The Progressive Corporation (PGR) 8-K Progressive Reports May Results

Exhibit 99

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

PROGRESSIVE REPORTS MAY RESULTS

MAYFIELD VILLAGE, OHIO — June 15, 2010 — The Progressive Corporation today reported the following results for May 2010:

(millions, except per share amounts and ratios)	May 2010			May 2009			Change
Net premiums written	$	1,108.6		$	1,054.9		5	%
Net premiums earned	$	1,105.9		$	1,058.2		5	%
Net income	$	44.2		$	54.6		(19	)%
Per share	$	.07		$	.08		(18	)%
Total pretax net realized gains (losses) on securities	$	(15.1	)	$	(.4	)	3675	%
Combined ratio		95.6			95.3		.3	pts.
Average diluted equivalent shares		665.9			674.9		(1	)%

(in thousands)	May 2010	May 2009	Change
Policies in Force:
Agency – Auto	4,446.9	4,343.2	2	%
Direct – Auto	3,470.0	3,014.0	15	%
Total Personal Auto	7,916.9	7,357.2	8	%
Total Special Lines	3,576.4	3,441.2	4	%
Total Personal Lines	11,493.3	10,798.4	6	%
Total Commercial Auto	518.9	531.4	(2	)%

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

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

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

INCOME STATEMENT

May 2010

(millions – except per share amounts)

(unaudited)

	Current Month			Comments on Monthly  Results1
Net premiums written	$	1,108.6
Revenues:
Net premiums earned	$	1,105.9
Investment income		42.9
Net realized gains (losses) on securities:
Other-than-temporary impairment (OTTI) losses:
Total OTTI losses		0
Less: portion of OTTI losses recognized in other comprehensive income		0
Net impairment losses recognized in earnings		0
Net realized gains (losses) on securities		(15.1	)
Total net realized gains (losses) on securities		(15.1	)
Service revenues		1.5
Total revenues		1,135.2
Expenses:
Losses and loss adjustment expenses		814.1
Policy acquisition costs		104.2
Other underwriting expenses		138.7
Investment expenses		1.1
Service expenses		1.6
Interest expense		11.7
Total expenses		1,071.4
Income before income taxes		63.8
Provision for income taxes		19.6
Net income	$	44.2
COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding		660.5
Per share	$	.07
Diluted:
Average shares outstanding		660.5
Net effect of dilutive stock-based compensation		5.4
Total equivalent shares		665.9
Per share	$	.07

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

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

INCOME STATEMENTS

May 2010 Year-to-Date

(millions – except per share amounts)

(unaudited)

	Year-to-Date
	2010			2009			% Change
Net premiums written	$	6,359.8		$	5,992.3		6
Revenues:
Net premiums earned	$	5,981.5		$	5,787.0		3
Investment income		216.5			213.3		2
Net realized gains (losses) on securities:
Other-than-temporary impairment (OTTI) losses:
Total OTTI losses		(9.3	)
Less: portion of OTTI losses recognized in other comprehensive income		6.2
Net impairment losses recognized in earnings		(3.1	)
Net realized gains (losses) on securities		26.8
Total net realized gains (losses) on securities		23.7			(71.2	)	NM
Service revenues		7.5			6.3		19
Total revenues		6,229.2			5,935.4		5
Expenses:
Losses and loss adjustment expenses		4,185.2			4,026.5		4
Policy acquisition costs		567.1			567.6		0
Other underwriting expenses		734.2			643.8		14
Investment expenses		5.8			4.5		29
Service expenses		8.8			7.8		13
Interest expense		58.6			56.7		3
Total expenses		5,559.7			5,306.9		5
Income before income taxes		669.5			628.5		7
Provision for income taxes		218.6			225.2		(3	)
Net income	$	450.9		$	403.3		12
COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding		661.1			668.8		(1	)
Per share	$	.68		$	.60		13
Diluted:
Average shares outstanding		661.1			668.8		(1	)
Net effect of dilutive stock-based compensation		5.2			4.2		24
Total equivalent shares		666.3			673.0		(1	)
Per share	$	.68		$	.60		13

NM = Not Meaningful

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

INCOME STATEMENT – OTHER INFORMATION

May 2010

(millions – except per share amounts)

(unaudited)

The following table sets forth the comprehensive income (loss) for the period:

