8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) November 11, 2004

THE PROGRESSIVE CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	1-9518	34-0963169
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6300 Wilson Mills Road, Mayfield Village, Ohio	44143
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 440-461-5000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ] Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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TABLE OF CONTENTS

	Item 7.01 Regulation FD Disclosure
	Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-99 Press Release

Item 7.01 Regulation FD Disclosure

On November 11, 2004, The Progressive Corporation and Subsidiaries (the “Company”) issued a News Release containing financial results of the Company for the month and year-to-date periods ended October 2004 (the “News Release”). A copy of the News Release is attached hereto as Exhibit 99.

Item 9.01 Financial Statements and Exhibits

(c)	Exhibits
	See exhibit index on page 4.

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SIGNATURES

     Pursuant to the requirements 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.

Dated: November 12, 2004

THE PROGRESSIVE CORPORATION
By:	/s/ Jeffrey W. Basch
	Name:	Jeffrey W. Basch
	Title:	Vice President and Chief Accounting Officer

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EXHIBIT INDEX

Exhibit No.
Under Reg.	Form 8-K
S-K Item	Exhibit	Description
601	No.
99	99	News Release dated November 11, 2004, containing financial results of The Progressive Corporation and Subsidiaries for the month and year-to-date periods ended October 2004

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EX-99

NEWS
RELEASE

The Progressive Corporation	Company Contact:
6300 Wilson Mills Road	Thomas A. King
Mayfield Village, Ohio 44143	(440)395-2260
http://www.progressive.com

FOR IMMEDIATE RELEASE

MAYFIELD VILLAGE, OHIO — November 11, 2004 — The Progressive Corporation today reported the following results for October 2004:

(millions, except per share amounts)	October		October
	2004		2003		Change
Net premiums written	$	1,279.8	$	1,169.6		9	%
Net premiums earned		1,275.2		1,165.1		9	%
Net income		140.2		145.7		(4	)%
Per share		.66		.66		—	%
Combined ratio		87.0		84.7		(2.3	)pts.

See the “Income Statement” for further month and year-to-date information.

     Progressive’s Personal Lines business units write insurance for private passenger automobiles and recreation vehicles. Progressive’s Commercial Auto business unit writes primary liability, physical damage and other auto-related insurance for automobiles and trucks owned by small businesses. The Company’s other businesses principally include writing directors’ and officers’ liability insurance and managing the Company’s run-off businesses. See “Supplemental Information” for the month and year-to-date results.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENT
October 2004
(millions – except per share amounts)
(unaudited)

	Current Month			Comments on Monthly Results1
Direct premiums written	$	1,298.6
Net premiums written	$	1,279.8
Revenues:
Net premiums earned	$	1,275.2
Investment income		37.7
Net realized gains (losses) on securities		14.2
Service revenues		3.9
Total revenues		1,331.0
Expenses:
Losses and loss adjustment expenses		854.4		Includes $19.2 million, 1.5 loss ratio points, of catastrophic losses, primarily related to the August and September hurricanes.
Policy acquisition costs		137.3
Other underwriting expenses		117.7
Investment expenses		1.6		Includes $.7 million related to the Company’s Dutch auction tender offer for its Common Shares, which was settled during the month.
Service expenses		2.3
Interest expense		6.7
Total expenses		1,120.0
Income before income taxes		211.0
Provision for income taxes		70.8
Net income	$	140.2
COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding		210.4		Reflects the weighted average impact of the shares repurchased during October pursuant to the Dutch auction tender offer.
Per share	$	.67
Diluted:
Average shares outstanding		210.4
Net effect of dilutive stock-based compensation		3.2
Total equivalent shares		213.6
Per share	$	.66
1 See the Monthly Commentary at the end of this release for additional discussion. Also see Note 1 to the Company’s 2003 audited consolidated financial statements included in the Company’s 2003 Annual Report, which can be found at progressive.com/annualreport, for a description of the Company’s reporting and accounting policies.
The following table sets forth the total return on investments for the month:
Fully taxable equivalent total return:
Fixed income securities		.6	%
Common stocks		1.6	%
Total portfolio		.8	%

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENTS
October 2004 Year-to-Date
(millions – except per share amounts)
(unaudited)

