__________to__________ of Title of each class Name of each exchange on which registered 2014: $14,825,867,953 30, 2015: 588,932,479 2012. We write the majority of our special lines products in all 50 states. Our special lines management group is organized by product and led by a general manager. - bundling strategy. Direct channels. Lines 2014. over the applicable time period, pursuant to criteria to be included in the stockholders’ agreement. the spot. Licensing of insurers and agents, Capital and surplus requirements, Statutory accounting principles specific to insurance companies and the content of required financial and other reports, Requirements for establishing insurance reserves, Investments, Acquisitions of insurers and transactions between insurers and affiliates, Limitations on rates of return or profitability, Rating criteria, rate levels, and rate changes, Insolvencies of insurance companies, Assigned risk programs, Authority to exit a business, and Numerous requirements relating to other areas of insurance operations, including: required coverages, policy forms, underwriting standards, and claims handling. the insurer’s financial statements under statutory accounting principles details concerning claims reserves held by the insurer specific investments held by the insurer, and numerous other disclosures about the insurer’s financial condition and operations. NAIC in 2010. Category GAAP Accounting SAP Accounting (millions) Balance at January 1 Less reinsurance recoverables on unpaid losses Net balance at January 1 Incurred related to: Current year Prior years Total incurred Paid related to: Current year Prior years Total paid Net balance at December 31 Plus reinsurance recoverables on unpaid losses Balance at December 31 loss adjustment expense reserves and our personal auto bodily injury reserves for accident years 2009 and 2008. LIABILITY FOR UNPAID LOSSES AND LAE - GROSS LESS: REINSURANCE RECOVERABLES ON UNPAID LOSSES LIABILITY FOR UNPAID LOSSES AND LAE - NET1 PAID (CUMULATIVE) AS OF: One year later Two years later Three years later Four years later Five years later Six years later Seven years later Eight years later Nine years later Ten years later LIABILITY RE-ESTIMATED AS OF: One year later Two years later Three years later Four years later Five years later Six years later Seven years later Eight years later Nine years later Ten years later NET CUMULATIVE DEVELOPMENT FAVORABLE/(UNFAVORABLE) PERCENTAGE2 RE-ESTIMATED LIABILITY FOR UNPAID LOSSES AND LAE - GROSS LESS: RE-ESTIMATED REINSURANCE RECOVERABLES ON UNPAID LOSSES RE-ESTIMATED LIABILITY FOR UNPAID LOSSES AND LAE - NET1 GROSS CUMULATIVE DEVELOPMENT: FAVORABLE/(UNFAVORABLE) Represents loss and LAE reserves net of reinsurance recoverables on net unpaid losses at the balance sheet date. our original estimate. Areas immaterial to our consolidated financial condition. Information Our success depends on our ability to underwrite risks accurately and to charge adequate rates to policyholders. the availability of sufficient, reliable data our ability to conduct a complete and accurate analysis of available data uncertainties inherent in estimates and assumptions, generally our ability to predict changes in operating expenses with reasonable accuracy the development, selection, and application of appropriate rating formulae or other pricing methodologies our ability to innovate with new pricing strategies, and the success of those strategies our ability to implement rate changes and obtain any required regulatory approvals on a timely basis our ability to predict policyholder retention accurately unanticipated court decisions, legislation, or regulatory the frequency and severity of catastrophic events, such as hurricanes, hail storms, floods, other severe weather, and terrorist events our ability to understand the impact of ongoing changes in our claims settlement practices changing vehicle usage and driving patterns, advancements in vehicle technology unexpected changes in the medical sector of the economy, including medical costs and systemic changes resulting from national or state health care laws or regulations unanticipated changes in auto repair costs, auto parts prices, and used car prices. the availability of sufficient, reliable data the difficulty in predicting the rate and direction of changes in frequency and severity trends, including the effects of future inflation rates, for multiple products in multiple markets unexpected changes in medical and auto repair costs unanticipated changes in governing statutes and regulations new or changing interpretations of insurance policy provisions and coverage-related issues by courts the effects of changes in our claims settlement practices our ability to recognize fraudulent or inflated claims the accuracy of our estimates regarding claims that have been incurred but not recorded as of the date of the financial statements the accuracy and adequacy of actuarial techniques and databases used in estimating loss reserves, and the accuracy and timeliness of estimates of August 8, 2014. disasters occur and how much insured damage they cause. complexity, while delivering high quality products and services. current customers. We believe that improving the effectiveness of our advertising and marketing campaigns relative to those of our competitors is particularly important given the significance of brand and reputation in the marketplace and the continuing high level of advertising and marketing efforts and related expenditures within the automobile insurance market. If our campaigns are unsuccessful or are less effective than those of competitors, or if our reliance on a particular spokesperson or character is compromised, our business could be materially adversely affected. Moreover, the negative impacts of these or other events may be aggravated as the perceptions of consumers and others are formed based on modern communication and social media tools over which we have no control. addition, The Progressive Corporation and its subsidiaries could face individual and class action lawsuits by insureds and other parties for alleged violations of certain of these laws or regulations. steal, corrupt, or destroy data misappropriate funds disrupt or shut down our systems deny customers, agents, brokers, or others access to our systems, or infect our systems with viruses or malware. deterioration of our ability to write and process new and renewal business, provide customer service, resolve and pay claims in a timely manner, or perform other necessary business functions. goodwill and to our brand. local, national, or international events, such as regulatory changes, power outages, system failures, wars, or terrorist attacks a recession, depression, political or social upheaval, or other development in either the U.S. or other economies that adversely affects the value of securities held in our portfolios financial weakness or failure of one or more financial institutions that play a prominent role in securities markets or act as a counterparty for various financial instruments, such as derivative transactions, which could further disrupt the markets or cause us to incur losses if counterparties to one or more of our transactions should default inactive markets for specific kinds of securities, or for the securities of certain issuers or in certain sectors, which could result in decreased valuations and impact our ability to sell a specific security or a group of securities at a reasonable price when desired the failure, or perceived failure, of governmental attempts to stabilize their budgets or economies through austerity programs, tax increases or other measures, to stabilize specific companies or groups of companies through capital injections, to shore up markets, or otherwise to spur economic recovery or growth, or the failure or refusal of a government to engage in such efforts investor fear, whether substantiated or not a significant change in inflation expectations or the onset of deflation a default on sovereign debt, or the perception that such a default is likely, and a significant devaluation of governmental or private sector credit, currencies or financial markets, or other factors or events. affiliates, pay dividends to shareholders, or repurchase its securities, or meet its other obligations. repeat the annual variable dividend in Service Centers. In addition to our corporate headquarters and another office complex and call center in Mayfield Village, Ohio, we own significant locations in Colorado Springs, Colorado; Tampa, Florida; and Tempe, Arizona. Year 2011 2010 $25.95. 2014. policy. record date. EQUITY COMPENSATION PLAN INFORMATION Plan Category Equity compensation plans approved by security holders: Employee Plans: 2010 Equity Incentive Plan 2003 Incentive Plan Subtotal Employee Plans Director Plans: 2003 Directors Equity Incentive Plan 1998 Directors’ Stock Option Plan2 Subtotal Director Plans Equity compensation plans not approved by security holders: None Total plans. ISSUER PURCHASES OF EQUITY SECURITIES 2011 Calendar Month October November December Total Total revenues Net income (loss) Per share: Net income (loss)1 Dividends Comprehensive income (loss) Total assets Debt outstanding Annual Meeting of Shareholders to be held on May 15, 2015 (the "Proxy Statement"). Name Age Offices Held and Last Five Years’ Business Experience Report of Independent Registered Public Accounting Firm Consolidated Statements of Changes in Shareholders’ Equity - For the Years Ended December 31, Notes to Consolidated Financial Statements Supplemental Information (Unaudited) Schedule I - Summary of Investments - Other than Investments in Related Parties Schedule II - Condensed Financial Information of Registrant Schedule III - Supplementary Insurance Information Schedule IV - Reinsurance Schedule VI - Supplemental Information Concerning Property-Casualty Insurance Operations Report of Independent Registered Public Accounting Firm on Financial Statement Schedules Consent of Independent Registered Public Accounting Firm No other schedules are required to be filed herewith pursuant to Article 7 of Regulation S-X. 10.90. Type of Investment Available-for-sale Fixed maturities: Bonds: United States Government and government agencies and authorities States, municipalities, and political subdivisions Public utilities Corporate and other debt securities Asset-backed securities Redeemable preferred stocks Total fixed maturities Equity securities: Common stocks: Public utilities Banks, trusts, and insurance companies Industrial, miscellaneous, and all other Nonredeemable preferred stocks Total equity securities Short-term investments1 Total investments Includes $5.7 million in treasury bills issued by the Australian government. 2014. Revenues Dividends from subsidiaries Undistributed income from subsidiaries Equity in net income of subsidiaries* Intercompany investment income* Net gains (losses) on extinguishment of debt Total revenues Expenses Interest expense Deferred compensation1 Other operating costs and expenses Total expenses Income before income taxes Provision (benefit) for income taxes Net income Other comprehensive income (loss) Comprehensive income Represents gain on net death benefit received on life insurance policies. Assets Investment in affiliate Investment in subsidiaries* Receivable from investment subsidiary* Intercompany receivable* Income taxes Other assets Total Assets Liabilities and Shareholders’ Equity Accounts payable, accrued expenses, and other liabilities Dividend payable Debt Total liabilities Common Shares, $1.00 par value (authorized 900.0; issued 797.7, including treasury shares of 184.7 and 135.3) Paid-in capital Retained earnings Total accumulated other comprehensive income Total shareholders’ equity Total Liabilities and Shareholders’ Equity Cash Flows From Operating Activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Undistributed income from subsidiaries Amortization of stock-based compensation Net (gains) losses on extinguishment of debt Changes in: Intercompany receivable Accounts payable, accrued expenses, and other liabilities Income taxes Other, net Net cash provided by operating activities Cash Flows From Investing Activities: Additional investments in equity securities of consolidated subsidiaries Received from (paid to) investment subsidiary Net cash provided by (used in) investing activities Cash Flows From Financing Activities: Proceeds from exercise of stock options Tax benefit from exercise/vesting of stock-based compensation Proceeds from debt issuance Reacquisition of debt Dividends paid to shareholders Acquisition of treasury shares Net cash used in financing activities Change in cash Cash, beginning of year Cash, end of year (millions) Income taxes, net of refunds Interest Segment Year ended December 31, 2011: Personal Lines Commercial Auto Other indemnity Total Year ended December 31, 2010: Personal Lines Commercial Auto Other indemnity3 Total Year ended December 31, 2009: Personal Lines Commercial Auto Other indemnity Total Year Ended: December 31, 2011 Premiums earned: Property and liability insurance December 31, 2010 Premiums earned: Property and liability insurance December 31, 2009 Premiums earned: Property and liability insurance Year Ended December 31, 2011 December 31, 2010 December 31, 2009 Corporation Filing Date S-8 S-8 S-8 S-8 S-8 S-8 S-8 10‑K. /s/ Glenn M. Renwick Director, Chairman of the Board, Glenn M. Renwick Brian C. Domeck Exhibit No. Under Reg. S-K, Item 601 Form 10-K Exhibit No. Description of Exhibit If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC Amended Articles of Incorporation of The Progressive Corporation (as amended April 18, 2008) Quarterly Report on Form 10-Q (filed on May 11, 2009; Exhibit 3.1 therein) Annual Report on Form 10-K (filed on February 27, 2008; Exhibit 4.5 therein) Exhibit No. Under Reg. S-K, Item 601 Form 10-K Exhibit No. Description of Exhibit If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC Fourth Supplemental Indenture dated November 21, 2002 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company, as Trustee Junior Subordinated Indenture dated as of June 21, 2007 between The Progressive Corporation and The Bank of New York Trust Company, N.A., Trustee (“Junior Subordinated Indenture”) (including table of contents and cross-reference sheet) Exhibit No. Under Reg. S-K, Item 601 Form 10-K Exhibit No. Description of Exhibit If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC The Progressive Corporation 2010 Gainsharing Plan The Progressive Corporation 2011 Gainsharing Plan Description of Exhibit December Annual Report on Form 10-K (filed on February Exhibit No. Under Reg. S-K, Item 601 Form 10-K Exhibit No. Description of Exhibit If Incorporated by Reference, Documents with Which Exhibit was Previously Filed with SEC xý Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 20112014¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 to Ohio 34-0963169 6300 Wilson Mills Road, Mayfield Village, Ohio 44143 (Address of principal executive offices) (Zip Code) Common Shares, $1.00 Par Value New York Stock Exchange xý Yes ¨ Noxý Noxý Yes ¨ Noxý Yes ¨ NoxýLarge accelerated filer xý Accelerated filer ¨ Non-accelerated filer Smaller reporting company ¨ xý No2011: $12,567,057,59231, 2012: 611,506,847April 20, 2012,May 15, 2015, and the Annual Report to Shareholders of The Progressive Corporation and subsidiaries for the year ended December 31, 2011,2014, included as Exhibit 13 to this Form 10-K, are incorporated by reference in Parts I, II, III, and IV hereof.INTRODUCTIONPortions of the information included in The Progressive Corporation’s Proxy Statement for the Annual Meeting of Shareholders to be held on April 20, 2012 (the “Proxy Statement”) have been incorporated by reference herein and are identified under the appropriate items in this Form 10-K. The 2011 Annual Report to Shareholders (the “Annual Report”) of The Progressive Corporation and subsidiaries, which will be attached as an Appendix to the 2012 Proxy Statement, is included as Exhibit 13 to this Form 10-K. Cross references to relevant sections of the Annual Report are included under the appropriate items of this Form 10-K.ITEM 1.BUSINESS5453 subsidiaries, and 1one mutual insurance company affiliate, and one limited partnership investment affiliate. TheseOur insurance subsidiaries and mutual insurance company affiliate provide personal auto insurance, commercial auto and commercial automobiletruck insurance principally for small businesses, and other specialty property-casualty insurance and related services. Our property-casualty insurance products protect our customers against losses due to collision and physical damage to their motor vehicles, uninsured and underinsured bodily injury, and liability to others for personal injury or property damage arising out of the use of those vehicles. Our non-insurance subsidiaries and limited partnership investment affiliate generally support our insurance and investment operations. We operate our businesses throughout the United States and sell personal auto physical damage and property damage liability insurance on an Internet-only basis in Australia.ourthe 2014 Annual Report to Shareholders of The Progressive Corporation and subsidiaries (the "Annual Report"), which is included as Exhibit 13 to this Form 10-K.$15.1$18.7 billion in 2011,2014, compared to $14.5$17.3 billion in 20102013 and $14.0$16.4 billion in 2009.2012. Our combined ratio, calculated on a basis consistent with accounting principles generally acceptedwhich we calculate by dividing the sum of our loss and loss adjustment expenses, policy acquisition costs, and other underwriting expenses, net of fees and other revenues, by our net premiums earned, was 92.3 in the United States of America (GAAP), was 93.02014, 93.5 in 2011, 92.42013, and 95.6 in 2010, and 91.6 in 2009.To respond to these local differences, weWe are organized as follows:•Personal Lines – One Group President manages our Personal Lines business, which includes insurance for personal autos and special lines products (e.g., motorcycles, ATVs, RVs, mobile homes, watercraft, snowmobiles, and similar items):manager, as well asmanager. We also have a separate manager for our California Agency organization.