurchase of a portion of our 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 during each of the last three years, and we reclassified the unrealized gain on forecasted transactions to net realized gains on securities.

During 2015, we recognized $1.8 million as a net decrease to interest expense on our closed debt issuance cash flow hedges, compared to $2.0 million during 2014 and $2.1 million during 2013.

See Note 4 – Debt for further discussion.

INTEREST RATE SWAPS and U.S. TREASURY FUTURES

We use interest rate swaps and treasury futures contracts to manage the fixed-income portfolio duration. At December 31, 2015, 2014, and 2013, we held interest rate swap positions for which we are paying a fixed rate and receiving a variable rate, effectively shortening the duration of our fixed-income portfolio. On the open positions, since inception, interest rates have increased; however, as interest rate swap rates fell during 2015, our fair value gain decreased by $11.4 million.

During 2013, we closed three interest rate swap positions including a 9-year interest rate swap position (opened in 2009) and

two5-year interest rate swap positions (opened in 2011); in each case, we were paying a fixed rate and receiving a variable

rate, effectively shortening the duration of our fixed-income portfolio.

During the second quarter 2015, we entered into U.S. treasury futures by selling contracts, and we recognized a net realized gain of $2.5 million during the year; all positions were closed at December 31, 2015. The net realized gain was the result of overall rising interest rates during the period that the contracts were held.

As of December 31, 2015, 2014, and 2013, the balance of the cash collateral that we had received from the applicable counterparty on our open positions was $4.9 million, $16.1 million, and $62.7 million, respectively.

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Fair Value

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value

FAIR VALUE

We have categorized our financial instruments, based on the degree of subjectivity inherent in the method by which they are valued, into a fair value hierarchy of three levels, as follows:

• Level 1:  Inputs are unadjusted, quoted prices in active markets for identical instruments at the measurement date (e.g., U.S. government obligations, active exchange-traded equity securities, and certain short-term securities).

• Level 2:  Inputs (other than quoted prices included within Level 1) that are observable for the instrument either directly or indirectly (e.g., certain corporate and municipal bonds and certain preferred stocks). This includes: (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, (iii) inputs other than quoted prices that are observable for the instruments, and (iv) inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3:  Inputs that are unobservable. Unobservable inputs reflect our subjective evaluation about the assumptions market participants would use in pricing the financial instrument (e.g., certain structured securities and privately held investments).

Determining the fair value of the investment portfolio is the responsibility of management. As part of the responsibility, we evaluate whether a market is distressed or inactive in determining the fair value for our portfolio. We review certain market level inputs to evaluate whether sufficient activity, volume, and new issuances exist to create an active market. Based on this evaluation, we concluded that there was sufficient activity related to the sectors and securities for which we obtained valuations.

The composition of the investment portfolio by major security type and our outstanding debt was:

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2015
Fixed maturities:
U.S. government obligations	$	2,429.2	$	0	$	0	$	2,429.2	$	2,425.4
State and local government obligations	0		2,721.4		0		2,721.4		2,677.6
Foreign government obligations	18.6		0		0		18.6		18.6
Corporate debt securities	0		3,691.6		0		3,691.6		3,713.2
Subtotal	2,447.8		6,413.0		0		8,860.8		8,834.8
Asset-backed securities:
Residential mortgage-backed	0		1,726.7		0		1,726.7		1,726.0
Agency residential pass-through obligations	0		89.3		0		89.3		90.3
Commercial mortgage-backed	0		2,643.3		9.9		2,653.2		2,665.7
Other asset-backed	0		1,767.9		0		1,767.9		1,771.1
Subtotal asset-backed securities	0		6,227.2		9.9		6,237.1		6,253.1
Redeemable preferred stocks:
Financials	0		92.0		0		92.0		76.8
Utilities	0		51.2		0		51.2		65.1
Industrials	0		91.1		0		91.1		118.1
Subtotal redeemable preferred stocks	0		234.3		0		234.3		260.0
Total fixed maturities	2,447.8		12,874.5		9.9		15,332.2		15,347.9
Equity securities:
Nonredeemable preferred stocks:
Financials	154.9		627.7		0		782.6		674.2
Subtotal nonredeemable preferred stocks	154.9		627.7		0		782.6		674.2
Common equities:
Common stocks	2,650.2		0		0		2,650.2		1,494.0
Other risk investments	0		0		0.3		0.3		0.3
Subtotal common equities	2,650.2		0		0.3		2,650.5		1,494.3
Total fixed maturities and equity securities	5,252.9		13,502.2		10.2		18,765.3		17,516.4
Short-term investments	2,056.3		115.7		0		2,172.0		2,172.0
Total portfolio	$	7,309.2	$	13,617.9	$	10.2	$	20,937.3	$	19,688.4
Debt	$	0	$	2,722.9	$	164.9	$	2,887.8	$	2,707.9

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2014
Fixed maturities:
U.S. government obligations	$	2,667.1	$	0	$	0	$	2,667.1	$	2,641.1
State and local government obligations	0		2,139.2		0		2,139.2		2,095.7
Foreign government obligations	14.2		0		0		14.2		14.2
Corporate debt securities	0		2,836.7		0		2,836.7		2,813.9
Subtotal	2,681.3		4,975.9		0		7,657.2		7,564.9
Asset-backed securities:
Residential mortgage-backed	0		1,658.5		0		1,658.5		1,635.5
Agency residential pass-through obligations	0		0		0		0		0
Commercial mortgage-backed	0		2,304.0		11.6		2,315.6		2,278.7
Other asset-backed	0		1,638.7		0		1,638.7		1,634.9
Subtotal asset-backed securities	0		5,601.2		11.6		5,612.8		5,549.1
Redeemable preferred stocks:
Financials	0		97.9		0		97.9		77.3
Utilities	0		65.3		0		65.3		65.0
Industrials	0		116.0		0		116.0		117.9
Subtotal redeemable preferred stocks	0		279.2		0		279.2		260.2
Total fixed maturities	2,681.3		10,856.3		11.6		13,549.2		13,374.2
Equity securities:
Nonredeemable preferred stocks:
Financials	204.1		554.1		69.3		827.5		590.4
Subtotal nonredeemable preferred stocks	204.1		554.1		69.3		827.5		590.4
Common equities:
Common stocks	2,491.9		0		0		2,491.9		1,288.8
Other risk investments	0		0		0.4		0.4		0.4
Subtotal common equities	2,491.9		0		0.4		2,492.3		1,289.2
Total fixed maturities and equity securities	5,377.3		11,410.4		81.3		16,869.0		15,253.8
Short-term investments	1,937.0		212.0		0		2,149.0		2,149.0
Total portfolio	$	7,314.3	$	11,622.4	$	81.3	$	19,018.0	$	17,402.8
Debt	$	0	$	2,527.5	$	0	$	2,527.5	$	2,164.7

Our portfolio valuations, excluding short-term investments, classified as either Level 1 or Level 2 in the above tables are priced exclusively by external sources, including: pricing vendors, dealers/market makers, and exchange-quoted prices. During 2015, we did not have any transfers between Level 1 and Level 2. During 2014, we had two nonredeemable preferred stocks with a value of $41.7 million that were transferred from Level 2 to Level 1 due to the availability of a consistent exchange price; this was the only transfer during 2014. We recognize transfers between levels at the end of the reporting period.

Our short-term security holdings classified as Level 1 are highly liquid, actively marketed, and have a very short duration, primarily 30 days or less to redemption. These securities are held at their original cost, adjusted for any accretion of discount, since that value very closely approximates what an active market participant would be willing to pay for such securities. The remainder of our short-term securities are classified as Level 2 and are not priced externally since these securities continually trade at par value. These securities are classified as Level 2 since they are primarily longer-dated auction securities issued by municipalities that contain a redemption put feature back to the auction pool with a redemption period typically less than seven days. The auction pool is created by a liquidity provider and if the auction is not available at the end of the seven days, we have the right to put the security back to the issuer at par.

At December 31, 2015, vendor-quoted prices represented 49% of our Level 1 classifications (excluding short-term investments), compared to 50% at December 31, 2014. The securities quoted by vendors in Level 1 primarily represent our holdings in U.S. Treasury Notes, which are frequently traded and the quotes are considered similar to exchange-traded quotes. The balance of our Level 1 pricing comes from quotes obtained directly from trades made on active exchanges. The year-over-year decline in vendor-quoted Level 1 prices was due to a reduction of U.S. Treasury Notes with the funds deployed primarily to short-term investments.

At both December 31, 2015 and 2014, vendor-quoted prices comprised 97% of our Level 2 classifications (excluding short-term investments), while dealer-quoted prices represented 3%. In our process for selecting a source (e.g., dealer, pricing service) to provide pricing for securities in our portfolio, we reviewed documentation from the sources that detailed the pricing techniques and methodologies used by these sources and determined if their policies adequately considered market activity, either based on specific transactions for the particular security type or based on modeling of securities with similar credit quality, duration, yield, and structure that were recently transacted. Once a source is chosen, we continue to monitor any changes or modifications to their processes by reviewing their documentation on internal controls for pricing and market reviews. We review quality control measures of our sources as they become available to determine if any significant changes have occurred from period to period that might indicate issues or concerns regarding their evaluation or market coverage.

As part of our pricing procedures, we obtain quotes from more than one source to help us fully evaluate the market price of securities. However, our internal pricing policy is to use a consistent source for individual securities in order to maintain the integrity of our valuation process. Quotes obtained from the sources are not considered binding offers to transact. Under our policy, when a review of the valuation received from our selected source appears to be outside of what is considered market level activity (which is defined as trading at spreads or yields significantly different than those of comparable securities or outside the general sector level movement without a reasonable explanation), we may use an alternate source’s price. To the extent we determine that it may be prudent to substitute one source’s price for another, we will contact the initial source to obtain an understanding of the factors that may be contributing to the significant price variance, which often leads the source to adjust their pricing input data for future pricing.

To allow us to determine if our initial source is providing a price that is outside of a reasonable range, we review our portfolio pricing on a weekly basis. We frequently challenge prices from our sources when a price provided does not match our expectations based on our evaluation of market trends and activity. Initially, we perform a review of our portfolio by sector to identify securities whose prices appear outside of a reasonable range. We then perform a more detailed review of fair values for securities disclosed as Level 2. We review dealer bids and quotes for these and/or similar securities to determine the market level context for our valuations. We then evaluate inputs relevant for each class of securities disclosed in the preceding hierarchy tables.

For our structured debt securities, including commercial, residential, and asset-backed securities, we evaluate available market-related data for these and similar securities related to collateral, delinquencies, and defaults for historical trends and reasonably estimable projections, as well as historical prepayment rates and current prepayment assumptions and cash flow estimates. We further stratify each class of our structured debt securities into more finite sectors (e.g., planned amortization class, first pay, second pay, senior, subordinated, etc.) and use duration, credit quality, and coupon to determine if the fair value is appropriate.

For our corporate debt and preferred stock (redeemable and nonredeemable) portfolios, as well as the notes and debentures issued by The Progressive Corporation (see Note 4-Debt), we review securities by duration, coupon, and credit quality, as well as changes in interest rate and credit spread movements within that stratification. The review also includes recent trades, including: volume traded at various levels that establish a market, issuer specific fundamentals, and industry specific economic news as it comes to light.

For our municipal securities (e.g., general obligations, revenue, and housing), we stratify the portfolio to evaluate securities by type, coupon, credit quality, and duration to review price changes relative to credit spread and interest rate changes. Additionally, we look to economic data as it relates to geographic location as an indication of price-to-call or maturity predictors. For municipal housing securities, we look to changes in cash flow projections, both historical and reasonably estimable projections, to understand yield changes and their effect on valuation.

Lastly, for our short-term securities, we look at acquisition price relative to the coupon or yield. Since our short-term securities are typically 90 days or less to maturity, with the majority listed in Level 2 being seven days or less to redemption, we believe that acquisition price is the best estimate of fair value.

We also review data assumptions as supplied by our sources to determine if that data is relevant to current market conditions. In addition, we independently review each sector for transaction volumes, new issuances, and changes in spreads, as well as the overall movement of interest rates along the yield curve to determine if sufficient activity and liquidity exists to provide a credible source for our market valuations.

During each valuation period, we create internal estimations of portfolio valuation (performance returns), based on current market-related activity (i.e., interest rate and credit spread movements and other credit-related factors) within each major sector of our portfolio. We compare our internally generated portfolio results with those generated based on quotes we received externally and research material valuation differences. We compare our results to index returns for each major sector adjusting for duration and credit quality differences to better understand our portfolio’s results. Additionally, we review on a monthly basis our external sales transactions and compare the actual final market sales price to a previous market valuation price. This review provides us further validation that our pricing sources are providing market level prices, since we are able to explain significant price changes (i.e., greater than 2%) as known events occur in the marketplace and affect a particular security’s price at sale.

This analysis provides us with additional comfort regarding each source’s process, the quality of its review, and its willingness to improve its analysis based on feedback from clients. We believe this effort helps ensure that we are reporting the most representative fair values for our securities.

Except as described below, our Level 3 securities are also priced externally; however, due to several factors (e.g., nature of the securities, level of inactivity, and lack of similar securities trading to obtain observable market level inputs), these valuations are more subjective in nature. Certain private equity investments and fixed-income investments included in the Level 3 category are valued using external pricing supplemented by internal review and analysis.

After all the valuations are received and our review is complete, if the inputs used by vendors are determined to not contain sufficient observable market information, we will reclassify the affected security valuations to Level 3. At December 31, 2015 and 2014, securities in our fixed-maturity portfolio listed as Level 3 were comprised substantially of securities that were either: (i) private placements, (ii) thinly held and/or traded securities, or (iii) non-investment-grade or non-rated securities with little liquidity. Based on these factors, it was difficult to independently verify observable market inputs that were used to generate the external valuations we received. Despite the lack of sufficient observable market information for our Level 3 securities, we believe the valuations received, in conjunction with our procedures for evaluating third-party prices, support the fair values reported in the financial statements.

We did not hold any internally-priced securities at December 31, 2015. At December 31, 2014, we held one internally-priced security, a private preferred equity security (our 5% equity interest in ARX) with a value of $69.3 million.

We review the prices from our external sources for reasonableness using internally developed assumptions to derive prices for the securities, which are then compared to the prices we received. During 2015 or 2014, there were no material assets or liabilities measured at fair value on a nonrecurring basis. Based on our review, all the prices received from external sources remain unadjusted.

The following tables provide a summary of changes in fair value associated with Level 3 assets for the years ended December 31, 2015 and 2014:

	Level 3 Fair Value
(millions)	Fair Value at Dec. 31, 2014		Calls/ Maturities/ Paydowns			Purchases		Sales		Net Realized (Gain)/Loss on Sales			Change in Valuation			Net Transfers In (Out)			Fair Value at Dec. 31, 2015
Fixed maturities:
Asset-backed securities:
Residential mortgage-backed	$	0	$	0		$	0	$	0	$	0		$	0		$	0		$	0
Commercial mortgage-backed	11.6		(1.3		)	0		0		0			(0.4		)	0			9.9
Total fixed maturities	11.6		(1.3		)	0		0		0			(0.4		)	0			9.9
Equity securities:
Nonredeemable preferred stocks:
Financials1	69.3		0			0		0		(39.4		)	(1.4		)	(28.5		)	0
Common equities:
Other risk investments	0.4		0			0		0		0			(0.1		)	0			0.3
Total Level 3 securities	$	81.3	$	(1.3	)	$	0	$	0	$	(39.4	)	$	(1.9	)	$	(28.5	)	$	10.2

¹ The $69.3 million decrease during the year reflects the reclassification of our 5% interest in ARX upon our acquisition of a controlling interest in ARX. The $39.4 million reflects our inception-to-date gain recognized, including the $1.4 million reduction in valuation that occurred during the first six months of 2015.

	Level 3 Fair Value
(millions)	Fair Value at Dec. 31, 2013		Calls/ Maturities/ Paydowns			Purchases		Sales			Net Realized (Gain)/Loss on Sales		Change in Valuation			Net Transfers In (Out)1			Fair Value at Dec. 31, 2014
Fixed maturities:
Asset-backed securities:
Residential mortgage-backed	$	0.2	$	0		$	0	$	(0.1	)	$	0.1	$	(0.2	)	$	0		$	0
Commercial mortgage-backed	29.0		(3.6		)	0		0			0		(0.2		)	(13.6		)	11.6
Total fixed maturities	29.2		(3.6		)	0		(0.1		)	0.1		(0.4		)	(13.6		)	11.6
Equity securities:
Nonredeemable preferred stocks:
Financials2	39.0		0			0		0			0		30.3			0			69.3
Common equities:
Other risk investments	0.5		(0.1		)	0		0			0		0			0			0.4
Total Level 3 securities	$	68.7	$	(3.7	)	$	0	$	(0.1	)	$	0.1	$	29.9		$	(13.6	)	$	81.3

¹ The $13.6 million was transferred out of Level 3 and into Level 2 due to an improvement in the security's underlying collateral and an increase in liquidity and market activity in comparable securities.

² The $30.3 million represents a net holding period gain on our investment in ARX, which is reflected in net realized gains (losses) on securities in the comprehensive income statement.

The following table provides a summary of the quantitative information about Level 3 fair value measurements for our applicable securities at December 31:

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at Dec. 31, 2015		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Fixed maturities:
Asset-backed securities:
Commercial mortgage-backed	$	9.9	External vendor	Prepayment rate1	0
Total fixed maturities	9.9
Equity securities:
Nonredeemable preferred stocks:
Financials	0		NA	NA	NA
Subtotal Level 3 securities	9.9
Third-party pricing exemption securities2	0.3
Total Level 3 securities	$	10.2

NA= Not Applicable since we did not hold any nonredeemable preferred stock Level 3 securities at December 31, 2015.

¹ Assumes that one security has 0% of the principal amount of the underlying loans that will be paid off prematurely in each year.

² The fair values for these securities were obtained from non-binding external sources where unobservable inputs are not reasonably available to us.

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at Dec. 31, 2014		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Fixed maturities:
Asset-backed securities:
Commercial mortgage-backed	$	11.6	External vendor	Prepayment rate1	0
Total fixed maturities	11.6
Equity securities:
Nonredeemable preferred stocks:
Financials	69.3		Multiple of tangible net book value	Price to book ratio multiple	2.6
Subtotal Level 3 securities	80.9
Third-party pricing exemption securities2	0.4
Total Level 3 securities	$	81.3

¹ Assumes that one security has 0% of the principal amount of the underlying loans that will be paid off prematurely in each year.

² Thefair values for these securities were obtained from non-binding external sources where unobservable inputs are not reasonably available to us.

Due to the relative size of the Level 3 securities’ fair values compared to the total portfolio’s fair value, any changes in pricing methodology would not have a significant change in valuation that would materially impact net and comprehensive income.

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Debt

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Debt

DEBT

Debt at December 31 consisted of:

	2015				2014
(millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
3.75% Senior Notes due 2021 (issued: $500.0, August 2011)	$	498.1	$	528.7	$	497.8	$	535.6
6 5/8% Senior Notes due 2029 (issued: $300.0, March 1999)	295.7		376.0		295.5		400.6
6.25% Senior Notes due 2032 (issued: $400.0, November 2002)	395.0		490.6		394.8		527.9
4.35% Senior Notes due 2044 (issued: $350.0, April 2014)	346.4		352.8		346.3		378.9
3.70% Senior Notes due 2045 (issued: $400.0, January 2015)	395.0		362.0		0		0
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (issued: $1,000.0, June 2007; outstanding: $614.4 and $632.8)	612.8		612.8		630.3		684.5
Other debt instruments	164.9		164.9		0		0
Total	$	2,707.9	$	2,887.8	$	2,164.7	$	2,527.5

The other debt instruments reported in the table above represent ARX indebtedness and consist of:

Type of debt instrument	Number of Instruments	Carrying Value		Stated Maturity Date(s)
Term loans	2	$	87.1	December 2018 and 2019
Junior subordinated notes1	2	41.2		June 2036 and 2037
Senior notes	4	24.0		Various2
Surplus note	1	12.6		November 2021
Total		$	164.9

¹ ARX issued junior subordinated floating rate notes to trusts established by ARX in connection with issuances of trust preferred securities by the trust(discussed below).

² The senior notes mature in May 2033, April 2034, December 2034, and June 2035.

Aggregate required principal payments on debt outstanding at December 31, 2015, are as follows:

(millions)
Year	Payments
2016	$	27.2
2017	27.2
2018	27.2
2019	13.4
2020	3.0
Thereafter	2,631.3
Total	$	2,729.3

The Progressive Corporation Debt

Excluding the other debt instruments, all of the outstanding debt was issued by The Progressive Corporation, the ultimate holding company. The holding company debt includes amounts that were borrowed and contributed to the capital of its insurance subsidiaries or used, or made available for use, for other business purposes. Fair values for these debt instruments are obtained from external sources. There are no restrictive financial covenants or credit rating triggers on The Progressive Corporation debt.

Interest on all debt issued by The Progressive Corporation is payable semiannually at the stated rates. However, the 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (the “6.70% Debentures”) will only bear interest at this fixed annual rate through June 14, 2017. Thereafter, the 6.70% Debentures will bear interest at an annual rate equal to the three-month London Interbank Offered Rate (LIBOR) plus 2.0175%, and interest will be payable quarterly until the 6.70% Debentures are redeemed or retired.

Except for the 6.70% Debentures, all remaining principal on the Senior Notes is due at the maturity stated in the tables above. The Senior Notes are redeemable, in whole or in part, at any time; however, the redemption price will equal the greater of the principal amount of the Senior Notes or a “make whole” amount calculated by reference to the present values of remaining scheduled principal and interest payments under the Senior Notes. Commencing on June 15, 2017, on each interest payment date, we have the right to redeem the 6.70% Debentures at par. If not previously redeemed, the 6.70% Debentures will become due on June 15, 2037, the scheduled maturity date, but only to the extent that we have received sufficient net proceeds from the sale of certain qualifying capital securities. The Progressive Corporation must use its commercially reasonable efforts, subject to certain market disruption events, to sell enough qualifying capital securities to permit repayment of the 6.70% Debentures in full on the scheduled maturity date or, if sufficient proceeds are not realized from the sale of such qualifying capital securities by such date, on each interest payment date thereafter. Any remaining outstanding principal will be due on June 15, 2067, the final maturity date.

The Progressive Corporation issued $400 million of 3.70% Senior Notes due 2045 in January 2015, and $350 million of 4.35% Senior Notes due 2044 in April 2014, in underwritten public offerings. We received proceeds, after deducting underwriter's discounts and commissions, of approximately $394.9 million and $346.3 million, respectively. In addition, we incurred expenses of approximately $0.8 million and $0.7 million, respectively, related to the issuances.

Prior to issuance of each of the Senior Notes and 6.70% Debentures, we entered into forecasted debt issuance hedges against possible rises in interest rates. Upon issuance of the applicable debt securities, the hedges were closed and we recognized unrealized gains (losses) as part of accumulated other comprehensive income. We recognize the gains and losses as an adjustment to interest expense and amortize them over the applicable life of the debt securities. The original unrealized gain (loss) at the time of each debt issuance and the unamortized balance at December 31, 2015, on a pretax basis, of these hedges, were as follows:

(millions)	Unrealized Gain (Loss) at Debt Issuance			Unamortized Balance at December 31, 2015
3.75% Senior Notes	$	(5.1	)	$	(3.1	)
6 5/8% Senior Notes	(4.2		)	(3.0		)
6.25% Senior Notes	5.1			3.9
4.35% Senior Notes	(1.6		)	(1.6		)
3.70% Senior Notes	(12.9		)	(12.6		)
6.70% Debentures	34.4			3.9

The gains (losses) on these hedges are deferred and are being amortized as adjustments to interest expense over the life of the related Senior Notes, and over the 10-year fixed interest rate term for the 6.70% Debentures. In addition to this amortization, during 2015 and 2014, we reclassified $0.2 million and $0.5 million, respectively, on a pretax basis, from accumulated other comprehensive income on the balance sheet to net realized gains on securities on the comprehensive income statement, reflecting the portion of the unrealized gain on forecasted transactions that was related to the portion of the 6.70% Debentures repurchased during the periods.

During 2015 and 2014, we repurchased, in the open market, $18.4 million and $44.3 million, respectively, in aggregate principal amount of the 6.70% Debentures. Since the amount paid exceeded the carrying value of the debt we repurchased, we recognized losses on these extinguishments of $0.9 million and $4.8 million, respectively.

ARX Debt (i.e., Other debt instruments)

The other debt instruments were issued by ARX, in which we acquired a controlling interest during the second quarter 2015. ARX, not The Progressive Corporation or any of its other subsidiaries, is responsible for the other debt, which includes amounts that were borrowed and contributed to the capital of ARX's insurance subsidiaries or used, or made available for use, for other business purposes.

In estimating the fair value of the other debt instruments, it was determined that the fair value of these notes is equal to the carrying value, based on the current rates offered for debt of similar maturities and interest rates.

The term loans require ARX and its subsidiaries to maintain specified debt leverage and fixed charge coverage ratios, as well as maintain a minimum risk-based capital ratio and minimum financial strength and credit ratings, as provided by A.M. Best Company, Inc. As of December 31, 2015, ARX was in compliance with these covenants. The surplus note requires ARX to maintain at least $50 million of surplus, which it met at December 31, 2015. There are no restrictive financial covenants or credit rating triggers on any of the remaining other debt instruments.

Monthly interest and principal payments are made on the term loans, with interest calculated based on the 30-day LIBOR plus 2.25%. Principal payments of $25.0 million are required to be paid during the next twelve months on these term loans. The term loans are secured by 100% of the outstanding common stock of four subsidiaries of ARX.

Interest on the junior subordinated notes and the senior notes is paid quarterly at a floating rate tied to the three-month LIBOR rate. Principal and interest on the surplus note is payable pursuant to a schedule permitted by the Florida Office of Insurance Regulation, and interest is set quarterly based upon the 10-year U.S. treasury bond rate. Principal payments of $2.2 million are due during the next twelve months on the surplus note.

The junior subordinated notes and senior notes can be redeemed, in whole or in part, at the option of ARX at par, plus accrued and unpaid interest, on any interest payment date.

Pursuant to agreements entered into by ARX relating to the trust preferred securities transactions, ARX established trusts that are 100% owned by ARX. The trusts, which are the holders of the junior subordinated notes, issued trust preferred securities to third parties. The shares in the trusts are not transferable. The trusts are considered special purpose variable interest entities for which ARX is not the primary beneficiary and, therefore, they are accounted for under the equity method of accounting and not consolidated with ARX. Our ownership interest of $1.3 million in the variable interest entities is reported as a component of "other assets" on our consolidated balance sheets.

The Progressive Corporation Line of Credit

In March 2015, we renewed the unsecured, discretionary line of credit (the "Line of Credit") with PNC Bank, National Association (PNC) in the maximum principal amount of $100 million. The prior line of credit, entered into in March 2014, has expired. The Line of Credit is on substantially the same terms and conditions as the prior line of credit. Subject to the terms and conditions of the Line of Credit documents, advances under the Line of Credit (if any) will bear interest at a variable rate equal to the higher of PNC's Prime Rate or the sum of the Federal Funds Open Rate plus 50 basis points. Each advance must be repaid on the 30th day after the advance or, if earlier, on April 30, 2016, the expiration date of the Line of Credit. Prepayments are permitted without penalty. All advances under the Line of Credit are subject to PNC's discretion. We had no borrowings under the Line of Credit or the prior line of credit in 2015 or 2014.

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Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The components of our income tax provision were as follows:

(millions)	2015			2014		2013
Current tax provision
Federal	$	655.3		$	594.4	$	460.2
State	14.7			0		0
Deferred tax expense (benefit)
Federal	(47.7		)	32.0		94.4
State	(11.2		)	0		0
Total income tax provision	$	611.1		$	626.4	$	554.6

As a result of our acquisition of a controlling interest in ARX, state income taxes are now being included in the income tax provision. In prior years, state income taxes were not significant. The provision for income taxes in the accompanying consolidated statements of comprehensive income differed from the statutory rate as follows:

($ in millions)	2015					2014					2013
Income before income taxes	$	1,911.6				$	1,907.4				$	1,720.0
Tax at statutory federal rate	$	669.1		35	%	$	667.6		35	%	$	602.0		35	%
Tax effect of:
Dividends received deduction	(19.8		)	(1	)	(18.3		)	(1	)	(17.6		)	(1	)
Exempt interest income	(17.8		)	(1	)	(13.8		)	(1	)	(13.1		)	(1	)
Non-taxable gain1	(13.8		)	(1	)	0			0		0			0
Tax-deductible dividends	(7.9		)	0		(6.5		)	0		(13.6		)	(1	)
State income taxes, net of federal taxes	2.3			0		0			0		0			0
Other items, net	(1.0		)	0		(2.6		)	0		(3.1		)	0
Total income tax provision	$	611.1		32	%	$	626.4		33	%	$	554.6		32	%

¹ Represents the tax effect of holding period gains on the 5% interest in ARX we owned prior to acquisition of a controlling interest on April 1, 2015.

Deferred income taxes reflect the effect for financial statement reporting purposes of temporary differences between the financial statement carrying amounts and the tax bases of assets and liabilities. At December 31, 2015 and 2014, the components of the net deferred tax asset (liability) were as follows:

(millions)	2015			2014
Federal deferred tax assets:
Unearned premiums reserve	$	453.3		$	378.8
Investment basis differences	40.5			60.6
Non-deductible accruals	231.4			208.0
Loss and loss adjustment expense reserves	75.3			76.9
Hedges on forecasted transactions	4.4			0
Other	9.6			7.5
Federal deferred tax liabilities:
Net unrealized gains on securities	(436.7		)	(550.3		)
Hedges on forecasted transactions	0			(0.8		)
Deferred acquisition costs	(197.4		)	(160.0		)
Property and equipment	(110.7		)	(100.9		)
Prepaid expenses	(11.9		)	(11.4		)
Intangible assets-ARX acquisition	(166.4		)	0
Deferred gain on extinguishment of debt	(2.2		)	(3.0		)
Other	(7.0		)	(4.3		)
Net federal deferred tax liability	(117.8		)	(98.9		)
Net state deferred tax asset	8.5			0
Net deferred tax liability	$	(109.3	)	$	(98.9	)

Although realization of the deferred tax assets is not assured, management believes that it is more likely than not that the deferred tax assets will be realized based on our expectation that we will be able to fully utilize the deductions that are ultimately recognized for tax purposes and, therefore, no valuation allowance was needed at December 31, 2015 or 2014.

At December 31, 2015 and 2014, we had $25.1 million and $49.4 million, respectively, of net taxes payable (included in other liabilities on the balance sheet).

The Progressive Corporation and its wholly-owned subsidiaries file a consolidated income tax return. This group has been a participant in the Compliance Assurance Program (CAP) since 2007. Under CAP, the Internal Revenue Service (IRS) begins its examination process for the tax year before the tax return is filed, by examining significant transactions and events as they occur. The goal of the CAP program is to expedite the exam process and to reduce the level of uncertainty regarding a taxpayer's tax filing positions.

All federal income tax years prior to 2012 are closed. The IRS exams for 2012-2014 have been completed. We consider these years to be effectively settled.

ARX and its wholly owned subsidiaries file their own consolidated income tax return since we own less than 80% of their outstanding stock. This group was last examined by the IRS for the 2011 and 2012 tax years, which we consider to be effectively settled. The 2013-2015 tax years remain open to examination.

The statute of limitations for state income tax purposes generally remains open for three to four years from the return filing date, depending upon the jurisdiction. There has been no significant state income tax audit activity.

We recognize interest and penalties, if any, as a component of income tax expense. For the year ended December 31, 2015, $0.1 million of interest and penalties expense has been recorded in the tax provision. For the year ended December 31, 2013, $0.2 million of interest benefit has been recorded in the tax provision. We have not recorded any unrecognized tax benefits, or any related interest and penalties, as of December 31, 2015 and 2014.

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Loss And Loss Adjustment Expense Reserves

12 Months Ended

Dec. 31, 2015

Loss and Loss Adjustment Expense Reserves Disclosures [Abstract]

Loss And Loss Adjustment Expense Reserves

LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES

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

(millions)	2015			2014			2013
Balance at January 1	$	8,857.4		$	8,479.7		$	7,838.4
Less reinsurance recoverables on unpaid losses	1,185.9			1,045.9			862.1
Net balance at January 1	7,671.5			7,433.8			6,976.3
Net loss and loss adjustment reserves acquired1	222.4			0			0
Total beginning reserves	7,893.9			7,433.8			6,976.3
Incurred related to:
Current year	14,657.1			13,330.3			12,427.3
Prior years	(315.1		)	(24.1		)	45.1
Total incurred	14,342.0			13,306.2			12,472.4
Paid related to:
Current year	9,577.3			8,831.5			8,095.0
Prior years	4,062.3			4,237.0			3,919.9
Total paid	13,639.6			13,068.5			12,014.9
Net balance at December 31	8,596.3			7,671.5			7,433.8
Plus reinsurance recoverables on unpaid losses	1,442.7			1,185.9			1,045.9
Balance at December 31	$	10,039.0		$	8,857.4		$	8,479.7

¹Net reserves acquired in ARX acquisition.

We experienced favorable reserve development of $315.1 million in 2015 and $24.1 million in 2014, compared to unfavorable reserve development of $45.1 million in 2013, which is reflected as “Incurred related to prior years” in the table above.

2015

•The favorable prior year reserve development was primarily attributable to accident year 2014.

• Favorable reserve development occurred in all segments; personal auto businesses experienced approximately 65% of total development, with the remainder split between our Commercial Lines business and Property business.

• In our personal auto and Commercial Lines businesses, we incurred favorable case loss reserve development primarily in bodily injury and uninsured motorist bodily injury coverages due to lower than anticipated severity.

