We write personal and commercial auto insurance, commercial liability and property insurance, residential property insurance, and other specialty property-casualty insurance and provide related services throughout the United States. Our Personal Lines segment writes insurance for personal autos and recreational vehicles. Our Commercial Lines segment writes auto-related primary liability and physical damage insurance, and general liability and property insurance, predominantly for small businesses. Our Property segment writes residential property insurance for homeowners, other property owners, and renters. We distribute our products through both the agency and direct channels.


Our operating philosophy is to grow as fast as possible, subject to the constraints of our 96 combined ratio goal and our ability to provide high-quality customer service. This philosophy is unwavering; however, our ability to drive profitable growth is always subject to influence from market conditions, competitor actions, weather patterns, and other external forces. The year 2020 is a prime example of external forces affecting our business performance and, given the unprecedented events, we can review the year in three distinct periods: Pre-COVID, Spring/early Summer shutdown, and Fall recovery. During these times, we continued to execute our business model, assisted our customers and agents, and enjoyed continued growth across our Personal Lines products. Our Personal Lines business unit, comprised of our personal auto and special lines products, produced an 86.8 combined ratio (CR) and increased policies in force (PIF) 10% during 2020. Profitability improved by 3.7 points versus 2019, driven primarily by reduced accident frequency, which was partially offset by increases in accident severity and credits given to policyholders. Personal Lines net premiums written grew more than $2 billion, to end the year at over $33 billion in net premiums written or a 7% increase over 2019. Revenue growth was primarily driven by unit growth through adding over 2 million policyholders and crossing over 21 million PIFs.

To set the stage for a discussion of 2020, it’s important to start with a quick look back at 2019 market conditions and business performance. The U.S. auto insurance market has historically lost money on an underwriting basis; however, 2019 represented the second year in a row (and only the second time over the past decade) that the U.S. private passenger auto market as a whole delivered an underwriting profit. This period of profitability (and strong industry premium growth) resulted from many competitors aggressively reacting to rate need in 2016-2018. As loss trends abated in 2018 and rate increases earned in, most major carriers rapidly altered course to stimulate growth, however, the 2019 industry premium growth rate was reduced significantly compared to prior years. Despite these softening market conditions, we were well positioned with strong volume momentum and competitive prices and delivered another record year for our total Personal Lines business in 2019 with $31 billion in net premiums written and 9% policy in force growth at a 90.5 combined ratio. As we entered 2020, competitors were slowing the pace of rate decreases, which when combined with our own targeted rate reductions, left us optimistic about continuing our multi-year run of growth and profitability.

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Pre-COVID January and February played out exactly as we had planned, with double-digit quotes and sales growth. However, as we all know, by mid-March life took a dramatic turn with the closure of many schools and widespread state-level shelter-in-place mandates that virtually shut down the economy, and started what we refer to as the Spring/Summer shutdown period. Not surprisingly, new business volume in both distribution channels dropped immediately in March and April as people appropriately focused on health, safety, and economic concerns and stopped shopping for insurance, resulting in new policy sales declines of 20% and 15% in March and April, respectively. The shutdown also rapidly drove down vehicle miles traveled by 30-40% and incurred losses about 35% during the early shelter-in-place periods. We quickly responded by launching our Apron Relief Program designed to support our customers, agents, communities, and employees. In total, we invested almost $1.2 billion across these groups including returning $1.1 billion to our personal auto customers in the form of credits of 20% of April and May premiums. Our program also included processes designed to help our customers navigate these uncertain times which included a customer leniency program and waiving of fees for a period of time to offer flexibility and continuous insurance to customers. We put in place a countrywide moratorium on cancellation and non-renewal of policies for non-payment with suspension of collection of unpaid earned premium from mid-March through mid-May. For our independent agents, we quickly created a program to provide financial assistance to them through relief funds established by the two national agent associations, while also opening up early payout options on contingent compensation programs and adjusting program targets to better reflect the reality of market conditions.