•▪ Commercial Auto– One Group PresidentClaims - A Claims Operations Leader manages our Commercial Autoclaims business which offers products in 49 states; we do not currently write Commercial Auto in Hawaii or the District of Columbia. The Commercial Auto business is organized by state, with product managers responsible for local implementation. These state-level managers are led by two regional directors who report to a general manager.•Claims– One Group President manages our Claims business area,function, which is organized into four groups. Three of the groups are based onorganized by geographic region, and one is a nationwidecountrywide group that provides various claims-related services, including catastrophe response and special investigations. Each group is headed by a general manager, and each handles both Personal Lines and Commercial AutoLines claims.Our customer service groups, located at call centers in Mayfield Village, Ohio; Austin, Texas; Tampa, Florida; Sacramento, California; Tempe, Arizona; and Colorado Springs, Colorado, support our policy servicing, agency distribution, claims, and direct sales operations.▪ policypolicies and makes key strategic decisions. This team includes the Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, Chief Investment Officer, Chief Information Officer, Chief Human Resource Officer, and Chief Marketing Officer, as well as our three Group Presidents (discussed above). The Group Presidents are responsible for the development and management of our product offerings and customer service processes that are tailored to the unique characteristics and purchasing preferences of customers who shop for and select our insurance products.forduring each of the last three years. Our strategy is to be a competitively priced provider of a full line of auto insurance products with distinctive service, distributed through whichever channel the customer prefers. Volume potential is driven by our price competitiveness, brand recognition, service quality, and the actions of our competitors, among other factors. See “Competitive Factors” on page 5 of this reportbelow for further discussion.• 20102013 based on net premiums written and believe that we held that position for 2011.2014. There are approximately 350310 competitors in this market. Progressive and the other leading 1514 private passenger auto insurers, each of which writes over $1.9$2.0 billion of premiums, comprise about 75% of this market. For 2010,2013, the industry net premiums written for private passenger auto insurance in the United States was $158.9$174.5 billion, and our share of this market was approximately 8.0%8.7%, compared to $156.6$168.0 billion and 7.7%8.5% in 2009,2012, respectively; comparable industry data is not available for 20112014 at this time. All industry data, including ranking and market share, was obtained directly from data reported by either SNL Financial or A.M. Best Company, Inc. (“A.M. Best”), or was estimated using A.M. Best data as the primary source.Thesegment consistsbusiness. Due to the nature of these products, we typically experience higher losses during the warmer weather months. Our competitors are specialty companies and large multi-line insurance carriers. Although industry figures are not available, based on our analysis of this market, we believe that we are one of the largest providers of these products, and that we have been the market share leader for the motorcycle product since 1998. As of December 31, 2014, we offered a personal umbrella insurance product in 37 states and the District of Columbia through certain independent agents and to Direct customers via telephone. We also offered a renters insurance product in three states through certain independent agents as of December 31, 2014; we intend to roll out this product to additional states and agents as part of our personal auto insurance products, as well as our special lines products.•Personal auto insurancerepresented approximately 90% of our total Personal Lines net premiums written for each of the last three years. This business includes Snapshot®, our usage-based insurance product, which is available to consumers in 39 states and the District of Columbia in our Direct channel, and in 33 jurisdictions in our Agency channel, with continued expansion planned for 2012, depending on regulatory approval and business results. We currently have four patents, and additional patent applications pending, with respect to certain methods and systems of providing usage-based insurance. Certain of our patent rights begin to expire on or about January 29, 2016, while others extend well beyond that date.•Special lines productsinclude insurance for motorcycles, ATVs, RVs, mobile homes, watercraft, snowmobiles, and similar items, and represent about 10% of our Personal Lines business. Due to the nature of these products, we typically experience higher losses during the warmer weather months. Our competitors are specialty companies and large multi-line insurance carriers. Although industry figures are not available, based on our analysis of this market, we believe that we are one of the largest participants in the specialty personal lines market, and that we have been the market share leader for the motorcycle product since 1998. We also offer a personal umbrella insurance product in 32 states through certain independent agents and to Direct customers via telephone, and plan to continue the roll-out in both channels in 2012.agencyAgency and direct channels:•The Agency businessincludes business written by our network of more than 35,000 independent insurance agencies located throughout the United States, including brokerages in New York and California. These independent insurance agents and brokers have the ability to place business with Progressive for specified insurance coverages within prescribed underwriting guidelines, subject to compliance with company-mandated procedures. Our guidelines prescribe the kinds and amounts of coverage that may be written and the premium rates that may be charged for specified categories of risk. The agents and brokers do not have authority on behalf of Progressive to establish underwriting guidelines, develop rates, settle or adjust claims, or enter into other transactions or commitments. The Agency business also writes through strategic alliance business relationships with other insurance companies, financial institutions, and national agencies. The total net premiums written through the Agency business represented 57% of our Personal Lines volume in 2011, compared to 58% in 2010 and 59% in 2009.•The Direct businessincludes business written directly by us online and over the phone. The Direct business represented 43% of our Personal Lines volume in 2011, compared to 42% in 2010 and 41% in 2009.AutoAutoLines business writes primary liability, and physical damage, and other auto-related insurance for automobiles and trucks owned and/or operated predominately by small businesses andas a part of the commercial auto market. This business represented approximately 10% of our total net premiums written forduring each of the last three years. The majorityOur Commercial Lines customers on average insure approximately two vehicles. Even though we continue to write over 90% of our Commercial Auto customers insure three or fewer vehicles.Lines business through the Agency channel, net premiums written through the Direct channel increased by 13% in 2014. The Commercial AutoLines business which is primarily distributed through the independent agency channel, operates in the following business market targets:3•Business auto – autos, vans, and pick-up trucks used by small businesses, such as retailing, farming, services, and private trucking•Contractor – vans, pick-up trucks, and dump trucks used by small businesses, such as artisan contractors, heavy construction, and landscapers/snowplowers•For-hire transportation – tractors, trailers, and straight trucks primarily used by regional general freight and expeditor-type businesses and non-fleet long-haul operators•For-hire specialty – dump trucks, log trucks, and garbage trucks used by dirt, sand and gravel, logging, and coal-type businesses, and•Tow – tow trucks and wreckers used in towing services and gas/service station businesses.are the two largest business market targets, and together account for approximately 60% of our total Commercial Auto premiums and approximately 75% of the vehicles we insure in this business.business, while for-hire transportation accounts for about 10%. Although the Commercial Auto businessLines differs from Personal Lines auto in its customer basesbase and products written, both businesses require the same fundamental skills, including disciplined underwriting and pricing, as well as excellent claims service.370340 competitors in the total U.S. commercial auto market. We primarily compete with about 3437 other large companies/groups, each with over $130$150 million of commercial auto premiums written annually. These leading commercial auto insurers comprise about 75% of this market. Our Commercial AutoLines business ranked fourthsecond in the commercial auto insurance market for 2010, and2013 based on net premiums written; we believe that we willestimate this business to be ranked in the top fourtwo for 2011. Businesses which represented less than 1% of our net premiums written in each of the last three years, consist of managing our run-off businesses, including the run-off of our professional liability businesses,business, which wewas sold in 2010. Pursuant to our agreement with the purchaser of this business, from the date of sale through April 30, 2012, we will continuecontinued to write these policies, principally directors and officers liability insurance for community banks, for an agreed upon period after the closing of the sale.banks. All professional liability insurance policies written in July 2010 and later were 100% reinsured. From August 1, 2009 through June 30, 2010, the substantial majority of the risks on this business written for thesewere 100% reinsured and prior to August 2009, a majority of the risks on this business were reinsured. We have only 15 policies was 100% reinsured. Beginning in July 2010, all such new and renewal business is 100% reinsured. Asforce as of December 31, 2011,2014.continuedsigned a purchase agreement to write thisacquire a controlling interest in ARX, the parent company of ASI and its affiliates. ASI, one of the 20 largest homeowners carriers in the United States, specializes in personal and commercial property insurance, personal umbrella insurance, and primary and excess flood insurance. After closing, we expect that ASI will continue to be the exclusive provider of homeowners products for new business in only two statesour Agency channel.stop writingenter into a new stockholders’ agreement to address the parties’ respective rights and obligations after the closing. Among other provisions, the stockholders’ agreement will provide the non-Progressive shareholders with rights to put all of thistheir shares to Progressive in two installments, one in early 2018 and one in early 2021. Progressive likewise will have the right to call shares from the other ARX shareholders in each of 2018 and 2021. If these rights are exercised in full when available, Progressive’s ownership stake in ARX capital stock would exceed 80% in 2018, and Progressive would acquire all of the remaining capital stock of ARX in 2021. The purchase prices for shares to be purchased by Progressive pursuant to these put or call rights will be determined by adding (A) the price per share paid in the closing currently expected in April 2015, to (B) the product of the change in the per share net tangible book value of ARX between December 31, 2014 and December 31, 2017 (for the 2018 put or call purchases) or December 31, 2020 (for the 2021 put or call purchases) times a multiple of between 1.0 and 2.0. The multiple will be determined based on the growth and profitability of ARX’s business as of April 30, 2012. The sale of these businesses did not have a material effect on our financial condition, results of operations, or cash flows.•Commercial Auto Insurance Procedures/Plans (CAIP) - We are the only servicing carrier on a nationwide basis for CAIP, which are state-supervised plans servicing the involuntary market in 42 states and the District of Columbia. As a service provider, we provide policy issuance and claims adjusting services and collect fee revenue that is earned on a pro rata basis over the terms of the related policies. In 2010, we reached an agreement with AIPSO (the national organization responsible for administering the involuntary insurance market) under which we will receive a supplemental fee, when necessary, to satisfy a minimum servicing fee requirement; this agreement is scheduled to expire on August 31, 2013. We cede 100% of the premiums and losses to the plans. Reimbursements to us from the CAIP plans are required by state laws and regulations. Material violations of contractual service standards can result in ceding restrictions for the affected business. We have maintained, and plan to continue to maintain, compliance with these standards. Any changes in our participation as a CAIP service provider would not materially affect our financial condition, results of operations, or cash flows.•Progressive Home Advantage® - Through Progressive Home Advantage, we offer, either directly or through our network of independent agents, new and existing Progressive Agency and Direct customers home, condominium, and renters insurance underwritten by unaffiliated homeowner’s insurance companies. Progressive Home Advantage is not available to customers in Florida and Alaska. For the policies written under this program in our Direct business, we receive commissions, which are used to mitigate the expenses associated with maintaining this program.•Progressive Commercial AdvantageSM - We currently offer our Commercial Auto customers the ability to package their auto coverage with other commercial coverages that are underwritten by three unaffiliated insurance companies. This program offers general liability coverage in 19 states and workers’ compensation coverage in 14 states as of December 31, 2011. We receive commissions for the policies written under this program, which are used to mitigate the expenses associated with maintaining this program.4280270 claims offices located throughout the United States. In addition, weWe have in operation 54 service centers,67 Service Centers in 4151 metropolitan areas across the country, that provide our concierge level claims service, of which 744 have combined our claims offices and service centersService Centers to improve our efficiency. These service centers are designedefficiency and manage costs. Insureds and other claimants can elect to have their vehicles repaired by their own repair shops, have their vehicles repaired by one of our network shops, or have the entire repair process coordinated by one of our Service Centers. If a customer elects to repair their vehicle through a Service Center, we provide end-to-end resolution for auto physical damage losses. Customers can choose to bring their vehicles to one of these sites, where they can pick up a rental vehicle. Our representatives will then write the estimate, select a qualified repair shop, arrange the repair, including pick-up and delivery of the vehicle, and inspect the vehicle once the repairs are complete. We hold a U.S. patent for thisThis innovative, patented approach to the vehicle repair process which increases consumer satisfaction and our productivity and improves the cycle time in comparison to our other claims settlement processes. This patent expiresUnder the Service Center and network shop options, we guarantee the repairs for as long as the customer owns or leases their car. If a customer decides not to repair their vehicle, our representatives will write an estimate and the customer can receive payment on June 5, 2021.issuers.insurers. In the Agency channel, some of our competitors have broad distribution networks of employed or captive agents. Over the last few years,With widely available comparative rating services, have gained prominence, adding transparency to industry pricing, and many of ourconsumers can easily compare prices among competitors. Many competitors have significantly increased theirinvest heavily in advertising and marketing efforts and/or expandedexpanding their online or mobile service offerings. TheseOver the past decade, these changes have further intensified the competitive nature of the automobile and other property-casualty insurance markets in which we operate.theour subsidiaries’ businesses are in good standing.5 historically been perceived to be limited to a specified multiple of the insurer’s total surplus, generally 3 to 1. Thus, the amount of an insurer’s statutory surplus, in certain cases, may limit its ability to grow its business. At year-end 2011,2014, we had net premiums written of $15,146.6 million$18.7 billion and statutory surplus of $5,269.2 million.