• In our Property business, development was favorable due to lower than anticipated severity and frequency, primarily in accident years 2014 and 2013.

2014

•The favorable prior year reserve development was primarily attributable to accident year 2010.

• Favorable reserve development in our Commercial Lines business was partially offset by unfavorable development in our Agency auto business. Our Direct auto business experienced slightly favorable development.

• The favorable reserve development in our Commercial Lines business was primarily related to favorable case reserve development on our high limit policies.

• In Agency auto, the unfavorable development was primarily attributable to personal injury protection (PIP) loss reserves and to the adjusting and other loss adjustment expense reserves.

2013

• Approximately 80% of the unfavorable reserve development was attributable to accident year 2011, while the remaining 20% was related to accident year 2012. The aggregate reserve development for accident years 2010 and prior was slightly favorable.

• About 55% of our unfavorable reserve development was in our Commercial Lines business, with the remainder split about equally between our Personal Lines business and our run-off businesses. In our Personal Lines business, unfavorable development in our Agency auto channel was offset in large part by favorable development in our Direct auto channel.

• The unfavorable reserve development in our Agency auto business was in our IBNR reserves due to higher frequency and severity on late emerging claims, as primarily reflected in the “all other development.”

• Lower than anticipated severity costs on case reserves were the primary contributor to the favorable development in our Direct auto business.

• In our Commercial Lines business, we experienced unfavorable development due to higher frequency and severity on late emerging claims primarily in our bodily injury coverage for our truck business.

• In our other businesses, we experienced unfavorable development primarily due to reserve increases in our run-off professional liability group business based on internal actuarial reviews of our claims history.

Because we are primarily an insurer of motor vehicles, we have limited exposure to environmental, asbestos, and general liability claims. We have established reserves for such exposures, in amounts that we believe to be adequate based on information currently known. These claims are not expected to have a material effect on our liquidity, financial condition, cash flows, or results of operations.

We write personal and commercial auto and property insurance throughout the United States and could be exposed to hurricanes or other catastrophes. We maintain catastrophic reinsurance coverage on our Property business to help mitigate this risk. Although the occurrence of a major catastrophe could have a significant effect on our monthly or quarterly results, we believe that, based on historical experience, such an event would not be so material as to disrupt the overall normal operations of Progressive. We are unable to predict the frequency or severity of any such events that may occur in the near term or thereafter.

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Reinsurance

12 Months Ended

Dec. 31, 2015

Reinsurance Disclosures [Abstract]

Reinsurance

REINSURANCE

The effect of reinsurance on premiums written and earned for the years ended December 31, was as follows:

	2015						2014						2013
(millions)	Written			Earned			Written			Earned			Written			Earned
Direct premiums	$	21,086.5		$	20,454.1		$	18,914.8		$	18,648.4		$	17,562.8		$	17,317.9
Ceded:
Regulated Plans	(358.0		)	(362.6		)	(251.9		)	(241.4		)	(216.2		)	(205.4		)
Non-Regulated Plans	(164.5		)	(192.4		)	(8.3		)	(8.5		)	(6.9		)	(9.1		)
Total Ceded	(522.5		)	(555.0		)	(260.2		)	(249.9		)	(223.1		)	(214.5		)
Net premiums	$	20,564.0		$	19,899.1		$	18,654.6		$	18,398.5		$	17,339.7		$	17,103.4

Regulated plans include the following:

• Federal reinsurance plan

◦ National Flood Insurance Program (NFIP)

• State-provided reinsurance facilities

◦ Michigan Catastrophic Claims Association (MCCA)

◦ North Carolina Reinsurance Facility (NCRF)

◦ Florida Hurricane Catastrophe Fund (FHCF)

• State-mandated involuntary plans

◦ Commercial Auto Insurance Procedures/Plans (CAIP)

The Non-Regulated plans primarily include amounts ceded on Property business under catastrophic and quota share reinsurance agreements. 

The increase in the amount of premiums ceded in 2015, compared to the prior years, primarily reflects ARX's reinsurance programs.

Losses and loss adjustment expenses were net of reinsurance ceded of $457.3 million in 2015, $322.7 million in 2014, and $347.0 million in 2013. The increase in losses and loss adjustment expenses is related to the Property business.

Our prepaid reinsurance premiums and reinsurance recoverables were comprised of the following at December 31:

	Prepaid Reinsurance Premiums								Reinsurance Recoverables
($ in millions)	2015				2014				2015				2014
Regulated Plans:
MCCA	$	31.4	16	%	$	32.8	38	%	$	1,217.6	82	%	$	1,018.8	83	%
CAIP	37.1		19		26.5		31		134.0		9		110.1		9
NCRF	25.6		13		21.9		26		56.7		4		51.1		4
NFIP	45.0		22		0		0		10.4		1		0		0
Other	0		0		0		0		2.8		0		2.0		0
Total Regulated Plans	139.1		70		81.2		95		1,421.5		96		1,182.0		96
Non-Regulated Plans:
Property	52.6		26		0		0		35.5		2		0		0
Other	7.6		4		4.1		5		31.8		2		49.9		4
Total Non-Regulated Plans	60.2		30		4.1		5		67.3		4		49.9		4
Total	$	199.3	100	%	$	85.3	100	%	$	1,488.8	100	%	$	1,231.9	100	%

Reinsurance contracts do not relieve us from our obligations to policyholders. Failure of reinsurers to honor their obligations could result in losses to us. Our exposure to losses from the failure of Regulated Plans is minimal, since these plans are funded by the federal government or by mechanisms supported by the insurance companies in the applicable state. We evaluate the financial condition of our other reinsurers and monitor concentrations of credit risk to minimize our exposure to significant losses from reinsurer insolvencies.

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Statutory Financial Information

12 Months Ended

Dec. 31, 2015

Statutory Financial Information Disclosures [Abstract]

Statutory Financial Information

STATUTORY FINANCIAL INFORMATION

Consolidated statutory surplus was $7,575.5 million and $6,442.8 million at December 31, 2015 and 2014, respectively. Statutory net income was $1,333.1 million, $1,289.5 million, and $1,086.3 million for the years ended December 31, 2015, 2014, and 2013, respectively.

At December 31, 2015, $637.6 million of consolidated statutory surplus represented net admitted assets of our insurance subsidiaries and affiliates that are required to meet minimum statutory surplus requirements in such entities’ states of domicile. The companies may be licensed in states other than their states of domicile, which may have higher minimum statutory surplus requirements. Generally, the net admitted assets of insurance companies that, subject to other applicable insurance laws and regulations, are available for transfer to the parent company cannot include the net admitted assets required to meet the minimum statutory surplus requirements of the states where the companies are licensed.

During 2015, the insurance subsidiaries paid aggregate cash dividends of $886.5 million to their parent company. Based on the dividend laws currently in effect, the insurance subsidiaries could pay aggregate dividends of $1,325.0 million in 2016 without prior approval from regulatory authorities, provided the dividend payments are not made within 12 months of previous dividends paid by the applicable subsidiary.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2015

Employee Benefit Plans Disclosures [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Except to the extent specifically included, references in this Note 9 to Progressive refer to The Progressive Corporation and its subsidiaries other than ARX and its subsidiaries, and references to ARX refer to ARX and its subsidiaries. ARX and its subsidiaries maintain employee benefit plans that are separate from the plans that cover employees of The Progressive Corporation's other subsidiaries.

Retirement Plans  Progressive has a defined contribution pension plan (401(k) Plan) that covers most of its employees who are United States residents and have been employed with the company for at least 30 days. Under Progressive's 401(k) Plan, we match up to a maximum of 6% of an employee’s eligible compensation contributed to the plan. Employee and company matching contributions are invested, at the direction of the employee, in a number of investment options available under the plan, including various mutual funds, a self-directed brokerage option, and a Progressive common stock fund. Progressive's common stock fund is an employee stock ownership program (ESOP) within the 401(k) Plan. At December 31, 2015, the ESOP held 25.2 million of our common shares, all of which are included in shares outstanding. Dividends on these shares are reinvested in common shares or paid out in cash, at the election of the participant, and the related tax benefit is recorded as part of our tax provision.

Matching contributions made by Progressive for its 401(k) Plan were $78.4 million, $74.8 million, and $69.9 million for the years ended December 31, 2015, 2014, and 2013, respectively.

ARX employees are covered by separate qualified defined contribution plans.  Matching contributions of up to 6% of each eligible employee’s compensation are made each pay period.  Contributions to these plans, from April 1, 2015, the date The Progressive Corporation acquired a controlling interest in ARX, were $0.7 million.

Postemployment BenefitsProgressive provides various postemployment benefits to former or inactive employees who meet eligibility requirements, and to their beneficiaries and covered dependents. Postemployment benefits include salary continuation and disability-related benefits, including workers’ compensation and, if elected, continuation of health-care benefits for specified limited periods. The liability for these benefits was $22.6 million and $22.5 million at December 31, 2015 and 2014, respectively.

Postretirement BenefitsProgressive provides postretirement health and life insurance benefits to all employees who met requirements as to age and length of service at December 31, 1988. There are approximately 100 people who are eligible for these postretirement benefits. Progressive's funding policy for these benefits is to contribute annually, to a 501(c)(9) trust, the maximum amount that can be deducted for federal income tax purposes.

Incentive Compensation Plans – EmployeesProgressive's incentive compensation programs include both non-equity incentive plans (cash) and equity incentive plans. Progressive's cash incentive compensation includes a cash bonus program for a limited number of senior executives and Progressive's Gainsharing program for other employees; the structures of these programs are similar in nature. Progressive's equity incentive compensation plans provide for the granting of restricted stock awards and restricted stock unit awards (collectively, “restricted equity awards”) to key members of management.

ARX provides cash bonuses to its employees, both annual and periodic, and has an equity compensation plan under which it has granted stock option awards, exercisable for shares of ARX common stock, to certain of its key employees. These stock option awards include both nonqualified and incentive stock options; all such stock options are subject to the put and call provisions of the ARX stockholders’ agreement. See Note 16 - Redeemable Noncontrolling Interest. As a result of these provisions, and the determination that the ultimate settlement of these awards would be in cash, the ARX stock options are treated for accounting purposes as liability awards.

The amounts charged to income for Progressive and ARX incentive compensation plans for the years ended December 31, were:

	2015				2014				2013
(millions)	Pretax		After Tax		Pretax		After Tax		Pretax		After Tax
Non-equity incentive plans - cash	$	337.7	$	219.5	$	266.2	$	173.0	$	234.5	$	152.4
Equity incentive plans:
Equity awards	64.5		41.9		51.4		33.4		64.9		42.2
Liability awards	1.7		1.1		0		0		0		0

The decrease in expense for 2014 reflected adjustments recorded to our performance-based equity awards based on estimates, as of December 31, 2014, of the level of performance expected to be reached.

Progressive's 2003 Incentive Plan has expired, and no new awards may be made under this plan; all awards granted prior to the plan’s expiration have vested, been forfeited, or expired, and no awards remain outstanding at December 31, 2015. Progressive's 2010 Equity Incentive Plan, which provides for the granting of equity-based compensation to officers and other key employees, originally authorized awards for up to 18.0 million shares. Progressive's 2015 Equity Incentive Plan, which provides for the granting of equity-based compensation to officers and other key employees, originally authorized awards for up to 13.0 million shares.

Since 2010, Progressive has issued restricted stock units as the form of equity awards to Progressive management. The restricted equity awards are issued as either time-based or performance-based awards. The time-based awards vest in equal installments upon the lapse of specified periods of time, typically three, four, and five years. All restricted stock units are settled at or after vesting in Progressive common shares from existing treasury shares on a one-to-one basis.

The performance-based awards were granted to our Chief Executive Officer as his sole equity award in each of the last five years, and to approximately 45 other Progressive executives and senior managers in 2015 in addition to their time-based awards, to provide additional incentive to achieve pre-established profitability and growth targets or relative investment performance.

Vesting of performance-based awards is contingent upon the achievement of predetermined performance goals within specified time periods. The targets for the performance-based awards, as well as the number of units that ultimately may vest, vary by grant. All performance-based awards include a specified number of shares or units that will vest if performance meets a specified target and minimum performance goals that must be achieved for any shares or units to vest. If at least the minimum performance goals are achieved, the range at which an award can vest is determined by the type of measurement goals included in the award, as follows:

Performance Measurement	Year of Grant	Vesting range, expressed as a percentage of target
Growth of our personal and commercial auto businesses, compared to market	2013-2015	0-250%
	2012 and Prior	0-200%
Investment results relative to peer group	2012-2015	0-200%
Growth in percentage of auto policies bundled with other specified types of policies (granted to two senior executive officers)	2015	0% or 100-200%

Generally, time-based and performance-based equity awards are expensed pro rata over their respective vesting periods based on the market value of the awards at the time of grant. Performance-based equity awards that contain variable vesting criteria are expensed based on management’s expectation of the percentage of the award, if any, that will ultimately vest. These estimates can change periodically throughout the measurement period.

A summary of all employee restricted equity award activity during the years ended December 31, follows:

	2015				2014				2013
Restricted Equity Awards	Number of Shares1		Weighted Average Grant Date Fair Value		Number of Shares1		Weighted Average Grant Date Fair Value		Number of Shares1		Weighted Average Grant Date Fair Value
Beginning of year	9,051,564		$	21.27	9,918,575		$	20.13	11,625,981		$	17.80
Add (deduct):
Granted2	2,489,976		25.20		3,542,984		19.32		2,738,809		22.73
Vested	(3,682,644	)	19.53		(4,228,673	)	16.99		(4,293,605	)	15.54
Forfeited	(133,669	)	21.63		(181,322	)	20.75		(152,610	)	18.28
End of year3,4	7,725,227		$	23.37	9,051,564		$	21.27	9,918,575		$	20.13

¹ Includes both restricted stock units and restricted stock. Upon vesting, all units will be converted on a one-for-one basis into Progressive common shares funded from existing treasury shares. All performance-based awards are included at their target amounts.

² We reinvest dividend equivalents on restricted stock units. For 2015, 2014, and 2013, the number of units "granted" shown in the table above includes 196,947, 538,749, and 161,077 of dividend equivalent units, respectively, at a weighted average grant date fair value of $0, since the dividends were factored into the grant date fair value of the original grant.

³ At December 31, 2015, the number of shares included 2,025,871 performance-based awards at their target amounts. We expect 1,946,565 of these performance-based awards to vest, based upon our current estimate of the likelihood of achieving these pre-determined performance goals.

⁴ At December 31, 2015, the total unrecognized compensation cost related to unvested equity awards was $78.3 million, which includes performance-based awards at their currently estimated vesting value. This compensation expense will be recognized into the income statement over the weighted average vesting period of 2.3 years.

The aggregate fair value of the restricted equity awards that vested during the years ended December 31, 2015, 2014, and 2013, was $105.4 million, $109.6 million, and $98.3 million, respectively, based on the actual stock price on the vesting date.

As a result of the put and call rights described in Note 16 - Redeemable Noncontrolling Interest, all outstanding stock options awarded to ARX employees prior to April 1, 2015, are treated as liability awards for accounting purposes; however, the awards maintain the specific features per the original award agreements. The value of each option is based upon our good faith estimate of the fair market value as of the end of the reporting period and the pro-rata expense is recognized.

A summary of all ARX employee stock option activity since acquisition, follows:

	2015
Options Outstanding	Number of Shares		Weighted Average Exercise Price
At acquisition	26,000		$	513.72
Add (deduct):
Exercised1	(1,005	)	197.01
End of year	24,995		$	526.46
Exercisable, end of year	12,995		$	386.69

¹ At the time of exercise, the value earned by the option holders was $1.1 million.

	2015
Non-Vested Options Outstanding	Number of Shares		Weighted Average Exercise Price
At acquisition	14,800		$	675.55
Add (deduct):
Vested	(2,800	)	665.85
End of year1	12,000		$	677.81

¹ At December 31, 2015, the remaining unrecognized compensation cost related to unvested options was $2.9 million and the remaining weighted average vesting period on the unvested awards is 1.72 years.

Since the acquisition, we recognized $1.7 million, or $1.1 million after tax, of compensation expense related to ARX's outstanding stock options.

Incentive Compensation Plans – Directors  Progressive's 2003 Directors Equity Incentive Plan, which provides for the granting of equity-based awards, including restricted stock awards, to non-employee directors, originally authorized awards for up to 1.4 million shares.

Through 2015, The Progressive Corporation granted restricted stock awards to its non-employee directors as their sole compensation for serving as members of the Board of Directors. The restricted stock awards are issued as time-based awards. The vesting period (i.e., requisite service period) must be a minimum of six months and one day. The time-based awards granted to date have typically included vesting periods of 11 months from the date of each grant. To the extent a director is newly appointed during the year, or a director's committee assignments change, the vesting period may be shorter, but always at least equal to six months and one day as required by the terms of the plan. The restricted stock awards are expensed pro rata over their respective vesting periods based on the market value of the awards at the time of grant.

A summary of all directors’ restricted stock activity during the years ended December 31, follows:

	2015				2014				2013
Restricted Stock	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Beginning of year	81,579		$	25.45	93,254		$	26.19	92,957		$	21.41
Add (deduct):
Granted	89,427		27.23		90,649		25.44		93,254		26.19
Vested	(81,579	)	25.45		(93,254	)	26.19		(92,957	)	21.41
Forfeited	0		0		(9,070	)	25.36		0		0
End of year	89,427		$	27.23	81,579		$	25.45	93,254		$	26.19

The aggregate fair value of the restricted stock vested, during the years ended December 31, 2015, 2014, and 2013, was $2.2 million, $2.2 million, and $2.3 million, respectively, based on the actual stock price at time of exercise/vesting.

Deferred CompensationThe Progressive Corporation Executive Deferred Compensation Plan (Deferral Plan) permits eligible Progressive executives to defer receipt of some or all of their annual bonuses and all of their annual equity awards. Deferred cash compensation is deemed invested in one or more investment funds, including Progressive common shares, offered under the Deferral Plan and elected by the participant. All Deferral Plan distributions attributable to deferred cash compensation will be paid in cash.

For all equity awards granted in or after March 2005, and deferred pursuant to the Deferral Plan, the deferred amounts are deemed invested in our common shares and are ineligible for transfer to other investment funds in the Deferral Plan; distributions of these deferred awards will be made in Progressive common shares. For all restricted stock awards granted prior to that date, the deferred amounts are eligible to be transferred to any of the investment funds in the Deferral Plan; distributions of these deferred awards will be made in cash. We reserved 11.1 million of our common shares for issuance under the Deferral Plan. An irrevocable grantor trust has been established to provide a source of funds to assist us in meeting our liabilities under the Deferral Plan.

The Deferral Plan Irrevocable Grantor Trust account held the following assets at December 31:

(millions)	2015		2014
Progressive common shares1	$	108.5	$	83.2
Other investment funds2	124.8		123.9
Total	$	233.3	$	207.1

¹Includes 4.4 million and 3.6 million common shares as of December 31, 2015 and 2014, respectively, to be distributed in common shares.

² Amount is included in other assets on the balance sheet.

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Segment Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

We write personal and commercial auto and property insurance and other specialty property-casualty insurance and provide related services. Our Personal Lines segment writes insurance for personal autos and recreational vehicles. The Personal Lines segment is comprised of both the Agency and Direct businesses. The Agency business includes business written by our network of more than 35,000 independent insurance agencies, including brokerages in New York and California, and strategic alliance business relationships (other insurance companies, financial institutions, and national agencies). The Direct business includes business written directly by us online, by phone, or on mobile devices. We operate our personal auto businesses throughout the United States and sell personal auto physical damage and auto property damage liability insurance in Australia. For the years ended December 31, 2015, 2014, and 2013, net premiums earned on our Australian business were $15.9 million, $17.1 million, and $13.0 million, respectively.

Our Commercial Lines segment writes primary liability and physical damage insurance for automobiles and trucks owned and/or operated predominantly by small businesses in the business auto, for-hire transportation, contractor, for-hire specialty, tow, and for-hire livery markets. This segment operates in 49 states and is distributed through both the independent agency and direct channels.

Our Property segment writes insurance for homeowners, other property owners, and renters primarily through the independent agency channel in 31 states and the District of Columbia for personal property and in 4 states for commercial property as of December 31, 2015 (flood insurance is written in 37 states and D.C.). Our Property business primarily consists of the operations of ARX, in which we acquired a controlling interest in the second quarter of 2015.

Our other indemnity businesses manage our run-off businesses, including the run-off of our professional liability insurance for community banks.

Our service businesses provide insurance-related services, including processing CAIP business, and serving as an agent for homeowners, general liability, and workers’ compensation insurance through our programs with American Strategic Insurance and other subsidiaries of ARX (ASI), and unaffiliated insurance companies.

All segment revenues are generated from external customers and we do not have a reliance on any major customer.

We evaluate profitability based on pretax underwriting profit (loss) for the Personal Lines, Commercial Lines, and Property segments and for the other indemnity businesses. Pretax underwriting profit (loss) is calculated as net premiums earned plus fees and other revenues, less: (i) losses and loss adjustment expenses; (ii) policy acquisition costs; and (iii) other underwriting expenses. Service business pretax profit (loss) is the difference between service business revenues and service business expenses.

Expense allocations are based on certain assumptions and estimates primarily related to revenue and volume; stated segment operating results would change if different methods were applied. We do not allocate assets or income taxes to operating segments. In addition, we do not separately identify depreciation expense by segment, and such allocation would be impractical. Companywide depreciation expense was $103.7 million in 2015, $97.1 million in 2014, and $101.3 million in 2013. The accounting policies of the operating segments are the same as those described in Note 1 - Reporting and Accounting Policies.

Following are the operating results for the years ended December 31:

	2015						2014						2013
(millions)	Revenues			Pretax Profit (Loss)			Revenues			Pretax Profit (Loss)			Revenues			Pretax Profit (Loss)
Personal Lines
Agency	$	9,108.6		$	713.2		$	9,087.0		$	683.0		$	8,601.5		$	542.9
Direct	8,185.9			403.4			7,474.0			423.4			6,740.1			473.9
Total Personal Lines1	17,294.5			1,116.6			16,561.0			1,106.4			15,341.6			1,016.8
Commercial Lines	1,995.9			318.3			1,837.5			315.8			1,761.6			114.1
Property2	609.1			61.3			0			0			0			0
Other indemnity3	(0.4		)	(1.0		)	0			(11.9		)	0.2			(10.8		)
Total underwriting operations	19,899.1			1,495.2			18,398.5			1,410.3			17,103.4			1,120.1
Fees and other revenues4	302.0			NA			309.1			NA			291.8			NA
Service businesses	86.3			8.8			56.0			5.1			39.6			0.8
Investments5	567.3			544.5			632.6			613.7			740.4			721.6
Gains (losses) on extinguishment of debt	(0.9		)	(0.9		)	(4.8		)	(4.8		)	(4.3		)	(4.3		)
Interest expense	NA			(136.0		)	NA			(116.9		)	NA			(118.2		)
Consolidated total	$	20,853.8		$	1,911.6		$	19,391.4		$	1,907.4		$	18,170.9		$	1,720.0

NA = Not Applicable

¹ Personal auto insurance accounted for 92% of the total Personal Lines segment net premiums earned in 2015, compared to 92% in 2014 and 91% in 2013; insurance for our special lines products (e.g., motorcycles, ATVs, RVs, manufactured homes, watercraft, and snowmobiles) accounted for the balance of the Personal Lines net premiums earned.

² We began reporting our Property business as a segment on April 1, 2015, when we acquired a controlling interest in ARX; Property business written prior to that date was negligible. During 2015, amounts include $45.2 million of amortization/depreciation expense associated with the acquisition of a controlling interest in ARX. Although this expense is included in our Property segment, it is not reported in the consolidated results of ARX Holding Corp. and, therefore, will not affect the value of the noncontrolling interest.

³ Our professional liability group recognized $0.4 million of reinstatement premiums paid to our reinsurers pursuant to their reinsurance contracts during 2015. This premium reduction is reflected in our companywide total results. In total, our run-off businesses generated an underwriting loss of $1.0 million in 2015.

⁴ Pretax profit (loss) for fees and other revenues are allocated to operating segments.

⁵ Revenues represent recurring investment income and total net realized gains (losses) on securities; pretax profit is net of investment expenses.

Our management uses underwriting margin and combined ratio as primary measures of underwriting profitability. Underwriting profitability is calculated by subtracting losses and loss adjustment expenses, policy acquisition costs, and other underwriting expenses from the total of net premiums earned and fees and other revenues. The underwriting margin is the pretax underwriting profit (loss) expressed as a percentage of net premiums earned (i.e., revenues from underwriting operations). Combined ratio is the complement of the underwriting margin. Following are the underwriting margins/combined ratios for our underwriting operations for the years ended December 31:

	2015			2014			2013
	Underwriting Margin		Combined Ratio	Underwriting Margin		Combined Ratio	Underwriting Margin		Combined Ratio
Personal Lines
Agency	7.8	%	92.2	7.5	%	92.5	6.3	%	93.7
Direct	4.9		95.1	5.7		94.3	7.0		93.0
Total Personal Lines	6.5		93.5	6.7		93.3	6.6		93.4
Commercial Lines	15.9		84.1	17.2		82.8	6.5		93.5
Property1	10.1		89.9	0		0	0		0
Other indemnity2	NM		NM	NM		NM	NM		NM
Total underwriting operations	7.5		92.5	7.7		92.3	6.5		93.5

¹Included is 7.4 points of amortization/depreciation expense associated with the acquisition of a controlling interest in ARX.

² Underwriting margins/combined ratios are not meaningful (NM) for our other indemnity businesses due to the low level of premiums earned by, and the variability of loss costs in, such businesses.

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Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Other Comprehensive Income (Loss)

OTHER COMPREHENSIVE INCOME (LOSS)

The components of other comprehensive income (loss), including reclassification adjustments by income statement line item, for the years ended December 31, were as follows:

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2014	$	1,574.0		$	(550.9	)	$	1,023.1		$	1,021.9		$	1.5		$	(0.3	)	$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	(198.7		)	67.5			(131.2		)	(131.2		)	0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0			0			0			0			0			0			0
Forecasted transactions	(12.9		)	4.5			(8.4		)	0			(8.4		)	0			0
Foreign currency translation adjustment	(1.8		)	0.6			(1.2		)	0			0			(1.2		)	0
Loss attributable to noncontrolling interest	1.6			(0.5		)	1.1			0			0			0			1.1
Total other comprehensive income (loss) before reclassifications	(211.8		)	72.1			(139.7		)	(131.2		)	(8.4		)	(1.2		)	1.1
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(23.8		)	8.4			(15.4		)	(15.4		)	0			0			0
Net realized gains (losses) on securities	149.7			(52.5		)	97.2			97.1			0.1			0			0
Interest expense	1.8			(0.6		)	1.2			0			1.2			0			0
Total reclassification adjustment for amounts realized in net income	127.7			(44.7		)	83.0			81.7			1.3			0			0
Total other comprehensive income (loss)	(339.5		)	116.8			(222.7		)	(212.9		)	(9.7		)	(1.2		)	1.1
Balance at December 31, 2015	$	1,234.5		$	(434.1	)	$	800.4		$	809.0		$	(8.2	)	$	(1.5	)	$	1.1

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2013	$	1,464.1		$	(512.4	)	$	951.7		$	947.0		$	4.1		$	0.6		$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	362.1			(126.7		)	235.4			235.4			0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0			0			0			0			0			0			0
Forecasted transactions	(1.6		)	0.6			(1.0		)	0			(1.0		)	0			0
Foreign currency translation adjustment	(1.3		)	0.4			(0.9		)	0			0			(0.9		)	0
Loss attributable to noncontrolling interest	0			0			0			0			0			0			0
Total other comprehensive income (loss) before reclassifications	359.2			(125.7		)	233.5			235.4			(1.0		)	(0.9		)	0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(7.7		)	2.7			(5.0		)	(5.0		)	0			0			0
Net realized gains (losses) on securities	255.0			(89.2		)	165.8			165.5			0.3			0			0
Interest expense	2.0			(0.7		)	1.3			0			1.3			0			0
Total reclassification adjustment for amounts realized in net income	249.3			(87.2		)	162.1			160.5			1.6			0			0
Total other comprehensive income (loss)	109.9			(38.5		)	71.4			74.9			(2.6		)	(0.9		)	0
Balance at December 31, 2014	$	1,574.0		$	(550.9	)	$	1,023.1		$	1,021.9		$	1.5		$	(0.3	)	$	0

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2012	$	1,340.0		$	(469.0	)	$	871.0		$	862.7		$	6.1		$	2.2		$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	368.2			(128.9		)	239.3			239.3			0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0.4			(0.1		)	0.3			0.3			0			0			0
Forecasted transactions	0			0			0			0			0			0			0
Foreign currency translation adjustment	(2.5		)	0.9			(1.6		)	0			0			(1.6		)	0
Loss attributable to noncontrolling interest	0			0			0			0			0			0			0
Total other comprehensive income (loss) before reclassifications	366.1			(128.1		)	238.0			239.6			0			(1.6		)	0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(5.7		)	2.0			(3.7		)	(3.7		)	0			0			0
Net realized gains (losses) on securities	245.5			(86.0		)	159.5			159.0			0.5			0			0
Interest expense	2.2			(0.7		)	1.5			0			1.5			0			0
Total reclassification adjustment for amounts realized in net income	242.0			(84.7		)	157.3			155.3			2.0			0			0
Total other comprehensive income (loss)	124.1			(43.4		)	80.7			84.3			(2.0		)	(1.6		)	0
Balance at December 31, 2013	$	1,464.1		$	(512.4	)	$	951.7		$	947.0		$	4.1		$	0.6		$	0

In an effort to manage interest rate risk, we entered into forecasted transactions on each of The Progressive Corporation's outstanding debt issuances. Upon issuing the debt, the gains (losses) recognized on these cash flow hedges are recorded as unrealized gains (losses) in accumulated other comprehensive income and amortized into interest expense over the term of the related debt issuance. We expect to reclassify $1.9 million (pretax) into income during the next 12 months, related to net unrealized gains on forecasted transactions.

To the extent we repurchased any of our outstanding debt, a portion of the unrealized gain (loss) would need to be recognized as a realized gain (loss) since the cash flow hedge is deemed ineffective. During 2015, 2014, and 2013, we repurchased in the open market a portion of our 6.70% Debentures and reclassified $0.2 million, $0.5 million, and $0.8 million, respectively, on a pretax basis, from accumulated other comprehensive income on the balance sheet to net realized gains on securities on the comprehensive income statement (see Note 4 - Debt for further discussion).

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Litigation

12 Months Ended

Dec. 31, 2015

Litigation Disclosures [Abstract]

Litigation

 LITIGATION

The Progressive Corporation and/or its insurance subsidiaries are named as defendants in various lawsuits arising out of claims made under insurance policies written by our insurance subsidiaries in the ordinary course of business. We consider all legal actions relating to such claims in establishing our loss and loss adjustment expense reserves.

In addition, The Progressive Corporation and/or its insurance subsidiaries are named as defendants in a number of class action or individual lawsuits arising out of the operations of the insurance subsidiaries. Other insurance companies face many of these same issues. The lawsuits discussed below are in various stages of development. We plan to contest these suits vigorously, but may pursue settlement negotiations in some cases, if appropriate. The outcomes of pending cases are uncertain at this time.

We establish accruals for lawsuits when it is probable that a loss has been or will be incurred and we can reasonably estimate its potential exposure, which may include a range of loss (referred to as a loss that is both “probable and estimable” in the discussion below). As to lawsuits in which the loss is not considered both probable and estimable, or is considered probable but not estimable, we do not establish an accrual in accordance with current accounting guidance. It is generally not possible to determine the exposure associated with our lawsuits for a number of reasons, including, without limitation, one or more of the following: liability appears to be remote; putative class action lawsuits generally pose immaterial exposure until a class is actually certified, which, historically, has not been granted by the courts in the vast majority of our cases in which certification has been sought; class definitions are often indefinite and preclude detailed exposure analysis; and complaints rarely state an amount sought as relief, and when such amount is stated, it is often a function of pleading requirements and may be unrelated to the potential exposure. The following is a discussion of potentially significant pending cases at December 31, 2015, and certain cases resolved during the three-year period then ended.

As to the pending cases, although their outcomes are uncertain, in each case we do not believe that the outcome will have a material impact on our consolidated financial condition, cash flows, or results of operations. In addition, we do not consider the losses from the pending cases to be both probable and estimable (except as noted below), and we are unable to estimate a range of loss, if any, at this time, due to the factors discussed above. In the event that any one or more of these cases results in a substantial judgment against, or settlement by us, or if our accruals (if any) prove to be inadequate, the resulting liability could have a material effect on our consolidated financial condition, cash flows, and/or results of operations.

Pending cases at December 31, 2015 that challenge certain of our vehicle insurance subsidiaries' practices, include:

• One putative class action alleging we sell personal injury protection (PIP) coverage and pay-related claims at levels lower than allowed by law.

• Two patent matters alleging that we infringed on patented technology.

• Two putative class action lawsuits alleging that we steer customers to Service Centers and network body shops to have their vehicles repaired.

• Six putative class action lawsuits challenging our practice in Florida of adjusting PIP and first-party medical payments.

• Three putative class action lawsuits challenging our adjustment of medical bills submitted by insureds in bodily injury claims.

• One putative class action lawsuit challenging the manner in which we grant a discount for anti-theft devices.

• One putative class action lawsuit alleging that we charged insureds for illusory uninsured motorist/underinsured motorist coverage.

• One certified class action lawsuit alleging that we undervalued total loss claims through the use of certain valuation tools.

• One conditionally certified collective class action lawsuit alleging we did not pay certain employees for work performed during meal periods.