Both of our distribution channels experienced a drop in volume at the start of the shelter-in-place period. Our Direct channel started to recover earlier than our Agency channel, which experienced the multiplicative effect of reduced customer shopping, closure of agents’ physical offices, and an aversion to in-person retail transactions. Our rapid volume recovery in Direct during May through July was due in part to significant increases in planned advertising spend for the year coupled with rapid redeployment of media impressions in response to changing consumer behavior. For example, when the shelter-in-place orders curtailed virtually all in-person sporting events for March and April, our in-house media team did a phenomenal job responding quickly to find and execute alternate means of reaching consumers who gravitated towards linear TV viewing of cooking, home improvement, and news programming. As the shelter-in-place restrictions began to lift, these changes to our media placements helped drive new business growth as widespread cancellation moratoria were coming to a close during May, June, and July. During this period, consumers shopped and, in many cases, switched carriers.

Our Agency distribution channel started to slowly recover in late June and early July as some states/regions opened up due to temporary reductions in infection and transmission rates. The Robinson consumer segment (i.e., bundled home and auto) continues to be a strategically important growth opportunity within the Agency channel and, despite the pandemic, we continued to expand our Platinum agent footprint and deployed products and tools to help agents place more preferred business with Progressive. During the year, we added more than 200 additional Platinum agencies, closing the year near 4,000 in total. We also completed the rollout of our portfolio quoting platform for agents, designed to improve their ease of use in quoting and selling Progressive products to multi-product Robinson customers.

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The second half of 2020 represented what we call the slow Fall recovery, with widely varied shopping and new business growth rates and corresponding loss costs across states and channels as businesses and schools opened and closed and associated vehicle miles traveled increased or decreased throughout the third and fourth quarters. During this second half of 2020, our slow but volatile recovery in new business applications was driven primarily by growth in our Direct channel.

Despite significant market disruption, we continued to deploy enhanced segmentation through product model upgrades that help us accurately match rate to risk, which enable us to offer highly competitive rates. During the year, we completed 22 auto model upgrades across channels and our latest product design, 8.6, is now in market in more than 30 states representing more than two-thirds of countrywide premium. This model brings more competitive rates for consumers with prior insurance and multiple cars and continues to drive growth and penetration among more preferred market segments. As some markets started opening up and we had more certainty around expected future loss costs, we started lowering rates in conjunction with product model deployment where we were both confident that the decreases were actuarially sound and, given the uncertainty, could reverse quickly if necessary. From April through December, we filed personal auto rate changes that averaged a decrease of approximately 3% in over 40 states that represent approximately 85% of our countrywide personal auto premium, thereby providing our customers aggregate annualized savings estimated at $800 million.

As many states work to help their residents recover from COVID and address concerns regarding racial and social justice, we continue to see elevated levels of legislative and regulatory challenges to the foundation of insurance—risk-based pricing. We’re highly engaged with regulators, industry trades, and other industry leaders to collectively identify and implement solutions to address their concerns. We believe in accurately matching rate to risk and that doing so ensures every insurance customer pays for the cost of indemnifying the risk they individually represent. We believe it is unfair to ask one consumer to knowingly subsidize the costs of another consumer and, as an industry, we need to vigorously defend this element of our healthy insurance system. While affordability is a real challenge for certain households, that can be addressed through other means and we believe that attacking the basic fundamentals of insurance pricing by forcing pricing inaccuracies and mass subsidization isn’t the answer. We believe that removing highly predictive variables from the voluntary insurance market this year will create significant consumer disruption and lead to unnecessary market turmoil at a time when many families have been materially affected by pandemic economic distress and are completely unprepared to manage through this disruption.

A key element in improving the accuracy of our rating is Snapshot®, our usage-based insurance offering. During the pandemic, we’ve seen higher consumer adoption of this offering, particularly in the Agency channel, as people recognize the value of pricing based in part on their individual driving behavior. Our latest Snapshot model, which offers discounts up to 30% for driving safe and driving less, is available in states representing about two-thirds of our countrywide premium. To provide those driving less with greater ability to control their insurance costs, we’re also shortening our Snapshot monitoring period for our existing customers not currently in the program and we expect to begin promoting this accelerated monitoring and faster impact to our customers during the first quarter 2021.

In light of the pandemic and the social distancing requirements, our special lines products experienced record growth as more consumers purchased and insured recreational vehicles (motorcycles, boats, RVs) in 2020, enjoying alternatives to travel and other discretionary activities. As a leader in protecting these products, our new business applications grew materially year over year and, in the aggregate, we finished the year with special lines PIF growth of 8%. While growth in usage of these seasonal products during the year also drove up our combined ratio on this line of business, we continued to meet our internal targets.