$6.4 billion. The combined premiums-to-surplus ratio for all Progressive insurance companies was 2.9 to 1. In addition, as of December 31, 2011,2014, we had access to $2.0$1.9 billion of securities held in a non-insurance subsidiary, portions of which could be contributed to the capital of our insurance subsidiaries to support growth as needed.or for other purposes. The National Association of Insurance Commissioners (NAIC) also has developed a risk-based capital (RBC) program to enable regulators to identify and take appropriate and timely regulatory actions relating to insurers that show signs of weak or deteriorating financial condition. RBC is a series of dynamic surplus-related formulas that contain a variety of factors that are applied to financial balances based on the degree of certain risks, such as asset, credit, and underwriting risks. At December 31, 2014, Progressive’s RBC ratios arewere well in excess of minimum requirements.certainspecified information. These laws impose prior approval requirements for certain transactions between insurers and their affiliates and generally regulate dividend and other distributions, including loans and cash advances, between insurers and their affiliates. See the “Dividends” discussion in Item 5(c) hereinbelow for further information on these dividend limitations. In December 2010,The scope of insurance holding company regulation has expanded as states have adopted the NAIC promulgated a revised model holding company act which, topromulgated by the extent ultimately adopted by individual state legislatures, will expand the scope of existing insurance holding company regulation.In a number of states, Progressive’s insurance subsidiaries use financial responsibility or credit information (credit) as part of the underwriting or rating process. This practice is expressly authorized by the federal Fair Credit Reporting Act, and our information demonstrates that credit is an effective predictor of insurance risk. The use of credit in underwriting and rating is the subject of significant regulatory and legislative activity. Regulators and legislators have expressed a number of concerns related to the use of credit, including: questions regarding the accuracy of credit reports, perceptions that credit may have a disparate effect on the poor and certain minority groups, the perceived lack of a demonstrated causal relationship between credit and insurance risk, the treatment of persons with limited or no credit, the impact on credit of extraordinary life events (e.g., catastrophic injury or death of a spouse), and the credit attributes applied in the credit scoring models used by insurers. A number of state insurance6departments have issued bulletins, directives, or regulations that regulate or prohibit the use of credit by insurers. In addition, a number of states are considering or have passed legislation to regulate insurers’ use of credit information. The use of credit information continues to be a regulatory and legislative issue, and it is possible that the U.S. Congress or one or more states may enact further legislation affecting its use in underwriting and rating.customerconsumer disclosures, and the Australian Prudential Regulatory Authority, which regulates solvency. Both agencies enforce laws within their jurisdiction, issue regulations, take enforcement actions, and, in general, have broad regulatory powers. Progressive Direct Insurance Company has been issued licenses by both agencies and the licenses are in good standing.7GAAP,accounting principles generally accepted in the United States of America (GAAP), which differ in certain respects from amounts reported under statutory accounting principles (SAP) prescribed by insurance regulatory authorities. Certain significant differences are described below:Commissions, premium taxes, and other variable costs incurred in connection with writingthe successful acquisition of new and renewal business are capitalized and amortized pro rata over the policy term as premiums are earned.Commissions, premium taxes, and all other acquisition expenses are expensed as incurred. Non-admitted AssetsPremium receivablesPremiums receivable are reported net of an allowance for doubtful accounts.Premium receivablesPremiums receivable over 90 days past due are “non-admitted,” which means they are excluded from surplus. For premium receivablespremiums receivable less than 90 days past due, we also estimate a bad debt reserve. Furniture, equipment, application software, leasehold improvements, and prepaid expenses are capitalized and amortized over their useful lives or periods benefited. Excluding computer equipment and operating software, the value of all other furniture, equipment, application software, leasehold improvements, and prepaid expenses, net of accumulated depreciation or amortization, is non-admitted against surplus. Computer equipment and operating software are capitalized, subject to statutory limitations based on surplus, and depreciated over three years. Deferred tax assets are recorded based on estimated future tax effects attributable to temporary differences. A valuation allowance would be recorded for any tax benefits that are not expected to be realized. The accounting for deferred tax assets is consistent with GAAP, except for certain deferred tax assets that do not meet statutory requirements for recognition, which are non-admitted against surplus.Reinsurance Ceded reinsurance balances are shown as an asset on the balance sheet as “prepaid reinsurance premiums” and “reinsurance recoverables.” Ceded unearned premiums are netted against the “unearned premiums” liability. Ceded unpaid loss and loss adjustment expense (LAE) amounts are netted against “loss and LAE reserves.” Only ceded paid loss and LAE are shown as a “reinsurance recoverables” asset. Fixed-maturity securities, which are classified as available-for-sale, are reported at current fair values.Fixed-maturity securitessecurities are reported at amortized cost or the lower of amortized cost or fair value, depending on the NAIC designation of the security. Preferred stocks, both redeemable and nonredeemable, are reported at quoted fair values.Redeemable preferred stocks are reported at amortized cost or the lower of amortized cost or fair value, depending on the NAIC designation of the security. Nonredeemable preferred stocks are reported at quoted fair value, consistent with GAAP.Federal tax expense and tax liability or recoverable balances includeincludes current and deferred income taxes.For income statement reporting, federal tax expense only includes the current tax provision. Deferred taxes are posted to surplus. SAP deferred tax assets are subject to certain limitations on admissibility. approachprincipal investment goals are to investment and capital management seeks to ensure that we have sufficient capitalmanage our portfolio on a total return basis to support all of the insurance premiums that we can profitably write.write and contribute to our comprehensive income. Our portfolio is invested primarily in short-term and intermediate-term, investment-grade fixed-income securities. Our investment portfolio had a fair value of $16.0$19.0 billion at December 31, 2011,2014, compared to $15.5$18.1 billion at December 31, 2010.2013. Investment income is affected by the variability of cash flows to or from the portfolio, shifts in the type and quality of investments in the portfolio, changes in yield, and other factors. Total investment income, including net realized gains (losses) on securities, before expenses and taxes, was $582.6$632.6 million in 2011,2014, compared to $616.2$740.4 million in 20102013 and $534.1$749.8 million in 2009.2012. On a pretax total return basis (i.e., total investment income plus changes in unrealized gains/losses), investment income was $747.9 million, $870.0 million, and $1,026.6 million for the years ended December 31, 2014, 2013, and 2012, respectively. For more detailed discussion, seeNote 2 – Investments, Note 3 – Fair Value, andManagement’s Discussion and Analysis of Financial Condition and Results of Operationsin our Annual Report, which is included as Exhibit 13 to this Form 10-K.820112014 was 25,007,26,501, all of whom were employed by subsidiaries of The Progressive Corporation.June 30, 2011,August 8, 2014, as well as in section “V. Critical Accounting Policies” of ourManagement’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report, which is included as Exhibit 13 to this Form 10-K. The accompanying tables present information concerning our property-casualty losses and LAE. 2011 2010 2009 $ 7,071.0 $ 6,653.0 $ 6,177.4 704.1 529.4 244.5 6,366.9 6,123.6 5,932.9 10,876.8 10,451.7 10,040.9 (242.0 ) (320.4 ) (136.0 ) 10,634.8 10,131.3 9,904.9 7,289.3 6,841.0 6,542.2 3,252.3 3,047.0 3,172.0 10,541.6 9,888.0 9,714.2 6,460.1 6,366.9 6,123.6 785.7 704.1 529.4 $ 7,245.8 $ 7,071.0 $ 6,653.0 (millions) 2014 2013 2012 Balance at January 1 $ 8,479.7 $ 7,838.4 $ 7,245.8 Less reinsurance recoverables on unpaid losses 1,045.9 862.1 785.7 Net balance at January 1 7,433.8 6,976.3 6,460.1 Incurred related to: Current year 13,330.3 12,427.3 11,926.0 Prior years (24.1 ) 45.1 22.0 Total incurred 13,306.2 12,472.4 11,948.0 Paid related to: Current year 8,831.5 8,095.0 7,895.3 Prior years 4,237.0 3,919.9 3,536.5 Total paid 13,068.5 12,014.9 11,431.8 Net balance at December 31 7,671.5 7,433.8 6,976.3 Plus reinsurance recoverables on unpaid losses 1,185.9 1,045.9 862.1 Balance at December 31 $ 8,857.4 $ 8,479.7 $ 7,838.4 each2014, compared to unfavorable development of the last three years,$45.1 million in 2013 and $22.0 million in 2012, which is reflected as “Incurred related to prior years” in the table above. Total development consists of net changes made by our actuarial department on prior accident year reserves, based on regularly scheduled reviews, claims settling for more or less than reserved, changes in reserve estimates by claim representatives, and emergence of unrecorded claims at rates different than reserved. Theanticipated.2011 and 2010 forour truck business. In addition, unfavorable development in our Personal Lines business (primarily personal auto) and for the last three years forreflected unfavorable reserve development in our Commercial AutoAgency auto business reflected the settlement of larger losses for amounts less than we originally reserved. During the last three years, we also experienced lower than expected defense and cost containment costs, reflecting a combination of fewer claims being litigated, as well as the fact that a greater percentage of these cases are now being handled by our in-house counsel, which is a cost-effective alternative to using external law firms. In addition, for 2010, our IBNR reserves developed favorablydue to higher frequency and severity on late emerging claims, offset in large part by favorable development in our Direct auto business due to lower than anticipated severity costs on case reserves. We also experienced unfavorable reserve development in our other businesses, primarily due to reserve increases in our run-off professional liability group business, based on internal actuarial reviews of our claims history.of late emerging claims. However, in 2011, the number ofand severity costs on late emerging claims increased over 2010 and was greater than anticipated by our carried IBNR; thus, we recognizedhigher settlements on large losses. This unfavorable development onwas partially offset by favorable reserve adjustments, primarily in our total IBNR reserves.policiespolicy written. These severities are projected based on historical trends, adjusted for anticipated changes in underwriting standards, inflation, policy provisions, claims resolution practices, and general economic trends. These anticipated trends are reconsidered periodically based on actual development and are modified if necessary.9ANALYSIS OF LOSS AND LOSS ADJUSTMENT EXPENSES DEVELOPMENTANALYSIS OF LOSS AND LOSS ADJUSTMENT EXPENSES DEVELOPMENT ($ in millions) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 LIABILITY FOR UNPAID LOSSES AND LAE - GROSS $ 5,285.6 $ 5,660.3 $ 5,725.0 $ 5,942.7 $ 6,177.4 $ 6,653.0 $ 7,071.0 $ 7,245.8 $ 7,838.4 $ 8,479.7 $ 8,857.4 LESS: REINSURANCE RECOVERABLES ON UNPAID LOSSES 337.1 347.2 361.4 287.5 244.5 529.4 704.1 785.7 862.1 1,045.9 1,185.9 4,948.5 5,313.1 5,363.6 5,655.2 5,932.9 6,123.6 6,366.9 6,460.1 6,976.3 7,433.8 7,671.5 PAID (CUMULATIVE) AS OF: One year later 2,355.5 2,662.1 2,897.4 3,036.9 3,172.0 3,047.0 3,252.3 3,536.5 3,919.9 4,237.0 Two years later 3,430.6 3,931.0 4,240.4 4,361.4 4,427.8 4,348.4 4,724.0 5,111.6 5,580.8 — Three years later 3,999.9 4,584.7 4,856.2 4,966.1 5,031.7 5,007.9 5,459.4 5,876.1 — — Four years later 4,269.6 4,839.1 5,121.9 5,227.5 5,314.7 5,323.9 5,794.3 — — — Five years later 4,368.6 4,948.7 5,229.0 5,340.1 5,452.0 5,467.9 — — — — Six years later 4,419.2 4,995.6 5,282.1 5,402.3 5,521.1 — — — — — Seven years later 4,445.7 5,023.7 5,317.8 5,443.0 — — — — — — Eight years later 4,459.8 5,042.3 5,344.5 — — — — — — — Nine years later 4,467.4 5,061.2 — — — — — — — — Ten years later 4,484.2 — — — — — — — — — LIABILITY RE-ESTIMATED AS OF: One year later 4,592.6 5,066.2 5,443.9 5,688.4 5,796.9 5,803.2 6,124.9 6,482.1 7,021.4 7,409.7 Two years later 4,485.2 5,130.5 5,469.8 5,593.8 5,702.1 5,647.7 6,074.4 6,519.6 6,994.7 — Three years later 4,501.6 5,093.6 5,381.9 5,508.0 5,573.8 5,575.0 6,075.9 6,495.4 — — Four years later 4,471.0 5,046.7 5,336.5 5,442.1 5,538.5 5,564.6 6,050.6 — — — Five years later 4,475.5 5,054.6 5,342.8 5,452.8 5,580.0 5,605.6 — — — — Six years later 4,486.4 5,060.8 5,352.8 5,475.6 5,609.1 — — — — — Seven years later 4,486.3 5,070.2 5,369.7 5,501.3 — — — — — — Eight years later 4,493.3 5,081.7 5,391.2 — — — — — — — Nine years later 4,497.5 5,100.6 — — — — — — — — Ten years later 4,518.8 — — — — — — — — — $ 429.7 $ 212.5 $ (27.6 ) $ 153.9 $ 323.8 $ 518.0 $ 316.3 $ (35.3 ) $ (18.4 ) $ 24.1 8.7 4.0 (0.5 ) 2.7 5.5 8.5 5.0 (0.5 ) (0.3 ) 0.3 RE-ESTIMATED LIABILITY FOR UNPAID LOSSES AND LAE - GROSS $ 5,031.1 $ 5,719.3 $ 6,060.7 $ 6,196.1 $ 6,338.8 $ 6,395.3 $ 6,957.0 $ 7,443.1 $ 8,026.7 $ 8,513.4 LESS: RE-ESTIMATED REINSURANCE RECOVERABLES ON UNPAID LOSSES 512.3 618.7 669.5 694.8 729.7 789.7 906.4 947.7 1,032.0 1,103.7 $ 4,518.8 $ 5,100.6 $ 5,391.2 $ 5,501.3 $ 5,609.1 $ 5,605.6 $ 6,050.6 $ 6,495.4 $ 6,994.7 $ 7,409.7 $ 254.5 $ (59.0 ) $ (335.7 ) $ (253.4 ) $ (161.4 ) $ 257.7 $ 114.0 $ (197.3 ) $ (188.3 ) $ (33.7 ) (millions)1 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $ 3,238.0 $ 3,813.0 $ 4,576.3 $ 5,285.6 $ 5,660.3 $ 5,725.0 $ 5,942.7 $ 6,177.4 $ 6,653.0 $ 7,071.0 $ 7,245.8 168.3 180.9 229.9 337.1 347.2 361.4 287.5 244.5 529.4 704.1 785.7 3,069.7 3,632.1 4,346.4 4,948.5 5,313.1 5,363.6 5,655.2 5,932.9 6,123.6 6,366.9 6,460.1 1,601.7 1,860.7 2,233.8 2,355.5 2,662.1 2,897.4 3,036.9 3,172.0 3,047.0 3,252.3 2,290.7 2,688.9 3,148.1 3,430.6 3,931.0 4,240.4 4,361.4 4,427.8 4,348.4 0 2,655.8 3,084.6 3,642.5 3,999.9 4,584.7 4,856.2 4,966.1 5,031.7 0 0 2,821.0 3,291.6 3,873.0 4,269.6 4,839.1 5,121.9 5,227.5 0 0 0 2,910.2 3,381.7 3,977.1 4,368.6 4,948.7 5,229.0 0 0 0 0 2,945.7 3,416.7 4,012.5 4,419.2 4,995.6 0 0 0 0 0 2,959.6 3,428.7 4,034.4 4,445.7 0 0 0 0 0 0 2,962.9 3,440.7 4,047.3 0 0 0 0 0 0 0 2,970.6 3,449.7 0 0 0 0 0 0 0 0 2,976.8 0 0 0 0 0 0 0 0 0 3,073.2 3,576.0 4,237.3 4,592.6 5,066.2 5,443.9 5,688.4 5,796.9 5,803.2 6,124.9 3,024.2 3,520.7 4,103.3 4,485.2 5,130.5 5,469.8 5,593.8 5,702.1 5,647.7 0 2,988.7 3,459.2 4,048.0 4,501.6 5,093.6 5,381.9 5,508.0 5,573.8 0 0 2,982.7 3,457.8 4,070.0 4,471.0 5,046.7 5,336.5 5,442.1 0 0 0 2,993.7 3,475.4 4,073.7 4,475.5 5,054.6 5,342.8 0 0 0 0 3,002.5 3,472.5 4,072.4 4,486.4 5,060.8 0 0 0 0 0 3,000.6 3,470.1 4,080.5 4,486.3 0 0 0 0 0 0 2,995.8 3,477.3 4,077.8 0 0 0 0 0 0 0 3,000.9 3,475.9 0 0 0 0 0 0 0 0 3,000.0 0 0 0 0 0 0 0 0 0 $ 69.7 $ 156.2 $ 268.6 $ 462.2 $ 252.3 $ 20.8 $ 213.1 $ 359.1 $ 475.9 $ 242.0 2.3 4.3 6.2 9.3 4.7 0.4 3.8 6.1 7.8 3.8 $ 3,204.7 $ 3,748.1 $ 4,446.2 $ 4,984.1 $ 5,655.7 $ 5,981.4 $ 6,083.6 $ 6,219.4 $ 6,333.4 $ 6,876.6 204.7 272.2 368.4 497.8 594.9 638.6 641.5 645.6 685.7 751.7 $ 3,000.0 $ 3,475.9 $ 4,077.8 $ 4,486.3 $ 5,060.8 $ 5,342.8 $ 5,442.1 $ 5,573.8 $ 5,647.7 $ 6,124.9 $ 33.3 $ 64.9 $ 130.1 $ 301.5 $ 4.6 $ (256.4 ) $ (140.9 ) $ (42.0 ) $ 319.6 $ 194.4 1Represents loss and LAE reserves net of reinsurance recoverables on net unpaid losses at the balance sheet date.2Cumulative development ÷ liability for unpaid losses and LAE - Net.1020012004 through 2010.2013. The top line of the table shows the estimated liability for unpaid losses and LAE recorded at the balance sheet dateDecember 31 for each of the indicated years for the property-casualty insurance subsidiaries only. This liability represents the estimated amount of losses and LAE for claims that were unpaid at the balance sheet date, including IBNR. The table also presents the re-estimated liability for unpaid losses and LAE on a gross and net basis, with separate disclosure of the re-estimated reinsurance recoverables on unpaid losses.of:”of”) shows the cumulative amount paid with respect to the previously recorded liability as of the end of each succeeding year. The lowermiddle portion of the table (labeled “Liability Re-estimated as of:”of”) shows the re-estimated amount of the previously recorded liability based on experience as of the end of each succeeding year. The re-estimated amount is the sum of the paid amounts above and the outstanding reserve for occurrences prior to the reservebalance sheet date. The estimate is increased or decreased as more information about the claims becomes known for individual years. For example, as of December 31, 2011,2014, our insurance subsidiaries had paid $3,449.7$5,061.2 million of the currently estimated $3,475.9$5,100.6 million of losses and LAE that had been unpaid at the end of 2002;2005; thus, an estimated $26.2$39.4 million of losses incurred through 20022005 remain unpaid as of the current financial statement date.20012004 liability has developed favorably by $69.7$429.7 million over ten years. That amount has been reflected in income over the ten years and had the largest impact on income in calendar year 2003.2005. The effects on income during the past three years due to changes in estimates of the liabilities for losses and LAE are shown in the reconciliation table on page 911 as the “prior years” contribution to incurred losses and LAE.2011,2014, but incurred in 2008,2011, will be included in the cumulative development amount for years 2008, 2009,2011, 2012, and 2010.2013. Conditions and trends that have affected development of the liability in the past may not necessarily occur in the future. Accordingly, it generally is not appropriate to extrapolate future development based on this table.For 2001, while we experienced an increase in bodily injury severity, our developed reserves were within 2.5% of our original estimates. 