• Four qui tam lawsuits alleging we did not comply with its purported obligation to reimburse Medicare for medical payments made to Medicare beneficiaries.

• Thirteen individual lawsuits and one putative class action lawsuit pending as multi-district litigation alleging Progressive and other insurers conspire to suppress body repair shop labor rates.

For cases that have settled, but for which settlement is not complete, an accrual has been established at our best estimate of the exposure. Settlements that are complete are fully reflected in our financial statements. The amounts accrued or paid for these settlements were not material to our consolidated financial condition, cash flows, or results of operations.

Cases settled during 2015 include:

• Two conditionally certified collective class action lawsuits challenging our exempt employee classification for certain claims employees under applicable wage and hour laws. These matters were settled and paid during the year.

• One certified class action lawsuit alleging that Progressive’s website did not adequately disclose sufficient information concerning the PIP deductibles when customers indicated they are covered by private health insurance. This matter was settled on a class-wide basis and an accrual established.

• One putative class action lawsuit challenging the labor rates our insurance subsidiaries pay to auto body repair shops. This matter was settled on an individual basis and an accrual established.

• One putative class action lawsuit challenging our policy form with regard to rejecting uninsured motorist coverage. We established an accrual for this matter in 2014 when it was probable that a loss had been incurred on this lawsuit and we were able to estimate a loss. This matter was settled on a class-wide basis in 2015 for the amount which was accrued.

• One putative class action lawsuit alleging that our claims representatives reduced lost wages when settling uninsured and underinsured motorist claims. This matter was settled on a class-wide basis and an accrual was established.

Cases settled during 2014 include:

• One putative class action lawsuit alleging that Progressive steers customers to Service Centers and network shops to have their vehicles repaired. This matter was settled on an individual basis.

• One putative class action lawsuit alleging that Progressive negligently designed, manufactured, and deceptively advertised Snapshot^® in that it purportedly drains a vehicle's battery to the point that the battery is non-functional or diminished in value. This matter was settled on an individual basis.

• One putative class action lawsuit alleging that Progressive violated the Telephone Consumer Protection Act in making cell phone calls to insureds. This matter was settled on an individual basis.

Cases settled during 2013 include:

• One putative class action lawsuit alleging that Progressive did not reimburse any of its insureds who incurred legal fees to recover money from another Progressive insured. This case was accrued for, settled, and paid in 2013.

• One putative class action lawsuit alleging that Progressive improperly applies a preferred provider discount to medical payment claims. This case was accrued for and settled in 2013.

• One putative class action lawsuit challenging the manner in which Progressive charges premium and assesses total loss claims for commercial vehicle stated amount policies. This case was accrued for, settled, and paid in 2013.

• Two putative class action lawsuits challenging Progressive’s practice in Florida of adjusting PIP and first-party medical payments. Both cases were settled on an individual basis.

• One putative class action lawsuit that challenged Progressive’s use of certain automated database vendors or software to assist in the adjustment of bodily injury claims where the plaintiffs alleged that these databases or software systematically undervalued the claims; an accrual was established during 2012, and the case was paid in 2013.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

We have certain noncancelable operating lease commitments with lease terms greater than one year for property and computer equipment. The minimum commitments under these agreements at December 31, 2015, were as follows:

(millions)	Commitments
2016	$	50.4
2017	47.8
2018	37.3
2019	24.7
2020	9.6
Thereafter	1.8
Total	$	171.6

Some of the leases have options to renew at the end of the lease periods. The expense we incurred for the leases disclosed above, as well as other operating leases that may be cancelable or have terms less than one year, was:

(millions)	Expense
2015	$	66.6
2014	63.4
2013	64.6

We also have certain noncancelable purchase obligations. The minimum commitment under these agreements at December 31, 2015, was $408.0 million.

During 2015, the insurance operations of ARX entered into several multiple-layer property catastrophe excess of loss reinsurance contracts with various reinsurers with terms ranging from one to two years. The minimum commitment under these contracts was $82.4 million at December 31, 2015.

As of December 31, 2015, we had no open investment funding commitments; we had no uncollateralized lines or letters of credit as of December 31, 2015 or 2014.

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Dividends

12 Months Ended

Dec. 31, 2015

Dividends [Abstract]

Dividends

DIVIDENDS

We maintain a policy of paying an annual variable dividend that, if declared, would be payable shortly after the close of the year. This annual variable dividend is based on a target percentage of after-tax underwriting income multiplied by a performance factor (Gainshare factor), determined by reference to the Agency auto, Direct auto, special lines, and Commercial Lines business units, subject to the limitations discussed below. The target percentage is determined by our Board of Directors on an annual basis and announced to shareholders and the public. In December 2014, the Board determined the target percentage for 2015 to be 33-1/3% of annual after-tax underwriting income, which is unchanged from the target percentage in both 2014 and 2013.

The Gainshare factor can range from zero to two and is determined by comparing our operating performance for the Agency auto, Direct auto, special lines, and Commercial Lines business units for the year to certain predetermined profitability and growth objectives approved by the Compensation Committee of the Board. This Gainshare factor is also used in the annual cash bonus program currently in place for our employees (our “Gainsharing program”). Although reviewed every year, the structure of the Gainsharing program generally remains the same. For 2015, the Gainshare factor was 1.60, compared to 1.32 in 2014 and 1.21 in 2013.

Our annual dividend program will result in a variable payment to shareholders each year, subject to certain limitations. If the Gainshare factor is zero or if our comprehensive income is less than after-tax underwriting income, no dividend would be payable under our annual variable dividend policy. In addition, the ultimate decision on whether or not a dividend will be paid is in the discretion of the Board of Directors. The Board could decide to alter our policy, or not to pay the annual variable dividend, at any time prior to the declaration of the dividend for the year. Such an action by the Board could result from, among other reasons, changes in the insurance marketplace, changes in our performance or capital needs, changes in federal income tax laws, disruptions of national or international capital markets, or other events affecting our business, liquidity, or financial position.

Following is a summary of our shareholder dividends, both variable and special, that were declared in the last three years:

(millions, except per share amounts)			Amount
Dividend Type	Declared	Paid	Per Share		Total1
Annual – Variable	December 2015	February 2016	$	0.8882	$	519.2
Annual – Variable	December 2014	February 2015	0.6862		404.1
Annual – Variable	December 2013	February 2014	0.4929		293.9
Special	December 2013	February 2014	1.0000		596.3

¹ Based on shares outstanding as of the record date.

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Redeemable Noncontrolling Interest (Notes)

12 Months Ended

Dec. 31, 2015

Noncontrolling Interest [Abstract]

Noncontrolling Interest Disclosure [Text Block]

16. REDEEMABLE NONCONTROLLING INTEREST

In connection with the acquisition of a controlling interest in ARX, The Progressive Corporation entered into a stockholders’ agreement with the other ARX stockholders. The stockholders’ agreement provides the non-Progressive shareholders with rights to put all of their shares to us in two installments, one in early 2018 and one in early 2021. The Progressive Corporation likewise will have the right to call shares from the other ARX shareholders in each of 2018 and 2021. If these rights are exercised in full when available, our ownership stake in ARX capital stock will exceed 80% in 2018 and will reach 100% in 2021. The purchase prices for shares to be purchased by Progressive pursuant to these put or call rights will be determined by adding (A) the price per share paid at the closing on April 1, 2015, to (B) the product of the change in the fully diluted net tangible book value per share of ARX between December 31, 2014 and December 31, 2017 (for the 2018 put or call purchases) or December 31, 2020 (for the 2021 put or call purchases) times a multiple of between 1.0 and 2.0. The multiple will be determined based on the growth and profitability of ARX’s business over the applicable time period, pursuant to criteria included in the stockholders’ agreement. Among other provisions, the stockholders’ agreement also prohibits ARX from taking a number of actions, including the payment of dividends, without the consent of The Progressive Corporation and two other stockholders.

Since the ARX shares are redeemable upon the occurrence of an event that is not solely within the control of Progressive, we have recorded the redeemable noncontrolling interest as mezzanine equity on our consolidated balance sheets. The redeemable noncontrolling interest was initially recorded at a fair value of $411.5 million, representing the minority shares at the net acquisition price adjusted for the fair value of the put and call rights. The value of the put and call rights on the acquisition date was based on an internally developed modified binomial model. Subsequent changes to the redeemable noncontrolling interest are based on the maximum redemption value at the end of the reporting period, as determined in accordance with the stockholders' agreement.

The components of redeemable noncontrolling interest (NCI) at December 31, 2015, were:

(millions)
Balance at March 31, 2015	$	0
Fair value at date of acquisition	411.5
Net income attributable to NCI	32.9
Other comprehensive loss attributable to NCI	(1.1		)
Purchase of shares from NCI	(12.6		)
Change in redemption value of NCI	34.2
Balance at December 31, 2015	$	464.9

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Acquisitions (Notes)

12 Months Ended

Dec. 31, 2015

Business Combinations [Abstract]

Acquisition

ACQUISITION

On April 1, 2015, The Progressive Corporation acquired approximately 63.2% of the outstanding capital stock of ARX, the parent company of ASI, primarily from non-management shareholders. Subsequently, in 2015, we purchased an additional 1.0% of ARX capital stock from certain employee shareholders and option holders. The total cost to acquire these shares was $890.1 million and was funded with available cash. Prior to the acquisition, Progressive held a 5% interest in ARX as part of our investment portfolio. During 2015, we recognized a $2.0 million loss to reflect the net acquisition cost attributable to this holding. This loss was reported in net realized gains (losses) on securities in the comprehensive income statement. At December 31, 2015, Progressive's total ownership interest in ARX was 69.2%. The minority shareholders of ARX retain a30.8%interest in the operating results of ARX. These interests are reflected in our comprehensive income statements as "Net income/Other comprehensive income attributable to noncontrolling interest (NCI)."

The property business written by ASI accounted for approximately 3% of our total net premiums written during 2015. As part of the acquisition, we recorded approximately $470 million of goodwill. Goodwill was calculated as the excess of the purchase price over the estimated fair values of the assets and liabilities acquired, and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. As a result of the ARX acquisition, we are able to build on the pre-existing relationship we had with ASI, which began in 2009, to expand on our bundling strategy in the Agency channel. The goodwill has been allocated equally between the ASI property business and our personal auto Agency business.

During 2015, subsequent to the date of acquisition, we completed our analysis related to the fair value of the loss and loss adjustment expense reserves recorded as of the acquisition date and we obtained additional information about the state and federal deferred tax liabilities that were recorded as of the acquisition date. As a result, we recognized a $42.0 million fair value reduction to loss and loss adjustment expense reserves acquired, and a related $16.7 million fair value increase in state and federal deferred taxes acquired, resulting in a net decrease of $25.3 million to the carrying value of goodwill. No goodwill impairment charges were recognized during the year. As of December 31, 2015, goodwill associated with the acquisition was $446.0 million.

In 2015, we adopted the newly issued accounting standard update related to business combinations, which simplifies the accounting for measurement-period adjustments by allowing us to record any goodwill adjustment prospectively, rather than retrospectively adjusting our previously issued financial statements.

As part of the acquisition, we recorded $520.4 million of other intangible assets; the other intangible assets will be amortized over an average life of about 9 years. The following table reports the intangible assets by asset category as of December 31, 2015:

($ in millions)
Category	Value at Acquisition		Accumulated Amortization		Useful Life
Policies in force	$	256.2	$	27.5	7 years
Agency relationships	159.2		8.5		14 years
Software	69.1		6.5		8 years
Trade name	34.8		2.6		10 years
Agent licenses	1.1		0		Indefinite
Total	$	520.4	$	45.1

All assets and liabilities are recorded at fair value at the date of acquisition, as adjusted during 2015. If additional new information is obtained within 12 months from the date of acquisition about facts and circumstances that existed at the acquisition date, we will adjust the amounts previously recorded. For income tax purposes, the historical tax bases of the acquired assets and assumed liabilities were carried over and were not recorded at fair value; therefore, no tax-basis goodwill was created.

At the date of acquisition, ARX had total fair value assets of $1.8 billion, including investment securities of $1.2 billion, cash and cash equivalents of $183 million, and prepaid reinsurance premiums of $146 million, and fair value liabilities of $1.2 billion, including unearned premiums of $550 million, loss and loss adjustment expense reserves of $264 million, and debt of $185 million. All of ARX's known contingencies were recognized as of the acquisition date. Subsequent to the date of acquisition, our consolidated 2015 results included total revenue and net income from ARX of $636.3 million and $106.8 million, respectively.

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Reporting And Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Nature of Operations

Nature of OperationsThe Progressive insurance organization began business in 1937. The Progressive Corporation, an insurance holding company was formed in 1965. The financial results of The Progressive Corporation include its subsidiaries and affiliates (references to “subsidiaries” in these notes include affiliates as well). Our insurance subsidiaries (collectively the Progressive Group of Insurance Companies) provide personal and commercial automobile and property insurance, other specialty property-casualty insurance and related services. Our Personal Lines segment writes insurance for personal autos and recreational vehicles through both an independent insurance agency channel and a direct channel. Our Commercial Lines segment writes primary liability and physical damage insurance for automobiles and trucks owned and/or operated predominantly by small businesses through both the independent agency and direct channels. Our Property segment writes personal and commercial property insurance for homeowners, other property owners, and renters, primarily through the independent insurance agency channel. We operate our businesses throughout the United States; we also sell personal auto physical damage and auto property damage liability insurance in Australia.

Consolidation Policy

Basis of Consolidation and Reporting The accompanying consolidated financial statements include the accounts of The Progressive Corporation and ARX Holding Corp. (ARX), and their respective wholly owned insurance and non-insurance subsidiaries and affiliates, in which Progressive or ARX has a controlling financial interest.  The Progressive Corporation owned 69.2% of the outstanding capital stock of ARX at December 31, 2015. All intercompany accounts and transactions are eliminated in consolidation.

Estimates And Assumptions Policy

EstimatesWe are required to make estimates and assumptions when preparing our financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (GAAP). As estimates develop into fact (e.g., losses are paid), results may, and will likely, differ from those estimates.

Investment Policy

InvestmentsOur fixed-maturity securities, equity securities, and short-term investments are accounted for on an available-for-sale basis. See Note 2 – Investments for details regarding the composition of our investment portfolio.

Fixed-maturity securities include debt securities and redeemable preferred stocks, which may have fixed or variable principal payment schedules, may be held for indefinite periods of time, and may be used as a part of our asset/liability strategy or sold in response to changes in interest rates, anticipated prepayments, risk/reward characteristics, liquidity needs, or other economic factors. These securities are carried at fair value with the corresponding unrealized gains (losses), net of deferred income taxes, reported in accumulated other comprehensive income. Fair values are obtained from recognized pricing services or are quoted by market makers and dealers, with limited exceptions discussed in Note 3 – Fair Value.

Included in the fixed-maturity portfolio are asset-backed securities. The asset-backed securities are generally accounted for under the retrospective method. The retrospective method recalculates yield assumptions (based on changes in interest rates or cash flow expectations) historically to the inception of the investment holding period, and applies the required adjustment, if any, to the cost basis, with the offset recorded to investment income. The prospective method is used primarily for interest-only securities, non-investment-grade asset-backed securities, and certain asset-backed securities with sub-prime loan exposure or where there is a greater risk of non-performance and where it is possible the initial investment may not be substantially recovered. The prospective method requires a calculation of expected future repayments and resets the yield to allow for future period adjustments; no current period impact to investment income or the security’s cost is made based on the cash flow update. Prepayment assumptions are based on market expectations and are updated quarterly.

Equity securities include common stocks, nonredeemable preferred stocks, and other risk investments, and are reported at fair values. Changes in fair value of these securities, net of deferred income taxes, are reflected as unrealized gains (losses) in accumulated other comprehensive income. To the extent we hold any foreign equities or foreign currency hedges, any change in value due to exchange rate fluctuations would be limited by foreign currency hedges, if any, and would be recognized in income in the current period.

Short-term investments may include Eurodollar deposits, commercial paper, repurchase transactions, and other securities expected to mature within one year. In addition, short-term investments can include auction rate securities (i.e., certain municipal bonds and preferred stocks). Due to the nature of auction rate securities, these securities are classified as short-term based upon their expected auction date (generally 7-49 days) rather than on their contractual maturity date (which is greater than one year at original issuance). In the event that an auction fails, the security may need to be reclassified from short-term. Changes in fair value of these securities, net of deferred income taxes, are reflected as unrealized gains (losses) in accumulated other comprehensive income.

Trading securities are securities bought principally for the purpose of sale in the near term. To the extent we have trading securities, changes in fair value would be recognized in income in the current period. Derivative instruments, which may be used for trading purposes or classified as trading derivatives due to the characteristics of the transaction, are discussed below.

Derivative instruments may include futures, options, forward positions, foreign currency forwards, interest rate swap agreements, and credit default swaps and may be used in the portfolio for general investment purposes or to hedge the exposure to:

• Changes in fair value of an asset or liability (fair value hedge),

• Foreign currency of an investment in a foreign operation (foreign currency hedge), or

• Variable cash flows of a forecasted transaction (cash flow hedge).

To the extent we have derivatives held for general investment purposes, these derivative instruments are recognized as either assets or liabilities and measured at fair value, with changes in fair value recognized in income as a component of net realized gains (losses) on securities during the period of change.

Derivatives designated as hedges are required to be evaluated on established criteria to determine the effectiveness of their correlation to, and ability to reduce the designated risk of, specific securities or transactions. Effectiveness is required to be reassessed regularly. Hedges that are deemed to be effective would be accounted for as follows:

• Fair value hedge:  changes in fair value of the hedge, as well as the hedged item, would be recognized in income in the period of change while the hedge is in effect.

• Foreign currency hedge:  changes in fair value of the hedge, as well as the hedged item, would be reflected as a change in translation adjustment as part of accumulated other comprehensive income. Gains and losses on the foreign currency hedge would offset the foreign exchange gains and losses on the foreign investment as they are recognized into income.

• Cash flow hedge:  changes in fair value of the hedge would be reported as a component of accumulated other comprehensive income and subsequently amortized into earnings over the life of the hedged transaction.

If a hedge is deemed to become ineffective or discontinued, the following accounting treatment would be applied:

• Fair value hedge:  the derivative instrument would continue to be adjusted through income, while the adjustment in the change in value of the hedged item would be reflected as a change in unrealized gains (losses) as part of accumulated other comprehensive income.

• Foreign currency hedge:  changes in the value of the hedged item would continue to be reflected as a change in translation adjustment as part of accumulated other comprehensive income, but the derivative instrument would be adjusted through income for the current period.

• Cash flow hedge:  changes in fair value of the derivative instrument would be reported in income for the current period.

For all derivative positions, net cash requirements are limited to changes in fair values, which may vary resulting from changes in interest rates, currency exchange rates, and other factors. Exposure to credit risk is limited to the carrying value; collateral may be required to limit credit risk. We have elected not to offset fair value amounts that arise from derivative positions with the same counterparty under a master netting arrangement.

Investment securities are exposed to various risks such as interest rate, market, credit, and liquidity risk. Fair values of securities fluctuate based on the nature and magnitude of changing market conditions; significant changes in market conditions could materially affect the portfolio’s value in the near term. We regularly monitor our portfolio for price changes, which might indicate potential impairments, and perform detailed reviews of securities with unrealized losses. In such cases, changes in fair value are evaluated to determine the extent to which such changes are attributable to: (i) fundamental factors specific to the issuer, such as financial condition, business prospects, or other factors, (ii) market-related factors, such as interest rates or equity market declines, or (iii) credit-related losses, where the present value of cash flows expected to be collected are lower than the amortized cost basis of the security.

We analyze our debt securities that are in a loss position to determine if we intend to sell, or if it is more likely than not that we will be required to sell, the security prior to recovery and, if so, we write down the security to its current fair value, with the entire amount of the write-down recorded to earnings. To the extent that it is more likely than not that we will hold the debt security until recovery (which could be maturity), we determine if any of the decline in value is due to a credit loss (i.e., where the present value of future cash flows expected to be collected is lower than the amortized cost basis of the security) and, if so, we recognize that portion of the impairment as a component of net realized gains (losses) in the comprehensive income statement, with the difference (i.e., non-credit related impairment) recognized as part of our net unrealized gains (losses) in accumulated other comprehensive income. When an equity security (common equity and nonredeemable preferred stock) in our investment portfolio has an unrealized loss in fair value that is deemed to be other-than-temporary, we reduce the book value of such security to its current fair value, recognizing the decline as a realized loss in the comprehensive income statement. Any future changes in fair value, either increases or decreases, are reflected as changes in unrealized gains (losses) as part of accumulated other comprehensive income.

Investment income consists of interest, dividends, and amortization. In addition to the discussion above for asset-backed securities, interest is recognized on an accrual basis using the effective yield method. Depending on the nature of the equity instruments, dividends are recorded at either the ex-dividend date or on an accrual basis.

Realized gains (losses) on securities are computed based on the first-in first-out method and include write-downs on available-for-sale securities considered to have other-than-temporary declines in fair value (excluding non-credit related impairments), as well as holding period valuation changes on derivatives, trading securities, and hybrid instruments (e.g., securities with embedded options, where the option is a feature of the overall change in the value of the instrument).

Insurance Premiums and Receivables Policy

Insurance Premiums and Receivables  Insurance premiums written are earned into income on a pro rata basis over the period of risk, based on a daily earnings convention. Accordingly, unearned premiums represent the portion of premiums written that are applicable to the unexpired risk. We provide insurance and related services to individuals and small commercial accounts and offer a variety of payment plans. Generally, premiums are collected prior to providing risk coverage, minimizing our exposure to credit risk. For our vehicle businesses, we perform a policy level evaluation to determine the extent to which the premiums receivable balance exceeds the unearned premiums balance. We then age this exposure to establish an allowance for doubtful accounts based on prior experience. For our Property business, we do not establish an allowance for doubtful accounts since the risk of uncollectibility is relatively low. If premiums are unpaid by the policy due date, we provide advance notice of cancellation in accordance with each state's requirements and cancel the policy if the premiums remain unpaid after receipt of notice and write off any remaining balance.

Deferred Acquisition Costs Policy

Deferred Acquisition CostsDeferred acquisition costs include commissions, premium taxes, and other variable underwriting and direct sales costs incurred in connection with the successful acquisition or renewal of insurance contracts. These acquisition costs, net of ceding allowances, are deferred and amortized over the policy period in which the related premiums are earned. We consider anticipated investment income in determining the recoverability of these costs. Management believes that these costs will be fully recoverable in the near term.

We do not defer any advertising costs.

Reserve For Losses And Loss Adjustment Expenses

Loss and Loss Adjustment Expense ReservesLoss reserves represent the estimated liability on claims reported to us, plus reserves for losses incurred but not recorded (IBNR). These estimates are reported net of amounts estimated to be recoverable from salvage and subrogation. Loss adjustment expense reserves represent the estimated expenses required to settle these claims and losses. The methods of making estimates and establishing these reserves are reviewed regularly, and resulting adjustments are reflected in income in the current period. Such loss and loss adjustment expense reserves are susceptible to change in the near term.

Reinsurance Policy

Reinsurance  Our reinsurance transactions include premium ceded to “Regulated” plans and “Non-Regulated” plans.  Regulated plans are plans in which we are required to participate by insurance regulations and include the Michigan Catastrophic Claims Association, Florida Hurricane Catastrophe Fund, North Carolina Reinsurance Facility, state-mandated involuntary plans for commercial vehicles (Commercial Auto Insurance Procedures/Plans - “CAIP”), and federally regulated plans for flood (National Flood Insurance Program). Non-Regulated plans are voluntary contractual arrangements and primarily relate to our Property business.  Prepaid reinsurance premiums are earned on a pro rata basis over the period of risk, based on a daily earnings convention, which is consistent with premiums written.  See Note 7 - Reinsurance for further discussion.

Income Tax Policy

Income Taxes  The income tax provision is calculated under the balance sheet approach. Deferred tax assets and liabilities are recorded based on the difference between the financial statement and tax bases of assets and liabilities at the enacted tax rates. The principal items giving rise to such differences are investment securities (e.g., net unrealized gains (losses), write-downs on securities determined to be other-than-temporarily impaired, and derivative instruments), loss and loss adjustment expense reserves, unearned premiums reserves, deferred acquisition costs, property and equipment, intangible assets, and non-deductible accruals. We review our deferred tax assets regularly for recoverability. See Note 5 – Income Taxes for further discussion.

Property, Plant and Equipment Policy

Property and Equipment  Property and equipment are recorded at cost, less accumulated depreciation, and include capitalized software developed or acquired for internal use. Depreciation is recognized over the estimated useful lives of the assets using accelerated methods for computer equipment and the straight-line method for all other fixed assets. The useful life for computer equipment and laptop computers is 3 years. The useful lives range from 7 to 40 years for buildings, improvements, and integrated components, and 3 to 15 years for all other property and equipment. We evaluate impairment of our property and equipment at least annually and expense any item determined to be impaired. Land and buildings comprised 75% and 77% of total property and equipment at December 31, 2015 and 2014, respectively.

During 2014, the decision was made to sell one property originally purchased for a future Service Center site. At December 31, 2015 and 2014, included in other assets in the consolidated balance sheets is $8.7 million of "held for sale" property, which represents the fair value of this property less the estimated costs to sell.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Goodwill and Intangible Assets Goodwill is the excess of the purchase price over the estimated fair value of the assets and liabilities acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Substantially all of the goodwill recorded as of December 31, 2015, relates to the April 1, 2015 acquisition of a controlling interest in ARX.

Intangible assets primarily arose through the acquisition of ARX and mainly represent the future premiums that will be recognized from the existing policies and current agency relationships, the value of software acquired, and the value of its trade name, "American Strategic Insurance," in the marketplace. The majority of the intangible assets have finite lives ranging from 7 to 14 years. See Note 15 - Acquisition for further discussion.

We evaluate our goodwill for impairment at least annually. If events or changes in circumstances indicate that the carrying value of goodwill or intangible assets may not be recoverable, we will evaluate such items for impairment.

Guaranty Fund Assessments Policy

Guaranty Fund Assessments  We are subject to state guaranty fund assessments, which provide for the payment of covered claims or other insurance obligations of insurance companies deemed insolvent. These assessments are accrued after a formal determination of insolvency has occurred, and we have written the premiums on which the assessments will be based. Assessments that are available for recoupment from policyholders or to offset against future premium taxes are capitalized when incurred; all other assessments are expensed.

Fees and Other Revenues

Fees and Other Revenues  Fees and other revenues primarily represent fees collected from policyholders relating to installment charges in accordance with our bill plans, as well as late payment and insufficient funds fees. Other revenues may include revenue from the sale of tax credits, rental income, and other revenue transactions.

Non-Insurance Service Business

Service Revenues and ExpensesOur service businesses provide insurance-related services. Service revenues and expenses from our commission-based businesses are recorded in the period in which they are earned or incurred. Service revenues generated from processing business for involuntary CAIP plans are earned on a pro rata basis over the term of the related policies. Service expenses related to these CAIP plans are expensed as incurred.

Equity-Based Compensation

Equity-Based Compensation  We currently issue time-based and performance-based restricted stock unit awards to key members of management (other than management of ARX and its subsidiaries) as our form of equity compensation, and time-based restricted stock awards to non-employee directors. Collectively, we refer to these awards as “restricted equity awards.” Compensation expense for time-based restricted equity awards with installment vesting is recognized over each respective vesting period. For performance-based restricted equity awards, compensation expense is recognized over the respective estimated vesting periods. Dividend equivalent units are credited to outstanding restricted unit awards, both time-based and performance-based, at the time a dividend is paid to shareholders.

We record an estimate for expected forfeitures of restricted equity awards based on our historical forfeiture rates. In addition, we shorten the vesting periods of certain time-based restricted equity awards based on the “qualified retirement” provisions in our equity compensation plans, under which (among other provisions) if the participant is 55 years of age or older and satisfies certain years-of-service requirements, the vesting and distribution of 50% of outstanding time-based restricted equity awards accelerates upon reaching eligibility for a qualified retirement and shortly after the grant date for each subsequent award. For awards granted before March 2013, awards held by an individual who satisfies the "qualified retirement" provisions vest in part upon separation from the company if earlier than the contractual vesting date.

ARX has nonqualified and incentive stock options outstanding that were issued prior to April 2015 as a form of equity compensation to certain of the officers and employees of ARX and its subsidiaries. These outstanding stock options are subject to the put/call features contained in the current stockholders' agreement, pursuant to which The Progressive Corporation has the right, and can be required, to purchase a portion or all of the shares underlying these awards in 2018 and 2021. See Note 16 - Redeemable Noncontrolling Interest. These stock options, which are treated for accounting purposes as liability awards, are expensed over the respective vesting periods based on the Black-Scholes value determined at period end.

Net Income Per Share Policy

Net Income Per Share  Net income attributable to Progressive is used in our calculation of the per share amounts. Basic net income per share is computed using the weighted average number of common shares outstanding during the reporting period, excluding unvested time-based and performance-based restricted equity awards that are subject to forfeiture. Diluted net income per share includes common stock equivalents assumed outstanding during the period. Our common stock equivalents include the incremental shares assumed to be issued for:

• earned but unvested time-based restricted equity awards, and

• certain unvested performance-based restricted equity awards that satisfied contingency conditions for common stock equivalents during the period.

Cash Flow Supplemental Disclosure

Supplemental Cash Flow InformationCash includes only bank demand deposits. Non-cash activity includes declared but unpaid dividends.

New Accounting Pronouncements

New Accounting Standards In February 2016, the Financial Accounting Standards Board (FASB) released an accounting standards update (ASU) intended to eliminate the off-balance-sheet accounting for leases. The new guidance will require lessees to report their operating leases as both an asset and liability on the statement of financial position and disclose key information about leasing arrangements; the expense recognition will be consistent with existing guidance. The ASU, which is required to be applied on a modified retrospective basis, will be effective for fiscal years (including interim periods within those fiscal years) beginning after December 15, 2018 (2019 for calendar-year companies). We are currently evaluating the impact the guidance will have on our financial statements.

In January 2016, the FASB released an ASU intended to improve the recognition and measurement of financial instruments. The new guidance will require the changes in fair value of equity securities to be recognized as a component of net income. The ASU is effective for fiscal years beginning after December 15, 2017 (the first quarter 2018 for calendar-year companies). The new guidance could create more volatility in net income, but will have no impact on comprehensive income.

In May 2015, the FASB issued an ASU related to disclosures about short-duration contracts. The disclosures are intended to provide users of financial statements with more transparent information about an insurance entity's initial claim estimates and

subsequent adjustments to those estimates, the methodologies and judgments used to estimate claims, and the timing, frequency, and severity of claims. This standard, which is required to be applied on a retrospective basis, is effective for fiscal years beginning after December 15, 2015 (2016 for calendar-year companies), except for those disclosures that require application only to the current period (e.g., information about significant changes in estimation methodologies and assumptions made in calculating the claim liability for short-duration contracts). We are currently evaluating the impact the guidance will have on our financial statements.

In May 2015, the FASB issued an ASU related to investments measured at net asset value (NAV). The intent is to exclude certain investments measured at NAV from the fair value hierarchy. This guidance is effective for annual and interim periods after December 15, 2015 (January 2016 for calendar-year companies). We did not hold any securities at December 31, 2015, that were priced at NAV. To the extent we acquire such securities, we will follow the guidance to determine the appropriate treatment in the fair value hierarchy table.

In April 2015, the FASB issued an ASU related to the balance sheet presentation of the cost of issuing debt. This standard requires that all costs incurred to issue debt be presented in the balance sheet as a direct deduction from the carrying value of the debt. In August 2015, the FASB further amended this ASU to clarify the treatment of debt issuance costs related to lines-of-credit arrangements. Registrants can elect to defer and present debt issuance costs related to a line of credit as an asset and subsequently amortize the costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the arrangement. This ASU, which is required to be applied on a retrospective basis, is effective for fiscal years beginning after December 15, 2015 (2016 for calendar-year companies). We have historically deducted the majority of our debt issuance costs from the carrying value of the debt; therefore, we do not expect this standard to have a significant impact on our financial condition, cash flows, or results of operations.

In April 2015, the FASB issued an ASU to clarify guidance around accounting for fees paid in a cloud computing arrangement. The standard prescribes when a cloud computing arrangement should be treated as software and when it should be treated as a service contract based on whether the arrangement includes a software license. This ASU, which allows for both prospective and retrospective methods of adoption, will be effective for annual periods (including interim periods within those annual periods) beginning after December 15, 2015 (2016 for calendar-year companies). We adopted this standard on January 1, 2016, on a prospective basis, and do not expect this standard to have a material impact on our financial condition, cash flows, or results of operations.

Reclassification, Policy [Policy Text Block]

Reclassification For the period ended December 31, 2015, we reclassified goodwill and intangible assets out of “other assets” to be reported as separate line items to conform with the current-year presentation. There was no effect on total assets.