	Year-to-Date				%
	2004		2003		Change
Direct premiums written	$	11,571.9	$	10,407.7		11
Net premiums written	$	11,305.6	$	10,176.6		11
Revenues:
Net premiums earned	$	10,880.4	$	9,466.1		15
Investment income		402.1		381.9		5
Net realized gains (losses) on securities		94.2		25.9		264
Service revenues		40.5		34.3		18
Other income1		—		31.0	NM
Total revenues		11,417.2		9,939.2		15
Expenses:
Losses and loss adjustment expenses		7,078.9		6,395.5		11
Policy acquisition costs		1,173.1		1,043.5		12
Other underwriting expenses		1,021.8		836.6		22
Investment expenses		12.0		9.6		25
Service expenses		20.3		21.9		(7	)
Interest expense		67.0		79.8		(16	)
Total expenses		9,373.1		8,386.9		12
Income before income taxes		2,044.1		1,552.3		32
Provision for income taxes		668.7		509.0		31
Net income	$	1,375.4	$	1,043.3		32
COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding		215.6		217.4		(1	)
Per share	$	6.38	$	4.80		33
Diluted:
Average shares outstanding		215.6		217.4		(1	)
Net effect of dilutive stock-based compensation		3.4		3.6		(6	)
Total equivalent shares		219.0		221.0		(1	)
Per share	$	6.28	$	4.72		33
NM = Not Meaningful

¹ Amount represents estimated interest earned through October 2003 on an income tax refund the Company received in 2004.

The following table sets forth the total return on investments for the year-to-date period:

	2004			2003
Fully taxable equivalent total return:
Fixed income securities		4.0	%		4.1	%
Common stocks		3.0	%		21.4	%
Total portfolio		3.9	%		6.6	%

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
October 2004
($ in millions)
(unaudited)

Current Month
											Commercial
	Personal Lines										Auto			Other			Companywide
		Agency			Direct			Total			Business			Businesses			Total
Net Premiums Written		$	749.2		$	360.4		$	1,109.6		$	167.7		$	2.5		$	1,279.8
% Growth in NPW			6	%		12	%		8	%		21	%		(11	)%		9	%
Net Premiums Earned		$	759.3		$	362.7		$	1,122.0		$	150.5		$	2.7		$	1,275.2
% Growth in NPE			7	%		13	%		9	%		17	%		(27	)%		9	%
GAAP Ratios
Loss/LAE ratio			66.8			68.6			67.4			64.5			47.5			67.0
Expense ratio			20.3			19.4			20.0			19.1			62.4			20.0
Combined ratio			87.1			88.0			87.4			83.6			109.9			87.0
Actuarial Adjustments1
Reserve Decrease/(Increase)
Prior accident years																	$	7.0
Current accident year																		9.8
Calendar year actuarial adjustment		$	12.6		$	6.6		$	19.2		$	(2.2	)	$	(.2	)	$	16.8
Prior Accident Years Development
Favorable/(Unfavorable)
Actuarial adjustment																	$	7.0
All other development																		1.5
Total development																	$	8.5
Calendar year loss/LAE ratio																		67.0
Accident year loss/LAE ratio																		67.7
Statutory Ratios
Loss/LAE ratio																		67.2
Expense ratio																		19.3
Combined ratio																		86.5

¹ Represents adjustments solely based on the Company’s corporate actuarial review.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
October 2004 Year-to-Date
($ in millions)
(unaudited)

Year-to-Date
											Commercial
	Personal Lines										Auto			Other			Companywide
		Agency			Direct			Total			Business			Businesses			Total
Net Premiums Written		$	6,716.7		$	3,207.8		$	9,924.5		$	1,359.5		$	21.6		$	11,305.6
% Growth in NPW			9	%		15	%		11	%		17	%		(56	)%		11	%
Net Premiums Earned		$	6,535.8		$	3,064.3		$	9,600.1		$	1,251.7		$	28.6		$	10,880.4
% Growth in NPE			13	%		19	%		14	%		23	%		(50	)%		15	%
GAAP Ratios
Loss/LAE ratio			65.9			65.2			65.7			60.6			55.9			65.0
Expense ratio			20.1			20.4			20.2			19.1			47.8			20.2
Combined ratio			86.0			85.6			85.9			79.7			103.7			85.2
Actuarial Adjustments1
Reserve Decrease/(Increase)
Prior accident years																	$	38.1
Current accident year																		(15.0	)
Calendar year actuarial adjustment		$	17.9		$	7.9		$	25.8		$	(2.5	)	$	(.2	)	$	23.1
Prior Accident Years Development
Favorable/(Unfavorable)
Actuarial adjustment																	$	38.1
All other development																		45.8
Total development																	$	83.9
Calendar year loss/LAE ratio																		65.0
Accident year loss/LAE ratio																		65.8
Statutory Ratios
Loss/LAE ratio																		65.2
Expense ratio																		19.4
Combined ratio																		84.6
Statutory surplus																	$	4,848.0

Policies in Force	October		October
(in thousands)	2004		2003		Change
Agency – Auto		4,265		3,939		8	%
Direct – Auto		2,071		1,818		14	%
Other Personal Lines2		2,356		1,991		18	%
Total Personal Lines		8,692		7,748		12	%
Commercial Auto Business		418		361		16	%

¹ Represents adjustments solely based on the Company’s corporate actuarial review.