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While the COVID disruption to our customers, the economy, and our country cannot be overstated, as we reflect on how our team and our business performed during this incredibly volatile period, the word Proud comes to mind. We’re Proud of the way all Progressive people effectively transitioned to the work-from-home environment and quickly adapted to this completely new operating model. We’re Proud of how quickly we were able to process $1.1 billion of customer credits and get that money back in the hands of our customers in need. We’re Proud of the way our internal teams collaborated cross-functionally, always with the mindset of “how can we help” and “what’s the right thing to do.” We’re Proud of how our field sales teams have engaged with the small business owners in our Agency channel to understand and help them through these incredibly challenging times. We’re Proud of what we’ve been able to do for our local communities during this time of need. While we won’t be able to fully assess some of the second and third-order lasting effects the pandemic will have on our business, we’re Proud of what we’ve accomplished to date and confident that we have the tools and systems in place to manage our business effectively despite what we hope are one-time or short-term dislocations.

The year 2020 will go down in infamy for many different reasons, but as we look back and assess where we were in mid-March and where we ended up the year, we’re Proud to have continued to make progress towards becoming consumers’ and agents’ #1 choice and destination for auto, home, and other insurance despite these incredibly challenging times.



The Commercial Lines business continued to build on the momentum of the last several years, finishing 2020 with 11% net written premium growth and 9% policy in force growth. The business crossed $5 billion in net premiums written with notable growth in the for-hire transportation business market target and in our direct channel. While we continue to receive tremendous support from the independent insurance agent channel, which grew 14% year over year, our direct channel business picked up the pace with growth of 28% for our core commercial auto products, albeit on a much smaller base. Our years of investment in building our direct business are paying off as pandemic-related shopping patterns appear to be accelerating the move to even more digital commercial insurance shopping.

In 2020, the commercial auto market continued its 10-year struggle to produce a combined ratio below 100. Over the last decade, commercial auto profitability challenges have been driven by loss costs that have outpaced consistent and significant premium increases aimed at covering these rising costs. Despite lower frequencies and pure premiums due to COVID-19, the market is seeing higher severities and adverse loss development trends. The industry has responded to continued poor underwriting results with rate increases and underwriting restrictions, especially in market segments like for-hire transportation. These rate actions, along with growth in the truck market, drove elevated shopping and, as a result, we enjoyed profitable growth in quotes and sales.

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The commercial auto business showed remarkable resilience during an unprecedented year. The combination of our focused initiatives to assist customers with their changing insurance needs and business support and better than anticipated customer payment behavior contributed to strong results during the first half of the year, exceeding our expectations. Our focus on the general transportation truck sectors, particularly new ventures, and pricing and risk segmentation discipline positioned us well for growth as economic conditions improved in the second half of the year.

We expanded our transportation network company (TNC) business in 2020, and at the end of the year provided insurance coverage for Uber’s rideshare and food delivery business in 13 states and Lyft’s rideshare business in 8 markets. This was a challenging year for the rideshare industry. The spread of COVID-19 severely reduced the demand for rides as entertainment, travel, and commuting drastically decreased during the shelter-in-place restrictions starting in early spring, which in turn decreased premiums written in this business. As economic conditions improved, ridesharing mileage began to recover and show improvements as rideshare usage increased. Going into 2021, we continue to strengthen our relationship with Uber and Lyft through business development efforts tailored to each partner. We remain committed to this business market segment and maintain a positive view of this market segment’s long-term contributions to our business.

Advancements in our commercial auto product segmentation and underwriting capabilities continued in 2020. Our 7.9 commercial auto product model is now in 30 states representing 70% of our commercial auto net premiums written on a trailing 12-month basis. Momentum is building in the rollout of our 8.0 commercial auto product along with our new policy administration system with 8 states successfully operating on our new system as of year-end. The new product model is improving the accuracy of our pricing and competitiveness for more stable and established businesses with better retention. Moving to a new policy administration system is also a key driver of our plans for increasing efficiency and extending our market leading expense advantage. Ongoing investments will target automation, self-service capabilities, and experiences that improve our ease-of-use and low-cost value proposition.

