Basis of Presentation

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation — The accompanying consolidated financial statements include the accounts of The Progressive Corporation, our wholly owned insurance and non-insurance subsidiaries and affiliates in which we have a controlling financial interest (Progressive), including, beginning on June 1, 2021, Protective Insurance Corporation and its subsidiaries (Protective Insurance), which Progressive acquired on that date. See Note 14 – Acquisition for further discussion.

The consolidated financial statements reflect all normal recurring adjustments that, in the opinion of management, were necessary for a fair statement of the results for the interim periods presented. The results of operations for the period ended September 30, 2021, are not necessarily indicative of the results expected for the full year. These consolidated financial statements and the notes thereto should be read in conjunction with Progressive’s audited financial statements and accompanying notes included in Exhibit 13 to our Annual Report on Form 10-K for the year ended December 31, 2020 (2020 Annual Report to Shareholders).

We perform analyses to evaluate our premiums receivables for expected credit losses. See the 2020 Annual Report to Shareholders for a discussion on our premiums receivable allowance for credit loss policy. The following table summarizes changes in our allowance for credit loss exposure on our premiums receivables:


	Three Months				Nine Months
Periods Ended September 30,	2021		2020		2021		2020
(millions)
Allowance for credit loss, beginning of period	$	245.2	$	437.9	$	356.2	$	283.2
Allowance acquired during period1	0		0		3.5		0
Increase (decrease) in allowance2	107.2		(3.6)		255.5		362.9
Write-offs3	(95.1)		(121.1)		(357.9)		(332.9)
Allowance for credit loss, end of period	$	257.3	$	313.2	$	257.3	$	313.2

1 Represents the amount of the allowance acquired in the Protective Insurance acquisition.

2 Represents the incremental increase (decrease) in other underwriting expenses.

3 Represents portion of allowance that is reversed when premiums receivables are written off.

For the three months ended September 30, 2021, we experienced an increase in our allowance for credit losses, compared to a decrease during the same period in 2020. Collections received on outstanding premiums receivable balances have increased following the lifting of the moratoriums and billing leniency efforts that we put in place from March through May 2020, which contributed to the decrease in our allowance during the third quarter 2020 and lower allowance recorded for the nine months ended September 30, 2021, compared to the same period in 2020. The greater collections are likely due in part to changes in consumer spending habits and government stimulus spending during the period.

Other assets on the consolidated balance sheets include certain long-lived assets that are considered “held for sale.” The fair value of these held for sale assets, less the estimated costs to sell, was $12.6 million at September 30, 2021, $27.1 million at September 30, 2020, and $56.6 million at December 31, 2020.