Segment Information — Our Personal Lines segment writes insurance for personal autos and recreational vehicles (our special lines products). 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. Our Property segment writes residential property insurance for homeowners, other property owners, and renters. Our other indemnity businesses manage our run-off businesses. Our service businesses provide insurance-related services, including processing Commercial Automobile Insurance Procedures/Plans (CAIP) business and serving as an agent for homeowners, general liability, and workers’ compensation insurance through our programs with ASI and unaffiliated insurance companies. All segment revenues are generated from external customers; all intercompany transactions, including those between Progressive and ASI, are eliminated in consolidation.

Following are the operating results for the respective periods:



	Three Months Ended September 30,										Nine Months Ended September 30,
	2017					2016					2017					2016
(millions)	Revenues		Pretax Profit (Loss)			Revenues		Pretax Profit (Loss)			Revenues		Pretax Profit (Loss)			Revenues		Pretax Profit (Loss)
Personal Lines
Agency	$	2,840.0	$	69.5		$	2,474.3	$	98.6		$	8,224.0	$	524.7		$	7,245.5	$	354.5
Direct	2,734.8		128.7			2,391.2		84.4			7,908.5		466.7			6,946.7		237.5
Total Personal Lines¹	5,574.8		198.2			4,865.5		183.0			16,132.5		991.4			14,192.2		592.0
Commercial Lines	714.0		42.8			630.2		4.4			2,031.2		166.4			1,772.4		96.7
Property²	255.2		(69.0		)	227.7		10.4			720.3		(57.5		)	638.0		(27.7		)
Other indemnity	0		0			0		(0.8		)	0		(0.3		)	0		(1.6		)
Total underwriting operations	6,544.0		172.0			5,723.4		197.0			18,884.0		1,100.0			16,602.6		659.4
Fees and other revenues³	96.3		NA			86.8		NA			270.3		NA			248.2		NA
Service businesses	33.3		4.4			26.2		3.0			94.5		12.7			77.7		9.2
Investments⁴	118.2		112.4			98.6		93.8			470.2		452.2			381.7		366.8
Gains on extinguishment of debt	0		0			0		0			0.2		0.2			1.6		1.6
Interest expense	NA		(37.4		)	NA		(35.3		)	NA		(117.6		)	NA		(103.8		)
Consolidated total	$	6,791.8	$	251.4		$	5,935.0	$	258.5		$	19,719.2	$	1,447.5		$	17,311.8	$	933.2

NA = Not applicable

¹Personal auto insurance accounted for 93% of the total Personal Lines segment net premiums earned in the three and nine months ended September 30, 2017, and 92% for the same periods in 2016; insurance for our special lines products (e.g., motorcycles, watercraft, and RVs) accounted for the balance of the Personal Lines net premiums earned.

²For the three and nine months ended September 30, 2017, pretax profit (loss) includes $17.2 million and $48.2 million, respectively, of amortization expense predominately associated with the acquisition of a controlling interest in ARX and $15.5 million and $46.6 million for the same periods in 2016.

³Pretax profit (loss) for fees and other revenues are attributable to operating segments.

⁴Revenues 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 and combined ratios for our underwriting operations for the respective periods:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
	Under-writing Margin		Combined Ratio	Under-writing Margin		Combined Ratio	Under-writing Margin		Combined Ratio	Under-writing Margin		Combined Ratio
Personal Lines
Agency	2.4	%	97.6	4.0	%	96.0	6.4	%	93.6	4.9	%	95.1
Direct	4.7		95.3	3.5		96.5	5.9		94.1	3.4		96.6
Total Personal Lines	3.6		96.4	3.8		96.2	6.1		93.9	4.2		95.8
Commercial Lines	6.0		94.0	0.7		99.3	8.2		91.8	5.5		94.5
Property¹	(27.0	)	127.0	4.6		95.4	(8.0	)	108.0	(4.3	)	104.3
Other indemnity²	NM		NM	NM		NM	NM		NM	NM		NM
Total underwriting operations	2.6		97.4	3.4		96.6	5.8		94.2	4.0		96.0

¹ Included in both the three and nine months ended September 30, 2017 are 6.7 points of amortization expense predominately associated with the acquisition of a controlling interest in ARX and 6.8 points and 7.3 points, respectively, for the three and nine months ended September 30, 2016. The nine months ended September 30, 2016, also include 0.7 points of expense related to the loss on the exchange transaction that occurred in 2016.

²Underwriting margins and 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.