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) April 14, 2010

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 communications 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))

Item 2.02 Results of Operations and Financial Condition.

On April 14, 2010, The Progressive Corporation issued a news release containing financial results for the Company and its consolidated subsidiaries for the month of, and year-to-date period ended, March 2010. A copy of the news release is attached hereto as Exhibit 99.

Item 9.01 Financial Statements and Exhibits.

(d) 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 hereunto duly authorized.

Date: April 14, 2010

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. S-K Item 601	Form 8-K Exhibit No.	Description
99	99	News release dated April 14, 2010, containing financial results of The Progressive Corporation and its consolidated subsidiaries for the month of, and year-to-date period ended, March 2010

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EX-99

Exhibit 99

NEWS RELEASE

The Progressive Corporation	Company Contact:
6300 Wilson Mills Road	Patrick Brennan
Mayfield Village, Ohio 44143	(440) 395-2370
http://www.progressive.com

PROGRESSIVE REPORTS MARCH RESULTS

MAYFIELD VILLAGE, OHIO — April 14, 2010 — The Progressive Corporation today reported the following results for March and the first quarter 2010:

	Month							Quarter
(millions, except per share amounts and ratios; unaudited)	2010		2009			Change		2010		2009			Change
Net premiums written	$	1,192.6	$	1,182.6		1	%	$	3,777.5	$	3,522.9		7	%
Net premiums earned	$	1,092.1	$	1,056.1		3	%	$	3,501.1	$	3,406.6		3	%
Net income	$	126.3	$	8.6		1369	%	$	295.6	$	232.5		27	%
Per share	$	.19	$	.01		1382	%	$	.44	$	.35		28	%
Pretax net realized gains (losses) on securities (including net impairment losses)	$	27.0	$	(87.5	)	NM		$	30.8	$	(73.4	)	NM
Combined ratio		88.2		90.5		(2.3) pts.			90.9		89.5		1.4 pts.
Average equivalent shares		665.9		672.0		(1	)%		666.4		672.0		(1	)%

NM = Not Meaningful

(in thousands; unaudited)	March 2010	March 2009	Change
Policies in Force:
Agency – Auto	4,416.7	4,348.7	2	%
Direct – Auto	3,394.9	2,954.0	15	%
Total Personal Auto	7,811.6	7,302.7	7	%
Total Special Lines	3,479.0	3,377.8	3	%
Total Personal Lines	11,290.6	10,680.5	6	%
Total Commercial Auto	510.8	532.6	(4	)%

Progressive offers insurance to personal and commercial auto drivers throughout the United States. Our Personal Lines business writes insurance for personal autos and recreational vehicles. Our Commercial Auto business writes primary liability, physical damage, and other auto-related insurance for autos and trucks owned by small businesses.

See the “Income Statements” and “Supplemental Information” for further month and year-to-date information and the “Monthly Commentary” at the end of this release for additional discussion.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

INCOME STATEMENT

March 2010

(millions – except per share amounts)

(unaudited)

	Current Month			Comments on Monthly  Results1
Net premiums written	$	1,192.6
Revenues:
Net premiums earned	$	1,092.1
Investment income		46.1
Net realized gains (losses) on securities:
Other-than-temporary impairment (OTTI) losses:
Total OTTI losses		(9.3	)
Less: portion of OTTI losses recognized in other comprehensive income		6.2
Net impairment losses recognized in earnings		(3.1	)
Net realized gains (losses) on securities		30.1
Total net realized gains (losses) on securities		27.0
Service revenues		1.4
Total revenues		1,166.6
Expenses:
Losses and loss adjustment expenses		731.0
Policy acquisition costs		103.0
Other underwriting expenses		129.0
Investment expenses		1.2
Service expenses		1.8
Interest expense		11.7
Total expenses		977.7
Income before income taxes		188.9
Provision for income taxes		62.6
Net income	$	126.3
COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding		660.8
Per share	$	.19
Diluted:
Average shares outstanding		660.8
Net effect of dilutive stock-based compensation		5.1
Total equivalent shares		665.9
Per share	$	.19

¹ See the Monthly Commentary at the end of this release for additional discussion. For a description of our reporting and accounting policies, see Note 1 to our 2009 audited consolidated financial statements included in our 2009 Shareholders’ Report, which can be found at www.progressive.com/annualreport.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

INCOME STATEMENTS

March 2010 Year-to-Date

(millions – except per share amounts)

(unaudited)