20022004 and 2005; thus, the reserve run-off for these years was very favorable following the end of each year, oryear. The favorable reserve development for 2007 through 2010 was about 4%3% to 9% of our original carried amounts. The reserve development for 2006 and 2007 was less than 4% of our original carried reserves. For both 2008 and 2009, we experienced favorable reserve development of more than 6% of our original estimates,reserves, which primarily reflects the decreases in severity between our original estimate and what we experienced in both our personal auto (about 3.5%) and Commercial Auto (about 5%)commercial auto businesses through 2011. The favorableduring that period. For 2011, 2012, and 2013, we experienced very minimal development, or less than 1% of approximately 4% for 2010 also reflects lower severity estimates for both personal auto and Commercial Auto, but to a lesser extent than the previous two years.10,13, we also re-estimate the reinsurance recoverables on unpaid losses each year. The top of the table shows the amount of reinsurance recoverables on unpaid losses that we had at the end of the calendar year, while the bottom shows the reserves re-estimated based on development in subsequent years. For example, at December 31, 2010,2013, we estimated our reinsurance recoverables on unpaid losses to be $704.1$1,045.9 million. During 2011,2014, these reserves developed unfavorably by $47.6$57.8 million, bringing the re-estimated reinsurance recoverables on unpaid losses to $751.7$1,103.7 million, as shown at the bottom of the table. Over the last ten years, we have experienced unfavorable development in our reinsurance recoverables on unpaid losses. ThisThe majority of this development primarily reflects our claims organization’s continuing process of re-evaluating Michigan personal injury protectionPIP claims that require lifetime reserve estimates. As a result, we have increased both our direct reserves and corresponding reinsurance recoverables, since these claims are reinsured through the Michigan Catastrophic Claims Association (MCCA) state-mandated plan. The MCCA is funded through an assessment that insurance companies collect from policyholders in the state; therefore, our exposure to losses from the failure of this reinsurer is minimal.1013 is constructed from Schedule P, Part-1, from the Consolidated Annual Statements of Progressive’s insurance subsidiaries, as filed with the state insurance departments.Areas.revenues and assets is insignificant.Information.10-K, Form 10-Q, andcurrent reports on Form 8-K, and any amendments to these reports, available free of charge via our website at progressive.com/investors. These reports are also available on the SEC’s website: http://www.sec.gov.11ITEM 1A.RISK FACTORS–- risks associated with assuming, or indemnifying for, the losses of, or liabilities incurred by policyholders–-therisks stemming from external or internal events or circumstances that directly or indirectly may affect our insurance operations–- changes in the value of assets held in our investment portfolios, which might result from a variety of factors impacting the investment marketplace generally, or the sectors, industries, or individual securities in which we have invested, and – - the risks that a counterpartythe other party to a transaction will fail to perform according to the terms of a contract, or that we will be unable to obtain capital when necessary or to pay or otherwise satisfy our obligations when due.due or obtain capital when necessary.Securities and Exchange Commission (“SEC”),SEC, as well as news releases and other information we publicly disseminated by usdisseminate from time to time.I.Insurance Risksuncertainties inherent in estimates and assumptions, generallytrendtrends and to predict both the severity and frequency of future losses with reasonable accuracyaction12suchthese risks may result in our pricing being based on inadequate or inaccurate data or inappropriate analyses, assumptions, or methodologies, and may cause us to estimate incorrectly future changes in the frequency or severity of claims. As a result, we could underprice risks, which would negatively affect our underwriting profit margins, or we could overprice risks, which could reduce our competitiveness and growth prospects. In either event, our operating results, financial condition, and cash flows could be materially adversely affected. In addition, underpricing insurance policies over time could erode the capital position of one or more of our insurance subsidiaries, thereby constraining our ability to write new business. total loss and loss adjustment expenses as determined by our employees for different categories of claims.orand financial position. Further information on our loss reserves can be found in the “Liability for Property-Casualty Losses and Loss Adjustment Expenses” discussion beginning on page 911 of this report, as well as our “Report on Loss Reserving Practices,” which was filed with the SEC on Form 8-K on June 30, 2011.the frequencyhow often severe weather events and severity ofother natural disasters.events, but thoseevents. Those tools and expert opinions are based on historical data and other assumptions that limit their reliability, and they may become even less reliable as climatic conditions change. As a result, inour forecasting efforts may generate projections that prove to be materially inaccurate. An increase in the frequency or severity of catastrophes during a given period could materially adversely affect our financial performance, cash flows, and results of operations.II.Operating Risksautomobileproperty and casualty insurance industry is a relatively mature industry, in which brand recognition, marketing skills, operational effectiveness (including, for example, rate and claim-paying accuracy, customer experience, and application of information technology)and other technologies), pricing, scale, and cost control are major competitive factors.13businesses.markets. If our competitors offer similar insurance products at lower prices, offer such insurance products bundled with other products or services that we do not offer, or engage in other successful competitive initiatives, our ability to generate new business or to retain a sufficient number of our existing customers could be seriously compromised. In addition, due to our focus on the auto insurance market, we may be more sensitive than other insurers to trends that could affect auto insurance coverages and rates over time. For example, if governmental mandates or restrictions, economic conditions, demographic trends, changing driving patterns, rising gasoline prices, advancements in vehicle technology or safety features, or other factors, were to result in decreased demand for auto insurance or decreased auto insurance rates for an extended period, the automobile insurance market as a whole could shrink and our ability to generate revenue growth could be significantly impaired.profitprofitability to acceptable levels. As more insurers react in this way, profit levels in the industry may increase to a point where some insurers begin to lower their rates, starting the cycle over again. In the past, this cycle has generally played out over a number of years. We cannot determinebe certain whether and to what extent such cyclicality is currently impacting the auto insurance market, nor can we predict whether it will do so in the future.theour ability to innovate effectively, respond to our competitors’ initiatives, and efficiently manage complexity. also require extensive modifications to our systems and processes, and thus may add to our costs and entail a high degree of complexity and risk, which makes their implementation a challenge. In addition, our efforts may disrupt our relationships with certain of our customers and producers (i.e., agents and brokers). Many of these initiatives are also implemented in cooperation with, or in reliance on, third partythird-party vendors and their systems, which may further limit our control of implementation, quality, customer experiences, and successful outcomes. Our efforts ultimately may not achieve the business goals that we have set. Our ability to develop and implement such strategic initiatives that are accepted and valued by our customers and create a sustainable advantage is critical, however, to maintaining or enhancing our competitive position; if we fail to do so, or if we are unable to maintain the advantage over our competition, our business could be materially adversely affected.industry.industry and adversely affect our competitive position. These developments can include product, pricing, or marketing innovations, new or improved services, technological advances, or new modesways of doing business, that enhanceamong other initiatives. Recent examples of significant developments in the customer’s abilitymarketplace include: new ways for customers to shop and compare prices from multiple companies, among other initiatives. Thethe growth in mobile communications and consumers’ desire to transact business on mobile devices, the prominence of social media as a source of information for consumers, are recent examplesand the availability of significant developments invery large volumes of data and the marketplace where we are committing substantial resources.challenges related to analyzing those data sets (sometimes referred to as “Big Data”). Our ability to react to such advances, develop and maintain winning strategies, and then navigate the new competitive environment is important to our success.The fast pace of change and innovation in our businesses, combined with ongoingresultsresult in significant levels of complexity in our products and in the systems and processes we use to run our business. TheThis complexity may create barriers to implementing or defending certain new ideas or providing high-quality products and customer experiences, may require us to modify our business practices, to adopt new systems, or to upgrade or replace outdated systems, each at significant expense, and may lead to the increased possibility of error in executing our business strategies, as well asstrategies. In addition, we must make difficult management decisions regarding the optimal allocation of available resources (such as ITinformation technology resources) for competing initiatives or projects. Our inabilityresult inexperience a decreased ability to compete effectively for insurance business, poor customer experiences for customers, substantially increased costs, liability to third parties, the need to modify our business processes, regulatory investigations and sanctions, and damage to our brand.14 also be adversely affected by incidents that reflect negatively on our company. These situations might include, among others, failing to protect sensitive customer information, systems failures, effects of actual or perceived vulnerabilities to cyber attacks (such as computer hacking, data theft, system disruption, and viruses and malware), errors in handling a customer’s policy, inappropriate handling of claims, of policyholders or other parties, misconduct by our officers, directors or employees or others acting on our behalf, inability to service outstanding policies or write new business due to our systems failures or the failure of third-party systems that we use, facility shut-downs or other causes, litigation or regulatory actions challenging our business practices, and actions by our other business partners, including unaffiliated businesses through which we offer bundled products (such as homeowners insurance) and other business partners,, and many of the other matters that are discussed in these Risk Factors.key managers.skills necessary for us to run our business. Our loss of certain key officers and employees, or the failure to attract or develop talented executives and managers with diverse backgrounds and experiences, could have a materially adverse effect on our business. employee culture that we have developed over the years. Our ability to do so may be impaired as a result of litigation against us, other judicial decisions, legislation or regulations, or other factors in the employment marketplace.marketplace, as well as our failure to recognize and respond to changing trends and other circumstances that affect our employees. In such events, the productivity of certain of our workers and the efficiency of our operations could be adversely affected, which could lead to an erosion of our operating performance and margins.insurers.insurers, in a wide range of areas, such as the use of credit information, privacy, and the reimbursement of certain medical costs incurred by the government. Our insurance subsidiaries’ ability to implement business plans and remain competitive while complying with these laws and regulations, and to obtain necessary regulatory action in a timely manner, is and will continue to be critical to our success.legislative and regulatory initiativesmatters concerning the use of nonpublic consumer information and related privacy issues, the use of credit scoring in underwriting, procedures for settling claims with our insureds and claimants, and efforts to freeze, set, or roll back insurance premium rates or limit the rate of return that an insurance company may earn. Insurance laws and regulations may limit, among other things, limit our insurance subsidiaries’ ability to underwrite and price risks accurately, prevent our subsidiaries from obtaining timely rate changes to recognize increased or decreased costs, restrict our subsidiaries’ ability to discontinue unprofitable businesses or exit unprofitable markets, prevent insurers from terminating policies under certain circumstances, prescribe the form and content of certain disclosures and notices to policyholders, and dictate the types of investments that an insurance company may hold. Moreover, inconsistencies between requirements at the state and federal level may further complicate our compliance efforts, potentially resulting in additional costs being imposed on us. In addition, laws in certain jurisdictions mandate that insurance companies pay assessments in a number of circumstances, including assessments to pay claims upon the insolvency of other insurance companies or to cover losses in government-provided insurance programs for high risk auto and homeowners coverages. Compliance with laws and regulations often results in increased costs, which can be substantial, to our insurance subsidiaries. These costs, in turn, may adversely affect our profitability or our ability or desire to grow or operate our business in the applicable jurisdictions.extremecertain cases, revocation of a subsidiary’s authority to do business in one or more jurisdictions. In15For example, in 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”), which, among other provisions that could impact aspects of our operations, created within the United States Department of the Treasury a new Federal Insurance Office (FIO), whose purpose is (in part) to collect information about the insurance industry and monitor the industry for systemic risk. If the FIO were to recommend to the new Financial Stability Oversight Council (also created by the Dodd-Frank Act) thatAt this time, we are “systemically significant” and therefore require additional regulation, or that the insurance industry as a whole should be regulated at the federal level, our businesses could be affected significantly. We are unable to predict whether any additional state or federal laws or regulations will be enacted as a result of legislative, regulatory or reform efforts, and how and to what extent such laws and regulations would affect our businesses.58 of this report.successeffectiveness of our concierge level claims services program.Service Center program and other methods of resolving claims. Our failure to pay claims fairly, accurately, and in a timely manner, or to deploy claims resources appropriately, could result in unanticipated costs to us, lead to material litigation, undermine customer goodwill and our reputation in the marketplace, and impair our brand image and, as a result, materially adversely affect our competitiveness, financial results, prospects, and liquidity.includehave recently included cases alleging damages as a result of our subsidiaries’ use of credit in underwriting and related requirements under the U.S. Fair Credit Reporting Act; methods used for evaluating and paying certain bodily injury, personal injury protection, and medical payment claims; other claims handling procedures; challenges to our direct repair program and service centerService Center program; interpretations of the provisions of our insurance policies; and policy implementation and renewal procedures,procedures; and employment-related litigation, including federal wage and hour claims, among other matters. From time to time, we also may be involved in litigation or other disputes alleging that certain of our subsidiaries’ business practices or systems violate the patent, trademark, or other intellectual property rights of third parties. Additional litigation may be filed against us concerning our employment-related practices, allegations of medical or attorney malpractice, and other general liability causes of action arising from our operations.theories. In addition, lawsuits have been filed, and other lawsuits may be filed in the future, against our competitors and other businesses, and although we are not a party to such litigation, the results of those cases may create additional risks for, and/or impose additional costs and/or limitations on, our subsidiaries’ business operations.damages.damages and injunctive relief. The potential for injunctive relief can threaten our use of important business practices, including how vehicles are repaired and other claims are settled. Moreover, the resolution of individual or class action litigation in insurance or related fields may lead to a new layer of court-imposed regulation, resulting in material increases in our costs of doing business.