In the three years ending December 2020, we nearly doubled our annual preferred truck premiums and believe that we are the #1 writer for preferred motor carriers with a fleet size of fewer than 10 power units by having grown our market share by more than 60% over that period. We’ve made these gains by applying telematics and new product enhancements for rate, rate stability, and coverage to intentionally target this segment and improve our competitiveness. Our small fleet program, targeted at businesses with 10–40 vehicles, was completely revamped in 2019 and is gaining significant traction. Investments in product segmentation, underwriting capabilities, and service level workflows have improved our competitiveness in this market segment, and we have grown our fleet premium 15%. We have been investing for a long time in the truck market segment and are pleased with our progress and the opportunity ahead.

Utilization of our usage-based insurance (UBI) Smart Haul® program for trucks continues to grow and has reached nearly $400 million of net premiums written, a 51% increase over 2019. Snapshot ProView® expanded and is now in 45 states. This program will further expand our UBI offerings beyond truck and could help more customers save money by switching to Progressive. Ongoing investments in our UBI programs will contribute to extending our product segmentation advantage and improving our competitiveness and ability to grow across all our business market target segments.

We made good progress this year on our ongoing efforts to expand our Commercial Lines addressable market through product extensions and new lines of business. In 2019, we expanded our product offering with our own Business Owners Policy (BOP). This line of business provides a product that fits with our customer set and creates an opportunity to extend relationships with our customers. We successfully deployed a new BOP product model with expanded business classes and coverage and launched 13 new states in 2020, bringing the state footprint to 17 states. We also added Progressive BOP to our digital BusinessQuote Explorer® (BQX) platform this year to serve the direct small business consumer. With the expansion onto the BQX platform, we are now serving customers in both channels and operating in states that represent approximately 31% of the total commercial multiperil market.

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This has been a remarkable year that will forever be a reference point in our history. As we reflect on 2020, it’s our people and how we came together in the face of significant change and uncertainty that will be remembered. Our teams demonstrated tremendous flexibility and adaptability in response to the pandemic. We quickly and effectively transitioned to a virtual work environment and assembled working teams to prioritize efforts to support each other and our customers. We came together as a team to assist our small business customers by providing billing and payment leniency and other business support for those who experienced financial hardship. In addition to assisting our individual small business customers, we made several investments to show appreciation for truckers and small business owners as they continued to provide services during the pandemic. We deepened our partnership with SCORE, an organization that provides free business mentoring and education, with a $100,000 sponsorship for their Coronavirus Small Business Resiliency Program. We also made a $100,000 donation to the Trucker's Relief Fund, also known as the St. Christopher’s Fund. Their mission is to provide financial support to truckers who are sick or injured on the job. We are honored to support and assist the many truckers and small business owners who continue to support the economy and serve our communities.

While 2020 posed some challenges to our Commercial Lines business, we are proud of how we responded and how we continue to make progress in pursuing commercial lines opportunities that will fuel future growth. As we enter 2021, we will continue to capitalize on the investments we have made in this business, respond to the ever-changing market conditions, and continue to look for other opportunities to offer the products and services that meet the needs of small business owners.



Our Property strategy is meant to complement our multi-channel auto offerings with leading property products in order to increase our share of the bundled home and auto (i.e., Robinsons) market. In the agency channel, we offer residential property insurance for homeowners, other property owners, and renters. In the direct channel, we offer residential property insurance policies written by Progressive Home to consumers both on and offline. While we also distribute property policies from other carriers in addition to the Progressive Home offering, this discussion focuses solely on our indemnity Property business.

During 2020, our Property business had net premiums written of $1.9 billion, an increase of 13% over last year. Policies in force also grew by 13%, ending the year at nearly 2.5 million.

The Property business combined ratio for 2020 was 107.1, which includes 3.2 points of amortization expense related to the acquisition of ARX. Underwriting expenses and non-weather losses were close to our expectations during the year, but catastrophe losses were substantially higher than we expected and contributed 24.0 points to our Property combined ratio. The 2020 Atlantic hurricane season was the most active on record with 30 named storms, 12 of which made landfall in the contiguous United States. In total, we experienced losses from 69 industry-declared catastrophe events, including wildfires in Oregon and California, the April Derecho (straight line windstorm) in Iowa, and many other wind and hail events. Our estimate of the ultimate direct loss and allocated loss adjustment expenses (ALAE) for the Property business due to the 2020 catastrophe events is $620 million, more than double what we incurred in losses and ALAE on a direct basis from 2019 catastrophe events.