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Reporting And Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Advertising Costs

Total advertising costs, which are expensed as incurred, for the years ended

December 31, were:

(millions)	Advertising Costs
2015	$	748.3
2014	681.8
2013	619.3

Interest Capitalized

Total capitalized interest, which primarily relates to capitalized software projects, for the years ended December 31, was:

(millions)	Capitalized Interest
2015	$	2.4
2014	1.3
2013	0.8

Equity-based Compensation and Related Tax Benefits

The total compensation expense recognized for equity-based compensation, both our equity and liability awards, for the years ended December 31, was:

(millions)	2015		2014		2013
Pretax expense	$	66.2	$	51.4	$	64.9
Tax benefit	23.2		18.0		22.7

Supplemental Cash Flow Information

For the years ended December 31, we paid the following:

(millions)	2015		2014		2013
Income taxes	$	701.8	$	515.0	$	497.0
Interest	132.0		116.0		122.3

XML

Investments (Tables)

12 Months Ended

Dec. 31, 2015

Investments Schedule [Abstract]

Investment Portfolio by Major Security Type

The following tables present the composition of our investment portfolio by major security type, consistent with our internal classification of how we manage, monitor, and measure the portfolio:

($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Net Realized Gains (Losses)1			Fair Value		% of Total Fair Value
December 31, 2015
Fixed maturities:
U.S. government obligations	$	2,425.4	$	4.4	$	(0.6	)	$	0		$	2,429.2	11.6	%
State and local government obligations	2,677.6		47.5		(3.7		)	0			2,721.4		13.0
Foreign government obligations	18.6		0		0			0			18.6		0.1
Corporate debt securities	3,713.2		11.3		(33.0		)	0.1			3,691.6		17.6
Residential mortgage-backed securities	1,726.0		22.1		(20.6		)	(0.8		)	1,726.7		8.3
Agency residential pass-through obligations	90.3		0.1		(1.1		)	0			89.3		0.4
Commercial mortgage-backed securities	2,665.7		16.9		(29.4		)	0			2,653.2		12.7
Other asset-backed securities	1,771.1		1.4		(5.1		)	0.5			1,767.9		8.4
Redeemable preferred stocks	260.0		17.6		(43.3		)	0			234.3		1.1
Total fixed maturities	15,347.9		121.3		(136.8		)	(0.2		)	15,332.2		73.2
Equity securities:
Nonredeemable preferred stocks	674.2		122.8		(15.7		)	1.3			782.6		3.7
Common equities	1,494.3		1,170.4		(14.2		)	0			2,650.5		12.7
Short-term investments	2,172.0		0		0			0			2,172.0		10.4
Total portfolio2,3	$	19,688.4	$	1,414.5	$	(166.7	)	$	1.1		$	20,937.3	100.0	%

($ in millions)	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Net Realized Gains (Losses)1			Fair Value		% of Total Fair Value
December 31, 2014
Fixed maturities:
U.S. government obligations	$	2,641.1	$	27.3	$	(1.3	)	$	0		$	2,667.1	14.0	%
State and local government obligations	2,095.7		44.6		(1.1		)	0			2,139.2		11.2
Foreign government obligations	14.2		0		0			0			14.2		0.1
Corporate debt securities	2,813.9		32.9		(10.4		)	0.3			2,836.7		14.9
Residential mortgage-backed securities	1,635.5		34.5		(10.8		)	(0.7		)	1,658.5		8.7
Agency residential pass-through obligations	0		0		0			0			0		0
Commercial mortgage-backed securities	2,278.7		39.3		(2.6		)	0.2			2,315.6		12.2
Other asset-backed securities	1,634.9		3.8		(0.8		)	0.8			1,638.7		8.6
Redeemable preferred stocks	260.2		24.7		(5.7		)	0			279.2		1.5
Total fixed maturities	13,374.2		207.1		(32.7		)	0.6			13,549.2		71.2
Equity securities:
Nonredeemable preferred stocks	590.4		201.1		(6.4		)	42.4			827.5		4.4
Common equities	1,289.2		1,213.2		(10.1		)	0			2,492.3		13.1
Short-term investments	2,149.0		0		0			0			2,149.0		11.3
Total portfolio2,3	$	17,402.8	$	1,621.4	$	(49.2	)	$	43.0		$	19,018.0	100.0	%

¹ Represents net holding period gains (losses) on certain hybrid securities (discussed below).

² Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

³ The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

Hybrid Securities

Included in our fixed-maturity and equity securities are hybrid securities, which are reported at fair value at December 31:

(millions)	2015		2014
Fixed maturities:
Corporate debt securities	$	49.1	$	139.8
Residential mortgage-backed securities	144.3		120.7
Commercial mortgage-backed securities	17.3		31.2
Other asset-backed securities	11.3		13.7
Total fixed maturities	222.0		305.4
Equity securities:
Nonredeemable preferred stocks	50.7		122.3
Total hybrid securities	$	272.7	$	427.7

Composition of Fixed Maturities by Maturity

The composition of fixed maturities by maturity at December 31, 2015, was:

(millions)	Cost		Fair Value
Less than one year	$	4,532.3	$	4,530.9
One to five years	6,758.0		6,734.7
Five to ten years	3,934.1		3,940.3
Ten years or greater	119.1		121.9
Total1	$	15,343.5	$	15,327.8

¹ Excludes $4.4 million related to our open interest rate swap positions.

Gross Unrealized Losses by Major Security

The following tables show the composition of gross unrealized losses by major security type and by the length of time that individual securities have been in a continuous unrealized loss position:

	Total No. of Sec.	Total Fair Value		Gross Unrealized Losses			Less than 12 Months						12 Months or Greater
($ in millions)							No. of Sec.	Fair Value		Unrealized Losses			No. of Sec.	Fair  Value		Unrealized Losses
December 31, 2015
Fixed maturities:
U.S. government obligations	22	$	897.1	$	(0.6	)	22	$	897.1	$	(0.6	)	0	$	0	$	0
State and local government obligations	290	606.7		(3.7		)	264	500.7		(2.6		)	26	106.0		(1.1		)
Corporate debt securities	215	2,580.6		(33.0		)	197	2,294.6		(25.2		)	18	286.0		(7.8		)
Residential mortgage-backed securities	188	1,294.7		(20.6		)	115	493.4		(3.7		)	73	801.3		(16.9		)
Agency residential pass-through obligations	61	84.9		(1.1		)	61	84.9		(1.1		)	0	0		0
Commercial mortgage-backed securities	207	2,046.5		(29.4		)	171	1,694.6		(25.8		)	36	351.9		(3.6		)
Other asset-backed securities	101	1,548.6		(5.1		)	92	1,472.0		(4.5		)	9	76.6		(0.6		)
Redeemable preferred stocks	9	199.4		(43.3		)	6	119.4		(14.5		)	3	80.0		(28.8		)
Total fixed maturities	1,093	9,258.5		(136.8		)	928	7,556.7		(78.0		)	165	1,701.8		(58.8		)
Equity securities:
Nonredeemable preferred stocks	10	301.8		(15.7		)	5	124.2		(1.7		)	5	177.6		(14.0		)
Common equities	64	164.8		(14.2		)	60	161.4		(14.2		)	4	3.4		0
Total equity securities	74	466.6		(29.9		)	65	285.6		(15.9		)	9	181.0		(14.0		)
Total portfolio	1,167	$	9,725.1	$	(166.7	)	993	$	7,842.3	$	(93.9	)	174	$	1,882.8	$	(72.8	)

	Total No. of Sec.	Total Fair Value		Gross Unrealized Losses			Less than 12 Months						12 Months or Greater
($ in millions)							No. of Sec.	Fair Value		Unrealized Losses			No. of Sec.	Fair Value		Unrealized Losses
December 31, 2014
Fixed maturities:
U.S. government obligations	11	$	428.2	$	(1.3	)	5	$	150.7	$	(0.3	)	6	$	277.5	$	(1.0	)
State and local government obligations	46	234.2		(1.1		)	28	177.9		(0.4		)	18	56.3		(0.7		)
Corporate debt securities	53	843.2		(10.4		)	43	647.5		(6.1		)	10	195.7		(4.3		)
Residential mortgage-backed securities	70	844.2		(10.8		)	33	465.2		(3.1		)	37	379.0		(7.7		)
Agency residential pass-through obligations	0	0		0			0	0		0			0	0		0
Commercial mortgage-backed securities	63	723.4		(2.6		)	54	667.5		(1.4		)	9	55.9		(1.2		)
Other asset-backed securities	44	741.8		(0.8		)	42	715.7		(0.7		)	2	26.1		(0.1		)
Redeemable preferred stocks	3	103.0		(5.7		)	1	33.0		(1.0		)	2	70.0		(4.7		)
Total fixed maturities	290	3,918.0		(32.7		)	206	2,857.5		(13.0		)	84	1,060.5		(19.7		)
Equity securities:
Nonredeemable preferred stocks	8	231.4		(6.4		)	5	143.2		(3.6		)	3	88.2		(2.8		)
Common equities	20	68.4		(10.1		)	19	61.8		(9.6		)	1	6.6		(0.5		)
Total equity securities	28	299.8		(16.5		)	24	205.0		(13.2		)	4	94.8		(3.3		)
Total portfolio	318	$	4,217.8	$	(49.2	)	230	$	3,062.5	$	(26.2	)	88	$	1,155.3	$	(23.0	)

Total Non-Credit Portion of Other-Than-Temporary Impairment Recorded in Accumulated Other Comprehensive Income, Reflecting Orginal Non-Credit Loss at the Time Credit Impairment

The following table shows the total non-credit portion of the OTTI recorded in accumulated other comprehensive income, reflecting the original non-credit loss at the time the credit impairment was determined:

	December 31,
(millions)	2015			2014
Fixed maturities:
Residential mortgage-backed securities	$	(43.3	)	$	(44.1	)
Commercial mortgage-backed securities	(0.6		)	(0.6		)
Total fixed maturities	$	(43.9	)	$	(44.7	)

OTTI Credit Losses Recognized in Earnings

The following tables provide rollforwards of the amounts related to credit losses recognized in earnings for the periods ended December 31, 2015, 2014, and 2013, for which a portion of the OTTI losses were also recognized in accumulated other comprehensive income at the time the credit impairments were determined and recognized:

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed		Total
Balance at December 31, 2014	$	12.7		$	0.4	$	13.1
Credit losses for which an OTTI was previously recognized	0			0		0
Reductions for securities sold/matured	(1.4		)	0		(1.4		)
Change in recoveries of future cash flows expected to be collected1,2	1.1			0		1.1
Reductions for previously recognized credit impairments written-down to fair value3	0			0		0
Balance at December 31, 2015	$	12.4		$	0.4	$	12.8

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed		Total
Balance at December 31, 2013	$	19.2		$	0.4	$	19.6
Credit losses for which an OTTI was previously recognized	0			0		0
Reductions for securities sold/matured	(0.1		)	0		(0.1		)
Change in recoveries of future cash flows expected to be collected1,2	(6.4		)	0		(6.4		)
Reductions for previously recognized credit impairments written-down to fair value3	0			0		0
Balance at December 31, 2014	$	12.7		$	0.4	$	13.1

(millions)	Residential Mortgage- Backed			Commercial Mortgage- Backed			Total
Balance at December 31, 2012	$	27.1		$	0.6		$	27.7
Credit losses for which an OTTI was previously recognized	0.1			0			0.1
Reductions for securities sold/matured	0			0			0
Change in recoveries of future cash flows expected to be collected1,2	(7.8		)	(0.2		)	(8.0		)
Reductions for previously recognized credit impairments written-down to fair value3	(0.2		)	0			(0.2		)
Balance at December 31, 2013	$	19.2		$	0.4		$	19.6

¹ Reflects expected recovery of prior period impairments that will be accreted into income over the remaining life of the security.

² Includes $2.9 million, $4.3 million, and $2.6 million at December 31, 2015, 2014, and 2013, respectively, recognized in income in excess of the cash flows expected to be collected at the time of the write-downs.

³ Reflects reductions of prior credit impairments where the current credit impairment requires writing securities down to fair value (i.e., no remaining non-credit loss).

Components of Net Realized Gains (Losses)

The components of net realized gains (losses) for the years ended December 31, were:

(millions)	2015			2014			2013
Gross realized gains on security sales
Fixed maturities:
U.S. government obligations	$	17.5		$	24.0		$	8.5
State and local government obligations	7.8			9.3			7.7
Corporate and other debt securities	31.2			37.2			47.7
Residential mortgage-backed securities	4.9			2.7			3.0
Commercial mortgage-backed securities	15.7			17.0			10.0
Redeemable preferred stocks	0.1			2.7			0
Total fixed maturities	77.2			92.9			76.9
Equity securities:
Nonredeemable preferred stocks	65.3			90.0			126.3
Common equities	50.4			107.3			68.6
Subtotal gross realized gains on security sales	192.9			290.2			271.8
Gross realized losses on security sales
Fixed maturities:
U.S. government obligations	(0.9		)	(7.6		)	(3.7		)
State and local government obligations	(0.3		)	(0.5		)	0
Corporate and other debt securities	(5.0		)	(2.8		)	(6.2		)
Residential mortgage-backed securities	(0.4		)	(0.2		)	0
Agency residential pass-through obligations	(0.4		)	0			0
Commercial mortgage-backed securities	(1.3		)	(8.3		)	(1.8		)
Redeemable preferred stocks	0			(3.2		)	(0.1		)
Total fixed maturities	(8.3		)	(22.6		)	(11.8		)
Equity securities:
Nonredeemable preferred stocks	(3.2		)	0			(0.1		)
Common equities	(38.4		)	(7.3		)	(0.6		)
Subtotal gross realized losses on security sales	(49.9		)	(29.9		)	(12.5		)
Net realized gains (losses) on security sales
Fixed maturities:
U.S. government obligations	16.6			16.4			4.8
State and local government obligations	7.5			8.8			7.7
Corporate and other debt securities	26.2			34.4			41.5
Residential mortgage-backed securities	4.5			2.5			3.0
Agency residential pass-through obligations	(0.4		)	0			0
Commercial mortgage-backed securities	14.4			8.7			8.2
Redeemable preferred stocks	0.1			(0.5		)	(0.1		)
Total fixed maturities	68.9			70.3			65.1
Equity securities:
Nonredeemable preferred stocks	62.1			90.0			126.2
Common equities	12.0			100.0			68.0
Subtotal net realized gains (losses) on security sales	143.0			260.3			259.3
Other-than-temporary impairment losses
Fixed maturities:
Residential mortgage-backed securities	0			0			(0.6		)
Total fixed maturities	0			0			(0.6		)
Equity securities:
Common equities	(8.7		)	(7.2		)	(5.5		)
Subtotal other-than-temporary impairment losses	(8.7		)	(7.2		)	(6.1		)
Other gains (losses)
Hybrid securities	(1.3		)	30.5			6.4
Derivative instruments	(20.7		)	(64.1		)	56.6
Litigation settlements	0.4			4.7			2.2
Subtotal other gains (losses)	(21.6		)	(28.9		)	65.2
Total net realized gains (losses) on securities	$	112.7		$	224.2		$	318.4

Components of Net Investment Income

The components of net investment income for the years ended December 31, were:

(millions)	2015			2014			2013
Fixed maturities:
U.S. government obligations	$	28.3		$	46.2		$	50.2
State and local government obligations	60.7			50.1			48.0
Foreign government obligations	0.4			0.4			0.2
Corporate debt securities	102.4			82.1			98.8
Residential mortgage-backed securities	52.2			44.9			28.1
Agency residential pass-through obligations	2.1			0			0
Commercial mortgage-backed securities	74.6			66.0			74.8
Other asset-backed securities	22.0			16.7			16.7
Redeemable preferred stocks	15.0			15.5			21.2
Total fixed maturities	357.7			321.9			338.0
Equity securities:
Nonredeemable preferred stocks	43.7			38.6			36.2
Common equities	51.0			46.6			45.8
Short-term investments	2.2			1.3			2.0
Investment income	454.6			408.4			422.0
Investment expenses	(22.8		)	(18.9		)	(18.8		)
Net investment income	$	431.8		$	389.5		$	403.2

Derivative Instruments

The following table shows the status of our derivative instruments at December 31, 2015 and 2014, and for the years ended December 31, 2015, 2014, and 2013:

(millions)								Balance Sheet2					Comprehensive Income Statement
	Notional Value1								Assets (Liabilities) Fair Value				Pretax Net Realized Gains (Losses)
													Years ended
	December 31,								December 31,				December 31,
Derivatives designated as:	2015		2014		2013		Purpose	Classification	2015		2014		2015			2014			2013
Hedging instruments
Closed:
Ineffective cash flow hedge	$	18	$	44	$	54	Manage interest rate risk	NA	$	0	$	0	$	0.2		$	0.5		$	0.8
Non-hedging instruments
Assets:
Interest rate swaps	750		750		750		Manage portfolio duration	Investments - fixed maturities	4.4		15.8		(23.4		)	(64.6		)	59.8
Closed:
Interest rate swaps	0		0		1,263		Manage portfolio duration	NA	0		0		0			0			(4.0		)
U.S. Treasury Note futures	691		0		0		Manage portfolio duration	NA	0		0		2.5			0			0
Total	NA		NA		NA				$	4.4	$	15.8	$	(20.7	)	$	(64.1	)	$	56.6

¹ The amounts represent the value held at year end for open positions and the maximum amount held during the year for closed positions.

² To the extent we hold both derivative assets and liabilities with the same counterparty that are subject to an enforceable master netting arrangement, we expect that we will report them on a gross basis on our balance sheets, consistent with our historical presentation.

NA = Not Applicable

XML

Fair Value (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Composition of Investment Portfolio by Major Security Type

The composition of the investment portfolio by major security type and our outstanding debt was:

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2015
Fixed maturities:
U.S. government obligations	$	2,429.2	$	0	$	0	$	2,429.2	$	2,425.4
State and local government obligations	0		2,721.4		0		2,721.4		2,677.6
Foreign government obligations	18.6		0		0		18.6		18.6
Corporate debt securities	0		3,691.6		0		3,691.6		3,713.2
Subtotal	2,447.8		6,413.0		0		8,860.8		8,834.8
Asset-backed securities:
Residential mortgage-backed	0		1,726.7		0		1,726.7		1,726.0
Agency residential pass-through obligations	0		89.3		0		89.3		90.3
Commercial mortgage-backed	0		2,643.3		9.9		2,653.2		2,665.7
Other asset-backed	0		1,767.9		0		1,767.9		1,771.1
Subtotal asset-backed securities	0		6,227.2		9.9		6,237.1		6,253.1
Redeemable preferred stocks:
Financials	0		92.0		0		92.0		76.8
Utilities	0		51.2		0		51.2		65.1
Industrials	0		91.1		0		91.1		118.1
Subtotal redeemable preferred stocks	0		234.3		0		234.3		260.0
Total fixed maturities	2,447.8		12,874.5		9.9		15,332.2		15,347.9
Equity securities:
Nonredeemable preferred stocks:
Financials	154.9		627.7		0		782.6		674.2
Subtotal nonredeemable preferred stocks	154.9		627.7		0		782.6		674.2
Common equities:
Common stocks	2,650.2		0		0		2,650.2		1,494.0
Other risk investments	0		0		0.3		0.3		0.3
Subtotal common equities	2,650.2		0		0.3		2,650.5		1,494.3
Total fixed maturities and equity securities	5,252.9		13,502.2		10.2		18,765.3		17,516.4
Short-term investments	2,056.3		115.7		0		2,172.0		2,172.0
Total portfolio	$	7,309.2	$	13,617.9	$	10.2	$	20,937.3	$	19,688.4
Debt	$	0	$	2,722.9	$	164.9	$	2,887.8	$	2,707.9

	Fair Value
(millions)	Level 1		Level 2		Level 3		Total		Cost
December 31, 2014
Fixed maturities:
U.S. government obligations	$	2,667.1	$	0	$	0	$	2,667.1	$	2,641.1
State and local government obligations	0		2,139.2		0		2,139.2		2,095.7
Foreign government obligations	14.2		0		0		14.2		14.2
Corporate debt securities	0		2,836.7		0		2,836.7		2,813.9
Subtotal	2,681.3		4,975.9		0		7,657.2		7,564.9
Asset-backed securities:
Residential mortgage-backed	0		1,658.5		0		1,658.5		1,635.5
Agency residential pass-through obligations	0		0		0		0		0
Commercial mortgage-backed	0		2,304.0		11.6		2,315.6		2,278.7
Other asset-backed	0		1,638.7		0		1,638.7		1,634.9
Subtotal asset-backed securities	0		5,601.2		11.6		5,612.8		5,549.1
Redeemable preferred stocks:
Financials	0		97.9		0		97.9		77.3
Utilities	0		65.3		0		65.3		65.0
Industrials	0		116.0		0		116.0		117.9
Subtotal redeemable preferred stocks	0		279.2		0		279.2		260.2
Total fixed maturities	2,681.3		10,856.3		11.6		13,549.2		13,374.2
Equity securities:
Nonredeemable preferred stocks:
Financials	204.1		554.1		69.3		827.5		590.4
Subtotal nonredeemable preferred stocks	204.1		554.1		69.3		827.5		590.4
Common equities:
Common stocks	2,491.9		0		0		2,491.9		1,288.8
Other risk investments	0		0		0.4		0.4		0.4
Subtotal common equities	2,491.9		0		0.4		2,492.3		1,289.2
Total fixed maturities and equity securities	5,377.3		11,410.4		81.3		16,869.0		15,253.8
Short-term investments	1,937.0		212.0		0		2,149.0		2,149.0
Total portfolio	$	7,314.3	$	11,622.4	$	81.3	$	19,018.0	$	17,402.8
Debt	$	0	$	2,527.5	$	0	$	2,527.5	$	2,164.7

Summary of Changes in Fair Value Associated With Level 3 Assets

The following tables provide a summary of changes in fair value associated with Level 3 assets for the years ended December 31, 2015 and 2014:

	Level 3 Fair Value
(millions)	Fair Value at Dec. 31, 2014		Calls/ Maturities/ Paydowns			Purchases		Sales		Net Realized (Gain)/Loss on Sales			Change in Valuation			Net Transfers In (Out)			Fair Value at Dec. 31, 2015
Fixed maturities:
Asset-backed securities:
Residential mortgage-backed	$	0	$	0		$	0	$	0	$	0		$	0		$	0		$	0
Commercial mortgage-backed	11.6		(1.3		)	0		0		0			(0.4		)	0			9.9
Total fixed maturities	11.6		(1.3		)	0		0		0			(0.4		)	0			9.9
Equity securities:
Nonredeemable preferred stocks:
Financials1	69.3		0			0		0		(39.4		)	(1.4		)	(28.5		)	0
Common equities:
Other risk investments	0.4		0			0		0		0			(0.1		)	0			0.3
Total Level 3 securities	$	81.3	$	(1.3	)	$	0	$	0	$	(39.4	)	$	(1.9	)	$	(28.5	)	$	10.2

¹ The $69.3 million decrease during the year reflects the reclassification of our 5% interest in ARX upon our acquisition of a controlling interest in ARX. The $39.4 million reflects our inception-to-date gain recognized, including the $1.4 million reduction in valuation that occurred during the first six months of 2015.

	Level 3 Fair Value
(millions)	Fair Value at Dec. 31, 2013		Calls/ Maturities/ Paydowns			Purchases		Sales			Net Realized (Gain)/Loss on Sales		Change in Valuation			Net Transfers In (Out)1			Fair Value at Dec. 31, 2014
Fixed maturities:
Asset-backed securities:
Residential mortgage-backed	$	0.2	$	0		$	0	$	(0.1	)	$	0.1	$	(0.2	)	$	0		$	0
Commercial mortgage-backed	29.0		(3.6		)	0		0			0		(0.2		)	(13.6		)	11.6
Total fixed maturities	29.2		(3.6		)	0		(0.1		)	0.1		(0.4		)	(13.6		)	11.6
Equity securities:
Nonredeemable preferred stocks:
Financials2	39.0		0			0		0			0		30.3			0			69.3
Common equities:
Other risk investments	0.5		(0.1		)	0		0			0		0			0			0.4
Total Level 3 securities	$	68.7	$	(3.7	)	$	0	$	(0.1	)	$	0.1	$	29.9		$	(13.6	)	$	81.3

¹ The $13.6 million was transferred out of Level 3 and into Level 2 due to an improvement in the security's underlying collateral and an increase in liquidity and market activity in comparable securities.

² The $30.3 million represents a net holding period gain on our investment in ARX, which is reflected in net realized gains (losses) on securities in the comprehensive income statement.

Summary of Quantitative Information about Level 3 Fair Value Measurements

The following table provides a summary of the quantitative information about Level 3 fair value measurements for our applicable securities at December 31:

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at Dec. 31, 2015		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Fixed maturities:
Asset-backed securities:
Commercial mortgage-backed	$	9.9	External vendor	Prepayment rate1	0
Total fixed maturities	9.9
Equity securities:
Nonredeemable preferred stocks:
Financials	0		NA	NA	NA
Subtotal Level 3 securities	9.9
Third-party pricing exemption securities2	0.3
Total Level 3 securities	$	10.2

NA= Not Applicable since we did not hold any nonredeemable preferred stock Level 3 securities at December 31, 2015.

¹ Assumes that one security has 0% of the principal amount of the underlying loans that will be paid off prematurely in each year.

² The fair values for these securities were obtained from non-binding external sources where unobservable inputs are not reasonably available to us.

	Quantitative Information about Level 3 Fair Value Measurements
($ in millions)	Fair Value at Dec. 31, 2014		Valuation Technique	Unobservable Input	Unobservable Input Assumption
Fixed maturities:
Asset-backed securities:
Commercial mortgage-backed	$	11.6	External vendor	Prepayment rate1	0
Total fixed maturities	11.6
Equity securities:
Nonredeemable preferred stocks:
Financials	69.3		Multiple of tangible net book value	Price to book ratio multiple	2.6
Subtotal Level 3 securities	80.9
Third-party pricing exemption securities2	0.4
Total Level 3 securities	$	81.3

¹ Assumes that one security has 0% of the principal amount of the underlying loans that will be paid off prematurely in each year.

² Thefair values for these securities were obtained from non-binding external sources where unobservable inputs are not reasonably available to us.

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Debt (Tables)

12 Months Ended

Dec. 31, 2015

Debt Table

Debt at December 31 consisted of:

	2015				2014
(millions)	Carrying Value		Fair Value		Carrying Value		Fair Value
3.75% Senior Notes due 2021 (issued: $500.0, August 2011)	$	498.1	$	528.7	$	497.8	$	535.6
6 5/8% Senior Notes due 2029 (issued: $300.0, March 1999)	295.7		376.0		295.5		400.6
6.25% Senior Notes due 2032 (issued: $400.0, November 2002)	395.0		490.6		394.8		527.9
4.35% Senior Notes due 2044 (issued: $350.0, April 2014)	346.4		352.8		346.3		378.9
3.70% Senior Notes due 2045 (issued: $400.0, January 2015)	395.0		362.0		0		0
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (issued: $1,000.0, June 2007; outstanding: $614.4 and $632.8)	612.8		612.8		630.3		684.5
Other debt instruments	164.9		164.9		0		0
Total	$	2,707.9	$	2,887.8	$	2,164.7	$	2,527.5

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

The other debt instruments reported in the table above represent ARX indebtedness and consist of:

Type of debt instrument	Number of Instruments	Carrying Value		Stated Maturity Date(s)
Term loans	2	$	87.1	December 2018 and 2019
Junior subordinated notes1	2	41.2		June 2036 and 2037
Senior notes	4	24.0		Various2
Surplus note	1	12.6		November 2021
Total		$	164.9

¹ ARX issued junior subordinated floating rate notes to trusts established by ARX in connection with issuances of trust preferred securities by the trust(discussed below).

² The senior notes mature in May 2033, April 2034, December 2034, and June 2035.

Aggregate Principal Payments on Debt Outstanding

Aggregate required principal payments on debt outstanding at December 31, 2015, are as follows:

(millions)
Year	Payments
2016	$	27.2
2017	27.2
2018	27.2
2019	13.4
2020	3.0
Thereafter	2,631.3
Total	$	2,729.3

Cash Flow Hedging [Member]

Unrealized Gain (Loss) on Interest Rate Cash Flow Hedges Included in Accumulated Other Comprehensive Income

The original unrealized gain (loss) at the time of each debt issuance and the unamortized balance at December 31, 2015, on a pretax basis, of these hedges, were as follows:

(millions)	Unrealized Gain (Loss) at Debt Issuance			Unamortized Balance at December 31, 2015
3.75% Senior Notes	$	(5.1	)	$	(3.1	)
6 5/8% Senior Notes	(4.2		)	(3.0		)
6.25% Senior Notes	5.1			3.9
4.35% Senior Notes	(1.6		)	(1.6		)
3.70% Senior Notes	(12.9		)	(12.6		)
6.70% Debentures	34.4			3.9

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Components of Income Tax Provision

The components of our income tax provision were as follows:

(millions)	2015			2014		2013
Current tax provision
Federal	$	655.3		$	594.4	$	460.2
State	14.7			0		0
Deferred tax expense (benefit)
Federal	(47.7		)	32.0		94.4
State	(11.2		)	0		0
Total income tax provision	$	611.1		$	626.4	$	554.6

Reconciliation of Provision (Benefit) for Income Taxes Reported in Consolidated Statements of Income with Tax at Statutory Rate

The provision for income taxes in the accompanying consolidated statements of comprehensive income differed from the statutory rate as follows:

($ in millions)	2015					2014					2013
Income before income taxes	$	1,911.6				$	1,907.4				$	1,720.0
Tax at statutory federal rate	$	669.1		35	%	$	667.6		35	%	$	602.0		35	%
Tax effect of:
Dividends received deduction	(19.8		)	(1	)	(18.3		)	(1	)	(17.6		)	(1	)
Exempt interest income	(17.8		)	(1	)	(13.8		)	(1	)	(13.1		)	(1	)
Non-taxable gain1	(13.8		)	(1	)	0			0		0			0
Tax-deductible dividends	(7.9		)	0		(6.5		)	0		(13.6		)	(1	)
State income taxes, net of federal taxes	2.3			0		0			0		0			0
Other items, net	(1.0		)	0		(2.6		)	0		(3.1		)	0
Total income tax provision	$	611.1		32	%	$	626.4		33	%	$	554.6		32	%

Components of Net Deferred Tax Assets

At December 31, 2015 and 2014, the components of the net deferred tax asset (liability) were as follows:

(millions)	2015			2014
Federal deferred tax assets:
Unearned premiums reserve	$	453.3		$	378.8
Investment basis differences	40.5			60.6
Non-deductible accruals	231.4			208.0
Loss and loss adjustment expense reserves	75.3			76.9
Hedges on forecasted transactions	4.4			0
Other	9.6			7.5
Federal deferred tax liabilities:
Net unrealized gains on securities	(436.7		)	(550.3		)
Hedges on forecasted transactions	0			(0.8		)
Deferred acquisition costs	(197.4		)	(160.0		)
Property and equipment	(110.7		)	(100.9		)
Prepaid expenses	(11.9		)	(11.4		)
Intangible assets-ARX acquisition	(166.4		)	0
Deferred gain on extinguishment of debt	(2.2		)	(3.0		)
Other	(7.0		)	(4.3		)
Net federal deferred tax liability	(117.8		)	(98.9		)
Net state deferred tax asset	8.5			0
Net deferred tax liability	$	(109.3	)	$	(98.9	)

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Loss And Loss Adjustment Expense Reserves (Tables)

12 Months Ended

Dec. 31, 2015

Loss and Loss Adjustment Expense Reserves Disclosures [Abstract]

Activity in Loss and Loss Adjustment Expense Reserves

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

(millions)	2015			2014			2013
Balance at January 1	$	8,857.4		$	8,479.7		$	7,838.4
Less reinsurance recoverables on unpaid losses	1,185.9			1,045.9			862.1
Net balance at January 1	7,671.5			7,433.8			6,976.3
Net loss and loss adjustment reserves acquired1	222.4			0			0
Total beginning reserves	7,893.9			7,433.8			6,976.3
Incurred related to:
Current year	14,657.1			13,330.3			12,427.3
Prior years	(315.1		)	(24.1		)	45.1
Total incurred	14,342.0			13,306.2			12,472.4
Paid related to:
Current year	9,577.3			8,831.5			8,095.0
Prior years	4,062.3			4,237.0			3,919.9
Total paid	13,639.6			13,068.5			12,014.9
Net balance at December 31	8,596.3			7,671.5			7,433.8
Plus reinsurance recoverables on unpaid losses	1,442.7			1,185.9			1,045.9
Balance at December 31	$	10,039.0		$	8,857.4		$	8,479.7

¹Net reserves acquired in ARX acquisition.

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Reinsurance (Tables)

12 Months Ended

Dec. 31, 2015

Reinsurance Disclosures [Abstract]

Effect of Reinsurance on Premiums Written and Earned

The effect of reinsurance on premiums written and earned for the years ended December 31, was as follows:

	2015						2014						2013
(millions)	Written			Earned			Written			Earned			Written			Earned
Direct premiums	$	21,086.5		$	20,454.1		$	18,914.8		$	18,648.4		$	17,562.8		$	17,317.9
Ceded:
Regulated Plans	(358.0		)	(362.6		)	(251.9		)	(241.4		)	(216.2		)	(205.4		)
Non-Regulated Plans	(164.5		)	(192.4		)	(8.3		)	(8.5		)	(6.9		)	(9.1		)
Total Ceded	(522.5		)	(555.0		)	(260.2		)	(249.9		)	(223.1		)	(214.5		)
Net premiums	$	20,564.0		$	19,899.1		$	18,654.6		$	18,398.5		$	17,339.7		$	17,103.4

Prepaid Reinsurance Premiums and Reinsurance Recoverables

	Prepaid Reinsurance Premiums								Reinsurance Recoverables
($ in millions)	2015				2014				2015				2014
Regulated Plans:
MCCA	$	31.4	16	%	$	32.8	38	%	$	1,217.6	82	%	$	1,018.8	83	%
CAIP	37.1		19		26.5		31		134.0		9		110.1		9
NCRF	25.6		13		21.9		26		56.7		4		51.1		4
NFIP	45.0		22		0		0		10.4		1		0		0
Other	0		0		0		0		2.8		0		2.0		0
Total Regulated Plans	139.1		70		81.2		95		1,421.5		96		1,182.0		96
Non-Regulated Plans:
Property	52.6		26		0		0		35.5		2		0		0
Other	7.6		4		4.1		5		31.8		2		49.9		4
Total Non-Regulated Plans	60.2		30		4.1		5		67.3		4		49.9		4
Total	$	199.3	100	%	$	85.3	100	%	$	1,488.8	100	%	$	1,231.9	100	%

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2015

Amounts Charged to Income for Employees Incentive Compensation Plans

The amounts charged to income for Progressive and ARX incentive compensation plans for the years ended December 31, were:

	2015				2014				2013
(millions)	Pretax		After Tax		Pretax		After Tax		Pretax		After Tax
Non-equity incentive plans - cash	$	337.7	$	219.5	$	266.2	$	173.0	$	234.5	$	152.4
Equity incentive plans:
Equity awards	64.5		41.9		51.4		33.4		64.9		42.2
Liability awards	1.7		1.1		0		0		0		0

Assets Held in Deferral Plan Irrevocable Grantor Trust Account

The Deferral Plan Irrevocable Grantor Trust account held the following assets at December 31:

(millions)	2015		2014
Progressive common shares1	$	108.5	$	83.2
Other investment funds2	124.8		123.9
Total	$	233.3	$	207.1

¹Includes 4.4 million and 3.6 million common shares as of December 31, 2015 and 2014, respectively, to be distributed in common shares.