	Year-to-Date						% Change
	2010			2009
Net premiums written	$	3,777.5		$	3,522.9		7
Revenues:
Net premiums earned	$	3,501.1		$	3,406.6		3
Investment income		129.8			131.5		(1)
Net realized gains (losses) on securities:
Other-than-temporary impairment (OTTI) losses:
Total OTTI losses		(9.3	)
Less: portion of OTTI losses recognized in other comprehensive income		6.2
Net impairment losses recognized in earnings		(3.1	)
Net realized gains (losses) on securities		33.9
Total net realized gains (losses) on securities		30.8			(73.4	)	NM
Service revenues		4.2			3.5		20
Total revenues		3,665.9			3,468.2		6
Expenses:
Losses and loss adjustment expenses		2,423.4			2,337.0		4
Policy acquisition costs		333.1			336.2		(1)
Other underwriting expenses		426.5			377.4		13
Investment expenses		3.6			2.6		38
Service expenses		5.2			4.6		13
Interest expense		35.2			33.7		4
Total expenses		3,227.0			3,091.5		4
Income before income taxes		438.9			376.7		17
Provision for income taxes		143.3			144.2		(1)
Net income	$	295.6		$	232.5		27
COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding		661.4			668.6		(1)
Per share	$	.45		$	.35		29
Diluted:
Average shares outstanding		661.4			668.6		(1)
Net effect of dilutive stock-based compensation		5.0			3.4		47
Total equivalent shares		666.4			672.0		(1)
Per share	$	.44		$	.35		28

NM = Not Meaningful

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

INCOME STATEMENT – OTHER INFORMATION

March 2010

(millions – except per share amounts)

(unaudited)

The following table sets forth the comprehensive income for the period:

	Current Month			Year-to-Date
				2010			2009
Net income	$	126.3		$	295.6		$	232.5
After-tax changes in:
Net unrealized gains (losses) on securities		51.2			200.1
Portion of OTTI losses recognized in other comprehensive income		(4.0	)		(4.0	)
Total net unrealized gains (losses) on securities		47.2			196.1			(151.0	)
Net unrealized gains on forecasted transactions		(.3	)		(.8	)		(.8	)
Foreign currency translation adjustment		.3			.1			0
Comprehensive income	$	173.5		$	491.0		$	80.7
Per share	$	.26		$	.74		$	.12

The following table sets forth the investment results for the period:

	Current Month		Year-to-Date
			2010		2009
Fully taxable equivalent total return:
Fixed-income securities	.6	%	2.8	%	(.6	)%
Common stocks	6.1	%	6.2	%	(10.3	)%
Total portfolio	1.0	%	3.2	%	(1.2	)%
Pretax recurring investment book yield	3.8	%	3.7	%	4.1	%

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

March 2010

($ in millions)

(unaudited)

Current Month
	Personal Lines Business									Commercial Auto Business			Other Businesses1		Companywide Total
	Agency			Direct			Total
Net Premiums Written	$	608.6		$	451.6		$	1,060.2		$	132.0		$	0.4	$	1,192.6
% Growth in NPW		(1	)%		6	%		2	%		(6	)%		NM		1	%
Net Premiums Earned	$	568.7		$	408.7		$	977.4		$	113.3		$	1.4	$	1,092.1
% Growth in NPE		1	%		12	%		5	%		(10	)%		NM		3	%
GAAP Ratios
Loss/LAE ratio		65.5			69.5			67.2			63.2			NM		67.0
Expense ratio		21.7			22.3			21.9			22.8			NM		21.2
Combined ratio		87.2			91.8			89.1			86.0			NM		88.2
Actuarial Adjustments2
Reserve Decrease/(Increase)
Prior accident years															$	20.0
Current accident year																2.4
Calendar year actuarial adjustment	$	8.5		$	5.9		$	14.4		$	8.0		$	0	$	22.4
Prior Accident Years Development
Favorable/(Unfavorable)
Actuarial adjustment															$	20.0
All other development																(29.1	)
Total development															$	(9.1	)
Calendar year loss/LAE ratio																67.0
Accident year loss/LAE ratio																66.2
Statutory Ratios
Loss/LAE ratio																67.0
Expense ratio																20.6
Combined ratio																87.6

¹ The other businesses generated an underwriting profit of $7.2 million for the month, primarily reflecting the sale of our professional liability insurance business at month-end. The activity for the policies in force on this business as of the date of sale, as well as any additional policies that we may write during an agreed upon period, will continue to be reported as part of our “other businesses.” These claims-made policies will continue to be covered by the existing reinsurance arrangements, including 100% reinsurance for all policies written on or after August 1, 2009.

² Represents adjustments solely based on our corporate actuarial reviews.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

March 2010 Year-to-Date

($ in millions)

(unaudited)

Year-to-Date
	Personal Lines Business									Commercial Auto Business			Other Businesses1		Companywide Total
	Agency			Direct			Total
Net Premiums Written	$	1,933.3		$	1,454.5		$	3,387.8		$	388.5		$	1.2	$	3,777.5
% Growth in NPW		5	%		15	%		9	%		(4	)%		NM		7	%
Net Premiums Earned	$	1,827.9		$	1,299.6		$	3,127.5		$	369.2		$	4.4	$	3,501.1
% Growth in NPE		1	%		11	%		5	%		(10	)%		NM		3	%
GAAP Ratios
Loss/LAE ratio		68.1			71.9			69.6			65.1			NM		69.2
Expense ratio		21.2			22.7			21.9			22.9			NM		21.7
Combined ratio		89.3			94.6			91.5			88.0			NM		90.9
Actuarial Adjustments2
Reserve Decrease/(Increase)
Prior accident years															$	39.1
Current accident year																11.1
Calendar year actuarial adjustment	$	20.1		$	15.0		$	35.1		$	15.1		$	0	$	50.2
Prior Accident Years Development
Favorable/(Unfavorable)
Actuarial adjustment															$	39.1
All other development																64.4
Total development															$	103.5
Calendar year loss/LAE ratio																69.2
Accident year loss/LAE ratio																72.2
Statutory Ratios
Loss/LAE ratio																69.3
Expense ratio																21.1
Combined ratio																90.4
Statutory Surplus															$	5,343.5

NM = Not Meaningful

¹ On a year-to-date basis, the other businesses generated an underwriting profit of $7.0 million; see note 1 on page 5 for additional commentary.