² Includes insurance for motorcycles, recreation vehicles, mobile homes, watercraft, snowmobiles, homeowners and similar items.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

BALANCE SHEET AND OTHER INFORMATION

(millions– except per share amounts)

(unaudited)

	October
	2004
CONDENSED GAAP BALANCE SHEET:1
Investments -
Available-for-sale:
Fixed maturities, at market (amortized cost: $8,976.1)	$	9,142.9
Equity securities, at market:
Preferred stocks (cost: $723.3)		747.5
Common equities (cost: $1,310.5)		1,709.8
Short-term investments, at amortized cost (market: $1,547.7)		1,547.7
Total investments2		13,147.9
Net premiums receivable		2,395.5
Deferred acquisition costs		461.2
Other assets		1,299.0
Total assets	$	17,303.6
Unearned premiums	$	4,327.6
Loss and loss adjustment expense reserves		5,190.9
Other liabilities2		1,675.9
Debt		1,290.2
Shareholders’ equity		4,819.0
Total liabilities and shareholders’ equity	$	17,303.6
Common Shares outstanding		200.2
Shares repurchased – October		16.9
Average cost per share	$	88.00
Book value per share	$	24.07
Return on average shareholders’ equity		29.9	%
Net unrealized pre-tax gains on investments	$	590.3
Debt to total capital ratio		21.1	%

¹ Pursuant to SFAS 113, “Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts,” loss and loss adjustment expense reserves are stated gross of reinsurance recoverables on unpaid losses of $258.4 million.

² Amounts include net unsettled security acquisitions of $167.1 million.

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Monthly Commentary

• Growth continued to slow in the Company’s Personal Lines businesses. Eight markets had year-to-date net premiums written growth of 20% or greater; these markets represented 14% of the total Personal Lines premiums. Nineteen states (44% of total Personal Lines) grew less than 10%.

• The Commercial Auto business growth is also slowing and slightly overstated in October reflecting the reduction in the inventory of unprocessed applications.

• The Company continued to experience strong profitability. Three markets in which the Company writes Personal Lines business were unprofitable for the month; two of the three markets were unfavorably impacted by catastrophic-related loss development. For the year-to-date period, all Personal Lines markets were profitable.

• The Company continues to respond to the catastrophic, weather-related claims. During October, the majority of the hurricane-related loss development related to the Company’s special lines business (primarily boats and recreation vehicles). To date, 96% of the approximately 21,000 reported claims have been paid.

• On October 22, the Company repurchased 16.9 million of its Common Shares, $1.00 par value, at a purchase price of $88 per share, for a total cost of $1.5 billion, pursuant to a modified “Dutch auction” tender offer that commenced in September. The tender offer, which reduced the Company’s outstanding shares by approximately 7.8% to 200.2 million, did not reduce the number of shares available for repurchase pursuant to the April 2003 Board resolution, which currently stands at 10,188,101 shares.

• The pretax recurring book yield of the investment portfolio was 3.5% for the month and 3.8% year-to-date.

• At October month-end, the net unrealized gains in the investment portfolio were $590.3 million, a decrease of $53.1 million from year-end 2003. In the fixed-income portfolio, the duration was 2.9 years and the weighted average credit quality remained AA+.

The Progressive group of insurance companies ranks third in the nation for auto insurance based on premiums written. The companies that offer insurance directly (by phone at 1-800-PROGRESSIVE and online at progressive.com) market their products and services through the Progressive Direct brand, while the companies that offer insurance through more than 30,000 independent agencies in the U.S. market their products and services through the Drive Insurance from Progressive brand. The Common Shares of The Progressive Corporation, the holding company, are publicly traded at NYSE:PGR. More information can be found at progressive.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this release 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 economic conditions (including changes in interest rates and financial markets); the accuracy and adequacy of the Company’s pricing and loss reserving methodologies; pricing competition and other initiatives by competitors; the Company’s ability to obtain regulatory approval for requested rate changes and the timing thereof; the effectiveness of the Company’s advertising campaigns; legislative and regulatory developments; the outcome of litigation pending or that may be filed against the Company; weather conditions (including the severity and frequency of storms, hurricanes, snowfalls, hail and winter conditions); changes in driving patterns and loss trends; acts of war and terrorist activities; the Company’s ability to maintain the uninterrupted operation of its facilities, systems (including information technology systems) and business functions; court decisions and trends in litigation and health care and auto repair costs; and other matters described from time to time by the Company in releases and publications, and in 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 a major contingency. Reported results, therefore, may appear to be volatile in certain accounting periods.

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