² Amount is included in other assets on the balance sheet.

Employee

Summary of Restricted Stock Activity

A summary of all employee restricted equity award activity during the years ended December 31, follows:

	2015				2014				2013
Restricted Equity Awards	Number of Shares1		Weighted Average Grant Date Fair Value		Number of Shares1		Weighted Average Grant Date Fair Value		Number of Shares1		Weighted Average Grant Date Fair Value
Beginning of year	9,051,564		$	21.27	9,918,575		$	20.13	11,625,981		$	17.80
Add (deduct):
Granted2	2,489,976		25.20		3,542,984		19.32		2,738,809		22.73
Vested	(3,682,644	)	19.53		(4,228,673	)	16.99		(4,293,605	)	15.54
Forfeited	(133,669	)	21.63		(181,322	)	20.75		(152,610	)	18.28
End of year3,4	7,725,227		$	23.37	9,051,564		$	21.27	9,918,575		$	20.13

¹ Includes both restricted stock units and restricted stock. Upon vesting, all units will be converted on a one-for-one basis into Progressive common shares funded from existing treasury shares. All performance-based awards are included at their target amounts.

² We reinvest dividend equivalents on restricted stock units. For 2015, 2014, and 2013, the number of units "granted" shown in the table above includes 196,947, 538,749, and 161,077 of dividend equivalent units, respectively, at a weighted average grant date fair value of $0, since the dividends were factored into the grant date fair value of the original grant.

³ At December 31, 2015, the number of shares included 2,025,871 performance-based awards at their target amounts. We expect 1,946,565 of these performance-based awards to vest, based upon our current estimate of the likelihood of achieving these pre-determined performance goals.

⁴ At December 31, 2015, the total unrecognized compensation cost related to unvested equity awards was $78.3 million, which includes performance-based awards at their currently estimated vesting value. This compensation expense will be recognized into the income statement over the weighted average vesting period of 2.3 years.

Director

Summary of Restricted Stock Activity

A summary of all directors’ restricted stock activity during the years ended December 31, follows:

	2015				2014				2013
Restricted Stock	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
Beginning of year	81,579		$	25.45	93,254		$	26.19	92,957		$	21.41
Add (deduct):
Granted	89,427		27.23		90,649		25.44		93,254		26.19
Vested	(81,579	)	25.45		(93,254	)	26.19		(92,957	)	21.41
Forfeited	0		0		(9,070	)	25.36		0		0
End of year	89,427		$	27.23	81,579		$	25.45	93,254		$	26.19

Employee Stock Option

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable [Table Text Block]

A summary of all ARX employee stock option activity since acquisition, follows:

	2015
Options Outstanding	Number of Shares		Weighted Average Exercise Price
At acquisition	26,000		$	513.72
Add (deduct):
Exercised1	(1,005	)	197.01
End of year	24,995		$	526.46
Exercisable, end of year	12,995		$	386.69

¹ At the time of exercise, the value earned by the option holders was $1.1 million.

	2015
Non-Vested Options Outstanding	Number of Shares		Weighted Average Exercise Price
At acquisition	14,800		$	675.55
Add (deduct):
Vested	(2,800	)	665.85
End of year1	12,000		$	677.81

¹ At December 31, 2015, the remaining unrecognized compensation cost related to unvested options was $2.9 million and the remaining weighted average vesting period on the unvested awards is 1.72 years.

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Reconciliation of Revenue and Operating Income from Segments to Consolidated

Following are the operating results for the years ended December 31:

	2015						2014						2013
(millions)	Revenues			Pretax Profit (Loss)			Revenues			Pretax Profit (Loss)			Revenues			Pretax Profit (Loss)
Personal Lines
Agency	$	9,108.6		$	713.2		$	9,087.0		$	683.0		$	8,601.5		$	542.9
Direct	8,185.9			403.4			7,474.0			423.4			6,740.1			473.9
Total Personal Lines1	17,294.5			1,116.6			16,561.0			1,106.4			15,341.6			1,016.8
Commercial Lines	1,995.9			318.3			1,837.5			315.8			1,761.6			114.1
Property2	609.1			61.3			0			0			0			0
Other indemnity3	(0.4		)	(1.0		)	0			(11.9		)	0.2			(10.8		)
Total underwriting operations	19,899.1			1,495.2			18,398.5			1,410.3			17,103.4			1,120.1
Fees and other revenues4	302.0			NA			309.1			NA			291.8			NA
Service businesses	86.3			8.8			56.0			5.1			39.6			0.8
Investments5	567.3			544.5			632.6			613.7			740.4			721.6
Gains (losses) on extinguishment of debt	(0.9		)	(0.9		)	(4.8		)	(4.8		)	(4.3		)	(4.3		)
Interest expense	NA			(136.0		)	NA			(116.9		)	NA			(118.2		)
Consolidated total	$	20,853.8		$	1,911.6		$	19,391.4		$	1,907.4		$	18,170.9		$	1,720.0

NA = Not Applicable

¹ Personal auto insurance accounted for 92% of the total Personal Lines segment net premiums earned in 2015, compared to 92% in 2014 and 91% in 2013; insurance for our special lines products (e.g., motorcycles, ATVs, RVs, manufactured homes, watercraft, and snowmobiles) accounted for the balance of the Personal Lines net premiums earned.

² We began reporting our Property business as a segment on April 1, 2015, when we acquired a controlling interest in ARX; Property business written prior to that date was negligible. During 2015, amounts include $45.2 million of amortization/depreciation expense associated with the acquisition of a controlling interest in ARX. Although this expense is included in our Property segment, it is not reported in the consolidated results of ARX Holding Corp. and, therefore, will not affect the value of the noncontrolling interest.

³ Our professional liability group recognized $0.4 million of reinstatement premiums paid to our reinsurers pursuant to their reinsurance contracts during 2015. This premium reduction is reflected in our companywide total results. In total, our run-off businesses generated an underwriting loss of $1.0 million in 2015.

⁴ Pretax profit (loss) for fees and other revenues are allocated to operating segments.

⁵ Revenues represent recurring investment income and total net realized gains (losses) on securities; pretax profit is net of investment expenses.

Underwriting Margins and Combined Ratios for our Underwriting Operations

Following are the underwriting margins/combined ratios for our underwriting operations for the years ended December 31:

	2015			2014			2013
	Underwriting Margin		Combined Ratio	Underwriting Margin		Combined Ratio	Underwriting Margin		Combined Ratio
Personal Lines
Agency	7.8	%	92.2	7.5	%	92.5	6.3	%	93.7
Direct	4.9		95.1	5.7		94.3	7.0		93.0
Total Personal Lines	6.5		93.5	6.7		93.3	6.6		93.4
Commercial Lines	15.9		84.1	17.2		82.8	6.5		93.5
Property1	10.1		89.9	0		0	0		0
Other indemnity2	NM		NM	NM		NM	NM		NM
Total underwriting operations	7.5		92.5	7.7		92.3	6.5		93.5

¹Included is 7.4 points of amortization/depreciation expense associated with the acquisition of a controlling interest in ARX.

² Underwriting margins/combined ratios are not meaningful (NM) for our other indemnity businesses due to the low level of premiums earned by, and the variability of loss costs in, such businesses.

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Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Components of Other Comprehensive Income (Loss)

The components of other comprehensive income (loss), including reclassification adjustments by income statement line item, for the years ended December 31, were as follows:

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2014	$	1,574.0		$	(550.9	)	$	1,023.1		$	1,021.9		$	1.5		$	(0.3	)	$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	(198.7		)	67.5			(131.2		)	(131.2		)	0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0			0			0			0			0			0			0
Forecasted transactions	(12.9		)	4.5			(8.4		)	0			(8.4		)	0			0
Foreign currency translation adjustment	(1.8		)	0.6			(1.2		)	0			0			(1.2		)	0
Loss attributable to noncontrolling interest	1.6			(0.5		)	1.1			0			0			0			1.1
Total other comprehensive income (loss) before reclassifications	(211.8		)	72.1			(139.7		)	(131.2		)	(8.4		)	(1.2		)	1.1
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(23.8		)	8.4			(15.4		)	(15.4		)	0			0			0
Net realized gains (losses) on securities	149.7			(52.5		)	97.2			97.1			0.1			0			0
Interest expense	1.8			(0.6		)	1.2			0			1.2			0			0
Total reclassification adjustment for amounts realized in net income	127.7			(44.7		)	83.0			81.7			1.3			0			0
Total other comprehensive income (loss)	(339.5		)	116.8			(222.7		)	(212.9		)	(9.7		)	(1.2		)	1.1
Balance at December 31, 2015	$	1,234.5		$	(434.1	)	$	800.4		$	809.0		$	(8.2	)	$	(1.5	)	$	1.1

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2013	$	1,464.1		$	(512.4	)	$	951.7		$	947.0		$	4.1		$	0.6		$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	362.1			(126.7		)	235.4			235.4			0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0			0			0			0			0			0			0
Forecasted transactions	(1.6		)	0.6			(1.0		)	0			(1.0		)	0			0
Foreign currency translation adjustment	(1.3		)	0.4			(0.9		)	0			0			(0.9		)	0
Loss attributable to noncontrolling interest	0			0			0			0			0			0			0
Total other comprehensive income (loss) before reclassifications	359.2			(125.7		)	233.5			235.4			(1.0		)	(0.9		)	0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(7.7		)	2.7			(5.0		)	(5.0		)	0			0			0
Net realized gains (losses) on securities	255.0			(89.2		)	165.8			165.5			0.3			0			0
Interest expense	2.0			(0.7		)	1.3			0			1.3			0			0
Total reclassification adjustment for amounts realized in net income	249.3			(87.2		)	162.1			160.5			1.6			0			0
Total other comprehensive income (loss)	109.9			(38.5		)	71.4			74.9			(2.6		)	(0.9		)	0
Balance at December 31, 2014	$	1,574.0		$	(550.9	)	$	1,023.1		$	1,021.9		$	1.5		$	(0.3	)	$	0

										Components of Changes in Accumulated Other Comprehensive Income (after tax)
(millions)	Pretax total accumulated other comprehensive income			Total tax (provision) benefit			After tax total accumulated other comprehensive income			Total net unrealized gains  (losses) on securities			Net unrealized gains on forecasted transactions			Foreign currency translation adjustment			Loss attributable to NCI
Balance at December 31, 2012	$	1,340.0		$	(469.0	)	$	871.0		$	862.7		$	6.1		$	2.2		$	0
Other comprehensive income (loss) before reclassifications:
Investment securities	368.2			(128.9		)	239.3			239.3			0			0			0
Net non-credit related OTTI losses, adjusted for valuation changes	0.4			(0.1		)	0.3			0.3			0			0			0
Forecasted transactions	0			0			0			0			0			0			0
Foreign currency translation adjustment	(2.5		)	0.9			(1.6		)	0			0			(1.6		)	0
Loss attributable to noncontrolling interest	0			0			0			0			0			0			0
Total other comprehensive income (loss) before reclassifications	366.1			(128.1		)	238.0			239.6			0			(1.6		)	0
Less: Reclassification adjustment for amounts realized in net income by income statement line item:
Net impairment losses recognized in earnings	(5.7		)	2.0			(3.7		)	(3.7		)	0			0			0
Net realized gains (losses) on securities	245.5			(86.0		)	159.5			159.0			0.5			0			0
Interest expense	2.2			(0.7		)	1.5			0			1.5			0			0
Total reclassification adjustment for amounts realized in net income	242.0			(84.7		)	157.3			155.3			2.0			0			0
Total other comprehensive income (loss)	124.1			(43.4		)	80.7			84.3			(2.0		)	(1.6		)	0
Balance at December 31, 2013	$	1,464.1		$	(512.4	)	$	951.7		$	947.0		$	4.1		$	0.6		$	0

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Minimum Commitments under Noncancelable Operating Lease Agreements

The minimum commitments under these agreements at December 31, 2015, were as follows:

(millions)	Commitments
2016	$	50.4
2017	47.8
2018	37.3
2019	24.7
2020	9.6
Thereafter	1.8
Total	$	171.6

Expense Incurred for Leases

The expense we incurred for the leases disclosed above, as well as other operating leases that may be cancelable or have terms less than one year, was:

(millions)	Expense
2015	$	66.6
2014	63.4
2013	64.6

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Dividends (Tables)

12 Months Ended

Dec. 31, 2015

Dividends [Abstract]

Dividends

Following is a summary of our shareholder dividends, both variable and special, that were declared in the last three years:

(millions, except per share amounts)			Amount
Dividend Type	Declared	Paid	Per Share		Total1
Annual – Variable	December 2015	February 2016	$	0.8882	$	519.2
Annual – Variable	December 2014	February 2015	0.6862		404.1
Annual – Variable	December 2013	February 2014	0.4929		293.9
Special	December 2013	February 2014	1.0000		596.3

¹ Based on shares outstanding as of the record date.

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Redeemable Noncontrolling Interest (Tables)

12 Months Ended

Dec. 31, 2015

Noncontrolling Interest [Line Items]

Redeemable Noncontrolling Interest [Table Text Block]

The components of redeemable noncontrolling interest (NCI) at December 31, 2015, were:

(millions)
Balance at March 31, 2015	$	0
Fair value at date of acquisition	411.5
Net income attributable to NCI	32.9
Other comprehensive loss attributable to NCI	(1.1		)
Purchase of shares from NCI	(12.6		)
Change in redemption value of NCI	34.2
Balance at December 31, 2015	$	464.9

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Acquisitions (Tables)

12 Months Ended

Dec. 31, 2015

Business Combinations [Abstract]

Schedule of Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The following table reports the intangible assets by asset category as of December 31, 2015:

($ in millions)
Category	Value at Acquisition		Accumulated Amortization		Useful Life
Policies in force	$	256.2	$	27.5	7 years
Agency relationships	159.2		8.5		14 years
Software	69.1		6.5		8 years
Trade name	34.8		2.6		10 years
Agent licenses	1.1		0		Indefinite
Total	$	520.4	$	45.1

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SCHEDULE I - Summary Of Investments - Other Than Investments in Related Parties Summary Of Investments - Other than Investments In Related Parties (Detail) $ in Millions	Dec. 31, 2015 USD ($)
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	$ 19,688.4
Fair Value	20,937.3
Amount At Which Shown In The Balance Sheet	20,937.3
Fixed maturities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	15,347.9
Fair Value	15,332.2
Amount At Which Shown In The Balance Sheet	15,332.2
Fixed maturities | Bonds | US Government and Government Agencies and Authorities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	2,425.4
Fair Value	2,429.2
Amount At Which Shown In The Balance Sheet	2,429.2
Fixed maturities | Bonds | State and local government obligations
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	2,677.6
Fair Value	2,721.4
Amount At Which Shown In The Balance Sheet	2,721.4
Fixed maturities | Bonds | Foreign government obligations
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	18.6
Fair Value	18.6
Amount At Which Shown In The Balance Sheet	18.6
Fixed maturities | Bonds | Public Utility, Bonds
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	140.3
Fair Value	139.7
Amount At Which Shown In The Balance Sheet	139.7
Fixed maturities | Bonds | Corporate And Other Debt Securities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	3,572.9
Fair Value	3,551.9
Amount At Which Shown In The Balance Sheet	3,551.9
Fixed maturities | Bonds | Asset-backed Securities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	6,253.1
Fair Value	6,237.1
Amount At Which Shown In The Balance Sheet	6,237.1
Fixed maturities | Redeemable preferred stocks
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	260.0
Fair Value	234.3
Amount At Which Shown In The Balance Sheet	234.3
Equity securities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	2,168.5
Fair Value	3,433.1
Amount At Which Shown In The Balance Sheet	3,433.1
Equity securities | Common Stocks, by Industry | Utilities
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	113.1
Fair Value	151.8
Amount At Which Shown In The Balance Sheet	151.8
Equity securities | Common Stocks, by Industry | Financials
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	264.1
Fair Value	484.2
Amount At Which Shown In The Balance Sheet	484.2
Equity securities | Common Stocks, by Industry | Industrials
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	1,117.1
Fair Value	2,014.5
Amount At Which Shown In The Balance Sheet	2,014.5
Equity securities | Nonredeemable preferred stocks
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	674.2
Fair Value	782.6
Amount At Which Shown In The Balance Sheet	782.6
Short-term investments
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Cost	2,172.0	[1]
Fair Value	2,172.0	[1]
Amount At Which Shown In The Balance Sheet	$ 2,172.0	[1]

[1] Includes $2.5 million in treasury bills issued by the Australian government.

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SCHEDULE I - Summary Of Investments - Other Than Investments in Related Parties Summary Of Investments - Other than Investments In Related Parties (Parenthetical) (Detail) $ in Millions	Dec. 31, 2015 USD ($)
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Fair Value	$ 20,937.3
Cost	19,688.4
Amount At Which Shown In The Balance Sheet	20,937.3
Short-term investments
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Fair Value	2,172.0	[1]
Cost	2,172.0	[1]
Amount At Which Shown In The Balance Sheet	2,172.0	[1]
Short-term investments | Foreign Government Debt
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items]
Fair Value	2.5
Cost	2.5
Amount At Which Shown In The Balance Sheet	$ 2.5

[1] Includes $2.5 million in treasury bills issued by the Australian government.

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SCHEDULE II - Condensed Financial Information Of Registrant Condensed Statements Of Comprehensive Income (Parent Company) (Detail) - USD ($) $ in Millions		9 Months Ended	12 Months Ended
		Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenues
Gains (losses) on extinguishment of debt		$ (0.9)	$ (0.9)	$ (4.8)	$ (4.3)
Total revenues			20,853.8	19,391.4	18,170.9
Expenses
Interest expense			136.0	116.9	118.2
Total expenses			18,942.2	17,484.0	16,450.9
Income before income taxes			1,911.6	1,907.4	1,720.0
Provision (benefit) for income taxes			611.1	626.4	554.6
Net income attributable to Progressive			1,267.6	1,281.0	1,165.4
Other comprehensive income (loss)			(223.8)	71.4	80.7
Comprehensive income			1,044.9	1,352.4	1,246.1
Parent Company
Revenues
Dividends from subsidiaries			852.5	1,000.2	1,119.7
Undistributed income (loss) from subsidiaries			500.0	358.3	117.5
Equity in net income of subsidiaries	[1]		1,352.5	1,358.5	1,237.2
Intercompany investment income	[1]		3.9	2.4	2.8
Gains (losses) on extinguishment of debt			(0.9)	(4.8)	(4.3)
Other Income	[2]		0.0	0.0	2.6
Total revenues			1,355.5	1,356.1	1,238.3
Expenses
Interest expense			136.1	120.2	121.2
Deferred compensation	[3]		5.3	2.8	9.5
Other operating costs and expenses			5.4	4.4	4.0
Total expenses			146.8	127.4	134.7
Income before income taxes			1,208.7	1,228.7	1,103.6
Provision (benefit) for income taxes			(58.9)	(52.3)	(61.8)
Net income attributable to Progressive			1,267.6	1,281.0	1,165.4
Other comprehensive income (loss)			(222.7)	71.4	80.7
Comprehensive income			$ 1,044.9	$ 1,352.4	$ 1,246.1

[1] Eliminated in consolidation.

[2] Represents gain on net death benefit received on life insurance policies.

[3] See Note 4 – Employee Benefit Plans in these condensed financial statements.

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SCHEDULE II - Condensed Financial Information Of Registrant Condensed Balance Sheets (Parent Company) (Detail) - USD ($) $ in Millions		Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Assets
Other assets		$ 335.8		$ 288.5
Total assets		29,819.3		25,787.6
Liabilities and Shareholders' Equity
Accounts payable, accrued expenses, and other liabilities		2,067.8		1,893.8
Dividend payable		519.2		404.1
Debt		2,707.9		2,164.7
Total liabilities		22,065.0		18,859.0
Redeemable Noncontrolling Interest, Equity, Carrying Amount		464.9	$ 0.0	0.0
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 214.0 and 209.8)		583.6		587.8
Paid-in capital		1,218.8		1,184.3
Retained earnings		4,686.6		4,133.4
Total accumulated other comprehensive income		800.4		1,023.1
Total shareholders' equity		7,289.4		6,928.6	$ 6,189.5
Total liabilities and shareholders' equity		29,819.3		25,787.6
Parent Company
Assets
Investment in affiliate		5.0		5.0
Investment in subsidiaries	[1]	9,192.3		7,423.5
Receivable from investment subsidiary	[1]	1,200.5		1,677.5
Intercompany receivable	[1]	406.0		413.0
Net deferred income taxes		90.6		74.5
Other assets		124.8		123.9
Total assets		11,019.2		9,717.4
Liabilities and Shareholders' Equity
Accounts payable, accrued expenses, and other liabilities		202.7		220.0
Dividend payable		519.2		404.1
Debt		2,543.0		2,164.7
Total liabilities		3,264.9		2,788.8
Redeemable Noncontrolling Interest, Equity, Carrying Amount		464.9		0.0
Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 214.0 and 209.8)		583.6		587.8
Paid-in capital		1,218.8		1,184.3
Retained earnings		4,686.6		4,133.4
Total accumulated other comprehensive income		800.4		1,023.1
Total shareholders' equity		7,289.4		6,928.6
Total liabilities and shareholders' equity		$ 11,019.2		$ 9,717.4

[1] Eliminated in consolidation.

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SCHEDULE II - Condensed Financial Information Of Registrant Condensed Balance Sheets (Parent Company) (Parenthetical) (Detail) - $ / shares shares in Millions	Dec. 31, 2015	Dec. 31, 2014
Condensed Financial Statements, Captions [Line Items]
Common Shares, par value (USD per share)	$ 1.00	$ 1.00
Common Shares, authorized (shares)	900.0	900.0
Common Shares, issued (shares)	797.6	797.6
Common Shares, treasury shares (shares)	214.0	209.8
Parent Company
Condensed Financial Statements, Captions [Line Items]
Common Shares, par value (USD per share)	$ 1.00	$ 1.00
Common Shares, authorized (shares)	900.0	900.0
Common Shares, issued (shares)	797.6	797.6
Common Shares, treasury shares (shares)	214.0	209.8

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SCHEDULE II - Condensed Financial Information Of Registrant Condensed Statements Of Cash Flows (Parent Company) (Detail) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash Flows From Operating Activities:
Net income attributable to Progressive		$ 1,267.6	$ 1,281.0	$ 1,165.4
Adjustments to reconcile net income attributable to Progressive to net cash provided by operating activities:
Amortization of equity-based compensation		66.2	51.4	64.9
(Gains) losses on extinguishment of debt	$ 0.9	0.9	4.8	4.3
Changes in:
Accounts payable, accrued expenses, and other liabilities		37.9	92.0	165.0
Income taxes		(107.2)	97.5	57.8
Other, net		(60.2)	(13.2)	(28.1)
Net cash provided by operating activities		2,292.9	1,725.6	1,899.9
Cash Flows From Investing Activities:
Net cash used in investing activities		(1,923.9)	(836.9)	(1,356.5)
Cash Flows From Financing Activities:
Tax benefit from exercise/vesting of equity-based compensation		16.8	12.8	10.3
Net proceeds from debt issuance		382.0	344.7	0.0
Payment of debt		(20.4)	0.0	(150.0)
Reacquisition of debt		(19.3)	(48.9)	(58.1)
Acquisition of treasury shares		(208.5)	(271.4)	(273.4)
Net cash used in financing activities		(252.8)	(855.4)	(646.8)
Increase (decrease) in cash		116.0	33.3	(104.0)
Cash, Beginning of year	108.4	108.4	75.1	179.1
Cash, End of year		224.4	108.4	75.1
Parent Company
Cash Flows From Operating Activities:
Net income attributable to Progressive		1,267.6	1,281.0	1,165.4
Adjustments to reconcile net income attributable to Progressive to net cash provided by operating activities:
Undistributed (income) loss from subsidiaries		(500.0)	(358.3)	(117.5)
Amortization of equity-based compensation		2.4	2.2	2.1
(Gains) losses on extinguishment of debt		0.9	4.8	4.3
Changes in:
Intercompany receivable		7.0	(105.4)	(11.4)
Accounts payable, accrued expenses, and other liabilities		(46.2)	18.2	19.4
Income taxes		12.3	61.1	(55.8)
Other, net		(3.1)	0.4	(16.3)
Net cash provided by operating activities		740.9	904.0	990.2
Cash Flows From Investing Activities:
Additional investments in equity securities of consolidated subsidiaries		(40.2)	(21.1)	(13.9)
Investment in affiliate		0.0	0.0	(4.0)
Payments to Acquire Businesses, Gross		(890.1)	0.0	0.0
(Paid to) received from investment subsidiary		409.1	(29.1)	(325.5)
Net cash used in investing activities		(521.2)	(50.2)	(343.4)
Cash Flows From Financing Activities:
Tax benefit from exercise/vesting of equity-based compensation		16.8	12.8	10.3
Net proceeds from debt issuance		394.9	346.3	0.0
Payment of debt		0.0	0.0	(150.0)
Reacquisition of debt		(19.3)	(48.9)	(58.1)
Dividends paid to shareholders		(403.6)	(892.6)	(175.6)
Acquisition of treasury shares		(208.5)	(271.4)	(273.4)
Net cash used in financing activities		(219.7)	(853.8)	(646.8)
Increase (decrease) in cash		0.0	0.0	0.0
Cash, Beginning of year	$ 0.0	0.0	0.0	0.0
Cash, End of year		$ 0.0	$ 0.0	$ 0.0

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SCHEDULE II - Condensed Financial Information Of Registrant Condensed Financial Information Of Registrant - Additional Information (Detail) - USD ($) $ in Billions	Dec. 31, 2015	Dec. 31, 2014
Disclosure Condensed Financial Information Of Registrant Additional Information [Abstract]
Securities Held in Consolidated Non-Insurance Subsidiary	$ 1.3	$ 1.9

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SCHEDULE II - Condensed Financial Information Of Registrant Progressive Corporation Cash Paid (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Taxes	$ 701.8	$ 515.0	$ 497.0
Interest	132.0	$ 116.0	$ 122.3
Parent Company
Income Taxes	625.0
Interest	$ 128.2

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SCHEDULE III - Supplementary Insurance Information Supplementary Insurance Information (Detail) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015		Dec. 31, 2014		Dec. 31, 2013
Supplementary Insurance Information, by Segment [Line Items]
Deferred policy acquisition costs	[1]	$ 564.1		$ 457.2		$ 447.6
Future policy benefits, losses, claims, and loss expenses	[1]	10,039.0		8,857.4		8,479.7
Unearned premiums	[1]	6,621.8		5,440.1		5,174.5
Other policy claims and benefits payable	[1]	0.0		0.0		0.0
Premium revenue		(19,899.1)		(18,398.5)		(17,103.4)
Net investment income		431.8	[1],[2]	389.5	[1],[2]	403.2
Benefits, claims, losses, and settlement expenses		(14,342.0)		(13,306.2)		(12,472.4)
Amortization of deferred policy acquisition costs		1,651.8		1,524.0		1,451.8
Other operating expenses		2,712.1		2,467.1		2,350.9
Net premiums written		(20,564.0)		(18,654.6)		(17,339.7)
Personal Lines
Supplementary Insurance Information, by Segment [Line Items]
Premium revenue		(17,294.5)		(16,561.0)		(15,341.6)
Benefits, claims, losses, and settlement expenses		(12,748.7)		(12,161.2)		(11,194.6)
Amortization of deferred policy acquisition costs		1,331.3		1,322.9		1,257.5
Other operating expenses		2,379.9		2,262.6		2,149.2
Net premiums written		(17,703.6)		(16,759.2)		(15,569.2)
Commercial Lines
Supplementary Insurance Information, by Segment [Line Items]
Premium revenue		(1,995.9)		(1,837.5)		(1,761.6)
Benefits, claims, losses, and settlement expenses		(1,244.5)		(1,133.4)		(1,267.3)
Amortization of deferred policy acquisition costs		219.4		201.1		194.3
Other operating expenses		232.6		204.2		201.2
Net premiums written		(2,171.2)		(1,895.4)		(1,770.5)
Property, Liability and Casualty Insurance Product Line
Supplementary Insurance Information, by Segment [Line Items]
Premium revenue		(609.1)		0.0		0.0
Benefits, claims, losses, and settlement expenses		(349.0)		0.0		0.0
Amortization of deferred policy acquisition costs		101.1		0.0		0.0
Other operating expenses		98.8		0.0		0.0
Net premiums written		(689.6)		0.0		0.0
Other Indemnity
Supplementary Insurance Information, by Segment [Line Items]
Premium revenue		(0.4)		0.0		(0.2)
Benefits, claims, losses, and settlement expenses		(0.2)		(11.6)		(10.5)
Amortization of deferred policy acquisition costs		0.0		0.0		0.0
Other operating expenses		0.8		0.3		0.5
Net premiums written		$ (0.4)		$ 0.0		$ 0.0

[1] Progressive does not allocate assets, liabilities, or investment income to operating segments.

[2] Excludes total net realized gains (losses) on securities.