We purchase substantial levels of reinsurance to both protect our capital against severe catastrophe events and reduce volatility. In 2020, we ceded $121 million in incurred losses and loss adjustment expenses to reinsurers in our aggregate catastrophe reinsurance program. During 2020, we increased our per-event retention to $80 million in our catastrophe per-event reinsurance program. As of year-end, Hurricane Laura was the only one of the 12 named storms making landfall to reach the $80 million retention limit, with an estimated ultimate loss and ALAE of $90 million producing a $10 million reinsurance recovery.

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We remained focused on three priorities for our Property business during 2020: 1) improving profitability; 2) driving volume in our agency channel through improved ease of use for quoting and selling Progressive Home policies; and 3) driving volume in our direct channel through increasing consumer awareness and maximizing sales yield. We made progress against all three of these goals during 2020.

We increased rates by 11% across all of Progressive Home’s product portfolio in 2020, with larger increases for the homeowners product in states exposed to substantial modeled hail risk. Our comparison of actual historical losses vs. modeled wind and hail losses using new and enhanced resources and predictive tools has given us increased confidence in our future wind and hail loss forecasts. We will continue to further refine our processes and adjust our pricing to reflect expected future losses from these severe convective storms. In many of the hail-prone states, we also introduced minimum wind and hail deductible requirements and began requiring actual cash value coverage for roofs nearing the end of their useful life. These coverage requirements were first introduced in Texas and Colorado in 2018. After several years of what we viewed as poor results in these states, we achieved our target profit margin in both states in 2020.

We now have nearly 4,000 Platinum agents, up more than 200 from the end of 2019. In addition, we continued our portfolio quoting rollout during 2020, so it’s now available to agents in all 47 jurisdictions where we offer Progressive Home products. Portfolio makes it easier for our agents to support quoting of bundled policies for our customers.

In the direct channel, we rolled out online buying functionality for homeowner shoppers in nine more states, bringing the year-end total to 23 active states. We plan to continue to expand this capability during 2021. This allows users of our HomeQuote Explorer® shopping service to complete their policy purchase online, often without needing to talk with one of our in-house agents. We also enabled online buying through mobile devices, so that customers can use their phone or tablet to complete their home or renters policy purchase. Direct channel sales now account for 26% of home and condos policies and 51% of new renters policies sold.

While the active storm season impacted our profitability during 2020, we are still pleased with all that we were able to accomplish during the year. We were fortunate that the pandemic did not have the impact on the homeowners product like it did with auto. While we will continue to focus on our top priorities throughout 2021, we feel we are well positioned as we start the new year.

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Operating Results

Personal Lines
($ in billions)
Net premiums written $33.3$31.17%
Net premiums earned $32.6$30.28%
Loss and loss adjustment expense ratio63.270.6(7.4) pts.
Underwriting expense ratio123.619.93.7 pts.
Combined ratio186.890.5(3.7) pts.
Policies in force (thousands)21,413.519,408.610%
Commercial Lines
($ in billions)
Net premiums written $5.3$4.811%
Net premiums earned $4.9$4.410%
Loss and loss adjustment expense ratio64.568.5(4.0) pts.
Underwriting expense ratio122.521.11.4 pts.
Combined ratio187.089.6(2.6) pts.
Policies in force (thousands)822.0751.49%
($ in billions)
Net premiums written $1.9$1.713%
Net premiums earned $1.8$1.614%
Loss and loss adjustment expense ratio77.371.26.1 pts.
Underwriting expense ratio229.830.5(0.7) pts.
Combined ratio2107.1101.75.4 pts.
Policies in force (thousands)2,484.42,202.113%

1 For 2020, includes 3.3 points and 0.7 points of policyholder credits and other billing credits issued, respectively, to personal auto and commercial auto customers.

2 For 2020 and 2019, includes 3.2 points and 4.3 points, respectively, of amortization expense associated with intangible assets acquired in an acquisition.