–- Litigation in our Annual Report, which is included as Exhibit 13 to this Form 10-K. including sophisticated individuals and groups with substantial computing resources and capabilities. Such attacks may include, among other things, attempts to gain unauthorized access to:16similar cyber attacks and other security breaches, along with the possible risk of loss, corruption, or unauthorized publication of Progressive’s information or the confidential information of our customers and employees. These relationships present further risk management challenges for us, including, among others: confirming and monitoring the third-party’s security measures; the potential for improper handling of or access to, or the inability to retrieve, our data; and data location uncertainty and the possibility of data storage in inappropriate jurisdictions, where laws or security measures may be inadequate.the sensitive personal information of our customers and employees.or confidential information. These efforts include internal processes and technological defenses that are preventative or detective, and other controls designed to provide multiple layers of security assurance.protection. Examples include physical security measures, access and password policies, firewalls, systems monitoring, malicious code protection, network and host-based intrusion detection and prevention measures, data loss prevention measures, configuration assurance, data encryption, and event management, as well as third party intrusion vulnerabilitythird-party testing. In addition, we seek to assureprotect the security and confidentiality of information provided to our vendors under “cloud computing” or other arrangements through appropriate risk evaluation, security and financial due diligence, contracts designed to set and maintain high security and confidentiality standards, and ongoing testing, auditing, and evaluation of third-party compliance with the required standards. While we expend significant resources on these defensive measures, there can be no assurance that we will be successful in preventing attacks or detecting and stopping them once they have begun.2011,2014, an independent organization recognized by PCI for such purposes, recertified Progressive as being in compliance with the current PCI standards. The PCI data security standards, however, will likely evolve over time to address emerging payment security risks and other issues, requiring additional compliance efforts by us and annual recertification of our processes. Our intention is to maintain compliance with PCI’sPCI's data security standards. The failure to do so could result in contractual fines or disruption of our ability to receive credit card payments.becausemany of our information technology and telecommunicationscritical business systems interface with and depend on third-party systems,systems; we could experience service denials if demand for such servicea third party’s services exceeds capacity or if a third-party system fails or experiences an interruption. If sustained or repeated, and if an alternate system, process, or vendor is not immediately available to us, such events could result in a17ThisAny such event could result inhave a materiallymaterial adverse effect on our business results, prospects, and liquidity, as well as damage to customer goodwill. also adversely affect our ability to make timely payments.III.Market Risks•Interest rate risk – the risk of adverse changes in the value of fixed-income securities as a result of increases in market interest rates.•Investment credit risk – the risk that the value of certain investments may decrease due to a deterioration in the financial condition, operating performance or business prospects of, or the liquidity available to, one or more issuers of those securities or, in the case of asset-backed securities, due to the deterioration of the loans or other assets that underlie the securities, which, in each case, also includes the risk of permanent loss. In the case of governmental issuers, the risk includes the potential for unbalanced budgets, required austerity measures, debt defaults, or other social or political turmoil.•Concentration risk – the risk that the portfolio may be too heavily concentrated in the securities of one or more issuers, sectors, or industries, which could result in a significant decrease in the value of the portfolio in the event of a deterioration of the financial condition or performance of, or outlook for, those issuers, sectors, or industries.•Prepayment or extension risk (applicable to certain securities in the portfolio, such as residential mortgage-backed securities) – the risk that, as interest rates change, the principal of such securities may be repaid earlier than anticipated, or that a security may not be redeemed when anticipated, adversely affecting the value of, or income from, such securities and the portfolio by investing at less attractive rates.•Liquidity risk – the risk that we will not be able to convert investment securities into cash on favorable terms and on a timely basis, or that we will not be able to sell them at all, when we desire to do so. Disruptions in the financial markets, or a lack of buyers for the specific securities that we are trying to sell, could prevent us from liquidating securities or cause a reduction in prices to levels that are not acceptable to us.lack of transparency regardingdeterioration in the underlying businesses of the issuers of the securities that we purchase; credit ratings assigned to such securities by nationally recognized creditstatistical rating agenciesorganizations are based on incomplete or inaccurate information or otherwise prove unwarranted; or our risk mitigation strategies are ineffective for the applicable market conditions.a separateexternal investment advisory firm using a value-oriented investment approach.firms. Our equity investments are subject to general movements in the values of equity markets and to the changes in the prices of the securities we hold. An investment portfolio that is designed to track an index, such as the Russell 1000, or that follows a specific investment discipline, such as value investing, does not reduce the risks inherent in equity investing and is not necessarily less risky than other equity investment strategies. Equity markets, sectors, industries, and individual securities may be subject to high volatility and to long periods of depressed or declining valuations, and also may be subject to some of the same risks that affect our fixed-income portfolio, as discussed above. For example, a rapid rise in interest rates may cause equity prices to fall, particularly those of interest-sensitive companies. In addition, even though the Russell 1000 Index is broadly diversified, significant portions of the index may be concentrated in one or more sectors, such as theenergy, technology, or financial services, industry, which may adversely affect the performance of our common equity portfolio if such a sector underperforms. A decline in the aggregate value of the equities that make up the index would be expected to result in a commensurate decline both in the value of our common equity portfolio and in our capital. Likewise, the actively managed equity portfolio will be subject to risks arising from the investment decisions of the investment advisor,advisors, including sector or industry concentrations, lack of geographic diversification, and the performance of individual issuers.18 causing the market to react irrationally or stagflationIf we, at that time, are unable to supplement the subsidiary’s capital from The Progressive Corporation’s other assets or by issuing debt or equity securities on acceptable terms,In any such event, our business could be materially adversely affected.2011,2014, and of the market risk associated with our investment portfolio.IV.Credit Risksexample,example: contracts for the acquisition of goods and services (such as telecommunications and information technology facilities, equipment and support, and other systems and services that are integral to our operations),; agreements with other insurance carriers to bundle products that we do not offer,offer; and arrangements for transferring certain of our risks (including reinsurance used by us in connection with certain of our insurance products and our corporate insurance policies)policies and the performance of certain state reinsurance facilities/associations relating to extreme events or certain catastrophic claims). In addition, from time to time, we enter into significant financial transactions, such as derivative instruments, with major banks, or other financial institutions.institutions, or security clearinghouses. If one or more of these parties were to default in the performance of their obligations under their respective contracts or determine to abandon or terminate support for a system, product, obligation, or service that is significant to our business, we could suffer significant financial losses and operational interruptions or other problems, which could in turn could adversely affect our financial performance, cash flows, or results of operations and cause damage to our brand and reputation.to the holding company, which in turn may limit the holding company’s ability to pay dividends to shareholders, repurchase its securities, repay indebtedness, or make capital contributions to its other subsidiaries or affiliate.pay dividends to shareholders, make payments on its indebtedness, meet its other obligations, repurchase its common shares or other securities, or make capital contributions to or otherwise fund its subsidiaries or affiliate.affiliates, pay dividends to shareholders, repurchase its common shares or other securities, or meet its other obligations. Each insurance subsidiary’s ability to pay dividends to the holding company may be limited by one or more of the following factors:Insuranceinsurance regulatory authorities require insurance companies to maintain specified minimum levels of statutory capital and surplusInsuranceinsurance regulations restrict the amounts available for distribution based on either net income or surplus of the insurance companyCompetitivecompetitive pressures require our insurance subsidiaries to maintain high financial strength ratings, or19Inin certain jurisdictions, prior approval must be obtained from regulatory authorities for the insurance subsidiaries to pay dividends or make other distributions to affiliated entities, including the parent holding company.The appropriate level ofManagement determines our capital needs at any given time is estimated by management based in part, on a number of factors, including:business resultsperformance of our insurance operations and investment portfoliosThethat we hold at any given time is determinedheld by regulatory requirements and the performance of our insurance operations and investment results (including investment income, valuation changes in our portfolio, and the realization of any deferred tax benefits), as well as by our capital management activities, such as the payment of cash dividends, repurchases of our common shares and debt securities, the establishment of credit lines, and the issuance by us of debt, equity, or other securities. Ifsubsidiaries. Also, if we experience losses in our insurance operations or from our investment portfolio, our capital levels may be reduced, perhaps significantly. If our capital level falls lower than the amount needed at a given time, our ability to grow and successfully operate the insurance business could be constrained, and our flexibility to pay dividends, repurchase our securities, or engage in other corporate transactions could be limited, until additional sources of capital are secured. Such a deterioration of our financial condition could adversely affect the perception of our company by insurance regulators and other third parties (such as rating agencies, underwriters, institutional and other investors, and our customers)consumers), potentially resulting in regulatory actions or our inability to gain access to debt or equity markets at favorable rates, and the price of our common shares or debt securities could fall significantly.20112014 and 2012)2015) and then by the Gainshare factor (determined under our employee Gainsharing (cash bonus) plans based on the operating performance of our principal insurance businesses). If our Gainshare factor for the year is zero or after-tax comprehensive income (which includes net investment income, realized investment gains and losses, and the change in unrealized investment gains and losses) is less than after-tax underwriting income, no dividend will be paid under our annual variable dividend policy.2020122015 (to be paid early in 2013)2016), the dividend, if any, would not be declared by the Board until late 20122015 or early 2013,2016, and the Board retains the discretion, at any time, to alter our policy or not to pay the annual dividend for 20122015 or future years. Such an action by the Board could result from, among other reasons, changes in the insurance marketplace, changes in our performance or capital needs, changes in U.S. federal income tax laws, disruptions of national or international capital markets, or other events affecting our liquidity, or financial position or prospects, as described above under “Investing“Market Risks.” Any such change could adversely affect investors’ perceptions of the company and the value of, or the total return of an investment in, our common shares or debt securities.21ITEM 1B.UNRESOLVED STAFF COMMENTSITEM 2.PROPERTIESservice centers that provide our concierge level of claims service.7188 buildings located throughout the United States. TheseNearly two-thirds of our owned buildings are for our Service Centers, the majority of which are combined with a claims office. Our owned facilities, which contain approximately 4.14.6 million square feet of space, are not segregated by industry segment.We lease approximately 3.1 million square feet of space throughout the United States and one location in Australia. These leases are generally short-term to medium-term leases of commercial space.ITEM 3.LEGAL PROCEEDINGSITEM 4.MINE SAFETY DISCLOSURES22ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Quarter High Low Close Dividends
Declared
Per Share 1 $ 21.24 $ 19.12 $ 21.13 $ 0 2 22.08 19.79 21.38 0 3 21.66 16.88 17.76 0 4 19.74 16.97 19.51 .4072 $ 22.08 $ 16.88 $ 19.51 $ .4072 1 $ 19.69 $ 16.18 $ 19.09 $ 0 2 20.94 18.67 18.72 0 3 21.59 18.41 20.87 0 4 22.13 19.54 19.87 1.3987 $ 22.13 $ 16.18 $ 19.87 $ 1.3987 Year Quarter High Low Close 2014 1 $ 27.30 $ 22.53 $ 24.22 $ 0 2 26.03 23.40 25.36 0 3 25.63 23.20 25.28 0 4 27.52 24.16 26.99 0.6862 $ 27.52 $ 22.53 $ 26.99 $ 0.6862 2013 1 $ 25.38 $ 21.36 $ 25.27 $ 0 2 26.39 23.99 25.42 0 3 27.55 24.86 27.23 0 4 28.54 25.81 27.27 1.4929 $ 28.54 $ 21.36 $ 27.27 $ 1.4929 Common Sharescommon shares on February 15, 2012,January 30, 2015, was $21.34.3,2732,359 shareholders of record on December 31, 2011.See the table above for the frequency and amount of cash dividends declared on our Common Shares, $1.00 par value, for the last two years.Progressive maintainsdeclaringpaying an annual variable dividend that, if declared, would be payable shortly after the close of the year. TheThis annual variable dividend is based on a formula that multiplies our annual after-tax underwriting income by a target percentage factor and then by a companywide performance factor (known as our Gainshare factor). The Board determined the target percentage of after-tax underwriting income multiplied by a companywide performance factor (“Gainshare factor”), subject to the limitations discussed below. The target percentage is determined by our Board of Directors on an annual basis and announced to shareholders and the public. In December 2013, the Board determined the target percentage for 2014 to be 20% for 2009, 25% for 2010,33-1/3% of annual after-tax underwriting income, which is unchanged from the target percentage in both 2013 and 33-1/3% for 2011. This2012. The Board also determined that this target will remain at 33-1/3% for 2012. 2015.infor our core insurance businesses. The Gainshare factor is also used in connection with our cash bonus program for employees and isbusinesses, as approved by the Compensation Committee of the Board annually.Board. This Gainshare factor is also used in the annual cash incentive program currently in place for our employees (our “Gainsharing program”). Although recalibrated every year, the structure of the Gainsharing program generally remains the same. Our annual variable dividend program iswill result in a variable payment to shareholders each year, subject to certain limitations. To the extentIf the Gainshare factor is zero or if after-taxour comprehensive income (net income plus the after-tax change in unrealized gains (losses) during the period, among other items) is less than after-tax underwriting income, no dividend would be payable under our annual variable dividend will be paid.20122015 or future years, at any time prior to the declaration of the dividend for the year. Such an action by the Board could result from, among other reasons, changes in the insurance marketplace, changes in our performance or capital needs, changes in federal income tax laws, disruptions of national or international capital markets, or other events affecting our business, liquidity, or financial position. In December 2011, the BoardDirectors declared an annual dividend, which wasour shareholder dividends, both variable and special, that were paid in February 2012 to shareholders of record at the close of businesslast three years:(millions, except per share amounts) Amount Dividend Type Declared Paid Per