² Represents adjustments solely based on our corporate actuarial reviews.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

BALANCE SHEET AND OTHER INFORMATION

(millions – except per share amounts)

(unaudited)

	March 2010
CONDENSED GAAP BALANCE SHEET:1
Investments – Available-for-sale, at fair value:
Fixed maturities (amortized cost: $11,660.4)	$	11,673.2
Equity securities:
Nonredeemable preferred stocks2(cost: $648.6)		1,310.5
Common equities (cost: $905.1)		1,191.4
Short-term investments (amortized cost: $1,389.2)		1,389.2
Total investments3, 4, 5		15,564.3
Net premiums receivable		2,722.9
Deferred acquisition costs		428.9
Other assets		2,332.8
Total assets	$	21,048.9
Unearned premiums	$	4,452.6
Loss and loss adjustment expense reserves		6,724.5
Other liabilities5		1,482.6
Debt		2,177.7
Shareholders’ equity		6,211.5
Total liabilities and shareholders’ equity	$	21,048.9
Common shares outstanding		670.5
Shares repurchased – March		.8
Average cost per share	$	17.95
Book value per share	$	9.26
Trailing 12-month return on average shareholders’ equity		20.8	%
Net unrealized pretax gains (losses) on investments	$	963.6
Increase (decrease) from February 2010	$	72.7
Increase (decrease) from December 2009	$	301.8
Debt-to-total capital ratio		26.0	%
Fixed-income portfolio duration		2.2 years
Weighted average credit quality		AA
Year-to-date Gainshare factor		1.32

¹ Loss and loss adjustment expense reserves are stated gross of reinsurance recoverables on unpaid losses of $625.8 million.

² As of March 31, 2010, we held certain hybrid securities and recognized a change in fair value of $2.6 million as a realized loss during the period we held these securities.

³ Includes $5.9 billion of short-term investments and U.S. Treasury securities prior to settling $53.2 million of net security transactions outstanding as of month-end.

⁴ Includes $2.1 billion, net of unsettled security transactions, of investments in a consolidated, non-insurance subsidiary of the holding company.

⁵ Includes $53.2 million of net unsettled security transactions (as discussed in note 3 above).

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Monthly Commentary

• Our March written premium growth rate was lower than that of the prior two months. As previously disclosed, February 28, which includes six-month renewals from policies written during the last several days of August, fell in fiscal February 2010 vs. fiscal March 2009, which resulted in a favorable effect on the reported written premium growth rates in February 2010 and a negative effect on growth rates for fiscal March 2010, as compared to the same months in 2009.

Upcoming Events

We are currently scheduled to release April results on Wednesday, May 19, 2010, before the market opens.

About Progressive

The Progressive Group of Insurance Companies, in business since 1937, is one of the country’s largest auto insurance groups, the largest seller of motorcycle policies, and a market leader in commercial auto insurance based on premiums written.

Progressive is committed to becoming consumers’ #1 choice for auto insurance by providing competitive rates and innovative products and services that meet drivers’ needs throughout their lifetimes, including superior online and in-person customer service, and best-in-class, 24-hour claims service, such as its concierge level of claims service available at service centers located in major metropolitan areas throughout the United States.

Progressive companies offer consumers choices in how to shop for, buy, and manage their auto insurance policies. Progressive offers its products, including personal and commercial auto, motorcycle, boat, and recreational vehicle insurance, through more than 30,000 independent insurance agencies throughout the U.S. and online and by phone directly from the Company. Personal auto products and prices are different when purchased directly from Progressive or through independent agencies. To find an agent or to get a quote, go to http://www.progressive.com. Progressive also has a branch that sells car insurance policies online in Australia at http://www.progressivedirect.com.au.

The Common Shares of The Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR. For more information, including a guide to interpreting the monthly reporting package, visit http://www.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 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 counterparties to certain financial transactions; the accuracy and adequacy of our pricing and loss reserving methodologies; the competitiveness of our pricing and the effectiveness of our initiatives to retain more customers; initiatives by competitors and the effectiveness of our response; our ability to obtain regulatory approval for requested rate changes and the timing thereof; the effectiveness of our brand strategy and advertising campaigns relative to those of competitors; legislative and regulatory developments; disputes relating to intellectual property rights; the outcome of litigation pending or that may be filed against us; 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; our ability to maintain the uninterrupted operation of our 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 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.

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