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SCHEDULE IV - Reinsurance Reinsurance (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Gross Amount	$ 20,454,100,000	$ 18,648,400,000	$ 17,317,900,000
Ceded to Other Companies	555,000,000	249,900,000	214,500,000
Property, Liability and Casualty Insurance Product Line
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Gross Amount	20,454,100,000	18,648,400,000	17,317,900,000
Ceded to Other Companies	555,000,000	249,900,000	214,500,000
Assumed From Other Companies	0	0	0
Net Amount	$ 19,899,100,000	$ 18,398,500,000	$ 17,103,400,000
Percentage of Amount Assumed to Net	0.00%	0.00%	0.00%

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SCHEDULE VI-Supplemental Information Concerning Property - Casualty Insurance Operations Supplemental Information Concerning Property - Casualty Insurance Operations (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Disclosure Supplemental Information Concerning Property Casualty Insurance Operations [Abstract]
Losses and Loss Adjustment Expenses Incurred Related to Current Year	$ 14,657.1	$ 13,330.3	$ 12,427.3
Losses and Loss Adjustment Expenses Incurred Related to Prior Years	(315.1)	(24.1)	45.1
Paid Losses and Loss Adjustment Expenses	$ 13,639.6	$ 13,068.5	$ 12,014.9

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Reporting And Accounting Policies Advertising Costs (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Marketing and Advertising Expense [Abstract]
Advertising Expense	$ 748.3	$ 681.8	$ 619.3

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Reporting And Accounting Policies Interest Capitalized (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Disclosure Interest Capitalized [Abstract]
Capitalized Interest	$ 2.4	$ 1.3	$ 0.8

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Reporting And Accounting Policies Equity Based Compensation (Detail) - Stock Compensation Plan - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Incentive Compensation Plans Expense [Line Items]
Pretax expense	$ 66.2	$ 51.4	$ 64.9
Tax benefit	$ 23.2	$ 18.0	$ 22.7

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Reporting And Accounting Policies Supplemental Cash Flow Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Disclosure Supplemental Cash Flow Information [Abstract]
Income Taxes	$ 701.8	$ 515.0	$ 497.0
Interest	$ 132.0	$ 116.0	$ 122.3

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Reporting And Accounting Policies - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Significant Accounting Policies [Line Items]
Number of Properties Held for Sale	1
Assets Held-for-Sale, Property, Plant and Equipment	$ 8.7
Lower Limit
Significant Accounting Policies [Line Items]
Auction Rate Securities, Period Between Auction Dates	7 days
Upper Limit
Significant Accounting Policies [Line Items]
Auction Rate Securities, Period Between Auction Dates	49 days
computer equipment and laptop computers
Significant Accounting Policies [Line Items]
Estimated useful lives	3 years
Building, Building Improvements, and Integrated Components | Lower Limit
Significant Accounting Policies [Line Items]
Estimated useful lives	7 years
Building, Building Improvements, and Integrated Components | Upper Limit
Significant Accounting Policies [Line Items]
Estimated useful lives	40 years
Property, Plant and Equipment, Other Types | Lower Limit
Significant Accounting Policies [Line Items]
Estimated useful lives	3 years
Property, Plant and Equipment, Other Types | Upper Limit
Significant Accounting Policies [Line Items]
Estimated useful lives	15 years
Land and Building
Significant Accounting Policies [Line Items]
Land and buildings as a percentage of total property and equipment	75.00%	77.00%
ARX Holding Corp. [Member] | Lower Limit
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Asset, Useful Life	7 years
ARX Holding Corp. [Member] | Upper Limit
Significant Accounting Policies [Line Items]
Finite-Lived Intangible Asset, Useful Life	14 years

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Investments Investment Portfolio by Major Security Type (Detail) - USD ($) $ in Millions		Dec. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Cost	[1],[2]	$ 19,688.4	$ 17,402.8
Gross Unrealized Gains	[1],[2]	1,414.5	1,621.4
Gross Unrealized Losses	[1],[2]	(166.7)	(49.2)
Net Realized Gains (Losses)	[1],[2],[3]	1.1	43.0
Total investments at fair value	[1],[2]	$ 20,937.3	$ 19,018.0
% of Total Fair Value	[1],[2]	100.00%	100.00%
Fixed maturities
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 15,347.9	$ 13,374.2
Gross Unrealized Gains		121.3	207.1
Gross Unrealized Losses		(136.8)	(32.7)
Net Realized Gains (Losses)	[3]	(0.2)	0.6
Total investments at fair value		$ 15,332.2	$ 13,549.2
% of Total Fair Value		73.20%	71.20%
Fixed maturities | U.S. government obligations
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 2,425.4	$ 2,641.1
Gross Unrealized Gains		4.4	27.3
Gross Unrealized Losses		(0.6)	(1.3)
Net Realized Gains (Losses)	[3]	0.0	0.0
Total investments at fair value		$ 2,429.2	$ 2,667.1
% of Total Fair Value		11.60%	14.00%
Fixed maturities | State and local government obligations
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 2,677.6	$ 2,095.7
Gross Unrealized Gains		47.5	44.6
Gross Unrealized Losses		(3.7)	(1.1)
Net Realized Gains (Losses)	[3]	0.0	0.0
Total investments at fair value		$ 2,721.4	$ 2,139.2
% of Total Fair Value		13.00%	11.20%
Fixed maturities | Foreign government obligations
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 18.6	$ 14.2
Gross Unrealized Gains		0.0	0.0
Gross Unrealized Losses		0.0	0.0
Net Realized Gains (Losses)	[3]	0.0	0.0
Total investments at fair value		$ 18.6	$ 14.2
% of Total Fair Value		0.10%	0.10%
Fixed maturities | Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 3,713.2	$ 2,813.9
Gross Unrealized Gains		11.3	32.9
Gross Unrealized Losses		(33.0)	(10.4)
Net Realized Gains (Losses)	[3]	0.1	0.3
Total investments at fair value		$ 3,691.6	$ 2,836.7
% of Total Fair Value		17.60%	14.90%
Fixed maturities | Residential mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 1,726.0	$ 1,635.5
Gross Unrealized Gains		22.1	34.5
Gross Unrealized Losses		(20.6)	(10.8)
Net Realized Gains (Losses)	[3]	(0.8)	(0.7)
Total investments at fair value		$ 1,726.7	$ 1,658.5
% of Total Fair Value		8.30%	8.70%
Fixed maturities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 90.3	$ 0.0
Gross Unrealized Gains		0.1	0.0
Gross Unrealized Losses		(1.1)	0.0
Net Realized Gains (Losses)	[3]	0.0	0.0
Total investments at fair value		$ 89.3	$ 0.0
% of Total Fair Value		0.40%	0.00%
Fixed maturities | Commercial mortgage-backed securities
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 2,665.7	$ 2,278.7
Gross Unrealized Gains		16.9	39.3
Gross Unrealized Losses		(29.4)	(2.6)
Net Realized Gains (Losses)	[3]	0.0	0.2
Total investments at fair value		$ 2,653.2	$ 2,315.6
% of Total Fair Value		12.70%	12.20%
Fixed maturities | Other asset-backed securities
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 1,771.1	$ 1,634.9
Gross Unrealized Gains		1.4	3.8
Gross Unrealized Losses		(5.1)	(0.8)
Net Realized Gains (Losses)	[3]	0.5	0.8
Total investments at fair value		$ 1,767.9	$ 1,638.7
% of Total Fair Value		8.40%	8.60%
Fixed maturities | Redeemable preferred stocks
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 260.0	$ 260.2
Gross Unrealized Gains		17.6	24.7
Gross Unrealized Losses		(43.3)	(5.7)
Net Realized Gains (Losses)	[3]	0.0	0.0
Total investments at fair value		$ 234.3	$ 279.2
% of Total Fair Value		1.10%	1.50%
Equity securities | Nonredeemable preferred stocks
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 674.2	$ 590.4
Gross Unrealized Gains		122.8	201.1
Gross Unrealized Losses		(15.7)	(6.4)
Net Realized Gains (Losses)	[3]	1.3	42.4
Total investments at fair value		$ 782.6	$ 827.5
% of Total Fair Value		3.70%	4.40%
Equity securities | Common equities
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 1,494.3	$ 1,289.2
Gross Unrealized Gains		1,170.4	1,213.2
Gross Unrealized Losses		(14.2)	(10.1)
Net Realized Gains (Losses)	[3]	0.0	0.0
Total investments at fair value		$ 2,650.5	$ 2,492.3
% of Total Fair Value		12.70%	13.10%
Short-term investments
Schedule of Available-for-sale Securities [Line Items]
Cost		$ 2,172.0	$ 2,149.0
Gross Unrealized Gains		0.0	0.0
Gross Unrealized Losses		0.0	0.0
Net Realized Gains (Losses)	[3]	0.0	0.0
Total investments at fair value		$ 2,172.0	$ 2,149.0
% of Total Fair Value		10.40%	11.30%

[1] Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

[2] The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

[3] Represents net holding period gains (losses) on certain hybrid securities (discussed below).

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Investments Investment Portfolio by Major Security Type (Parenthetical) (Detail) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
Other Receivables from Broker-Dealers and Clearing Organizations	$ 23.1
Net unsettled security transactions offset in other liabilities		$ 31.3
Securities in the portfolio of a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions	$ 1,300.0	$ 1,900.0

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Investments Hybrid Securities (Detail) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Hybrid Securities [Line Items]
Hybrid securities	$ 272.7	$ 427.7
Fixed maturities
Hybrid Securities [Line Items]
Hybrid securities	222.0	305.4
Fixed maturities | Corporate debt securities
Hybrid Securities [Line Items]
Hybrid securities	49.1	139.8
Fixed maturities | Residential mortgage-backed securities
Hybrid Securities [Line Items]
Hybrid securities	144.3	120.7
Fixed maturities | Commercial mortgage-backed securities
Hybrid Securities [Line Items]
Hybrid securities	17.3	31.2
Fixed maturities | Other asset-backed securities
Hybrid Securities [Line Items]
Hybrid securities	11.3	13.7
Equity securities | Nonredeemable preferred stocks
Hybrid Securities [Line Items]
Hybrid securities	$ 50.7	$ 122.3

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Investments Composition of Fixed Maturities by Maturity (Detail) $ in Millions	Dec. 31, 2015 USD ($)
Available for sale, cost
Less than one year	$ 4,532.3
One to five years	6,758.0
Five to ten years	3,934.1
Ten years or greater	119.1
Total	15,343.5	[1]
Available for sale, Fair value
Less than one year	4,530.9
One to five years	6,734.7
Five to ten years	3,940.3
Ten years or greater	121.9
Total	$ 15,327.8	[1]

[1] Excludes $4.4 million related to our open interest rate swap positions.

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Investments Composition of Fixed Maturities by Maturity (Parenthetical) (Details) - USD ($) $ in Millions		Dec. 31, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Open interest rate swap positions	[1]	$ 4.4	$ 15.8
Interest Rate Swaps
Schedule of Available-for-sale Securities [Line Items]
Open interest rate swap positions		$ 4.4

[1] To the extent we hold both derivative assets and liabilities with the same counterparty that are subject to an enforceable master netting arrangement, we expect that we will report them on a gross basis on our balance sheets, consistent with our historical presentation.

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Investments Gross Unrealized losses by Major Security (Detail) $ in Millions	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	1,167	318
Total Fair Value	$ 9,725.1	$ 4,217.8
Gross Unrealized Losses	$ (166.7)	$ (49.2)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	993	230
Less than 12 Months Fair Value	$ 7,842.3	$ 3,062.5
Less than 12 Months Unrealized Losses	$ (93.9)	$ (26.2)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	174	88
12 Months or Greater Fair Value	$ 1,882.8	$ 1,155.3
12 Months or Greater Unrealized Losses	$ (72.8)	$ (23.0)
Fixed maturities
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	1,093	290
Total Fair Value	$ 9,258.5	$ 3,918.0
Gross Unrealized Losses	$ (136.8)	$ (32.7)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	928	206
Less than 12 Months Fair Value	$ 7,556.7	$ 2,857.5
Less than 12 Months Unrealized Losses	$ (78.0)	$ (13.0)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	165	84
12 Months or Greater Fair Value	$ 1,701.8	$ 1,060.5
12 Months or Greater Unrealized Losses	$ (58.8)	$ (19.7)
Fixed maturities | U.S. government obligations
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	22	11
Total Fair Value	$ 897.1	$ 428.2
Gross Unrealized Losses	$ (0.6)	$ (1.3)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	22	5
Less than 12 Months Fair Value	$ 897.1	$ 150.7
Less than 12 Months Unrealized Losses	$ (0.6)	$ (0.3)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	0	6
12 Months or Greater Fair Value	$ 0.0	$ 277.5
12 Months or Greater Unrealized Losses	$ 0.0	$ (1.0)
Fixed maturities | State and local government obligations
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	290	46
Total Fair Value	$ 606.7	$ 234.2
Gross Unrealized Losses	$ (3.7)	$ (1.1)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	264	28
Less than 12 Months Fair Value	$ 500.7	$ 177.9
Less than 12 Months Unrealized Losses	$ (2.6)	$ (0.4)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	26	18
12 Months or Greater Fair Value	$ 106.0	$ 56.3
12 Months or Greater Unrealized Losses	$ (1.1)	$ (0.7)
Fixed maturities | Corporate debt securities
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	215	53
Total Fair Value	$ 2,580.6	$ 843.2
Gross Unrealized Losses	$ (33.0)	$ (10.4)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	197	43
Less than 12 Months Fair Value	$ 2,294.6	$ 647.5
Less than 12 Months Unrealized Losses	$ (25.2)	$ (6.1)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	18	10
12 Months or Greater Fair Value	$ 286.0	$ 195.7
12 Months or Greater Unrealized Losses	$ (7.8)	$ (4.3)
Fixed maturities | Residential mortgage-backed securities
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	188	70
Total Fair Value	$ 1,294.7	$ 844.2
Gross Unrealized Losses	$ (20.6)	$ (10.8)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	115	33
Less than 12 Months Fair Value	$ 493.4	$ 465.2
Less than 12 Months Unrealized Losses	$ (3.7)	$ (3.1)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	73	37
12 Months or Greater Fair Value	$ 801.3	$ 379.0
12 Months or Greater Unrealized Losses	$ (16.9)	$ (7.7)
Fixed maturities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	61	0
Total Fair Value	$ 84.9	$ 0.0
Gross Unrealized Losses	$ (1.1)	$ 0.0
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	61	0
Less than 12 Months Fair Value	$ 84.9	$ 0.0
Less than 12 Months Unrealized Losses	$ (1.1)	$ 0.0
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	0	0
12 Months or Greater Fair Value	$ 0.0	$ 0.0
12 Months or Greater Unrealized Losses	$ 0.0	$ 0.0
Fixed maturities | Commercial mortgage-backed securities
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	207	63
Total Fair Value	$ 2,046.5	$ 723.4
Gross Unrealized Losses	$ (29.4)	$ (2.6)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	171	54
Less than 12 Months Fair Value	$ 1,694.6	$ 667.5
Less than 12 Months Unrealized Losses	$ (25.8)	$ (1.4)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	36	9
12 Months or Greater Fair Value	$ 351.9	$ 55.9
12 Months or Greater Unrealized Losses	$ (3.6)	$ (1.2)
Fixed maturities | Other asset-backed securities
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	101	44
Total Fair Value	$ 1,548.6	$ 741.8
Gross Unrealized Losses	$ (5.1)	$ (0.8)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	92	42
Less than 12 Months Fair Value	$ 1,472.0	$ 715.7
Less than 12 Months Unrealized Losses	$ (4.5)	$ (0.7)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	9	2
12 Months or Greater Fair Value	$ 76.6	$ 26.1
12 Months or Greater Unrealized Losses	$ (0.6)	$ (0.1)
Fixed maturities | Redeemable preferred stocks
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	9	3
Total Fair Value	$ 199.4	$ 103.0
Gross Unrealized Losses	$ (43.3)	$ (5.7)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	6	1
Less than 12 Months Fair Value	$ 119.4	$ 33.0
Less than 12 Months Unrealized Losses	$ (14.5)	$ (1.0)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	3	2
12 Months or Greater Fair Value	$ 80.0	$ 70.0
12 Months or Greater Unrealized Losses	$ (28.8)	$ (4.7)
Equity securities
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	74	28
Total Fair Value	$ 466.6	$ 299.8
Gross Unrealized Losses	$ (29.9)	$ (16.5)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	65	24
Less than 12 Months Fair Value	$ 285.6	$ 205.0
Less than 12 Months Unrealized Losses	$ (15.9)	$ (13.2)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	9	4
12 Months or Greater Fair Value	$ 181.0	$ 94.8
12 Months or Greater Unrealized Losses	$ (14.0)	$ (3.3)
Equity securities | Nonredeemable preferred stocks
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	10	8
Total Fair Value	$ 301.8	$ 231.4
Gross Unrealized Losses	$ (15.7)	$ (6.4)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	5	5
Less than 12 Months Fair Value	$ 124.2	$ 143.2
Less than 12 Months Unrealized Losses	$ (1.7)	$ (3.6)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	5	3
12 Months or Greater Fair Value	$ 177.6	$ 88.2
12 Months or Greater Unrealized Losses	$ (14.0)	$ (2.8)
Equity securities | Common equities
Investments, Unrealized Loss Position [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions	64	20
Total Fair Value	$ 164.8	$ 68.4
Gross Unrealized Losses	$ (14.2)	$ (10.1)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year	60	19
Less than 12 Months Fair Value	$ 161.4	$ 61.8
Less than 12 Months Unrealized Losses	$ (14.2)	$ (9.6)
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year	4	1
12 Months or Greater Fair Value	$ 3.4	$ 6.6
12 Months or Greater Unrealized Losses	$ 0.0	$ (0.5)

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Investments Total Non-Credit Portion of Other-Than-Temporary Impairment Recorded in Accumulated Other Comprehensive Income, Reflecting Original Non-Credit Loss at Time Credit Impairment (Detail) - Fixed maturities - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Other Than Temporary Impairment Non Credit Losses Recognized In Accumulated Other Comprehensive Income [Line Items]
Accumulated Other Comprehensive Income (Loss), Other than Temporary Impairment, Not Credit Loss, Pre-Tax, Available-for-sale, Debt Securities	$ (43.9)	$ (44.7)
Residential mortgage-backed securities
Other Than Temporary Impairment Non Credit Losses Recognized In Accumulated Other Comprehensive Income [Line Items]
Accumulated Other Comprehensive Income (Loss), Other than Temporary Impairment, Not Credit Loss, Pre-Tax, Available-for-sale, Debt Securities	(43.3)	(44.1)
Commercial mortgage-backed securities
Other Than Temporary Impairment Non Credit Losses Recognized In Accumulated Other Comprehensive Income [Line Items]
Accumulated Other Comprehensive Income (Loss), Other than Temporary Impairment, Not Credit Loss, Pre-Tax, Available-for-sale, Debt Securities	$ (0.6)	$ (0.6)

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Investments OTTI Credit Losses Recognized in Earnings (Detail) - Fixed maturities - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning balance		$ 13.1	$ 19.6	$ 27.7
Credit losses for which an OTTI was previously recognized		0.0	0.0	0.1
Reductions for securities sold/matured		(1.4)	(0.1)	0.0
Change in recoveries of future cash flows expected to be collected	[1],[2]	1.1	(6.4)	(8.0)
Reductions for previously recognized credit impairments written-down to fair value	[3]	0.0	0.0	(0.2)
Ending balance		12.8	13.1	19.6
Residential mortgage-backed securities
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning balance		12.7	19.2	27.1
Credit losses for which an OTTI was previously recognized		0.0	0.0	0.1
Reductions for securities sold/matured		(1.4)	(0.1)	0.0
Change in recoveries of future cash flows expected to be collected	[1],[2]	1.1	(6.4)	(7.8)
Reductions for previously recognized credit impairments written-down to fair value	[3]	0.0	0.0	(0.2)
Ending balance		12.4	12.7	19.2
Commercial mortgage-backed securities
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning balance		0.4	0.4	0.6
Credit losses for which an OTTI was previously recognized		0.0	0.0	0.0
Reductions for securities sold/matured		0.0	0.0	0.0
Change in recoveries of future cash flows expected to be collected	[1],[2]	0.0	0.0	(0.2)
Reductions for previously recognized credit impairments written-down to fair value	[3]	0.0	0.0	0.0
Ending balance		$ 0.4	$ 0.4	$ 0.4

[1] Includes $2.9 million, $4.3 million, and $2.6 million at December 31, 2015, 2014, and 2013, respectively, recognized in income in excess of the cash flows expected to be collected at the time of the write-downs.

[2] Reflects expected recovery of prior period impairments that will be accreted into income over the remaining life of the security.

[3] Reflects reductions of prior credit impairments where the current credit impairment requires writing securities down to fair value (i.e., no remaining non-credit loss).

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Investments OTTI Credit Losses Recognized in Earnings (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Actual Cash Flow Recovery
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Change in recoveries of future cash flows expected to be collected	$ 2.9	$ 4.3	$ 2.6

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Investments Components of Net Realized Gains (Losses) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	$ 192.9	$ 290.2	$ 271.8
Gross realized losses on securities sales	(49.9)	(29.9)	(12.5)
Net realized gains (losses) on securities sales	143.0	260.3	259.3
Other-than-temporary impairment losses	(8.7)	(7.2)	(6.1)
Total net realized gains (losses) on securities	112.7	224.2	318.4
Fixed maturities
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	77.2	92.9	76.9
Gross realized losses on securities sales	(8.3)	(22.6)	(11.8)
Net realized gains (losses) on securities sales	68.9	70.3	65.1
Other-than-temporary impairment losses	0.0	0.0	(0.6)
Fixed maturities | U.S. government obligations
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	17.5	24.0	8.5
Gross realized losses on securities sales	(0.9)	(7.6)	(3.7)
Net realized gains (losses) on securities sales	16.6	16.4	4.8
Fixed maturities | State and local government obligations
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	7.8	9.3	7.7
Gross realized losses on securities sales	(0.3)	(0.5)	0.0
Net realized gains (losses) on securities sales	7.5	8.8	7.7
Fixed maturities | Corporate And Other Debt Securities
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	31.2	37.2	47.7
Gross realized losses on securities sales	(5.0)	(2.8)	(6.2)
Net realized gains (losses) on securities sales	26.2	34.4	41.5
Fixed maturities | Residential mortgage-backed securities
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	4.9	2.7	3.0
Gross realized losses on securities sales	(0.4)	(0.2)	0.0
Net realized gains (losses) on securities sales	4.5	2.5	3.0
Other-than-temporary impairment losses	0.0	0.0	(0.6)
Fixed maturities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Gain (Loss) on Investments [Line Items]
Gross realized losses on securities sales	(0.4)	0.0	0.0
Net realized gains (losses) on securities sales	(0.4)	0.0	0.0
Fixed maturities | Commercial mortgage-backed securities
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	15.7	17.0	10.0
Gross realized losses on securities sales	(1.3)	(8.3)	(1.8)
Net realized gains (losses) on securities sales	14.4	8.7	8.2
Fixed maturities | Redeemable preferred stocks
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	0.1	2.7	0.0
Gross realized losses on securities sales	0.0	(3.2)	(0.1)
Net realized gains (losses) on securities sales	0.1	(0.5)	(0.1)
Equity securities | Nonredeemable preferred stocks
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	65.3	90.0	126.3
Gross realized losses on securities sales	(3.2)	0.0	(0.1)
Net realized gains (losses) on securities sales	62.1	90.0	126.2
Equity securities | Common equities
Gain (Loss) on Investments [Line Items]
Gross realized gains on securities sales	50.4	107.3	68.6
Gross realized losses on securities sales	(38.4)	(7.3)	(0.6)
Net realized gains (losses) on securities sales	12.0	100.0	68.0
Other-than-temporary impairment losses	(8.7)	(7.2)	(5.5)
Hybrid and Derivative Instruments and Litigation Settlements
Gain (Loss) on Investments [Line Items]
Other gains (losses)	(21.6)	(28.9)	65.2
Hybrid and Derivative Instruments and Litigation Settlements | Litigation Settlements
Gain (Loss) on Investments [Line Items]
Other gains (losses)	0.4	4.7	2.2
Hybrid and Derivative Instruments and Litigation Settlements | Hybrid Preferred Stock
Gain (Loss) on Investments [Line Items]
Other gains (losses)	(1.3)	30.5	6.4
Hybrid and Derivative Instruments and Litigation Settlements | Derivative Instruments
Gain (Loss) on Investments [Line Items]
Other gains (losses)	$ (20.7)	$ (64.1)	$ 56.6

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Investments Components of Net Investment Income (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	$ 454.6	$ 408.4	$ 422.0
Investment expenses	(22.8)	(18.9)	(18.8)
Net investment income	431.8	389.5	403.2
Fixed maturities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	357.7	321.9	338.0
Fixed maturities | U.S. government obligations
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	28.3	46.2	50.2
Fixed maturities | State and local government obligations
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	60.7	50.1	48.0
Fixed maturities | Foreign government obligations
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	0.4	0.4	0.2
Fixed maturities | Corporate debt securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	102.4	82.1	98.8
Fixed maturities | Residential mortgage-backed securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	52.2	44.9	28.1
Fixed maturities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	2.1	0.0	0.0
Fixed maturities | Commercial mortgage-backed securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	74.6	66.0	74.8
Fixed maturities | Other asset-backed securities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	22.0	16.7	16.7
Fixed maturities | Redeemable preferred stocks
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	15.0	15.5	21.2
Equity securities | Nonredeemable preferred stocks
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	43.7	38.6	36.2
Equity securities | Common equities
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	51.0	46.6	45.8
Short-term investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Investment income	$ 2.2	$ 1.3	$ 2.0

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Investments Derivative Instruments (Detail) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Derivative [Line Items]
Balance Sheet - Fair Value	[1]	$ 4.4	$ 15.8
Income Statement - Net Realized Gain (Loss) on Securities		(20.7)	(64.1)	$ 56.6
Hedging Instrument | Closed Positions | Ineffective Cash Flow Hedge
Derivative [Line Items]
Notional Value	[2]	$ 18.0	$ 44.0	$ 54.0
Purpose		Manage interest rate risk	Manage interest rate risk	Manage interest rate risk
Balance Sheet - Fair Value	[1]	$ 0.0	$ 0.0
Income Statement - Net Realized Gain (Loss) on Securities		0.2	0.5	$ 0.8
Non-hedging Instruments | Closed Positions | Interest Rate Swaps
Derivative [Line Items]
Notional Value	[2]	0.0	0.0	$ 1,263.0
Purpose				Manage portfolio duration
Balance Sheet - Fair Value	[1]	0.0	0.0
Income Statement - Net Realized Gain (Loss) on Securities		0.0	0.0	$ (4.0)
Non-hedging Instruments | Closed Positions | Future [Member]
Derivative [Line Items]
Notional Value	[2]	$ 691.0	0.0	0.0
Purpose		Manage portfolio duration
Balance Sheet - Fair Value	[1]	$ 0.0	0.0
Income Statement - Net Realized Gain (Loss) on Securities		2.5	0.0	0.0
Non-hedging Instruments | Assets | Interest Rate Swaps | Fixed maturities
Derivative [Line Items]
Notional Value	[2]	$ 750.0	$ 750.0	$ 750.0
Purpose		Manage portfolio duration	Manage portfolio duration	Manage portfolio duration
Balance Sheet - Fair Value	[1]	$ 4.4	$ 15.8
Income Statement - Net Realized Gain (Loss) on Securities		$ (23.4)	$ (64.6)	$ 59.8

[1] To the extent we hold both derivative assets and liabilities with the same counterparty that are subject to an enforceable master netting arrangement, we expect that we will report them on a gross basis on our balance sheets, consistent with our historical presentation.

[2] The amounts represent the value held at year end for open positions and the maximum amount held during the year for closed positions.

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Investments - Additional Information (Detail)	1 Months Ended		12 Months Ended
	Jan. 26, 2015 USD ($)	Apr. 25, 2014 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Jun. 18, 2007
Schedule of Investments [Line Items]
Short-term Investments			$ 2,172,000,000	$ 2,149,000,000
Open reverse repurchase commitments			0	0
Largest Outstanding Balance of Reverse Repurchase Agreements			$ 275,000,000
RRP Largest Outstanding Balance Number of Days Open			1 day
Reverse Repurchase Agreement Average Daily Balance			$ 135,400,000
Principal amount of bonds and certificates of deposit on deposit to meet state insurance regulatory and/or rating agency requirements			184,800,000
Fair value of fixed-maturity securities that were non-income producing during the preceding 12 months			0
Gross Unrealized Losses			$ 166,700,000	$ 49,200,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions			1,167	318
Trading securities			$ 0	$ 0
Net realized gains (losses) on securities			136,500,000	232,100,000	$ 324,500,000
Senior notes, issuance amount	$ 400,000,000	$ 350,000,000
Debt Instrument, Interest Rate, Stated Percentage	3.70%	4.35%
Reclassification out of Accumulated Other Comprehensive Income
Schedule of Investments [Line Items]
Cash flow hedge gain recognized as an adjustment to interest expense			1,800,000	2,000,000	$ 2,100,000
3.70% Senior Notes due 2045
Schedule of Investments [Line Items]
Unrealized Gain (Loss)	$ (12,900,000)		(12,900,000)
Senior notes, issuance amount	$ 400,000,000		$ 400,000,000	0
Debt Instrument, Interest Rate, Stated Percentage	3.70%		3.70%			6.70%
4.35% Senior Notes due 2044
Schedule of Investments [Line Items]
Unrealized Gain (Loss)		$ (1,600,000)	$ (1,600,000)
Senior notes, issuance amount		$ 350,000,000	$ 350,000,000	350,000,000
Debt Instrument, Interest Rate, Stated Percentage		4.35%	4.35%
Equity securities
Schedule of Investments [Line Items]
Gross Unrealized Losses			$ 29,900,000	$ 16,500,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions			74	28
Equity securities | Common equities
Schedule of Investments [Line Items]
Gross Unrealized Losses			$ 14,200,000	$ 10,100,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions			64	20
Equity securities | Nonredeemable preferred stocks
Schedule of Investments [Line Items]
Gross Unrealized Losses			$ 15,700,000	$ 6,400,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions			10	8
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Percentage Decline			5.00%
Fixed maturities
Schedule of Investments [Line Items]
Gross Unrealized Losses			$ 136,800,000	$ 32,700,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions			1,093	290
Fixed maturities | Corporate debt securities
Schedule of Investments [Line Items]
Percentage which the issuer receives the security back at once the change of control is triggered			1.00%
Realized investment losses			$ 1,500,000
Gross Unrealized Losses			$ 33,000,000	$ 10,400,000
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions			215	53
Fixed Income Securities
Schedule of Investments [Line Items]
Gross Unrealized Losses			$ 152,500,000
Foreign Government Debt
Schedule of Investments [Line Items]
Short-term Investments			2,500,000	$ 5,700,000
Interest Rate Swaps
Schedule of Investments [Line Items]
Number of derivative positions closed during the period					3
Cash collateral received from counterparty			4,900,000	16,100,000	$ 62,700,000
Interest Rate Swaps | Opened in 2009 | Closed Positions | Nine Year Time Horizon
Schedule of Investments [Line Items]
Number of derivative positions closed during the period					1
Derivative Maturity1					9 years
Interest Rate Swaps | Opened in 2011 | Closed Positions | Five Year Time Horizon
Schedule of Investments [Line Items]
Number of derivative positions closed during the period					2
Derivative Maturity1					5 years
Value Of Securities Of Any One Issuer Excluding US Government Obligations Exceeding 10 % Of Total Shareholders Equity
Schedule of Investments [Line Items]
Aggregate cost or fair value of securities			0	0
Future [Member]
Schedule of Investments [Line Items]
Derivative, Gain (Loss) on Derivative, Net			2,500,000
Categories of Investments, Marketable Securities, Trading Securities
Schedule of Investments [Line Items]
Net realized gains (losses) on securities			$ 0	$ 0	$ 0
Russell One Thousand | Equity securities | Common equities
Schedule of Investments [Line Items]
Percentage of common stock portfolio			96.00%
Managed Equity Strategy | Equity securities | Common equities
Schedule of Investments [Line Items]
Percentage of common stock portfolio			4.00%
Non-hedging Instruments | Interest Rate Swaps | Closed Positions
Schedule of Investments [Line Items]
Purpose					Manage portfolio duration
Non-hedging Instruments | Interest Rate Swaps | Fixed maturities | Assets
Schedule of Investments [Line Items]
Derivative, Loss on Derivative			$ 11,400,000
Purpose			Manage portfolio duration	Manage portfolio duration	Manage portfolio duration
ARX Holding Corp. [Member]
Schedule of Investments [Line Items]
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions			492
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Percentage Decline			0.90%