ShareAnnual – Variable December 2014 February 2015 $ 0.6862 $ 404.1 Annual – Variable December 2013 February 2014 0.4929 293.9 Special December 2013 February 2014 1.0000 596.3 Annual – Variable December 2012 February 2013 0.2845 172.0 Special October 2012 November 2012 1.0000 604.7 January 26, 2012. The amountshares outstanding as of the dividend was $.4072 per common share, or $249.4 million. The 2010 annual dividend was declared by the Board in December 2010 and paid to shareholders in February 2011; the total amount of dividends was $263.8 million, or $.3987 per common share. The 2009 annual dividend was declared by the Board in December 2009 and paid to shareholders in February 2010; the total amount of dividends was $108.4 million, or $.1613 per common share. In addition, in 2010, we returned $663.2 million to shareholders via an extraordinary cash dividend of $1.00 per share.23$5.3$6.4 billion on December 31, 2011,2014, and $5.1$6.0 billion on December 31, 2010.2013. At December 31, 2011, $472.62014, $549.2 million of consolidated statutory surplus represented net admitted assets of Progressive’s insurance subsidiaries and affiliate that are required to meet minimum statutory surplus requirements in such entities’ states of domicile. The companies may be licensed in states other than their states of domicile, however, which may have higher minimum statutory surplus requirements. Generally, the net admitted assets of insurance companies that, subject to other applicable insurance laws and regulations, are available for transfer to the parent company cannot include the net admitted assets required to meet the minimum statutory surplus requirements of the states where the companies are licensed. The companies may be licensed in states other than their states of domicile, however, which may have higher minimum statutory surplus requirements. Based on the dividend laws currently in effect, the insurance subsidiaries could pay aggregate dividends of $1,195.8$1,346.5 million in 20122015 without prior approval from regulatory authorities, provided the dividend payments are not made within 12 months of previous dividends paid by the applicable subsidiary.The followingis set forth with respect toabout securities authorized for issuance under our equity compensation plans at December 31, 2011. Number of
Securities to be
Issued upon Exercise
of Outstanding
Options, Warrants
and Rights Weighted-Average
Exercise Price
of Outstanding
Options,
Warrants
and Rights Number of Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation Plans 2,390,460 1 NA 15,609,540 2,769,862 1 NA 2,532,382 5,160,322 NA 18,141,922 0 0 663,095 36,237 $ 12.51 0 36,237 $ 12.51 663,095 5,196,559 NM 18,805,017 NA = Not ApplicableNM = Not meaningful since restricted stock unit awards do not have an exercise price.1Represents restricted stock unit awards, including reinvested dividend equivalents, under which, upon vesting, the holder has the right to receive common shares on a one-to-one basis; there is no exercise price associated with restricted stock unit awards. For further discussion of these awards, seeNote 9 - Employee Benefit Plans in Progressive’s 2011 Annual Report to Shareholders.2This plan has expired and no further awards may be made thereunder.24 Total Number of
Shares Purchased Average Price
Paid per Share Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs Maximum Number of Shares
That May Yet Be Purchased
Under the Plans or Programs 4,225,100 $ 18.00 19,546,591 55,453,409 3,100,000 18.69 22,646,591 52,353,409 1,681,510 18.94 24,328,101 50,671,899 9,006,610 $ 18.41 ISSUER PURCHASES OF EQUITY SECURITIES 2014 Calendar Month October 1,460,483 $ 25.10 54,997,782 20,002,218 November 3,094 26.37 55,000,876 19,999,124 December 1,096 27.15 55,001,972 19,998,028 Total 1,464,673 $ 25.10 Shares repurchasedShare repurchases under this authorization may be accomplished through open market purchases, privately negotiated transactions, or otherwise, and may include trading plans entered into with one or more brokerage firms in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. In August 2011, we entered into a 10b5-1 trading plan to permit, under certain circumstances specified in the plan, the repurchase of our common shares during periods that are otherwise restricted under our internal policies; this plan expired in November 2011. During the fourth quarter we repurchased shares under the 10b5-1 plan, in2014, all repurchases were accomplished through the open market andor in conjunction with our incentive compensation plans at the then currentthen-current market prices.returneffectively use underleveraged capital to investors.capital. SeeNote 9 - Employee Benefit Plans, “Incentive Compensation Plans” in our Annual Report, which is included as Exhibit 13 to this Form 10-K, for a summary of our restricted equity grants.ITEM 6.SELECTED FINANCIAL DATA For the years ended December 31, 2011 2010 2009 2008 2007 $ 15,508.1 $ 14,963.3 $ 14,563.6 $ 12,840.1 $ 14,686.8 1,015.5 1,068.3 1,057.5 (70.0 ) 1,182.5 1.59 1.61 1.57 (.10 ) 1.65 .4072 1.3987 .1613 0 2.1450 924.3 1,398.8 1,752.2 (614.7 ) 1,071.0 21,844.8 21,150.3 20,049.3 18,250.5 18,843.1 2,442.1 1,958.2 2,177.2 2,175.5 2,173.9 1For 2008, amount represents basic earnings per share, since diluted earnings per share was antidilutive due to the net loss for the year. For the years ended December 31, 2014 2013 2012 2011 2010 Total revenues $ 19,391.4 $ 18,170.9 $ 17,083.9 $ 15,774.6 $ 15,215.5 Net income 1,281.0 1,165.4 902.3 1,015.5 1,068.3 Per share: Net income 2.15 1.93 1.48 1.59 1.61 Dividends 0.6862 1.4929 1.2845 0.4072 1.3987 Comprehensive income 1,352.4 1,246.1 1,080.8 924.3 1,398.8 Total assets 25,787.6 24,408.2 22,694.7 21,844.8 21,150.3 Debt outstanding 2,164.7 1,860.9 2,063.1 2,442.1 1,958.2 ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK25ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 9A.CONTROLS AND PROCEDURESITEM 9B.OTHER INFORMATION26ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEand the individuals who haveeach of whom has been nominated for election as directorsa director at the 20122015 Annual Meeting of Shareholders of the Registrant, is incorporated herein by reference from the section entitled “Item 1: Election of Directors” in The Progressive Corporation's Proxy Statement for the Proxy Statement. Glenn M. Renwick 5659 Chairman of the Board since November 2013; President and Chief Executive Officer Brian C. Domeck 5255 Vice President and Chief Financial Officer Charles E. Jarrett 5457 Vice President, Secretary, and Chief Legal Officer Thomas A. King 5255 Vice President and Treasurer Jeffrey W. Basch 5356 Vice President and Chief Accounting Officer John A. Barbagallo 5255 Commercial Lines Group President, including Agency Operations since September 2007; Agency Group President prior to September 2007M. Jeffrey Charney 5255 Chief Marketing Officer since November 2010; Senior Vice President and Chief Marketing Officer of Aflac Incorporated from November 2008 to October 2010; Senior Vice President and Chief Marketing Officer of QVC, Inc. prior to November 20082010 William M. Cody 4952 Chief Investment Officer Susan Patricia Griffith 4750 President of Customer Operations since April 2014; Claims Group President since March 2008; Chief Human Resource Officer prior to March 2008April 2014 Valerie Krasowski 4649 Chief Human Resource Officer since August 2008; Special Lines General Manager prior to August 2008John P. Sauerland 4750 Personal Lines Group President Michael D. Sieger 53 Claims Operations Leader since September 2007; Direct Group PresidentJanuary 2015; Claims Process General Manager prior to September 2007January 2015 Raymond M. Voelker 4851 Chief Information Officer 27Incorporated by reference from the “Section 16(a) Beneficial Ownership Reporting Compliance” section of the Proxy Statement.None.2011.2014. The description of those procedures is incorporated by reference from the “Shareholder-Proposed Candidate Procedures” section of the Proxy Statement (which can be found in “Other Board of Directors Information”).ITEM 11.EXECUTIVE COMPENSATIONITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSEQUITY COMPENSATION PLAN INFORMATION Plan Category Equity compensation plans approved by security holders: 2010 Equity Incentive Plan 7,726,619 NM 5,206,913 1,324,945 NM 0 Subtotal Employee Plans 9,051,564 NM 5,206,913 2003 Directors Equity Incentive Plan 81,579 NM 395,305 Subtotal Director Plans 81,579 NM 395,305 Equity compensation plans not approved by security holders: None Total 9,133,143 NM 5,602,218 ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE“Certain Relationships and“Transactions with Related Transactions.Parties.”ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES28ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES(a)(1)Listing of Financial Statements20112014 Annual Report, which is included as Exhibit 13 to this Form 10-K, are incorporated by reference in Item 8:2011, 2010,2014, 2013, and 2009201220112014 and 201020132011, 2010,2014, 2013, and 20092011, 2010,2014, 2013, and 20092012(a)(2)Listing of Financial Statement Schedules(a)(3)Listing of Exhibits42.48. Management contracts and compensatory plans and arrangements are identified in the Exhibit Index as Exhibit Nos. 10.410.5 through 10.69.(b)Exhibits(c)Financial Statement Schedules29 December 31, 2014 Type of Investment Cost Fair Value Available-for-sale Fixed maturities: Bonds: United States Government and government agencies and authorities $ 2,641.1 $ 2,667.1 $ 2,667.1 States, municipalities, and political subdivisions 2,095.7 2,139.2 2,139.2 Foreign government obligations 14.2 14.2 14.2 Public utilities 63.1 66.6 66.6 Corporate and other debt securities 2,750.8 2,770.1 2,770.1 Asset-backed securities 5,549.1 5,612.8 5,612.8 Redeemable preferred stocks 260.2 279.2 279.2 Total fixed maturities 13,374.2 13,549.2 13,549.2 Equity securities: Common stocks: Public utilities 95.0 143.3 143.3 Banks, trusts, and insurance companies 220.1 438.4 438.4 Industrial, miscellaneous, and all other 974.1 1,910.6 1,910.6 Nonredeemable preferred stocks 590.4 827.5 827.5 Total equity securities 1,879.6 3,319.8 3,319.8 2,149.0 2,149.0 2,149.0 Total investments $ 17,402.8 $ 19,018.0 $ 19,018.0 (millions) December 31, 2011 Cost Fair Value Amount At
Which Shown
In The
Balance Sheet $ 2,842.7 $ 2,963.0 $ 2,963.0 1,938.6 2,002.1 2,002.1 97.8 97.5 97.5 2,703.7 2,798.7 2,798.7 3,493.6 3,524.1 3,524.1 379.3 373.9 373.9 11,455.7 11,759.3 11,759.3 113.7 147.4 147.4 203.0 224.7 224.7 1,114.3 1,473.5 1,473.5 473.7 806.3 806.3 1,904.7 2,651.9 2,651.9 1,551.8 1,551.8 1,551.8 $ 14,912.2 $ 15,963.0 $ 15,963.0 1Includes $10.0 million in treasury bills issued by the Australian government.2011.30 Years Ended December 31, 2014 2013 2012 Revenues Dividends from subsidiaries $ 1,000.2 $ 1,119.7 $ 782.3 Undistributed income (loss) from subsidiaries 358.3 117.5 193.1 Equity in net income of subsidiaries* 1,358.5 1,237.2 975.4 Intercompany investment income* 2.4 2.8 6.1 Gains (losses) on extinguishment of debt (4.8 ) (4.3 ) (1.8 ) 0 2.6 0 Total revenues 1,356.1 1,238.3 979.7 Expenses Interest expense 120.2 121.2 126.3 2.8 9.5 5.5 Other operating costs and expenses 4.4 4.0 3.7 Total expenses 127.4 134.7 135.5 Income before income taxes 1,228.7 1,103.6 844.2 Benefit for income taxes (52.3 ) (61.8 ) (58.1 ) Net income $ 1,281.0 $ 1,165.4 $ 902.3 Other comprehensive income 71.4 80.7 178.5 Comprehensive income $ 1,352.4 $ 1,246.1 $ 1,080.8 (millions) Years Ended December 31, 2011 2010 2009 $ 875.3 $ 1,216.2 $ 1,230.6 225.7 (73.5 ) (78.7 ) 1,101.0 1,142.7 1,151.9 5.6 6.6 8.5 (.1 ) 6.4 0 1,106.5 1,155.7 1,160.4 138.0 139.5 146.4 .4 4.3 4.8 4.7 3.9 3.3 143.1 147.7 154.5 963.4 1,008.0 1,005.9 (52.1 ) (60.3 ) (51.6 ) $ 1,015.5 $ 1,068.3 $ 1,057.5 (91.2 ) 330.5 694.7 $ 924.3 $ 1,398.8 $ 1,752.2 *Eliminated in consolidation.1SeeNote 4 – Employee Benefit Plans in these condensed financial statements.31 December 31, 2011 2010 $ 1.0 $ 1.0 6,179.5 5,984.8 2,096.6 2,120.2 237.6 179.1 52.1 48.7 69.0 70.2 $ 8,635.8 $ 8,404.0 $ 137.4 $ 132.8 249.6 264.1 2,442.1 1,958.2 2,829.1 2,355.1 613.0 662.4 1,006.2 1,007.1 3,495.0 3,595.7 692.5 783.7 5,806.7 6,048.9 $ 8,635.8 $ 8,404.0 *Eliminated in consolidation. December 31, 2014 2013 Assets Investment in affiliate $ 5.0 $ 5.0 Investment in subsidiaries* 7,423.5 6,923.5 Receivable from investment subsidiary* 1,677.5 1,648.4 Intercompany receivable* 413.0 307.6 Net deferred income taxes 74.5 69.1 Other assets 123.9 141.8 Total Assets $ 9,717.4 $ 9,095.4 Liabilities and Shareholders’ Equity Accounts payable, accrued expenses, and other liabilities $ 220.0 $ 154.8 Dividend payable 404.1 890.2 Debt 2,164.7 1,860.9 Total liabilities 2,788.8 2,905.9 Common shares, $1.00 par value (authorized 900.0; issued 797.6, including treasury shares of 209.8 and 201.8) 587.8 595.8 Paid-in capital 1,184.3 1,142.0 Retained earnings 4,133.4 3,500.0 Total accumulated other comprehensive income 1,023.1 951.7 Total shareholders’ equity 6,928.6 6,189.5 Total Liabilities and Shareholders’ Equity $ 9,717.4 $ 9,095.4 32 Years Ended December 31, 2011 2010 2009 $ 1,015.5 $ 1,068.3 $ 1,057.5 (225.7 ) 73.5 78.7 2.1 2.4 1.8 .1 (6.4 ) 0 (58.5 ) (54.1 ) (22.0 ) 4.5 7.3 12.5 (3.4 ) (12.2 ) 31.1 4.2 (1.9 ) (5.6 ) 738.8 1,076.9 1,154.0 (11.8 ) (3.5 ) (152.4 ) 23.6 122.0 (849.5 ) 11.8 118.5 (1,001.9 ) 22.4 27.2 18.8 6.4 14.0 9.7 497.0 0 0 (15.0 ) (214.3 ) 0 (263.6 ) (763.7 ) 0 (997.8 ) (258.6 ) (180.6 ) (750.6 ) (1,195.4 ) (152.1 ) 0 0 0 0 0 0 $ 0 $ 0 $ 0 Years Ended December 31, 2014 2013 2012 Cash Flows From Operating Activities: Net income $ 1,281.0 $ 1,165.4 $ 902.3 Adjustments to reconcile net income to net cash provided by operating activities: Undistributed (income) loss from subsidiaries (358.3 ) (117.5 ) (193.1 ) Amortization of equity-based compensation 2.2 2.1 2.0 (Gains) losses on extinguishment of debt 4.8 4.3 1.8 Changes in: Intercompany receivable (105.4 ) (11.4 ) (58.6 ) Accounts payable, accrued expenses, and other liabilities 18.2 19.4 0.3 Income taxes 61.1 (55.8 ) 21.7 Other, net 0.4 (16.3 ) (9.9 ) Net cash provided by operating activities 904.0 990.2 666.5 Cash Flows From Investing Activities: Additional investments in equity securities of consolidated subsidiaries (21.1 ) (13.9 ) (36.1 ) Investment in affiliate 0 (4.0 ) 0 (Paid to) received from investment subsidiary (29.1 ) (325.5 ) 773.7 Net cash provided by (used in) investing activities (50.2 ) (343.4 ) 737.6 Cash Flows From Financing Activities: Proceeds from exercise of stock options 0 0 0.5 Tax benefit from exercise/vesting of equity-based compensation 12.8 10.3 5.8 Net proceeds from debt issuance 346.3 0 0 Payment of debt 0 (150.0 ) (350.0 ) Reacquisition of debt (48.9 ) (58.1 ) (32.5 ) Dividends paid to shareholders (892.6 ) (175.6 ) (853.7 ) Acquisition of treasury shares (271.4 ) (273.4 ) (174.2 ) Net cash used in financing activities (853.8 ) (646.8 ) (1,404.1 ) Change in cash 0 0 0 Cash, beginning of year 0 0 0 Cash, end of year $ 0 $ 0 $ 0 33subsidiaries’ Annual Report to Shareholders,its subsidiaries, which is included as Exhibit 13 to this Form 10-K.20112014 and 2010, $2.02013, $1.9 billion and $2.2$1.8 billion, respectively, of marketable securities were available in this company.subsidiary. Non-cash activity includes declared but unpaid dividends. For the years ended December 31, we paid the following: 2011 2010 2009 $ 435.0 $ 434.0 $ 461.7 129.5 138.4 144.7 (millions) 2014 2013 2012 Income taxes $ 515.0 $ 497.0 $ 389.1 Interest 116.0 122.3 135.0 IncomeThe consolidated group’s net income taxes currently payable/recoverable are included in other liabilities/assets, respectively, in the accompanying Condensed Balance Sheets are comprisedbased on the balance at the end of the parent company’s net deferred tax assets and the consolidated group’s net income taxes payable/recoverable.year. The Progressive Corporation and its subsidiaries have adopted, pursuant to a written agreement, a method of allocating consolidated federal income taxes. Amounts allocated to the subsidiaries under the written agreement are included in “Intercompany Receivable” in the accompanying Condensed Balance Sheets. (loss) represents activity of the subsidiaries of The Progressive Corporation and includes net unrealized gains (losses) on securities, net unrealized gains on forecasted transactions, and foreign currency translation adjustments.34Segment
policy
acquisition costs1
policy
benefits,
losses,
claims,
and
loss expenses1
policy
claims
and
benefits payable1 Premium revenue
investment income1,2 Benefits,
claims,
losses, and
settlement expenses Amortization
of deferred
policy
acquisition costs Other
operating expenses
premiumsYear ended December 31, 2014: Personal Lines $ 16,561.0 $ 12,161.2 $ 1,322.9 $ 2,262.6 $ 16,759.2 Commercial Lines 1,837.5 1,133.4 201.1 204.2 1,895.4 Other indemnity 0 11.6 0 0.3 0 Total $ 457.2 $ 8,857.4 $ 5,440.1 $ 0 $ 18,398.5 $ 389.5 $ 13,306.2 $ 1,524.0 $ 2,467.1 $ 18,654.6 Year ended December 31, 2013: Personal Lines $ 15,341.6 $ 11,194.6 $ 1,257.5 $ 2,149.2 $ 15,569.2 Commercial Lines 1,761.6 1,267.3 194.3 201.2 1,770.5 Other indemnity 0.2 10.5 0 0.5 0 Total $ 447.6 $ 8,479.7 $ 5,174.5 $ 0 $ 17,103.4 $ 403.2 $ 12,472.4 $ 1,451.8 $ 2,350.9 $ 17,339.7 Year ended December 31, 2012: Personal Lines $ 14,368.1 $ 10,745.3 $ 1,250.4 $ 2,010.5 $ 14,636.8 Commercial Lines 1,649.0 1,196.6 186.2 195.2 1,735.9 Other indemnity 0.9 6.1 0 0.6 0 Total $ 434.5 $ 7,838.4 $ 4,930.7 $ 0 $ 16,018.0 $ 427.6 $ 11,948.0 $ 1,436.6 $ 2,206.3 $ 16,372.7 (millions)Progressive does not allocate assets, liabilities, or investment income to operating segments. Future policy benefits, Other losses, policy Benefits, Amortization Deferred claims, claims claims, of deferred policy and and Net losses, and policy Other Net acquisition loss Unearned benefits Premium investment settlement acquisition operating premiums costs1 expenses1 premiums1 payable1 revenue income1,2 expenses costs expenses written $ 13,431.1 $ 9,615.2 $ 1,231.9 $ 1,664.7 $ 13,612.2 1,467.1 1,010.7 166.6 156.3 1,534.3 4.6 8.9 .7 .5 .1 $ 433.6 $ 7,245.8 $ 4,579.4 $ 0 $ 14,902.8 $ 466.5 $ 10,634.8 $ 1,399.2 $ 1,821.5 $ 15,146.6 $ 12,826.9 $ 9,159.6 $ 1,188.1 $ 1,587.1 $ 13,024.4 1,474.2 958.6 167.9 162.7 1,449.5 13.7 13.1 3.9 (9.7 ) 2.9 $ 417.2 $ 7,071.0 $ 4,353.8 $ 0 $ 14,314.8 $ 508.2 $ 10,131.3 $ 1,359.9 $ 1,740.1 $ 14,476.8 $ 12,365.9 $ 8,847.0 $ 1,171.6 $ 1,410.2 $ 12,453.1 1,623.3 1,050.7 187.0 155.8 1,533.9 23.6 7.2 6.0 1.7 15.9 $ 402.2 $ 6,653.0 $ 4,172.9 $ 0 $ 14,012.8 $ 495.9 $ 9,904.9 $ 1,364.6 $ 1,567.7 $ 14,002.9 1Progressive does not allocate assets, liabilities, or investment income to operating segments.2Excludes total net realized gains (losses) on securities.3We sold our professional liability insurance businesses in the first quarter 2010. The gain on the sale is reflected in other operating expenses.35 Assumed Percentage Ceded to From of Amount Gross Other Other Assumed Amount Companies Companies Net Amount to Net $ 15,107.5 $ 204.7 $ 0 $ 14,902.8 0 $ 14,519.2 $ 204.4 $ 0 $ 14,314.8 0 $ 14,199.4 $ 186.6 $ 0 $ 14,012.8 0 36Year Ended: Gross Amount Ceded to
Other Companies Assumed
From
Other Companies Net Amount Percentage
of Amount