	Current Month			Year-to-Date
				2010			2009
Net income	$	44.2		$	450.9		$	403.3
After-tax changes in:
Net unrealized gains (losses) on securities		(131.3	)		125.7
Portion of OTTI losses recognized in other comprehensive income		0			(4.0	)
Total net unrealized gains (losses) on securities		(131.3	)		121.7			171.9
Net unrealized gains on forecasted transactions		(.3	)		(1.4	)		(.8	)
Foreign currency translation adjustment		(1.0	)		(.5	)		0
Comprehensive income (loss)	$	(88.4	)	$	570.7		$	574.4
Per share	$	(.13	)	$	.86		$	.85

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

	Current Month		Year-to-Date
			2010		2009
Fully taxable equivalent total return:
Fixed-income securities	(.5	)%	3.2	%	3.6	%
Common stocks	(7.8	)%	(.3	)%	4.0	%
Total portfolio	(1.1	)%	3.0	%	3.3	%
Pretax recurring investment book yield	3.5	%	3.6	%	3.9	%

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

May 2010

($ in millions)

(unaudited)

	Current Month									Commercial Auto Business			Other Businesses1		Companywide Total
	Personal Lines Business
	Agency			Direct			Total
Net Premiums Written	$	578.2		$	411.9		$	990.1		$	118.0		$	0.5	$	1,108.6
% Growth in NPW		2	%		13	%		6	%		(3	)%		NM		5	%
Net Premiums Earned	$	573.3		$	417.0		$	990.3		$	114.4		$	1.2	$	1,105.9
% Growth in NPE		2	%		12	%		6	%		(8	)%		NM		5	%
GAAP Ratios
Loss/LAE ratio		74.4			74.0			74.2			68.2			NM		73.6
Expense ratio		21.5			22.5			21.9			22.5			NM		22.0
Combined ratio		95.9			96.5			96.1			90.7			NM		95.6
Actuarial Adjustments2
Reserve Decrease/(Increase)
Prior accident years															$	10.6
Current accident year																5.4
Calendar year actuarial adjustment	$	5.2		$	4.9		$	10.1		$	5.9		$	0	$	16.0
Prior Accident Years Development
Favorable/(Unfavorable)
Actuarial adjustment															$	10.6
All other development																1.0
Total development															$	11.6
Calendar year loss/LAE ratio																73.6
Accident year loss/LAE ratio																74.6
Statutory Ratios
Loss/LAE ratio																73.7
Expense ratio																22.4
Combined ratio																96.1

¹ The other businesses generated an underwriting loss of $0.1 million for the month. Combined ratios and % growth are not meaningful (NM) due to the low level of premiums earned by, and the variability of loss costs in, such businesses.

² Represents adjustments solely based on our corporate actuarial reviews.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

May 2010 Year-to-Date

($ in millions)

(unaudited)

	Year-to-Date									Commercial Auto Business			Other Businesses1		Companywide Total
	Personal Lines Business
	Agency			Direct			Total
Net Premiums Written	$	3,282.2		$	2,404.8		$	5,687.0		$	670.5		$	2.3	$	6,359.8
% Growth in NPW		4	%		14	%		8	%		(4	)%		NM		6	%
Net Premiums Earned	$	3,115.4		$	2,233.0		$	5,348.4		$	625.9		$	7.2	$	5,981.5
% Growth in NPE		1	%		11	%		5	%		(10	)%		NM		3	%
GAAP Ratios
Loss/LAE ratio		69.3			72.0			70.4			65.7			NM		70.0
Expense ratio		21.4			22.4			21.8			22.6			NM		21.7
Combined ratio		90.7			94.4			92.2			88.3			NM		91.7
Actuarial Adjustments2
Reserve Decrease/(Increase)
Prior accident years															$	58.0
Current accident year																24.2
Calendar year actuarial adjustment	$	30.5		$	22.1		$	52.6		$	29.6		$	0	$	82.2
Prior Accident Years Development
Favorable/(Unfavorable)
Actuarial adjustment															$	58.0
All other development																59.5
Total development															$	117.5
Calendar year loss/LAE ratio																70.0
Accident year loss/LAE ratio																72.0
Statutory Ratios
Loss/LAE ratio																70.0
Expense ratio																21.4
Combined ratio																91.4
Statutory Surplus															$	5,434.0

NM = Not Meaningful

¹On a year-to-date basis, the other businesses generated an underwriting profit of $6.8 million.