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Fair Value Composition of Investment Portfolio by Major Security Type (Detail) - USD ($) $ in Millions		Dec. 31, 2015	Dec. 31, 2014
Fair Value Measurements [Line Items]
Portfolio	[1],[2]	$ 20,937.3	$ 19,018.0
Long-term Debt, Fair Value		2,887.8	2,527.5
Debt		2,707.9	2,164.7
Fixed maturities
Fair Value Measurements [Line Items]
Portfolio		15,332.2	13,549.2
Fixed maturities | Redeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		234.3	279.2
Fixed maturities | Redeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		92.0	97.9
Fixed maturities | Redeemable preferred stocks | Utilities
Fair Value Measurements [Line Items]
Portfolio		51.2	65.3
Fixed maturities | Redeemable preferred stocks | Industrials
Fair Value Measurements [Line Items]
Portfolio		91.1	116.0
Fixed maturities | Debt Securities
Fair Value Measurements [Line Items]
Portfolio		8,860.8	7,657.2
Fixed maturities | Debt Securities | U.S. government obligations
Fair Value Measurements [Line Items]
Portfolio		2,429.2	2,667.1
Fixed maturities | Debt Securities | State and local government obligations
Fair Value Measurements [Line Items]
Portfolio		2,721.4	2,139.2
Fixed maturities | Debt Securities | Foreign government obligations
Fair Value Measurements [Line Items]
Portfolio		18.6	14.2
Fixed maturities | Debt Securities | Corporate debt securities
Fair Value Measurements [Line Items]
Portfolio		3,691.6	2,836.7
Fixed maturities | Asset-backed Securities
Fair Value Measurements [Line Items]
Portfolio		6,237.1	5,612.8
Fixed maturities | Asset-backed Securities | Residential mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		1,726.7	1,658.5
Fixed maturities | Asset-backed Securities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value Measurements [Line Items]
Portfolio		89.3	0.0
Fixed maturities | Asset-backed Securities | Commercial mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		2,653.2	2,315.6
Fixed maturities | Asset-backed Securities | Other asset-backed securities
Fair Value Measurements [Line Items]
Portfolio		1,767.9	1,638.7
Equity securities | Nonredeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		782.6	827.5
Equity securities | Nonredeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		782.6	827.5
Equity securities | Common equities
Fair Value Measurements [Line Items]
Portfolio		2,650.5	2,492.3
Equity securities | Common equities | Common equities
Fair Value Measurements [Line Items]
Portfolio		2,650.2	2,491.9
Equity securities | Common equities | Other risk investments
Fair Value Measurements [Line Items]
Portfolio		0.3	0.4
Total Fixed Maturities and Equity Securities
Fair Value Measurements [Line Items]
Portfolio		18,765.3	16,869.0
Short-term investments
Fair Value Measurements [Line Items]
Portfolio		2,172.0	2,149.0
Carrying (Reported) Amount, Fair Value Disclosure
Fair Value Measurements [Line Items]
Portfolio		19,688.4	17,402.8
Debt		2,707.9	2,164.7
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities
Fair Value Measurements [Line Items]
Portfolio		15,347.9	13,374.2
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Redeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		260.0	260.2
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Redeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		76.8	77.3
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Redeemable preferred stocks | Utilities
Fair Value Measurements [Line Items]
Portfolio		65.1	65.0
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Redeemable preferred stocks | Industrials
Fair Value Measurements [Line Items]
Portfolio		118.1	117.9
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Debt Securities
Fair Value Measurements [Line Items]
Portfolio		8,834.8	7,564.9
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Debt Securities | U.S. government obligations
Fair Value Measurements [Line Items]
Portfolio		2,425.4	2,641.1
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Debt Securities | State and local government obligations
Fair Value Measurements [Line Items]
Portfolio		2,677.6	2,095.7
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Debt Securities | Foreign government obligations
Fair Value Measurements [Line Items]
Portfolio		18.6	14.2
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Debt Securities | Corporate debt securities
Fair Value Measurements [Line Items]
Portfolio		3,713.2	2,813.9
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Asset-backed Securities
Fair Value Measurements [Line Items]
Portfolio		6,253.1	5,549.1
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Asset-backed Securities | Residential mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		1,726.0	1,635.5
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Asset-backed Securities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value Measurements [Line Items]
Portfolio		90.3	0.0
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Asset-backed Securities | Commercial mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		2,665.7	2,278.7
Carrying (Reported) Amount, Fair Value Disclosure | Fixed maturities | Asset-backed Securities | Other asset-backed securities
Fair Value Measurements [Line Items]
Portfolio		1,771.1	1,634.9
Carrying (Reported) Amount, Fair Value Disclosure | Equity securities | Nonredeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		674.2	590.4
Carrying (Reported) Amount, Fair Value Disclosure | Equity securities | Nonredeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		674.2	590.4
Carrying (Reported) Amount, Fair Value Disclosure | Equity securities | Common equities
Fair Value Measurements [Line Items]
Portfolio		1,494.3	1,289.2
Carrying (Reported) Amount, Fair Value Disclosure | Equity securities | Common equities | Common equities
Fair Value Measurements [Line Items]
Portfolio		1,494.0	1,288.8
Carrying (Reported) Amount, Fair Value Disclosure | Equity securities | Common equities | Other risk investments
Fair Value Measurements [Line Items]
Portfolio		0.3	0.4
Carrying (Reported) Amount, Fair Value Disclosure | Total Fixed Maturities and Equity Securities
Fair Value Measurements [Line Items]
Portfolio		17,516.4	15,253.8
Carrying (Reported) Amount, Fair Value Disclosure | Short-term investments
Fair Value Measurements [Line Items]
Portfolio		2,172.0	2,149.0
Fair Value, Inputs, Level 1
Fair Value Measurements [Line Items]
Portfolio		7,309.2	7,314.3
Long-term Debt, Fair Value		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities
Fair Value Measurements [Line Items]
Portfolio		2,447.8	2,681.3
Fair Value, Inputs, Level 1 | Fixed maturities | Redeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Redeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Redeemable preferred stocks | Utilities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Redeemable preferred stocks | Industrials
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Debt Securities
Fair Value Measurements [Line Items]
Portfolio		2,447.8	2,681.3
Fair Value, Inputs, Level 1 | Fixed maturities | Debt Securities | U.S. government obligations
Fair Value Measurements [Line Items]
Portfolio		2,429.2	2,667.1
Fair Value, Inputs, Level 1 | Fixed maturities | Debt Securities | State and local government obligations
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Debt Securities | Foreign government obligations
Fair Value Measurements [Line Items]
Portfolio		18.6	14.2
Fair Value, Inputs, Level 1 | Fixed maturities | Debt Securities | Corporate debt securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Asset-backed Securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Asset-backed Securities | Residential mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Asset-backed Securities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Asset-backed Securities | Commercial mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Fixed maturities | Asset-backed Securities | Other asset-backed securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Equity securities | Nonredeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		154.9	204.1
Fair Value, Inputs, Level 1 | Equity securities | Nonredeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		154.9	204.1
Fair Value, Inputs, Level 1 | Equity securities | Common equities
Fair Value Measurements [Line Items]
Portfolio		2,650.2	2,491.9
Fair Value, Inputs, Level 1 | Equity securities | Common equities | Common equities
Fair Value Measurements [Line Items]
Portfolio		2,650.2	2,491.9
Fair Value, Inputs, Level 1 | Equity securities | Common equities | Other risk investments
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 1 | Total Fixed Maturities and Equity Securities
Fair Value Measurements [Line Items]
Portfolio		5,252.9	5,377.3
Fair Value, Inputs, Level 1 | Short-term investments
Fair Value Measurements [Line Items]
Portfolio		2,056.3	1,937.0
Fair Value, Inputs, Level 2
Fair Value Measurements [Line Items]
Portfolio		13,617.9	11,622.4
Long-term Debt, Fair Value		2,722.9	2,527.5
Fair Value, Inputs, Level 2 | Fixed maturities
Fair Value Measurements [Line Items]
Portfolio		12,874.5	10,856.3
Fair Value, Inputs, Level 2 | Fixed maturities | Redeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		234.3	279.2
Fair Value, Inputs, Level 2 | Fixed maturities | Redeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		92.0	97.9
Fair Value, Inputs, Level 2 | Fixed maturities | Redeemable preferred stocks | Utilities
Fair Value Measurements [Line Items]
Portfolio		51.2	65.3
Fair Value, Inputs, Level 2 | Fixed maturities | Redeemable preferred stocks | Industrials
Fair Value Measurements [Line Items]
Portfolio		91.1	116.0
Fair Value, Inputs, Level 2 | Fixed maturities | Debt Securities
Fair Value Measurements [Line Items]
Portfolio		6,413.0	4,975.9
Fair Value, Inputs, Level 2 | Fixed maturities | Debt Securities | U.S. government obligations
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 2 | Fixed maturities | Debt Securities | State and local government obligations
Fair Value Measurements [Line Items]
Portfolio		2,721.4	2,139.2
Fair Value, Inputs, Level 2 | Fixed maturities | Debt Securities | Foreign government obligations
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 2 | Fixed maturities | Debt Securities | Corporate debt securities
Fair Value Measurements [Line Items]
Portfolio		3,691.6	2,836.7
Fair Value, Inputs, Level 2 | Fixed maturities | Asset-backed Securities
Fair Value Measurements [Line Items]
Portfolio		6,227.2	5,601.2
Fair Value, Inputs, Level 2 | Fixed maturities | Asset-backed Securities | Residential mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		1,726.7	1,658.5
Fair Value, Inputs, Level 2 | Fixed maturities | Asset-backed Securities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value Measurements [Line Items]
Portfolio		89.3	0.0
Fair Value, Inputs, Level 2 | Fixed maturities | Asset-backed Securities | Commercial mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		2,643.3	2,304.0
Fair Value, Inputs, Level 2 | Fixed maturities | Asset-backed Securities | Other asset-backed securities
Fair Value Measurements [Line Items]
Portfolio		1,767.9	1,638.7
Fair Value, Inputs, Level 2 | Equity securities | Nonredeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		627.7	554.1
Fair Value, Inputs, Level 2 | Equity securities | Nonredeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		627.7	554.1
Fair Value, Inputs, Level 2 | Equity securities | Common equities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 2 | Equity securities | Common equities | Common equities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 2 | Equity securities | Common equities | Other risk investments
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 2 | Total Fixed Maturities and Equity Securities
Fair Value Measurements [Line Items]
Portfolio		13,502.2	11,410.4
Fair Value, Inputs, Level 2 | Short-term investments
Fair Value Measurements [Line Items]
Portfolio		115.7	212.0
Fair Value, Inputs, Level 3
Fair Value Measurements [Line Items]
Portfolio		10.2	81.3
Long-term Debt, Fair Value		164.9	0.0
Fair Value, Inputs, Level 3 | Fixed maturities
Fair Value Measurements [Line Items]
Portfolio		9.9	11.6
Fair Value, Inputs, Level 3 | Fixed maturities | Redeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Redeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Redeemable preferred stocks | Utilities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Redeemable preferred stocks | Industrials
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Debt Securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Debt Securities | U.S. government obligations
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Debt Securities | State and local government obligations
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Debt Securities | Foreign government obligations
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Debt Securities | Corporate debt securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Asset-backed Securities
Fair Value Measurements [Line Items]
Portfolio		9.9	11.6
Fair Value, Inputs, Level 3 | Fixed maturities | Asset-backed Securities | Residential mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Asset-backed Securities | Mortgage-backed Securities, Issued by US Government Sponsored Enterprises [Member]
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Fixed maturities | Asset-backed Securities | Commercial mortgage-backed securities
Fair Value Measurements [Line Items]
Portfolio		9.9	11.6
Fair Value, Inputs, Level 3 | Fixed maturities | Asset-backed Securities | Other asset-backed securities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Equity securities | Nonredeemable preferred stocks
Fair Value Measurements [Line Items]
Portfolio		0.0	69.3
Fair Value, Inputs, Level 3 | Equity securities | Nonredeemable preferred stocks | Financials
Fair Value Measurements [Line Items]
Portfolio		0.0	69.3
Fair Value, Inputs, Level 3 | Equity securities | Common equities
Fair Value Measurements [Line Items]
Portfolio		0.3	0.4
Fair Value, Inputs, Level 3 | Equity securities | Common equities | Common equities
Fair Value Measurements [Line Items]
Portfolio		0.0	0.0
Fair Value, Inputs, Level 3 | Equity securities | Common equities | Other risk investments
Fair Value Measurements [Line Items]
Portfolio		0.3	0.4
Fair Value, Inputs, Level 3 | Total Fixed Maturities and Equity Securities
Fair Value Measurements [Line Items]
Portfolio		10.2	81.3
Fair Value, Inputs, Level 3 | Short-term investments
Fair Value Measurements [Line Items]
Portfolio		$ 0.0	$ 0.0

[1] Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

[2] The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

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Fair Value Summary of Changes in Fair Value Associated With Level 3 Assets (Detail) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015		Dec. 31, 2014
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Fair Value		$ 81.3		$ 68.7
Calls/ Maturities/ Paydowns		(1.3)		(3.7)
Purchases		0.0		0.0
Sales		0.0		(0.1)
Net Realized (Gain)/Loss on Sales		(39.4)		0.1
Change in Valuation		(1.9)		29.9
Net Transfers In (Out)		(28.5)		(13.6)	[1]
Ending Fair value		10.2		81.3
Fixed maturities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Fair Value		11.6		29.2
Calls/ Maturities/ Paydowns		(1.3)		(3.6)
Purchases		0.0		0.0
Sales		0.0		(0.1)
Net Realized (Gain)/Loss on Sales		0.0		0.1
Change in Valuation		(0.4)		(0.4)
Net Transfers In (Out)		0.0		(13.6)	[1]
Ending Fair value		9.9		11.6
Fixed maturities | Asset-backed Securities | Residential mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Fair Value		0.0		0.2
Calls/ Maturities/ Paydowns		0.0		0.0
Purchases		0.0		0.0
Sales		0.0		(0.1)
Net Realized (Gain)/Loss on Sales		0.0		0.1
Change in Valuation		0.0		(0.2)
Net Transfers In (Out)		0.0		0.0	[1]
Ending Fair value		0.0		0.0
Fixed maturities | Asset-backed Securities | Commercial mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Fair Value		11.6		29.0
Calls/ Maturities/ Paydowns		(1.3)		(3.6)
Purchases		0.0		0.0
Sales		0.0		0.0
Net Realized (Gain)/Loss on Sales		0.0		0.0
Change in Valuation		(0.4)		(0.2)
Net Transfers In (Out)		0.0		(13.6)	[1]
Ending Fair value		9.9		11.6
Equity securities | Nonredeemable preferred stocks | Financials
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Fair Value	[2]	69.3	[3]	39.0
Calls/ Maturities/ Paydowns		0.0	[3]	0.0	[2]
Purchases		0.0	[3]	0.0	[2]
Sales		0.0	[3]	0.0	[2]
Net Realized (Gain)/Loss on Sales		(39.4)	[3]	0.0	[2]
Change in Valuation		(1.4)	[3]	30.3	[2]
Net Transfers In (Out)		(28.5)	[3]	0.0	[1],[2]
Ending Fair value	[3]	0.0		69.3	[2]
Equity securities | Common equities | Other risk investments
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Fair Value		0.4		0.5
Calls/ Maturities/ Paydowns		0.0		(0.1)
Purchases		0.0		0.0
Sales		0.0		0.0
Net Realized (Gain)/Loss on Sales		0.0		0.0
Change in Valuation		(0.1)		0.0
Net Transfers In (Out)		0.0		0.0	[1]
Ending Fair value		$ 0.3		$ 0.4

[1] The $13.6 million was transferred out of Level 3 and into Level 2 due to an improvement in the security's underlying collateral and an increase in liquidity and market activity in comparable securities.

[2] The $30.3 million represents a net holding period gain on our investment in ARX, which is reflected in net realized gains (losses) on securities in the comprehensive income statement.

[3] The $69.3 million decrease during the year reflects the reclassification of our 5% interest in ARX upon our acquisition of a controlling interest in ARX. The $39.4 million reflects our inception-to-date gain recognized, including the $1.4 million reduction in valuation that occurred during the first six months of 2015.

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Fair Value Summary of Changes in Fair Value Associated With Level 3 Assets (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015		Dec. 31, 2014		Dec. 31, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Net realized gains (losses) on securities	$ 136.5		$ 232.1		$ 324.5
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	(39.4)		0.1
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	(1.9)		29.9
Fixed maturities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	0.0		0.1
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	(0.4)		(0.4)
Equity securities | Nonredeemable preferred stocks | Financials
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	(39.4)	[1]	0.0	[2]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	(1.4)	[1]	30.3	[2]
Equity securities | Nonredeemable preferred stocks | Hybrid Securities | Financials
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Period Increase (Decrease)	69.3
Net realized gains (losses) on securities			30.3
Asset-backed Securities | Fixed maturities | Residential mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Transferred out of Level 3 into Level 2			(13.6)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	0.0		0.1
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	0.0		(0.2)
Asset-backed Securities | Fixed maturities | Commercial mortgage-backed securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	0.0		0.0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)	$ (0.4)		$ (0.2)

[1] The $69.3 million decrease during the year reflects the reclassification of our 5% interest in ARX upon our acquisition of a controlling interest in ARX. The $39.4 million reflects our inception-to-date gain recognized, including the $1.4 million reduction in valuation that occurred during the first six months of 2015.

[2] The $30.3 million represents a net holding period gain on our investment in ARX, which is reflected in net realized gains (losses) on securities in the comprehensive income statement.

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Fair Value Summary of Quantitative Information about Level 3 Fair Value Measurements (Detail) $ in Millions		12 Months Ended
		Dec. 31, 2015 USD ($) Investment		Dec. 31, 2014 USD ($) Investment
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value	[1],[2]	$ 20,937.3		$ 19,018.0
Fair Value, Inputs, Level 3
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value		10.2		81.3
Fair Value, Inputs, Level 3 | Fixed maturities
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value		$ 9.9		$ 11.6
External Pricing | Fair Value, Inputs, Level 3 | Fixed maturities | Asset-backed Securities | Commercial mortgage-backed securities | Prepayment rate zero percent
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Number of securities | Investment		1		1
Fair Value		$ 9.9		$ 11.6
Valuation Technique		External vendor		External vendor
Unobservable Input, prepayment rate		0.00%		0.00%
Internal Pricing | Fair Value, Inputs, Level 3
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Number of securities | Investment		0
Internal Pricing | Fair Value, Inputs, Level 3 | Equity securities | Nonredeemable preferred stocks
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Number of securities | Investment				1
Fair Value				$ 69.3
Internal Pricing | Fair Value, Inputs, Level 3 | Equity securities | Nonredeemable preferred stocks | Financials
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value		$ 0.0		$ 69.3
Valuation Technique				Multiple of tangible net book value
Unobservable Input, price to book ratio multiple				2.6
Subtotal Level 3 Securities | Fair Value, Inputs, Level 3
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value		9.9		$ 80.9
Third Party Pricing Exemption Securities | Fair Value, Inputs, Level 3
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Fair Value		$ 0.3	[3]	$ 0.4	[4]

[1] Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

[2] The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

[3] The fair values for these securities were obtained from non-binding external sources where unobservable inputs are not reasonably available to us.

[4] The fair values for these securities were obtained from non-binding external sources where unobservable inputs are not reasonably available to us.

XML

Fair Value - Additional Information (Detail) $ in Millions		12 Months Ended
		Dec. 31, 2015 USD ($) Investment		Dec. 31, 2014 USD ($) Investment
Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings		$ 39.4		$ (0.1)
Number of securities transferred out of Level 2 into Level 1 | Investment		0
Quoted prices percentage of fair value assets	[1],[2]	100.00%		100.00%
Portfolio	[1],[2]	$ 20,937.3		$ 19,018.0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)		1.9		(29.9)
Fair Value, Inputs, Level 1
Fair Value Measurements [Line Items]
Portfolio		$ 7,309.2		$ 7,314.3
Fair Value, Inputs, Level 1 | Vendor Quoted Pricing
Fair Value Measurements [Line Items]
Quoted prices percentage of fair value assets		49.00%		50.00%
Fair Value, Inputs, Level 2
Fair Value Measurements [Line Items]
Portfolio		$ 13,617.9		$ 11,622.4
Fair Value, Inputs, Level 2 | Vendor Quoted Pricing
Fair Value Measurements [Line Items]
Quoted prices percentage of fair value assets		97.00%		97.00%
Fair Value, Inputs, Level 2 | Dealer Quoted Pricing
Fair Value Measurements [Line Items]
Quoted prices percentage of fair value assets		3.00%		3.00%
Fair Value, Inputs, Level 3
Fair Value Measurements [Line Items]
Portfolio		$ 10.2		$ 81.3
Fair Value, Inputs, Level 3 | Internal Pricing
Fair Value Measurements [Line Items]
Number of securities | Investment		0
Nonredeemable preferred stocks | Equity securities
Fair Value Measurements [Line Items]
Number of securities transferred out of Level 2 into Level 1 | Investment				2
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount				$ 41.7
Nonredeemable preferred stocks | Fair Value, Inputs, Level 3 | Equity securities | Internal Pricing
Fair Value Measurements [Line Items]
Number of securities | Investment				1
Portfolio				$ 69.3
Financials | Nonredeemable preferred stocks | Equity securities
Fair Value Measurements [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings		$ 39.4	[3]	0.0	[4]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Other Comprehensive Income (Loss)		1.4	[3]	(30.3)	[4]
Financials | Nonredeemable preferred stocks | Fair Value, Inputs, Level 3 | Equity securities | Internal Pricing
Fair Value Measurements [Line Items]
Portfolio		$ 0.0		$ 69.3

[1] Our portfolio reflects the effect of unsettled security transactions and collateral on open derivative positions; at December 31, 2015, $23.1 million was included in "other assets," compared to $31.3 million in "other liabilities" at December 31, 2014.

[2] The total fair value of the portfolio included $1.3 billion and $1.9 billion at December 31, 2015 and 2014, respectively, of securities held in a consolidated, non-insurance subsidiary of the holding company, net of any unsettled security transactions.

[3] The $69.3 million decrease during the year reflects the reclassification of our 5% interest in ARX upon our acquisition of a controlling interest in ARX. The $39.4 million reflects our inception-to-date gain recognized, including the $1.4 million reduction in valuation that occurred during the first six months of 2015.

[4] The $30.3 million represents a net holding period gain on our investment in ARX, which is reflected in net realized gains (losses) on securities in the comprehensive income statement.

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Debt (Detail) $ in Millions	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)
Debt Instrument [Line Items]
Carrying Value	$ 2,707.9	$ 2,164.7
Fair Value	2,887.8	2,527.5
Debt, Long-term and Short-term, Combined Amount	2,707.9	2,164.7
3.75% Senior Notes due 2021
Debt Instrument [Line Items]
Carrying Value	498.1	497.8
Fair Value	528.7	535.6
6 5/8% Senior Notes due 2029
Debt Instrument [Line Items]
Carrying Value	295.7	295.5
Fair Value	376.0	400.6
6.25% Senior Notes due 2032
Debt Instrument [Line Items]
Carrying Value	395.0	394.8
Fair Value	490.6	527.9
4.35% Senior Notes due 2044
Debt Instrument [Line Items]
Carrying Value	346.4	346.3
Fair Value	352.8	378.9
3.70% Senior Notes due 2045
Debt Instrument [Line Items]
Carrying Value	395.0	0.0
Fair Value	362.0	0.0
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067
Debt Instrument [Line Items]
Carrying Value	612.8	630.3
Fair Value	612.8	684.5
Other Debt Instruments [Member]
Debt Instrument [Line Items]
Debt, Long-term and Short-term, Combined Amount	$ 164.9	$ 0.0
Notes Payable, Other Payables [Member] | Other Debt Instruments [Member]
Debt Instrument [Line Items]
Debt Instrument, Number of Debt Instruments Acquired	2,000,000
Debt, Long-term and Short-term, Combined Amount	$ 87.1
Trust Preferred Debt Securities [Member] | Other Debt Instruments [Member]
Debt Instrument [Line Items]
Debt Instrument, Number of Debt Instruments Acquired	2,000,000
Carrying Value	$ 41.2
Senior Notes [Member] | Other Debt Instruments [Member]
Debt Instrument [Line Items]
Debt Instrument, Number of Debt Instruments Acquired	4,000,000
Carrying Value	$ 24.0
Surplus Note [Member] | Other Debt Instruments [Member]
Debt Instrument [Line Items]
Debt Instrument, Number of Debt Instruments Acquired	1,000,000
Debt, Long-term and Short-term, Combined Amount	$ 12.6

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Debt (Parenthetical) (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2015	Jan. 26, 2015	Dec. 31, 2014	Apr. 25, 2014	Jun. 18, 2007
Debt Instrument [Line Items]
Senior notes, issuance amount		$ 400,000,000		$ 350,000,000
Debt instrument, outstanding	$ 2,729,300,000
Debt Instrument, Interest Rate, Stated Percentage		3.70%		4.35%
3.75% Senior Notes due 2021
Debt Instrument [Line Items]
Senior notes, issuance amount	$ 500,000,000		$ 500,000,000
Debt Instrument, Interest Rate, Stated Percentage	3.75%
6 5/8% Senior Notes due 2029
Debt Instrument [Line Items]
Senior notes, issuance amount	$ 300,000,000		300,000,000
Debt Instrument, Interest Rate, Stated Percentage	6.625%
6.25% Senior Notes due 2032
Debt Instrument [Line Items]
Senior notes, issuance amount	$ 400,000,000		400,000,000
Debt Instrument, Interest Rate, Stated Percentage	6.25%
4.35% Senior Notes due 2044
Debt Instrument [Line Items]
Senior notes, issuance amount	$ 350,000,000		350,000,000	$ 350,000,000
Debt Instrument, Interest Rate, Stated Percentage	4.35%			4.35%
3.70% Senior Notes due 2045
Debt Instrument [Line Items]
Senior notes, issuance amount	$ 400,000,000	$ 400,000,000	0
Debt Instrument, Interest Rate, Stated Percentage	3.70%	3.70%			6.70%
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067
Debt Instrument [Line Items]
Senior notes, issuance amount	$ 1,000,000,000		1,000,000,000
Debt instrument, outstanding	$ 614,300,000		$ 632,800,000
Debt Instrument, Interest Rate, Stated Percentage	6.70%
Discretionary Line of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate Description	advances under the Line of Credit (if any) will bear interest at a variable rate equal to the higher of PNC's Prime Rate or the sum of the Federal Funds Open Rate plus 50 basis points.
Long-term Line of Credit	$ 0

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Debt Unrealized Gains (Losses) From Debt Hedges Included In Accumulated Other (Detail) - USD ($) $ in Millions	1 Months Ended		12 Months Ended
	Jan. 26, 2015	Apr. 25, 2014	Dec. 31, 2015
3.75% Senior Notes due 2021
Debt Instrument [Line Items]
Unrealized Gain (Loss)			$ (5.1)
Unamortized Balance			(3.1)
6 5/8% Senior Notes due 2029
Debt Instrument [Line Items]
Unrealized Gain (Loss)			(4.2)
Unamortized Balance			(3.0)
6.25% Senior Notes due 2032
Debt Instrument [Line Items]
Unrealized Gain (Loss)			5.1
Unamortized Balance			3.9
4.35% Senior Notes due 2044
Debt Instrument [Line Items]
Unrealized Gain (Loss)		$ (1.6)	(1.6)
Unamortized Balance			(1.6)
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067
Debt Instrument [Line Items]
Unrealized Gain (Loss)			34.4
Unamortized Balance			3.9
3.70% Senior Notes due 2045
Debt Instrument [Line Items]
Unrealized Gain (Loss)	$ (12.9)		(12.9)
Unamortized Balance			$ (12.6)

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Debt Aggregate Principal Payments On Debt Outstanding (Detail) $ in Millions	Dec. 31, 2015 USD ($)
Debt Disclosure [Abstract]
2015	$ 27.2
2016	27.2
2017	27.2
2018	13.4
2019	3.0
Thereafter	2,631.3
Total	$ 2,729.3

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Debt - Additional Information (Detail) - USD ($)	1 Months Ended		3 Months Ended	9 Months Ended			12 Months Ended
	Jan. 26, 2015	Apr. 25, 2014	Sep. 30, 2015	Dec. 31, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Jun. 18, 2007
Debt Instrument [Line Items]
Debt interest payments								Interest on all debt issued by The Progressive Corporation is payable semiannually at the stated rates. However, the 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 (the “6.70% Debentures”) will only bear interest at this fixed annual rate through June 14, 2017. Thereafter, the 6.70% Debentures will bear interest at an annual rate equal to the three-month London Interbank Offered Rate (LIBOR) plus 2.0175%, and interest will be payable quarterly until the 6.70% Debentures are redeemed or retired.
Debt Instrument, Face Amount	$ 400,000,000	$ 350,000,000
Debt Instrument, Interest Rate, Stated Percentage	3.70%	4.35%
Interest payment frequency								Payable semiannually
Payment of debt								$ 20,400,000	$ 0	$ 150,000,000
Gains (losses) on extinguishment of debt					$ (900,000)			(900,000)	(4,800,000)	(4,300,000)
Cash flow hedge gain reclassification from accumulated other comprehensive income to net realized gains/losses on securities								1,300,500,000	1,281,000,000	1,165,400,000
Discretionary Line of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity				$ 100,000,000				$ 100,000,000	100,000,000
Line of Credit Facility, Interest Rate Description								advances under the Line of Credit (if any) will bear interest at a variable rate equal to the higher of PNC's Prime Rate or the sum of the Federal Funds Open Rate plus 50 basis points.
Long-term Line of Credit				0				$ 0
Discretionary Line of Credit [Member] | Federal Funds Rate
Debt Instrument [Line Items]
Basis points								0.50%
4.35% Senior Notes due 2044
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 350,000,000		$ 350,000,000				$ 350,000,000	350,000,000
Debt Instrument, Interest Rate, Stated Percentage		4.35%		4.35%				4.35%
Proceeds from Debt, Net of Issuance Costs		$ 346,300,000
Debt Related Commitment Fees and Debt Issuance Costs		700,000
Unrealized Gain (Loss)		$ (1,600,000)						$ (1,600,000)
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067
Debt Instrument [Line Items]
Debt Instrument, Face Amount				$ 1,000,000,000				$ 1,000,000,000	1,000,000,000
Debt Instrument, Interest Rate, Stated Percentage				6.70%				6.70%
Unrealized Gain (Loss)								$ 34,400,000
Repurchase of debt, face amount					$ 18,400,000	$ 44,300,000
Fixed interest rate term								10 years
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 | Three Month LIBOR
Debt Instrument [Line Items]
Basis points								2.0175%
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 | Net unrealized gains on forecasted transactions
Debt Instrument [Line Items]
Cash flow hedge gain reclassification from accumulated other comprehensive income to net realized gains/losses on securities								$ 200,000	500,000	$ 800,000
3.70% Senior Notes due 2045
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 400,000,000			$ 400,000,000				$ 400,000,000	$ 0
Debt Instrument, Interest Rate, Stated Percentage	3.70%			3.70%				3.70%			6.70%
Proceeds from Debt, Net of Issuance Costs	$ 394,900,000
Debt Related Commitment Fees and Debt Issuance Costs	800,000
Unrealized Gain (Loss)	$ (12,900,000)							$ (12,900,000)
Other Assets [Member]
Debt Instrument [Line Items]
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets				$ 1,300,000				$ 1,300,000
Surplus Note [Member] | Other Debt Instruments [Member]
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment, Principal							$ 2,200,000
Debt Instrument, Restrictive Covenant, Minimum Surplus Requirement			$ 50,000,000
Scenario, Forecast [Member] | Notes Payable, Other Payables [Member] | Other Debt Instruments [Member]
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment, Principal							$ 25,000,000
London Interbank Offered Rate (LIBOR) [Member] | Notes Payable, Other Payables [Member] | Other Debt Instruments [Member]
Debt Instrument [Line Items]
Basis points				2.25%

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Income Taxes Components of Income Tax Provision (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Current State and Local Tax Expense (Benefit)	$ 14.7	$ 0.0	$ 0.0
Current Federal Tax Expense (Benefit)	655.3	594.4	460.2
Deferred State and Local Income Tax Expense (Benefit)	(11.2)	0.0	0.0
Deferred Federal Income Tax Expense (Benefit)	(47.7)	32.0	94.4
Income Tax Expense (Benefit)	$ 611.1	$ 626.4	$ 554.6

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Income Taxes Reconciliation of Provision (Benefit) for income Taxes Reported in Consolidated Statements Of Income with Tax at Statutory Rate (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Tax Disclosure [Abstract]
Income before income taxes	$ 1,911.6	$ 1,907.4	$ 1,720.0
Tax at statutory rate	669.1	667.6	602.0
Dividends received deduction	(19.8)	(18.3)	(17.6)
Exempt interest income	(17.8)	(13.8)	(13.1)
Tax-deductible dividends	(7.9)	(6.5)	(13.6)
Other items, net	(1.0)	(2.6)	(3.1)
Income Tax Expense (Benefit)	$ 611.1	$ 626.4	$ 554.6
Tax at statutory rate	35.00%	35.00%	35.00%
Dividends received deduction	(1.00%)	(1.00%)	(1.00%)
Exempt interest income	(1.00%)	(1.00%)	(1.00%)
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount	$ (13.8)	$ 0.0	$ 0.0
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Percent	(1.00%)	(0.00%)	(0.00%)
Tax-deductible dividends	(0.00%)	(0.00%)	(1.00%)
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount	$ 2.3	$ 0.0	$ 0.0
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Percent	(0.00%)	(0.00%)	(0.00%)
Other items, net	0.00%	0.00%	0.00%
Total income tax provision	32.00%	33.00%	32.00%

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Income Taxes Components of Net Deferred Tax Assets (Detail) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Deferred tax assets:
Unearned premiums reserve	$ 453.3	$ 378.8
Investment basis differences	40.5	60.6
Non-deductible accruals	231.4	208.0
Loss and loss adjustment expense reserves	75.3	76.9
Deferred Tax Assets, Hedging Transactions	4.4	0.0
Other	9.6	7.5
Deferred tax liabilities:
Net unrealized gains on securities	(436.7)	(550.3)
Hedges on forecasted transactions	0.0	(0.8)
Deferred acquisition costs	(197.4)	(160.0)
Property and equipment	(110.7)	(100.9)
Prepaid expenses	(11.9)	(11.4)
Deferred Tax Liabilities, Intangible Assets	(166.4)	0.0
Deferred gain on extinguishment of debt	(2.2)	(3.0)
Other	(7.0)	(4.3)
Deferred Tax Liability, Federal Tax	117.8	98.9
Net deferred tax liability	(109.3)	(98.9)
Deferred Tax Assets, State Taxes	$ 8.5	$ 0.0

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Income Taxes [Line Items]
Net taxes payable	$ 25.1	$ 49.4
Provision (benefit) for income taxes	(611.1)	(626.4)	$ (554.6)
Interest Expense or Benefit
Income Taxes [Line Items]
Provision (benefit) for income taxes	$ (0.1)	$ 0.0	$ 0.2

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Loss And Loss Adjustment Expense Reserves Activity in Loss and loss Adjustment Expense Reserves (Detail) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Apr. 01, 2015
Loss and Loss Adjustment Expense Reserves Disclosures [Abstract]
Liability for Unpaid Claims and Claims Adjustment Expense, Adjustments						$ 222.4
Liability for Unpaid Claims and Claims Adjustment Expense, Business Acquisitions	$ 0.0				$ 0.0
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward]
Balance at beginning of period	7,838.4	$ 8,857.4	$ 8,479.7	$ 7,838.4
Less reinsurance recoverables on unpaid losses	862.1	1,185.9	1,045.9	862.1
Net balance at beginning of period	$ 6,976.3	7,671.5	7,433.8	6,976.3
Incurred related to:
Current year		14,657.1	13,330.3	12,427.3
Prior years		(315.1)	(24.1)	45.1
Total incurred		14,342.0	13,306.2	12,472.4
Paid related to:
Current year		9,577.3	8,831.5	8,095.0
Prior years		4,062.3	4,237.0	3,919.9
Total paid		13,639.6	13,068.5	12,014.9
Net balance at ending of period		8,596.3	7,671.5	7,433.8	6,976.3
Plus reinsurance recoverables on unpaid losses		1,442.7	1,185.9	1,045.9	862.1
Balance at ending of period		$ 10,039.0	8,857.4	$ 8,479.7	$ 7,838.4
Liability for Unpaid Claims and Claims Adjustment Expense, Net, Adjusted Beginning Balance			$ 7,893.9

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Loss And Loss Adjustment Expense Reserves Loss And Loss Adjustment Expense Reserves - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Insurance Reserves [Line Items]
Prior years	$ 315.1	$ 24.1	$ (45.1)
Accident Year 2011
Insurance Reserves [Line Items]
Unfavorable development in loss and loss adjustment expense reserves			80.00%
Accident Year 2012
Insurance Reserves [Line Items]
Unfavorable development in loss and loss adjustment expense reserves			20.00%
Commercial Lines
Insurance Reserves [Line Items]
Unfavorable development in loss and loss adjustment expense reserves			55.00%
Personal Lines
Insurance Reserves [Line Items]
percentage of favorable development Loss and Loss adjustment expense reserve	65.00%

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Reinsurance Effect of Reinsurance on Premiums Written and Earned (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Direct premiums written	$ 21,086.5	$ 18,914.8	$ 17,562.8
Ceded written	(522.5)	(260.2)	(223.1)
Net premiums written	20,564.0	18,654.6	17,339.7
Direct premiums earned	20,454.1	18,648.4	17,317.9
Ceded earned	(555.0)	(249.9)	(214.5)
Net premiums earned	19,899.1	18,398.5	17,103.4
non regulated reinsurance plan [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Ceded written	(164.5)	(8.3)	(6.9)
Ceded earned	(192.4)	(8.5)	(9.1)
Regulated reinsurance plan [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Ceded written	(358.0)	(251.9)	(216.2)
Ceded earned	$ (362.6)	$ (241.4)	$ (205.4)