Assumed to NetDecember 31, 2014 Premiums earned: Property and liability insurance $ 18,648.4 $ 249.9 $ 0 $ 18,398.5 0 December 31, 2013 Premiums earned: Property and liability insurance $ 17,317.9 $ 214.5 $ 0 $ 17,103.4 0 December 31, 2012 Premiums earned: Property and liability insurance $ 16,207.6 $ 189.6 $ 0 $ 16,018.0 0 Losses and Loss Adjustment Expenses Incurred Related to Paid Losses and Loss
Adjustment Expenses Current Year Prior Years $ 10,876.8 $ (242.0 ) $ 10,541.6 $ 10,451.7 $ (320.4 ) $ 9,888.0 $ 10,040.9 $ (136.0 ) $ 9,714.2 Year Ended Current Year Prior Years December 31, 2014 $ 13,330.3 $ (24.1 ) $ 13,068.5 December 31, 2013 $ 12,427.3 $ 45.1 $ 12,014.9 December 31, 2012 $ 11,926.0 $ 22.0 $ 11,431.8 37Corporation:February 28, 2012March 2, 2015 appearing in the 20112014 Annual Report to Shareholders of The Progressive Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 15(a)(2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.February 28, 201238To the Board of Directors and Shareholders of The Progressive Corporation:on:on Forms:Form Filing No. 333-185704 December 27, 2012 S-8 333-185703 December 27, 2012 S-8 333-172663 March 8, 2011 333-104646 April 21, 2003 333-104653 April 21, 2003 333-41238 July 12, 2000 333-51613May 1, 1998S-8 33-57121 December 29, 1994 33-51034 August 20, 1992 33-16509 August 14, 1987 February 28, 2012March 2, 2015 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in the 2014 Annual Report to Shareholders, which is incorporated by reference in thisThe Progressive Corporation’s Annual Report on Form 10-K.10‑K for the year ended December 31, 2014. We also consent to the incorporation by reference of our report dated February 28, 2012March 2, 2015 relating to the financial statement schedules, which appears in thissuch Annual Report on Form 10-K.February 28, 201239 THE PROGRESSIVE CORPORATION February 28, 2012March 2, 2015 By: Glenn M. Renwick Director,Chairman of the Board, President, and Chief Executive Officer*Peter B. Lewis February 28, 2012/s/ Glenn M. RenwickGlenn M. RenwickDirector, President, and Chief Executive Officer February 28, 2012March 2, 2015/s/ Brian C. Domeck Brian C. Domeck Vice President and Chief Financial Officer February 28, 2012March 2, 2015/s/ Jeffrey W. Basch Jeffrey W. Basch Vice President and Chief Accounting Officer February 28, 2012March 2, 2015Jeffrey W. Basch * Lead Independent Director March 2, 2015 Stephen R. Hardis * Director March 2, 2015 Stuart B. Burgdoerfer * Director March 2, 2015 Charles A. Davis * Director March 2, 2015 Roger N. Farah * Director March 2, 2015 Lawton W. Fitt * Director March 2, 2015 Jeffrey D. Kelly * Director March 2, 2015 Patrick H. Nettles, Ph.D. * Director March 2, 2015 Bradley T. Sheares, Ph.D. * Director March 2, 2015 Barbara R. Snyder By: /s/ Charles E. Jarrett March 2, 2015 *Stuart B. BurgdoerferDirectorFebruary 28, 2012*Charles A. DavisDirectorFebruary 28, 2012*Roger N. FarahDirectorFebruary 28, 2012*Lawton W. FittDirectorFebruary 28, 2012*Stephen R. HardisDirectorFebruary 28, 2012*Norman S. MatthewsDirectorFebruary 28, 2012*Heidi G. Miller, Ph.D.DirectorFebruary 28, 2012*Patrick H. Nettles, Ph.D.DirectorFebruary 28, 2012*Bradley T. Sheares, Ph.D.DirectorFebruary 28, 201240*Charles E. Jarrett by signing his name hereto, does sign this document on behalf of the persons indicated above pursuant to powers of attorney duly executed by such persons.Attorney-in-fact EXHIBIT INDEX Description of Exhibit 3(i) 3.1 Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 3.1 therein) 3(ii) 3.2 Code of Regulations of The Progressive Corporation (as amended October 10, 2014) Current Report on Form 8-K (filed on October 14, 2014; Exhibit 3 therein) 4 4.1 Form of 3.75% Senior Notes due 2021, issued in the aggregate principal amount of $500,000,000 under the 1993 Senior Indenture (see exhibit 4.5 below), as amended and supplemented Current Report on Form 8-K (filed on August 22, 2011; Exhibit 4.2 therein) 4 4.2 Form of 6 5/8% Senior Notes due 2029, issued in the aggregate principal amount of $300,000,000 under the 1993 Senior Indenture, as amended and supplemented Filed herewith 4 4.3 Form of 6.25% Senior Notes due 2032, issued in the aggregate principal amount of $400,000,000 under the 1993 Senior Indenture, as amended and supplemented Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.4 therein) 4 4.4 Form of 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067, issued in the original aggregate principal amount of $1,000,000,000 under the Junior Subordinated Indenture (see exhibit 4.11 below), as amended and supplemented Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.5 therein) 4 4.5 Form of 4.35% Senior Notes due 2044, issued in the aggregate principal amount of $350,000,000 under the 1993 Senior Indenture, as amended and supplemented Current Report on Form 8-K (filed on April 25, 2014; Exhibit 4.2 therein) 4 4.6 Form of 3.70% Senior Notes due 2045, issued in the aggregate principal amount of $400,000,000 under the 1993 Senior Indenture, as amended and supplemented Current Report on Form 8-K (filed on January 26, 2015; Exhibit 4.2 therein) 4 4.7 Indenture dated as of September 15, 1993 between The Progressive Corporation and State Street Bank and Trust Company (successor in interest to The First National Bank of Boston), as Trustee (“1993 Senior Indenture”) (including table of contents and cross-reference sheet) Registration Statement No. 333-48935 (filed on March 31, 1998; Exhibit 4.1 therein) 4 4.8 First Supplemental Indenture dated March 15, 1996 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company Registration Statement No. 333-01745 (filed on March 15, 1996; Exhibit 4.2 therein) 4 4.9 Second Supplemental Indenture dated February 26, 1999 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company, as Trustee Registration Statement No. 333-100674 (filed on October 22, 2002; Exhibit 4.3 therein) EXHIBIT INDEX Description of Exhibit 4 4.10 Fourth Supplemental Indenture dated November 21, 2002 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company, as Trustee Registration Statement No. 333-143824 (filed on June 18, 2007; Exhibit 4.5 therein) 4 4.11 Fifth Supplemental Indenture dated June 13, 2007 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, evidencing the designation of U.S. Bank National Association as successor Trustee under the 1993 Senior Indenture Registration Statement No. 333-143824 (filed on June 18, 2007; Exhibit 4.6 therein) 4 4.12 Sixth Supplemental Indenture dated August 22, 2011 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, as Trustee Quarterly Report on Form 10-Q (filed on November 7, 2011; Exhibit 4.1 therein) 4 4.13 Seventh Supplemental Indenture dated April 25, 2014 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, as Trustee Current Report on Form 8-K (filed on April 25, 2014; Exhibit 4.1 therein) 4 4.14 Current Report on Form 8-K (filed on January 26, 2015; Exhibit 4.1 therein) 4 4.15 Junior Subordinated Indenture dated as of June 21, 2007 between The Progressive Corporation and The Bank of New York Trust Company, N.A., Trustee (“Junior Subordinated Indenture”) (including table of contents and cross-reference sheet) Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.12 therein) 4 4.16 First Supplemental Indenture dated June 21, 2007 to the Junior Subordinated Indenture between The Progressive Corporation and The Bank of New York Trust Company, N.A., as Trustee Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.13 therein) 4 4.17 Second Supplemental Indenture dated September 2, 2011, to the Junior Subordinated Indenture dated June 21, 2007, between The Progressive Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee Current Report on Form 8-K (filed on September 7, 2011; Exhibit 4 therein) 4 4.18 Replacement Capital Covenant dated June 21, 2007, of The Progressive Corporation Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 4.15 therein) 4 4.19 Termination of Replacement Capital Covenant, dated June 23, 2010 Current Report on Form 8-K (filed on June 24, 2010; Exhibit 4 therein) EXHIBIT INDEX Description of Exhibit 4 4.20 Confirmation Letter-Discretionary Line of Credit dated March 24, 2014 from PNC Bank, National Association to The Progressive Corporation Current Report on Form 8-K (filed on March 25, 2014; Exhibit 4.1 therein) 4 4.21 Discretionary Line of Credit Note dated March 24, 2014 from The Progressive Corporation to PNC Bank, National Association Current Report on Form 8-K (filed on March 25, 2014; Exhibit 4.2 therein) 10(i) 10.1 Stock Purchase Agreement, dated as of December 15, 2014, among ARX Holding Corp., The Progressive Corporation and the selling shareholders identified therein, including Exhibit H, the form of Stockholders' Agreement to be executed at closing Filed herewith 10(ii) 10.2 Sublease Agreement for Aircraft Hangar dated as of August 21, 2006 between Progressive Casualty Insurance Company and Acme Operating Corporation Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.1 therein) 10(ii) 10.3 First Amendment to Sublease Agreement for Aircraft Hangar dated June 6, 2011 between Progressive Casualty Insurance Company and Acme Operating Corporation Quarterly Report on Form 10-Q (filed on August 9, 2011; Exhibit 10.1 therein) 10(ii) 10.4 Assignment and Assumption of Lease Agreement dated July 7, 2010, between Acme Operating Company and Acme Acquisition Company Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.2 therein) 10(iii) 10.5 The Progressive Corporation 2012 Gainsharing Plan Annual Report on Form 10-K (filed on February 28, 2012; Exhibit 10.7 therein) 10(iii) 10.6 The Progressive Corporation 2013 Gainsharing Plan Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 10.6 therein) 10(iii) 10.7 The Progressive Corporation 2014 Gainsharing Plan Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 10.7 therein) 10(iii) 10.8 The Progressive Corporation 2015 Gainsharing Plan Filed herewith 10(iii) 10.9 The Progressive Corporation 2007 Executive Bonus Plan Annual Report on Form 10-K (filed on February 28, 2012; Exhibit 10.8 therein) 10(iii) 10.10 The Progressive Corporation 2003 Incentive Plan Registration Statement No. 333-104646 (filed on April 21, 2003; Exhibit 4(a) therein) 10(iii) 10.11 First Amendment to The Progressive Corporation 2003 Incentive Plan Annual Report on Form 10-K (filed on February 28, 2012; Exhibit 10.10 therein) 10(iii) 10.12 Second Amendment to The Progressive Corporation 2003 Incentive Plan Filed herewith By: /s/ Charles E. Jarrett Description of Exhibit February 28, 2012Charles E. JarrettAttorney-in-fact41EXHIBIT INDEX 3(i) 3.1 Quarterly Report on Form 10-Q (filed on May 6, 2008; Exhibit 3.1 therein) 3(ii) 3.2 Code of Regulations of The Progressive Corporation (as amended April 24, 2009) 4 4.1 364-Day Secured Liquidity Credit Facility Agreement dated as of December 31, 2008 between The Progressive Corporation and PNC Bank, National Association (successor in interest to National City Bank) (“PNC Credit Agreement”) Current Report on Form 8-K (filed on January 7, 2009; Exhibit 4.1 therein) 4 4.2 Amendment No. 1, dated as of December 31, 2009, to PNC Credit Agreement Current Report on Form 8-K (filed on January 6, 2010; Exhibit 4.1 therein) 4 4.3 Amendment No. 2, dated as of December 31, 2010, to PNC Credit Agreement Current Report on Form 8-K (filed on January 4, 2011; Exhibit 4 therein) 4 4.4 Amendment No. 3, dated as of December 31, 2011, to PNC Credit Agreement Current Report on Form 8-K (filed on January 4, 2012; Exhibit 4 therein) 4 4.5 Form of 6.375% Senior Notes due 2012, issued in the aggregate principal amount of $350,000,000 under the 1993 Senior Indenture (see exhibit 4.11 below), as amended and supplemented Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 4.4 therein) 4 4.6 Form of 7% Notes due 2013 issued in the aggregate principal amount of $150,000,000 under the 1993 Senior Indenture, as amended and supplemented Annual Report on Form 10-K (filed on March 1, 2010; Exhibit 4.4 therein) 4 4.7 Form of 3.75% Senior Notes due 2021, issued in the aggregate principal amount of $500,000,000 under the 1993 Senior Indenture, as amended and supplemented Current Report on Form 8-K (filed on August 22, 2011; Exhibit 4.2 therein) 4 4.8 Form of 6 5/8% Senior Notes due 2029, issued in the aggregate principal amount of $300,000,000 under the 1993 Senior Indenture, as amended and supplemented Annual Report on Form 10-K (filed on March 1, 2010; Exhibit 4.5 therein) 4 4.9 Form of 6.25% Senior Notes due 2032, issued in the aggregate principal amount of $400,000,000 under the 1993 Senior Indenture, as amended and supplemented 4 4.10 Form of 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067 issued in the original aggregate principal amount of $1,000,000,000 under the Junior Subordinated Indenture (see exhibit 4.18 below), as amended and supplemented Current Report on Form 8-K (filed on June 22, 2007; Exhibit 4.3 therein) 42EXHIBIT INDEX 4 4.11 Indenture dated as of September 15, 1993 between The Progressive Corporation and State Street Bank and Trust Company (successor in interest to The First National Bank of Boston), as Trustee (“1993 Senior Indenture”) (including table of contents and cross-reference sheet) Registration Statement No. 333-48935 (filed on March 31, 1998; Exhibit 4.1 therein) 4 4.12 First Supplemental Indenture dated March 15, 1996 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company Registration Statement No. 333-01745 (filed on March 15, 1996; Exhibit 4.2 therein) 4 4.13 Second Supplemental Indenture dated February 26, 1999 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company, as Trustee Registration Statement No. 333-100674 (filed on October 22, 2002; Exhibit 4.3 therein) 4 4.14 Third Supplemental Indenture dated December 7, 2001 to the 1993 Senior Indenture between The Progressive Corporation and State Street Bank and Trust Company, as Trustee Registration Statement No. 333-100674 (filed on October 22, 2002; Exhibit 4.4 therein) 4 4.15 Registration Statement No. 333-143824 (filed on June 18, 2007; Exhibit 4.5 therein) 4 4.16 Fifth Supplemental Indenture dated June 13, 2007 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, evidencing the designation of U.S. Bank National Association as successor Trustee under the 1993 Senior Indenture Registration Statement No. 333-143824 (filed on June 18, 2007; Exhibit 4.6 therein) 4 4.17 Sixth Supplemental Indenture dated August 22, 2011 to the 1993 Senior Indenture between The Progressive Corporation and U.S. Bank National Association, as Trustee Quarterly Report on Form 10-Q (filed on November 7, 2011; Exhibit 4.1 therein) 4 4.18 Current Report on Form 8-K (filed on June 22, 2007; Exhibit 4.1 therein) 4 4.19 First Supplemental Indenture dated June 21, 2007 to the Junior Subordinated Indenture between The Progressive Corporation and The Bank of New York Trust Company, N.A., as Trustee Current Report on Form 8-K (filed on June 22, 2007; Exhibit 4.2 therein) 43EXHIBIT INDEX 4 4.20 Second Supplemental Indenture dated September 2, 2011, to the Junior Subordinated Indenture dated June 21, 2007, between The Progressive Corporation and The Bank of New York Mellon Trust Company, N.A., as Trustee Current Report on Form 8-K (filed on September 7, 2011; Exhibit 4 therein) 4 4.21 Replacement Capital Covenant dated June 21, 2007, of The Progressive Corporation Current Report on Form 8-K (filed on June 22, 2007; Exhibit 4.4 therein) 4 4.22 Termination of Replacement Capital Covenant, dated June 23, 2010 Current Report on Form 8-K (filed on June 24, 2010; Exhibit 4 therein) 10(ii) 10.1 Sublease Agreement for Aircraft Hangar dated as of August 21, 2006 between Progressive Casualty Insurance Company and Acme Operating Corporation Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.1 therein) 10(ii) 10.2 First Amendment to Sublease Agreement for Aircraft Hangar dated June 6, 2011 between Progressive Casualty Insurance Company and Acme Operating Corporation Quarterly Report on Form 10-Q (filed on August 9, 2011; Exhibit 10.1 therein) 10(ii) 10.3 Assignment and Assumption of Lease Agreement dated July 7, 2010, between Acme Operating Company and Acme Acquisition Company Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.2 therein) 10(iii) 10.4 Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.6 therein) 10(iii) 10.5 First Amendment to The Progressive Corporation 2010 Gainsharing Plan Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.7 therein) 10(iii) 10.6 Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.8 therein) 10(iii) 10.7 The Progressive Corporation 2012 Gainsharing Plan Filed herewith 10(iii) 10.8 The Progressive Corporation 2007 Executive Bonus Plan Filed herewith 10(iii) 10.9 The Progressive Corporation 2003 Incentive Plan Registration Statement No. 333-104646 (filed on April 21, 2003; Exhibit 4(a) therein) 10(iii) 10.10 First Amendment to The Progressive Corporation 2003 Incentive Plan Filed herewith 10(iii) 10.11 Second Amendment to The Progressive Corporation 2003 Incentive Plan Current Report on Form 8-K (filed on February 4, 2010; Exhibit 10.1 therein) 44EXHIBIT INDEXExhibit No.UnderReg. S-K,Item 601Form 10-KExhibitNo.Description of Exhibit10(iii) 10.12 10.13 Third Amendment to The Progressive Corporation 2003 Incentive Plan Current Report on Form 8-K (filed on February 2, 2011; Exhibit 10.2 therein) 10(iii) 10.13 10.14 Fourth Amendment to The Progressive Corporation 2003 Incentive Plan Quarterly Report on Form 10-Q (filed on May 7, 2012; Exhibit 10.4 therein) 10(iii) 10.15 Form of The Progressive Corporation 2003 Incentive Plan Restricted Stock Award Agreement (Time-Based Award) (for March 2007 and thereafter)through 2010) CurrentAnnual Report on Form 8-K10-K (filed on MarchFebruary 26, 2007;2013; Exhibit 10.110.13 therein)10(iii) 10.14 10.16 Form of The Progressive Corporation 2003 Incentive Plan Restricted Stock Award Agreement (Performance-Based Award) (for 2004 through February 2007) Annual Report on Form 10-K (filed on March 1, 2010; Exhibit 10.16 therein)Filed herewith10(iii) 10.15 10.17 Form of The Progressive Corporation 2003 Incentive Plan Restricted Stock Award Agreement (Performance-Based Award) (for March 2007 through February 2009) CurrentAnnual Report on Form 8-K10-K (filed on MarchFebruary 26, 2007;2013; Exhibit 10.210.15 therein)10(iii) 10.16 10.18 Form of The Progressive Corporation 2003 Incentive Plan Restricted Stock Award Agreement (Performance-Based Award) (for March 2009 through February 