²Represents adjustments solely based on our corporate actuarial reviews.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES

BALANCE SHEET AND OTHER INFORMATION

(millions – except per share amounts)

(unaudited)

	May 2010
CONDENSED GAAP BALANCE SHEET:
Investments – Available-for-sale, at fair value:
Fixed maturities1(amortized cost: $11,628.7)	$	11,721.6
Equity securities:
Nonredeemable preferred stocks1(cost: $627.4)		1,171.8
Common equities (cost: $904.9)		1,113.9
Short-term investments (amortized cost: $1,784.5)		1,784.5
Total investments2, 3		15,791.8
Net premiums receivable		2,766.0
Deferred acquisition costs		442.0
Other assets4		2,408.9
Total assets	$	21,408.7
Unearned premiums	$	4,555.9
Loss and loss adjustment expense reserves4		6,876.5
Other liabilities3		1,530.2
Debt		2,178.0
Shareholders’ equity		6,268.1
Total liabilities and shareholders’ equity	$	21,408.7
Common shares outstanding		668.9
Shares repurchased – May		1.6
Average cost per share	$	19.57
Book value per share	$	9.37
Trailing 12-month return on average shareholders’ equity		19.5	%
Net unrealized pretax gains (losses) on investments	$	849.0
Increase (decrease) from April 2010	$	(202.1	)
Increase (decrease) from December 2009	$	187.2
Debt-to-total capital ratio		25.8	%
Fixed-income portfolio duration		2.0 years
Weighted average credit quality		AA
Year-to-date Gainshare factor		1.46

¹ As of May 31, 2010, we held certain hybrid securities and recognized a change in fair value of $2.7 million as a realized loss during the period we held these securities.

²Includes $6.0 billion of short-term investments and U.S. Treasury securities prior to settling $81.3 million of net security transactions outstanding as of month-end.

³Includes $81.3 million of net unsettled security transactions (as discussed in note 2 above).

⁴Loss and loss adjustment expense reserves are stated gross of reinsurance recoverables on unpaid losses of $640.0 million.

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Monthly Commentary

• During May, we incurred $26.6 million, or 2.4 combined ratio points, of catastrophe losses primarily reflecting storm activity in Oklahoma, Nebraska, Wyoming, and Texas, compared to $4.4 million, or .4 points last year.

• On June 10, we commenced a tender offer to purchase up to $350 million of our 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures due 2067. This tender offer is contingent upon receipt of consent of the holders of a majority of the principal amount of our 6.25% Senior Notes due 2032 to terminate the Replacement Capital Covenant that was granted in connection with the Debentures. See the News Release dated June 10, 2010, for further details.

Upcoming Events

As previously announced, Progressive will host a simultaneous webcast of its 2010 Investor Relations Meeting on Thursday, June 17, 2010, beginning at 9:00 a.m. eastern time. The meeting will last approximately three hours and will include a question and answer session following the presentations. The meeting will also be available simultaneously, in a listen-only format, by phone. Participants via the phone will not be able to submit questions during the question and answer session. To attend the webcast or to receive the call-in instructions, visit our Web site athttp://investors.progressive.com/events.aspx. Information that is distributed at the meeting will be made available at the Web site on the morning of the meeting.

We are currently scheduled to release June results on Wednesday, July 14, 2010, before the market opens.

About Progressive

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

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

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

The Common Shares of The Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR. For more information, including a guide to interpreting the monthly reporting package, visithttp://www.progressive.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Statements in this report that are not historical fact are forward-looking statements that are subject to certain risks and uncertainties that could cause actual events and results to differ materially from those discussed herein. These risks and uncertainties include, without limitation, uncertainties related to estimates, assumptions, and projections generally; inflation and changes in economic conditions (including changes in interest rates and financial markets); the financial condition of, and other issues relating to the strength of and liquidity available to, issuers of securities held in our investment portfolios and other companies with which we have ongoing business relationships, including counterparties to certain financial transactions; the accuracy and adequacy of our pricing and loss reserving methodologies; the competitiveness of our pricing and the effectiveness of our initiatives to retain more customers; initiatives by competitors and the effectiveness of our response; our ability to obtain regulatory approval for requested rate changes and the timing thereof; the effectiveness of our brand strategy and advertising campaigns relative to those of competitors; legislative and regulatory developments, including, but not limited to, health care reform and tax law changes; disputes relating to intellectual property rights; the outcome of litigation pending or that may be filed against us; weather conditions (including the severity and frequency of storms,

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hurricanes, snowfalls, hail, and winter conditions); changes in driving patterns and loss trends; acts of war and terrorist activities; our ability to maintain the uninterrupted operation of our facilities, systems (including information technology systems), and business functions; court decisions and trends in litigation and health care and auto repair costs; and other matters described from time to time in our releases and publications, and in our periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding claims activity becomes known. Reported results, therefore, may be volatile in certain accounting periods.

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