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Reinsurance Prepaid Reinsurance Premiums and Reinsurance Recoverables (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Ceded Premiums Written	$ 522.5	$ 260.2	$ 223.1
Ceded Premiums Earned	555.0	249.9	214.5
Prepaid reinsurance premiums	$ 199.3	$ 85.3
Percentage of Prepaid Reinsurance Premiums	100.00%	100.00%
Reinsurance Recoverables	$ 1,488.8	$ 1,231.9
Percentage of Reinsurance Recoverables	100.00%	100.00%
State Reinsurance Plan
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 139.1	$ 81.2
Percentage of Prepaid Reinsurance Premiums	70.00%	95.00%
Reinsurance Recoverables	$ 1,421.5	$ 1,182.0
Percentage of Reinsurance Recoverables	96.00%	96.00%
State Reinsurance Plan | Michigan Catastrophic Claims Association
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 31.4	$ 32.8
Percentage of Prepaid Reinsurance Premiums	16.00%	38.00%
Reinsurance Recoverables	$ 1,217.6	$ 1,018.8
Percentage of Reinsurance Recoverables	82.00%	83.00%
State Reinsurance Plan | Commercial Auto Insurance Procedures Plans
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 37.1	$ 26.5
Percentage of Prepaid Reinsurance Premiums	19.00%	31.00%
Reinsurance Recoverables	$ 134.0	$ 110.1
Percentage of Reinsurance Recoverables	9.00%	9.00%
State Reinsurance Plan | North Carolina Reinsurance Facility
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 25.6	$ 21.9
Percentage of Prepaid Reinsurance Premiums	13.00%	26.00%
Reinsurance Recoverables	$ 56.7	$ 51.1
Percentage of Reinsurance Recoverables	4.00%	4.00%
State Reinsurance Plan | other reinsurance program [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 0.0	$ 0.0
Percentage of Prepaid Reinsurance Premiums	0.00%	0.00%
Reinsurance Recoverables	$ 2.8	$ 2.0
Percentage of Reinsurance Recoverables	0.00%	0.00%
Federal Reinsurance Plans [Member] | National Flood Insurance Program [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 45.0	$ 0.0
Percentage of Prepaid Reinsurance Premiums	22.00%	0.00%
Reinsurance Recoverables	$ 10.4	$ 0.0
Percentage of Reinsurance Recoverables	1.00%	0.00%
other reinsurance program [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 7.6	$ 4.1
Percentage of Prepaid Reinsurance Premiums	4.00%	5.00%
Reinsurance Recoverables	$ 31.8	$ 49.9
Percentage of Reinsurance Recoverables	2.00%	4.00%
Non State Reinsurance Plans
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 60.2	$ 4.1
Percentage of Prepaid Reinsurance Premiums	30.00%	5.00%
Reinsurance Recoverables	$ 67.3	$ 49.9
Percentage of Reinsurance Recoverables	4.00%	4.00%
Property reinsurance program [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Prepaid reinsurance premiums	$ 52.6	$ 0.0
Percentage of Prepaid Reinsurance Premiums	26.00%	0.00%
Reinsurance Recoverables	$ 35.5	$ 0.0
Percentage of Reinsurance Recoverables	2.00%	0.00%
Regulated reinsurance plan [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Ceded Premiums Written	$ 358.0	$ 251.9	216.2
Ceded Premiums Earned	362.6	241.4	205.4
non regulated reinsurance plan [Member]
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Ceded Premiums Written	164.5	8.3	6.9
Ceded Premiums Earned	$ 192.4	$ 8.5	$ 9.1

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Reinsurance - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reinsurance Premiums for Insurance Companies, by Product Segment [Line Items]
Reinsurance ceded	$ (457.3)	$ (322.7)	$ (347.0)

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Statutory Financial Information - Additional Information (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statutory Financial Information Disclosures [Abstract]
Consolidated statutory policyholders' surplus	$ 7,575.5	$ 6,442.8
Statutory net income	1,333.1	$ 1,289.5	$ 1,086.3
Consolidated statutory policyholders' surplus, net admitted assets of insurance subsidiaries and affiliate that are required to meet minimum statutory surplus requirements in such entities' states of domicile	637.6
Aggregate cash dividends paid to the parent company by subsidiaries	886.5
Maximum aggregate dividend amount subsidiaries could pay without prior approval from regulatory authorities	$ 1,325.0

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Employee Benefit Plans Amounts Charged to Income for employees Incentive Compensation Plans (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Incentive Compensation Cash Award
Incentive Compensation Plans Expense [Line Items]
Pretax	$ 337.7	$ 266.2	$ 234.5
After Tax	219.5	173.0	152.4
Employee Stock [Member]
Incentive Compensation Plans Expense [Line Items]
Pretax	64.5	51.4	64.9
After Tax	41.9	33.4	42.2
Employee Stock Option
Incentive Compensation Plans Expense [Line Items]
Pretax	1.7	0.0	$ 0.0
After Tax	$ 1.1	$ 0.0

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Employee Benefit Plans Summary of All Employee Restricted Equity Award Activity (Detail) - $ / shares		12 Months Ended
		Dec. 31, 2015		Dec. 31, 2014		Dec. 31, 2013
Employee Restricted Equity Awards
Number of Shares
Beginning of year	[3]	9,051,564	[1],[2]	9,918,575	[1],[2]	11,625,981
Add (deduct):
Granted	[3],[4]	2,489,976		3,542,984		2,738,809
Vested	[3]	(3,682,644)		(4,228,673)		(4,293,605)
Forfeited	[3]	(133,669)		(181,322)		(152,610)
End of year	[1],[2],[3]	7,725,227		9,051,564		9,918,575
Weighted Average Grant Date Fair Value
Beginning of year		$ 21.27	[1],[2]	$ 20.13	[1],[2]	$ 17.80
Granted	[4]	25.20		19.32		22.73
Vested		19.53		16.99		15.54
Forfeited		21.63		20.75		18.28
End of year	[1],[2]	$ 23.37		$ 21.27		$ 20.13
Employee Restricted Equity Awards Vesting Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]		three, four, and five years

[1] At December 31, 2015, the number of shares included 2,025,871 performance-based awards at their target amounts. We expect 1,946,565 of these performance-based awards to vest, based upon our current estimate of the likelihood of achieving these pre-determined performance goals.

[2] At December 31, 2015, the total unrecognized compensation cost related to unvested equity awards was $78.3 million, which includes performance-based awards at their currently estimated vesting value. This compensation expense will be recognized into the income statement over the weighted average vesting period of 2.3 years.

[3] Includes both restricted stock units and restricted stock. Upon vesting, all units will be converted on a one-for-one basis into Progressive common shares funded from existing treasury shares. All performance-based awards are included at their target amounts.

[4] We reinvest dividend equivalents on restricted stock units. For 2015, 2014, and 2013, the number of units "granted" shown in the table above includes 196,947, 538,749, and 161,077 of dividend equivalent units, respectively, at a weighted average grant date fair value of $0, since the dividends were factored into the grant date fair value of the original grant.

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Employee Benefit Plans Summary of All Employee Restricted Equity Award Activity (Parenthetical) (Detail) - Employee Restricted Equity Awards - USD ($) $ / shares in Units, $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted units	[1],[2]	2,489,976	3,542,984	2,738,809
Weighted average grant date fair value	[2]	$ 25.20	$ 19.32	$ 22.73
Unrecognized compensation cost related to unvested equity awards		$ 78.3
Period of recognition of compensation expense related to unvested equity awards		2 years 3 months 15 days
Dividend Equivalent Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number granted units		196,947	538,749	161,077
Weighted average grant date fair value		$ 0	$ 0	$ 0
Performance Based Restricted Equity Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity awards target amount		2,025,871
Equity awards to vest		1,946,565

[1] Includes both restricted stock units and restricted stock. Upon vesting, all units will be converted on a one-for-one basis into Progressive common shares funded from existing treasury shares. All performance-based awards are included at their target amounts.

[2] We reinvest dividend equivalents on restricted stock units. For 2015, 2014, and 2013, the number of units "granted" shown in the table above includes 196,947, 538,749, and 161,077 of dividend equivalent units, respectively, at a weighted average grant date fair value of $0, since the dividends were factored into the grant date fair value of the original grant.

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Employee Benefit Plans Summary of all Directors' Restricted Stock Activity (Detail) - Non Employee Director Restricted Equity Awards - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Number of Shares
Beginning of year	81,579	93,254	92,957
Add (deduct):
Granted	89,427	90,649	93,254
Vested	(81,579)	(93,254)	(92,957)
Forfeited	0	(9,070)	0
End of year	89,427	81,579	93,254
Weighted Average Grant Date Fair Value
Beginning of year	$ 25.45	$ 26.19	$ 21.41
Granted	27.23	25.44	26.19
Vested	25.45	26.19	21.41
Forfeited		25.36	0
End of year	$ 27.23	$ 25.45	$ 26.19

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Employee Benefit Plans Assets Held in Deferral Plan Irrevocable Grantor Trust Account (Detail) - USD ($) $ in Millions		Dec. 31, 2015	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Assets held in Deferral Plan Irrevocable Grantor Trust account		$ 233.3	$ 207.1
Progressive common shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Assets held in Deferral Plan Irrevocable Grantor Trust account	[1]	108.5	83.2
Other Investment Funds
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Assets held in Deferral Plan Irrevocable Grantor Trust account	[2]	$ 124.8	$ 123.9

[1] Includes 4.4 million and 3.6 million common shares as of December 31, 2015 and 2014, respectively, to be distributed in common shares.

[2] Amount is included in other assets on the balance sheet.

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Employee Benefit Plans Assets Held in Deferral Plan Irrevocable Grantor Trust Account (Parenthetical) (Detail) - shares shares in Millions	Dec. 31, 2015	Dec. 31, 2014
Progressive common shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares held in Deferral Plan Irrevocable Grantor Trust account to be distributed in-kind	4.4	3.6

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Employee Benefit Plans - Additional Information (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($) Person shares	Dec. 31, 2014 USD ($) Person	Dec. 31, 2013 USD ($) Person	Dec. 31, 2011	Dec. 31, 2010
Employee Benefits Disclosure [Line Items]
Employee Stock Ownership Plan Shares held | shares	25,200,000
Postemployment benefits liability	$ 22.6	$ 22.5
Employee Restricted Equity Awards
Employee Benefits Disclosure [Line Items]
Aggregate fair value of the restricted equity awards that vested during the period	$ 105.4	109.6	$ 98.3
Non Employee Director Restricted Equity Awards
Employee Benefits Disclosure [Line Items]
Vesting period of grants to date	11 months
Total pretax intrinsic value of options exercised and restricted stock vested	$ 2.2	$ 2.2	$ 2.3
ARX employee [Member] | Employee Stock Option
Employee Benefits Disclosure [Line Items]
Allocated Share-based Compensation Expense	1.7
Allocated Share-based Compensation Expense, Net of Tax	$ 1.1
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | shares	(1,005)
Executive Deferred Compensation Plan
Employee Benefits Disclosure [Line Items]
Common shares reserved for issuance under executive deferred compensation plan | shares	11,100,000
2010 Equity Incentive Plan | Employee Restricted Equity Awards
Employee Benefits Disclosure [Line Items]
Shares authorized | shares	18,000,000.0
2003 Directors Equity Incentive Plan | Non Employee Director Restricted Equity Awards
Employee Benefits Disclosure [Line Items]
Shares authorized | shares	1,400,000
Performance Based Restricted Equity Awards
Employee Benefits Disclosure [Line Items]
Number of employees, approximately | Person	45	45	45
Performance Based Restricted Equity Awards | Insurance Operating Results | Lower Limit
Employee Benefits Disclosure [Line Items]
Performance-based awards granted vesting percentage of the award amount		0.00%	0.00%	0.00%	0.00%
Performance Based Restricted Equity Awards | Insurance Operating Results | Upper Limit
Employee Benefits Disclosure [Line Items]
Performance-based awards granted vesting percentage of the award amount		250.00%	200.00%	200.00%	200.00%
Performance Based Restricted Equity Awards | Investment Results | Lower Limit
Employee Benefits Disclosure [Line Items]
Performance-based awards granted vesting percentage of the award amount		0.00%	0.00%	0.00%	0.00%
Performance Based Restricted Equity Awards | Investment Results | Upper Limit
Employee Benefits Disclosure [Line Items]
Performance-based awards granted vesting percentage of the award amount		200.00%	200.00%	200.00%	200.00%
Other Postretirement Benefit Plans, Defined Benefit
Employee Benefits Disclosure [Line Items]
Number of employees, approximately | Person	100
Defined Contribution Pension Plan 401k
Employee Benefits Disclosure [Line Items]
Matching contributions	$ 78.4	$ 74.8	$ 69.9
Defined Contribution Pension Plan 401k | Upper Limit
Employee Benefits Disclosure [Line Items]
Matching contribution to defined contribution pension plan	6.00%

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Employee Benefit Plans Summary of ARX employee stock option plans (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2015	Apr. 01, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value	$ 1.1
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost related to unvested equity awards	$ 2.9
Period of recognition of compensation expense related to unvested equity awards	1 year 8 months 20 days
Employee Stock Option | ARX employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Weighted Average Grant Date Fair Value	$ 665.85
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number	24,995	26,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price	$ 526.46	$ 513.72
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares	12,000	14,800
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value	$ 677.81	$ 675.55
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested, Number of Shares	2,800
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period	(1,005)
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price	$ 197.01
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number	12,995
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 386.69

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Employee Benefit Plans Summary of ARX Defined Contribution Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Defined Contribution Pension Plan 401k
Defined Contribution Plan Disclosure [Line Items]
Matching contributions	$ 78.4	$ 74.8	$ 69.9
Defined Contribution Pension Plan Four Zero One K ARX [Domain]
Defined Contribution Plan Disclosure [Line Items]
Matching contributions	$ 0.0

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Segment Information Operating Results (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Depreciation		$ 103.7	$ 97.1	$ 101.3
Premium Revenue		19,899.1	18,398.5	17,103.4
Revenues		20,853.8	19,391.4	18,170.9
Pretax Profit (Loss)		(1,911.6)	(1,907.4)	(1,720.0)
Personal Lines
Segment Reporting Information [Line Items]
Premium Revenue		17,294.5	16,561.0	15,341.6
Commercial Lines
Segment Reporting Information [Line Items]
Premium Revenue		1,995.9	1,837.5	1,761.6
Property, Liability and Casualty Insurance Product Line
Segment Reporting Information [Line Items]
Depreciation		45.2
Premium Revenue		609.1	0.0	0.0
Other Indemnity
Segment Reporting Information [Line Items]
Premium Revenue		$ 0.4	$ 0.0	$ 0.2
Underwriting Operations
Segment Reporting Information [Line Items]
Underwriting Margin		7.50%	7.70%	6.50%
Combined Ratio		92.50%	92.30%	93.50%
Revenues		$ 19,899.1	$ 18,398.5	$ 17,103.4
Pretax Profit (Loss)		$ (1,495.2)	$ (1,410.3)	$ (1,120.1)
Underwriting Operations | Personal Lines
Segment Reporting Information [Line Items]
Underwriting Margin		6.50%	6.70%	6.60%
Combined Ratio		93.50%	93.30%	93.40%
Revenues	[1]	$ 17,294.5	$ 16,561.0	$ 15,341.6
Pretax Profit (Loss)	[1]	$ (1,116.6)	$ (1,106.4)	$ (1,016.8)
Underwriting Operations | Personal Lines | Agency Channel
Segment Reporting Information [Line Items]
Underwriting Margin		7.80%	7.50%	6.30%
Combined Ratio		92.20%	92.50%	93.70%
Revenues		$ 9,108.6	$ 9,087.0	$ 8,601.5
Pretax Profit (Loss)		$ (713.2)	$ (683.0)	$ (542.9)
Underwriting Operations | Personal Lines | Direct Channel
Segment Reporting Information [Line Items]
Underwriting Margin		4.90%	5.70%	7.00%
Combined Ratio		95.10%	94.30%	93.00%
Revenues		$ 8,185.9	$ 7,474.0	$ 6,740.1
Pretax Profit (Loss)		$ (403.4)	$ (423.4)	$ (473.9)
Underwriting Operations | Commercial Lines
Segment Reporting Information [Line Items]
Underwriting Margin		15.90%	17.20%	6.50%
Combined Ratio		84.10%	82.80%	93.50%
Pretax Profit (Loss)		$ (318.3)	$ (315.8)	$ (114.1)
Underwriting Operations | Property, Liability and Casualty Insurance Product Line
Segment Reporting Information [Line Items]
Underwriting Margin		10.10%	0.00%	0.00%
Combined Ratio		89.90%	0.00%	0.00%
Pretax Profit (Loss)		$ (61.3)	$ 0.0	$ 0.0
Underwriting Operations | Other Indemnity
Segment Reporting Information [Line Items]
Pretax Profit (Loss)		1.0	11.9	10.8
Fees And Other Revenues
Segment Reporting Information [Line Items]
Revenues	[2]	302.0	309.1	291.8
Service Businesses
Segment Reporting Information [Line Items]
Revenues		86.3	56.0	39.6
Pretax Profit (Loss)		(8.8)	(5.1)	(0.8)
Investments
Segment Reporting Information [Line Items]
Revenues	[3]	567.3	632.6	740.4
Pretax Profit (Loss)		(544.5)	(613.7)	(721.6)
Gains (losses) on extinguishment of debt
Segment Reporting Information [Line Items]
Revenues		(0.9)	(4.8)	(4.3)
Pretax Profit (Loss)		0.9	4.8	4.3
Interest Expense
Segment Reporting Information [Line Items]
Pretax Profit (Loss)		$ 136.0	$ 116.9	$ 118.2

[1] Personal auto insurance accounted for 92% of the total Personal Lines segment net premiums earned in 2015, compared to 92% in 2014 and 91% in 2013; insurance for our special lines products (e.g., motorcycles, ATVs, RVs, manufactured homes, watercraft, and snowmobiles) accounted for the balance of the Personal Lines net premiums earned.

[2] Pretax profit (loss) for fees and other revenues are allocated to operating segments.

[3] Revenues represent recurring investment income and total net realized gains (losses) on securities; pretax profit is net of investment expenses.

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Segment Information Operating Results (Parenthetical) (Details)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Personal Lines | Personal Auto | Underwriting Operations
Segment Reporting Information [Line Items]
Personal auto insurance percentage of the total personal lines segment net premiums earned	92.00%	92.00%	91.00%

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Segment Information Underwriting Margins and Combined Ratios for our Underwriting Operations (Details) - Underwriting Operations	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Segment Reporting Information [Line Items]
Underwriting Margin	7.50%	7.70%	6.50%
Combined Ratio	92.50%	92.30%	93.50%
Personal Lines
Segment Reporting Information [Line Items]
Underwriting Margin	6.50%	6.70%	6.60%
Combined Ratio	93.50%	93.30%	93.40%
Personal Lines | Agency Channel
Segment Reporting Information [Line Items]
Underwriting Margin	7.80%	7.50%	6.30%
Combined Ratio	92.20%	92.50%	93.70%
Personal Lines | Direct Channel
Segment Reporting Information [Line Items]
Underwriting Margin	4.90%	5.70%	7.00%
Combined Ratio	95.10%	94.30%	93.00%
Commercial Lines
Segment Reporting Information [Line Items]
Underwriting Margin	15.90%	17.20%	6.50%
Combined Ratio	84.10%	82.80%	93.50%

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Segment Information - Additional Information (Detail) $ in Millions	12 Months Ended
	Dec. 31, 2015 USD ($) Entity	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Segment Reporting Information [Line Items]
Net premiums earned	$ 19,899.1	$ 18,398.5	$ 17,103.4
Depreciation	$ 103.7	97.1	101.3
Underwriting Operations | Personal Lines | Agency Channel | Lower Limit
Segment Reporting Information [Line Items]
Independent insurance agencies and brokerages | Entity	35,000
Australia
Segment Reporting Information [Line Items]
Net premiums earned	$ 15.9	$ 17.1	$ 13.0

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Other Comprehensive Income Components of Other Comprehensive Income (Loss) Including Reclassification Adjustments by Income Statement (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Components Of Other Comprehensive Income Loss [Line Items]
AOCI before Tax, Attributable to Parent	$ 1,234.5	$ 1,574.0	$ 1,464.1	$ 1,340.0
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward]
Investment securities, pre tax	(198.7)	362.1	368.2
Net non-credit related OTTI losses, adjusted for valuation changes, pre tax	0.0	0.0	0.4
Forecasted transactions, pre tax	(12.9)	(1.6)	0.0
Foreign currently translation adjustement, pre tax	(1.8)	(1.3)	(2.5)
Total other comprehensive income (loss) before reclassifications, pre tax	(211.8)	359.2	366.1
Total reclassification adjustment for amounts realized in net income, pre tax	127.7	249.3	242.0
Total other comprehensive income (loss), pre tax	(339.5)	109.9	124.1
Accumulated Other Comprehensive Income (Loss), Tax [Roll Forward]
Investment securities, Total tax (provision) benefit	67.5	(126.7)	(128.9)
Net non-credit related OTTI losses, adjusted for valuation changes Total tax (provision) benefit	0.0	0.0	(0.1)
Forecasted transactions, Total tax (provision) benefit	4.5	0.6	0.0
Foreign currency traslation adjustment, Total tax (provision) benefit	0.6	0.4	0.9
Total other comprehensive Income (loss) before reclassifications, Total tax (provision) benefit	72.1	(125.7)	(128.1)
Total reclassification adjustment for amounts realized in net income, Total tax (provision) benefit	(44.7)	(87.2)	(84.7)
Total other comprehensive income (loss), Total tax (provision) benefit	116.8	(38.5)	(43.4)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Investment securities, after tax	(131.2)	235.4	239.3
Net non-credit related OTTI losses, adjusted for valuation changes, after tax	0.0	0.0	0.3
Forecasted transactions, after tax	(8.4)	(1.0)	0.0
Foreign currency translation adjustment, after tax	(1.2)	(0.9)	(1.6)
Total other comprehensive income (loss), before reclassifications, after tax	(139.7)	233.5	238.0
Total reclassification adjustment for amounts realized in net income, after tax	83.0	162.1	157.3
Other Comprehensive Income (Loss), before Tax, Portion Attributable to Noncontrolling Interest	1.6	0.0	0.0
Other Comprehensive Income (Loss), Tax, Portion Attributable to Noncontrolling Interest	(0.5)	0.0	0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest	1.1	0.0	0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(222.7)	71.4	80.7
Net impairment losses recognized in earnings	(23.8)	(7.9)	(6.1)
Net realized gains (losses) on securities	136.5	232.1	324.5
Interest expense	136.0	116.9	118.2
AOCI Tax, Attributable to Parent	(434.1)	(550.9)	(512.4)	(469.0)
AOCI Net of Tax, Attributable to Parent	800.4	1,023.1	951.7	871.0
Net unrealized gains (losses) on securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Investment securities, after tax	(131.2)	235.4	239.3
Net non-credit related OTTI losses, adjusted for valuation changes, after tax	0.0	0.0	0.3
Forecasted transactions, after tax	0.0	0.0	0.0
Foreign currency translation adjustment, after tax	0.0	0.0	0.0
Total other comprehensive income (loss), before reclassifications, after tax	(131.2)	235.4	239.6
Total reclassification adjustment for amounts realized in net income, after tax	81.7	160.5	155.3
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest	0.0	0.0	0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(212.9)	74.9	84.3
AOCI Net of Tax, Attributable to Parent	809.0	1,021.9	947.0	862.7
Net unrealized gains on forecasted transactions
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Investment securities, after tax	0.0	0.0	0.0
Net non-credit related OTTI losses, adjusted for valuation changes, after tax	0.0	0.0	0.0
Forecasted transactions, after tax	(8.4)	(1.0)	0.0
Foreign currency translation adjustment, after tax	0.0	0.0	0.0
Total other comprehensive income (loss), before reclassifications, after tax	(8.4)	(1.0)	0.0
Total reclassification adjustment for amounts realized in net income, after tax	1.3	1.6	2.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest	0.0	0.0	0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(9.7)	(2.6)	(2.0)
AOCI Net of Tax, Attributable to Parent	(8.2)	1.5	4.1	6.1
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Investment securities, after tax	0.0	0.0	0.0
Net non-credit related OTTI losses, adjusted for valuation changes, after tax	0.0	0.0	0.0
Forecasted transactions, after tax	0.0	0.0	0.0
Foreign currency translation adjustment, after tax	(1.2)	(0.9)	(1.6)
Total other comprehensive income (loss), before reclassifications, after tax	(1.2)	(0.9)	(1.6)
Total reclassification adjustment for amounts realized in net income, after tax	0.0	0.0	0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest	0.0	0.0	0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	(1.2)	(0.9)	(1.6)
AOCI Net of Tax, Attributable to Parent	(1.5)	(0.3)	0.6	2.2
Noncontrolling Interest [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Investment securities, after tax	0.0	0.0	0.0
Net non-credit related OTTI losses, adjusted for valuation changes, after tax	0.0	0.0	0.0
Forecasted transactions, after tax	0.0	0.0	0.0
Foreign currency translation adjustment, after tax	0.0	0.0	0.0
Total other comprehensive income (loss), before reclassifications, after tax	1.1	0.0	0.0
Total reclassification adjustment for amounts realized in net income, after tax	0.0	0.0	0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest	1.1	0.0	0.0
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Parent	1.1	0.0	0.0
AOCI Net of Tax, Attributable to Parent	1.1	0.0	0.0	$ 0.0
Reclassification out of Accumulated Other Comprehensive Income | Accumulated other comprehesnive income pretax
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net impairment losses recognized in earnings	(23.8)	(7.7)	(5.7)
Net realized gains (losses) on securities	149.7	255.0	245.5
Interest expense	1.8	2.0	2.2
Reclassification out of Accumulated Other Comprehensive Income | Accumulated other comprehensive income tax
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net impairment losses recognized in earnings	8.4	2.7	2.0
Net realized gains (losses) on securities	(52.5)	(89.2)	(86.0)
Interest expense	(0.6)	(0.7)	(0.7)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated other comprehensive income after tax
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net impairment losses recognized in earnings	(15.4)	(5.0)	(3.7)
Net realized gains (losses) on securities	97.2	165.8	159.5
Interest expense	1.2	1.3	1.5
Reclassification out of Accumulated Other Comprehensive Income | Net unrealized gains (losses) on securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net impairment losses recognized in earnings	(15.4)	(5.0)	(3.7)
Net realized gains (losses) on securities	97.1	165.5	159.0
Interest expense	0.0	0.0	0.0
Reclassification out of Accumulated Other Comprehensive Income | Net unrealized gains on forecasted transactions
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net impairment losses recognized in earnings	0.0	0.0	0.0
Net realized gains (losses) on securities	0.1	0.3	0.5
Interest expense	1.2	1.3	1.5
Reclassification out of Accumulated Other Comprehensive Income | Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net impairment losses recognized in earnings	0.0	0.0	0.0
Net realized gains (losses) on securities	0.0	0.0	0.0
Interest expense	0.0	0.0	0.0
Reclassification out of Accumulated Other Comprehensive Income | Noncontrolling Interest [Member]
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Net impairment losses recognized in earnings	0.0	0.0	0.0
Net realized gains (losses) on securities	0.0	0.0	0.0
Interest expense	$ 0.0	$ 0.0	$ 0.0

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Other Comprehensive Income Components of Other Comprehensive Income (Loss) Including Reclassification Adjustments by Income Statement (Parenthetical) (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Components Of Other Comprehensive Income Loss [Line Items]
Cash flow hedge gain reclassification from accumulated other comprehensive income to net realized gains/losses on securities	$ 1,300.5	$ 1,281.0	$ 1,165.4
Pre Tax
Components Of Other Comprehensive Income Loss [Line Items]
Net unrealized gains on forecasted transactions, expected to reclassify into income within the next 12 months	1.9
6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 | Net unrealized gains on forecasted transactions
Components Of Other Comprehensive Income Loss [Line Items]
Cash flow hedge gain reclassification from accumulated other comprehensive income to net realized gains/losses on securities	$ 0.2	$ 0.5	$ 0.8

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Commitments and Contingencies Minimum Commitments under Noncancelable Operating Lease Agreements (Detail) $ in Millions	Dec. 31, 2015 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2015	$ 50.4
2016	47.8
2017	37.3
2018	24.7
2019	9.6
Thereafter	1.8
Total	$ 171.6

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Commitments and Contingencies Expenses Incurred for Leases (Detail) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Expense	$ 66.6	$ 63.4	$ 64.6

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Commitments and Contingencies - Additional Information (Detail) $ in Millions	Dec. 31, 2015 USD ($)
reinsurance contract obligation [Line Items]
Other Commitment	$ 82.4
Minimum commitment under noncancelable purchase obligations	$ 408.0

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Dividends Dividends (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended
	Feb. 12, 2016	Feb. 13, 2015	Feb. 26, 2014
Annual variable dividend
Common Stock, Dividends, Per Share, Cash Paid		$ 0.6862	$ 0.4929
Payments of Ordinary Dividends, Common Stock		$ 404.1	$ 293.9
Special dividend
Common Stock, Dividends, Per Share, Cash Paid			$ 1.0000
Payments of Ordinary Dividends, Common Stock			$ 596.3
Subsequent Event | Annual variable dividend
Common Stock, Dividends, Per Share, Cash Paid	$ 0.8882
Payments of Ordinary Dividends, Common Stock	$ 519.2

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Dividends-Additional Information (Details)	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Dividends [Abstract]
Target percentage used to determine annual variable dividend	33.33%
Gainshare factor used to determine annual variable dividend range, minimum	0
Gainshare factor used to determine annual variable dividend range, maximum	2
Gainshare factor used to determine annual variable dividend	1.60	1.32	1.21

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Subsequent Event Subsequent Event - Additional Information (Details) - USD ($)	1 Months Ended	12 Months Ended
	Jan. 26, 2015	Dec. 31, 2015	Dec. 31, 2014	Apr. 25, 2014	Jun. 18, 2007
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 400,000,000			$ 350,000,000
Debt Instrument, Interest Rate, Stated Percentage	3.70%			4.35%
3.70% Senior Notes due 2045
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 400,000,000	$ 400,000,000	$ 0
Debt Instrument, Interest Rate, Stated Percentage	3.70%	3.70%			6.70%
Proceeds from Debt, Net of Issuance Costs	$ 394,900,000
Debt Related Commitment Fees and Debt Issuance Costs	800,000
Unrealized Gain (Loss)	$ (12,900,000)	$ (12,900,000)

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Redeemable Noncontrolling Interest (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Apr. 01, 2015	Mar. 31, 2015
Noncontrolling Interest [Abstract]
Redeemable Noncontrolling Interest, Equity, Carrying Amount	$ 464.9	$ 0.0			$ 0.0
Fair value at date of acquisition				$ 411.5
Net income attributable to NCI	32.9
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest	(1.1)	$ 0.0	$ 0.0
Purchase of shares from NCI	(12.6)
Change in redemption value of NCI	$ 34.2

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Acquisitions (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended	12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Dec. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Apr. 01, 2015
Business Acquisition [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners	30.80%			30.80%	30.80%
Goodwill	$ 447.6			$ 447.6	$ 447.6	$ 1.6
Revenues					20,853.8	19,391.4	$ 18,170.9
Cash flow hedge gain reclassification from accumulated other comprehensive income to net realized gains/losses on securities					$ 1,300.5	$ 1,281.0	$ 1,165.4
ARX Holding Corp. [Member]
Business Acquisition [Line Items]
Interest acquired (percentage)								63.20%
Additional Interest acquired (percent)			1.00%
Cost of interest acquired			$ 0.0
Ownership interest held prior to acquisition (percent)								5.00%
Loss recognized to reflect the net acquisition cost attributable to interest held prior			$ 2.0
Business Combination, Step Acquisition, Equity Interest in Acquiree, Including Subsequent Acquisition, Percentage	69.20%			69.20%	69.20%
Goodwill	$ 446.0			$ 446.0	$ 446.0			$ 470.0
Loss and loss adjustment expense		$ 42.0		25.3
Goodwill, Subsequent Recognition of Deferred Tax Asset				16.7
Value at acquisition	$ 520.4			520.4	$ 520.4
Total assets acquired								1,800.0
Investment securities acquired								1,200.0
Cash and cash equivalents acquired								183.0
Prepaid reinsurance premium acquired								146.0
Liability assumed in acquisition								1,200.0
Unearned premiums acquired								550.0
Loss and loss adjustment expense reserves acquired								264.0
Debt acquired								$ 185.0
Revenues				636.3
Cash flow hedge gain reclassification from accumulated other comprehensive income to net realized gains/losses on securities				$ 106.8
Sales Revenue, Segment [Member] | ARX Holding Corp. [Member]
Business Acquisition [Line Items]
Percentage of total net premium written (percent)	3.00%

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Acquisitions Schedule of Intangible Assets by Category (Details) - USD ($) $ in Millions		12 Months Ended
	Apr. 01, 2015	Dec. 31, 2015
Policies in Force [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life		7 years
Agency Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life		14 years
Computer Software, Intangible Asset [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life		8 years
Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Useful life		10 years
ARX Holding Corp. [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Value at acquisition		$ 520.4
Accumulative Amortization		45.1
Useful life	9 years
ARX Holding Corp. [Member] | Policies in Force [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Value at acquisition		256.2
Accumulative Amortization		27.5
ARX Holding Corp. [Member] | Agency Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Value at acquisition		159.2
Accumulative Amortization		8.5
ARX Holding Corp. [Member] | Computer Software, Intangible Asset [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Value at acquisition		69.1
Accumulative Amortization		6.5
ARX Holding Corp. [Member] | Trade Names [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Value at acquisition		34.8
Accumulative Amortization		2.6
ARX Holding Corp. [Member] | Licensing Agreements [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Accumulative Amortization		0.0
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets		$ 1.1