2010) Quarterly Report on Form 10-Q (filed onMay 11, 2009; Exhibit 10.2 therein)10(iii) 10.17 10.19 Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2003 Incentive Plan Current Report on Form 8-K (filed on March 30, 2010; Exhibit 10.1 therein) 10(iii) 10.18 10.20 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards under The Progressive Corporation 2003 Incentive Plan Current Report on Form 8-K (filed on March 30, 2010; Exhibit 10.2 therein) 10(iii) 10.19 10.21 The Progressive Corporation 2010 Equity Incentive Plan Current ReportRegistration Statement No. 333-172663 (filed on Form 8-K (filed onFebruary 4, 2010;March 8, 2011; Exhibit 10.24.1 therein)10(iii) 10.20 10.22 First Amendment to The Progressive Corporation 2010 Equity Incentive Plan Registration Statement No. 333-172663 (filed on March 8, 2011; Exhibit 4.2 therein) 10(iii) 10.23 Second Amendment to The Progressive Corporation 2010 Equity Incentive Plan Registration Statement No. 333-172663 (filed on March 8, 2011; Exhibit 4.3 therein) 10(iii) 10.24 Third Amendment to The Progressive Corporation 2010 Equity Incentive Plan Registration Statement No. 333-172663 (filed on March 8, 2011; Exhibit 4.4 therein) 10(iii) 10.25 Fourth Amendment to The Progressive Corporation 2010 Equity Incentive Plan Current Report on Form 8-K (filed on March 8, 2010;February 2, 2012; Exhibit 10.1 therein)10(iii) 10.26 Fifth Amendment to The Progressive Corporation 2010 Equity Incentive Plan Quarterly Report on Form 10-Q (filed on May 7, 2012; Exhibit 10.5 therein) EXHIBIT INDEX Description of Exhibit 10(iii) 10.21 10.27 SecondSixth Amendment to The Progressive Corporation 2010 Equity Incentive Plan Current Report on Form 8-K (filed on MarchDecember 11, 2010;2012; Exhibit 10.1 therein)10(iii) 10.22 Third Amendment to The Progressive Corporation 2010 Equity Incentive PlanCurrent Report on Form 8-K (filed onFebruary 2, 2011; Exhibit 10.1 therein) 10(iii)10.23 Fourth Amendment to The Progressive Corporation 2010 Equity Incentive PlanCurrent Report on Form 8-K (filed onFebruary 2, 2012; Exhibit 10.1 therein) 10(iii)10.24 10.28 Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2010 Equity Incentive Plan (for 2011 and 2012) Current Report on Form 8-K (filed on March 25, 2011; Exhibit 10.1 therein) 10(iii) 10.25 10.29 Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2010 Equity Incentive Plan (for 2013) Current Report on Form 8-K (filed on March 22, 2013; Exhibit 10.1 therein) 10(iii) 10.30 Form of Restricted Stock Unit Award Agreement for Time-Based Awards under The Progressive Corporation 2010 Equity Incentive Plan (for 2014) Filed herewith 10(iii) 10.31 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Insurance Performance) under The Progressive Corporation 2010 Equity Incentive Plan (for 2011 and 2012) Current Report on Form 8-K (filed on March 25, 2011; Exhibit 10.2 therein) 10(iii) 10.32 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Performance) under The Progressive Corporation 2010 Equity Incentive Plan (for 2012) Current Report on Form 8-K (filed on March 22, 2012; Exhibit 10.1 therein) 10(iii) 10.33 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Insurance Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2013) Current Report on Form 8-K (filed on March 22, 2013; Exhibit 10.2 therein) 10(iii) 10.34 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2013) Current Report on Form 8-K (filed on March 22, 2013; Exhibit 10.3 therein) 10(iii) 10.35 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Insurance Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2014) Filed herewith 10(iii) 10.36 Form of Restricted Stock Unit Award Agreement for Performance-Based Awards (Investment Results) under The Progressive Corporation 2010 Equity Incentive Plan (for 2014) Filed herewith 10(iii) 10.37 The Progressive Corporation 2015 Equity Incentive Plan Current Report on Form 8-K (filed on February 4, 2015; Exhibit 10.1 therein) 45EXHIBIT INDEXEXHIBIT INDEX 10(iii) �� 10.26 10.38 The Progressive Corporation 2003 Directors Equity Incentive Plan Registration Statement No. 333-104653 (filed on April 21, 2003; Exhibit 4(a) therein) 10(iii) 10.27 10.39 Amendment No. 1 to The Progressive Corporation 2003 Directors Equity Incentive Plan Annual Report on Form 10-K (filed on March 1, 2010; Exhibit 10.21 therein)Filed herewith10(iii) 10.28 10.40 Amendment No. 2 to The Progressive Corporation 2003 Directors Equity Incentive Plan Current Report on Form 8-K (filed on February 2, 2012; Exhibit 10.2 therein) 10(iii) 10.29 10.41 Amendment No. 3 to The Progressive Corporation 2003 Directors Equity Incentive Plan Quarterly Report on Form 10-Q (filed on May 7, 2012; Exhibit 10.3 therein) 10(iii) 10.42 Form of The Progressive Corporation 2003 Directors Equity Incentive Plan Restricted Stock Award Agreement (for 2004 and thereafter) Annual Report on Form 10-K (filed on March 1, 2010; Exhibit 10.22 therein)Filed herewith10(iii) 10.30 10.43 The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on February 25, 2009;December 27, 2012; Exhibit 10.244.3 therein)10(iii) 10.31 10.44 First Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.244.4 therein)10(iii) 10.32 10.45 Second Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.254.5 therein)10(iii) 10.33 10.46 Third Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2011;December 27, 2012; Exhibit 10.354.6 therein)10(iii) 10.34 10.47 Fourth Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2003 Amendment and Restatement) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2011;December 27, 2012; Exhibit 10.364.7 therein)10(iii) 10.35 10.48 The Progressive Corporation Executive Deferred Compensation Plan (2008 Amendment and Restatement) Current ReportRegistration Statement No. 333-185704 (filed on Form 8-K (filed on20, 2007;27, 2012; Exhibit 10.14.8 therein)10(iii) 10.36 10.49 First Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2008 Amendment and Restatement) Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.9 therein) 10(iii) 10.50 The Progressive Corporation Executive Deferred Compensation Plan (2010 Amendment and Restatement) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.294.10 therein)EXHIBIT INDEX Description of Exhibit 10(iii) 10.37 10.51 First Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2010 Amendment and Restatement) Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.11 therein) 10(iii) 10.52 Second Amendment to The Progressive Corporation Executive Deferred Compensation Plan (2010 Amendment and Restatement) Current Report on Form 8-K (filed on October 14, 2014; Exhibit 10 therein) 10(iii) 10.53 Form of The Progressive Corporation Executive Deferred Compensation Plan Deferral Agreement (for 2005 through 2009) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.304.12 therein)10(iii) 10.38 10.54 Form of The Progressive Corporation Executive Deferred Compensation Plan Gainsharing/Bonus Deferral Agreement (for 2010 and thereafter) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.314.13 therein)46EXHIBIT INDEXExhibit No.UnderReg. S-K,Item 601Form 10-KExhibitNo.Description of ExhibitIf Incorporated by Reference, Documents withWhich Exhibit was Previously Filed with SEC10(iii) 10.39 10.55 Form of The Progressive Corporation Executive Deferred Compensation Plan Performance-Based Restricted Stock Deferral Agreement (for 2004) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.324.14 therein)10(iii) 10.40 10.56 Form of The Progressive Corporation Executive Deferred Compensation Plan Performance-Based Restricted Stock Deferral Agreement (for 2005) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.334.15 therein)10(iii) 10.41 10.57 Form of The Progressive Corporation Executive Deferred Compensation Plan Performance-Based Restricted Stock Deferral Agreement (for 2006 through 2009) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2011;December 27, 2012; Exhibit 10.434.16 therein)10(iii) 10.42 10.58 Form of The Progressive Corporation Executive Deferred Compensation Plan Performance-Based Restricted Stock Unit Deferral Agreement (for 2010 and thereafter)through 2014) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.354.17 therein)10(iii) 10.43 10.59 Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Deferral Agreement (for 2003) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on February 25, 2009;December 27, 2012; Exhibit 10.344.18 therein)10(iii) 10.44 10.60 Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Deferral Agreement (for 2004) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.374.19 therein)10(iii) 10.45 10.61 Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Deferral Agreement (for 2005) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.384.20 therein)EXHIBIT INDEX Description of Exhibit 10(iii) 10.46 10.62 Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Deferral Agreement (for 2006 through 2009) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2011;December 27, 2012; Exhibit 10.484.21 therein)10(iii) 10.47 10.63 Form of The Progressive Corporation Executive Deferred Compensation Plan Time-Based Restricted Stock Unit Deferral Agreement (for 2010 and thereafter) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.404.22 therein)10(iii) 10.48 10.64 The Progressive Corporation Executive Deferred Compensation Trust (November 8, 2002 Amendment and Restatement) Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.414.23 therein)10(iii) 10.49 10.65 First Amendment to Trust Agreement between Fidelity Management Trust Company and Progressive Annual Report on Form 10-KRegistration Statement No. 333-185704 (filed on March 1, 2010;December 27, 2012; Exhibit 10.424.24 therein)47EXHIBIT INDEXExhibit No.UnderReg. S-K,Item 601Form 10-KExhibitNo.Description of ExhibitIf Incorporated by Reference, Documents withWhich Exhibit was Previously Filed with SEC10(iii) 10.50 10.66 Second Amendment to The Progressive Corporation Executive Deferred Compensation Trust Quarterly Report on Form 10-QRegistration Statement No. 333-185704 (filed on August 2, 2007;December 27, 2012; Exhibit 10.14.25 therein)10(iii) 10.51 10.67 Third Amendment to The Progressive Corporation Executive Deferred Compensation Trust Annual ReportRegistration Statement No. 333-185704 (filed on Form 10-K (filed onFebruaryDecember 27, 2008;2012; Exhibit 10.544.26 therein)10(iii) 10.52 10.68 Fourth Amendment to The Progressive Corporation Executive Deferred Compensation Trust Annual ReportRegistration Statement No. 333-185704 (filed on Form 10-K (filed onFebruary 25, 2009;December 27, 2012; Exhibit 10.424.27 therein)10(iii) 10.53 10.69 Fifth Amendment to The Progressive Corporation Executive Deferred Compensation Trust Quarterly Report on Form 10-QRegistration Statement No. 333-185704 (filed on May 11, 2009;December 27, 2012; Exhibit 10.14.28 therein)10(iii) 10.54 10.70 Sixth Amendment to The Progressive Corporation Executive Deferred Compensation Trust Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.29 therein) 10(iii) 10.71 Seventh Amendment to The Progressive Corporation Executive Deferred Compensation Trust Registration Statement No. 333-185704 (filed on December 27, 2012; Exhibit 4.30 therein) 10(iii) 10.72 Eighth Amendment to The Progressive Corporation Executive Deferred Compensation Trust Annual Report on Form 10-K (filed on March 1, 2010;February 26, 2014; Exhibit 10.4710.66 therein)10(iii) 10.55 Seventh Amendment to The Progressive Corporation Executive Deferred Compensation TrustFiled herewith 10(iii)10.56 10.73 The Progressive Corporation Directors Deferral Plan (2008 Amendment and Restatement) CurrentAnnual Report on Form 8-K10-K (filed onDecember 20, 2007; February 26, 2013; Exhibit 10.210.62 therein)10(iii) 10.57 10.74 The Progressive Corporation Directors Restricted Stock Deferral Plan (2008 Amendment and Restatement) CurrentAnnual Report on Form 8-K10-K (filed onDecember 20, 2007; February 26, 2013; Exhibit 10.310.63 therein)10(iii) 10.58 10.75 First Amendment to The Progressive Corporation Directors Restricted Stock Deferral Plan (2008 Amendment and Restatement) 25, 2009;26, 2014; Exhibit 10.4710.69 therein)10(iii) 10.59 10.76 Form of The Progressive Corporation Directors Restricted Stock Deferral Plan Deferral Agreement Annual Report on Form 10-K (filed on March 1, 2010; Exhibit 10.53 therein)Filed herewith 10(iii)10.60 The Progressive Corporation 1998 Directors’ Stock Option PlanAnnual Report on Form 10-K (filed on February 27, 2008; Exhibit 10.65 therein)EXHIBIT INDEX Description of Exhibit 10(iii) 10.61 10.77 Director Compensation Schedule for 20102011 and 20112012 Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.64 therein) 10(iii) 10.62 10.78 Director Compensation Schedule for 2013 Annual Report on Form 10-K (filed on February 26, 2014; Exhibit 10.72 therein) 10(iii) 10.79 Director Compensation Schedule for 2014 Filed herewith 10(iii) 10.80 The Progressive Corporation Executive Separation Allowance Plan (2006 Amendment and Restatement) Annual Report on Form 10-K (filed on March 1, 2011; Exhibit 10.65 therein) 10(iii) 10.63 10.81 First Amendment to The Progressive Corporation Executive Separation Allowance Plan (2006 Amendment and Restatement) Annual Report on Form 10-K (filed on February 26, 2013; Exhibit 10.68 therein) 10(iii) 10.82 Second Amendment to The Progressive Corporation Executive Separation Allowance Plan (2006 Amendment and Restatement) Quarterly Report on Form 10-Q (filed on November 1, 2007;May 9, 2011; Exhibit 10.1 therein)48EXHIBIT INDEX 10(iii) 10.64 Second Amendment to The Progressive Corporation Executive Separation Allowance Plan (2006 Amendment and Restatement) Quarterly Report on Form 10-Q (filed on May 9, 2011; Exhibit 10.1 therein) 10(iii) 10.65 Third Amendment to The Progressive Corporation Executive Separation Allowance Plan (2006 Amendment and Restatement) Quarterly Report on Form 10-Q (filed on May 9, 2011; Exhibit 10.2 therein) 10(iii) 10.66 Employment Offer Letter for Chief Marketing Officer Filed herewith 10(iii) 10.67 2010 Non-plan Cash Bonus Paid to William M. Cody, Chief Investment Officer Current Report on Form 8-K (filed on February 2, 2011; description under “Changes to Cash Bonus Plans” therein) 11 11 Computation of Earnings Per Share Filed herewith 13 13 The Progressive Corporation 2011 Annual Report to Shareholders Filed herewith 21 21 Subsidiaries of The Progressive Corporation Filed herewith 23 23 Consent of Independent Registered Public Accounting Firm Incorporated herein by reference to page 39 of this Annual Report on Form 10-K 24 24 Powers of Attorney Filed herewith 31 31.1 Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer, Glenn M. Renwick Filed herewith 31 31.2 Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer, Brian C. Domeck Filed herewith 32 32.1 Section 1350 Certification of the Principal Executive Officer, Glenn M. Renwick Furnished herewith 32 32.2 Section 1350 Certification of the Principal Financial Officer, Brian C. Domeck Furnished herewith 99 99 Letter to Shareholders from Glenn M. Renwick, President and Chief Executive Officer Furnished herewith 49EXHIBIT INDEXExhibit No.UnderReg. S-K,Item 601 Form 10-KExhibitNo. Description of Exhibit If Incorporated by Reference, Documents withWhichQuarterly Report on Form 10-Q (filed on May 9, 2011; Exhibit was Previously Filed with SEC10110(iii) 101.INS 10.84 Fourth Amendment to The Progressive Corporation Executive Separation Allowance Plan (2006 Amendment and Restatement) XBRL Instance DocumentQuarterly Report on Form 10-Q (filed on August 6, 2013; Exhibit 10.2 therein) 10(iii) 10.85 Fifth Amendment to The Progressive Corporation Executive Separation Allowance Plan (2006 Amendment and Restatement) Quarterly Report on Form 10-Q (filed on August 6, 2013; Exhibit 10.3 therein) 10(iii) 10.86 Sixth Amendment to The Progressive Corporation Executive Separation Allowance Plan (2006 Amendment and Restatement) Filed herewith 10110(iii) 101.SCH10.87 XBRL Taxonomy Extension Schema Document2012 Progressive Capital Management Bonus Plan Filed herewithCurrent Report on Form 8-K (filed on March 6, 2012; Exhibit 10.1 therein)10110(iii) 101.CAL10.88 XBRL Taxonomy Extension Calculation Linkbase Document2013 Progressive Capital Management Bonus Plan Filed herewithAnnual Report on Form 10-K (filed on February 26, 2013; Exhibit 10.73 therein)10110(iii) 101.DEF10.89 XBRL Taxonomy Extension Definition Linkbase Document2014 Progressive Capital Management Bonus Plan Filed herewithAnnual Report on Form 10-K (filed on February 26, 2014; Exhibit 10.82 therein)10110(iii) 101.LAB10.90 XBRL Taxonomy Extension Label Linkbase DocumentFiled herewith101101.PRE XBRL Taxonomy Extension Presentation Linkbase Document2015 Progressive Capital Management Bonus Plan Filed herewith No other exhibits are required to be filed herewith pursuant to Item 601 of Regulation S-K.50EXHIBIT INDEX Exhibit No.
Under
Reg. S-K,
Item 601 Form 10-K
Exhibit
No. Description of Exhibit If Incorporated by Reference, Documents with
Which Exhibit was Previously Filed with SEC11 11 Computation of Earnings Per Share Filed herewith 13 13 The Progressive Corporation 2014 Annual Report to Shareholders Filed herewith 21 21 Subsidiaries of The Progressive Corporation Filed herewith 23 23 Consent of Independent Registered Public Accounting Firm Incorporated herein by reference to page 45 of this Annual Report on Form 10-K 24 24 Powers of Attorney Filed herewith 31 31.1 Rule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer, Glenn M. Renwick Filed herewith 31 31.2 Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer, Brian C. Domeck Filed herewith 32 32.1 Section 1350 Certification of the Principal Executive Officer, Glenn M. Renwick Furnished herewith 32 32.2 Section 1350 Certification of the Principal Financial Officer, Brian C. Domeck Furnished herewith 99 99 Letter to Shareholders from Glenn M. Renwick, President and Chief Executive Officer Furnished herewith 101 101.INS XBRL Instance Document Filed herewith 101 101.SCH XBRL Taxonomy Extension Schema Document Filed herewith 101 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document Filed herewith 101 101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed herewith 101 101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed herewith 101 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith