1 Exhibit No. 12 -------------- Computation of Ratio of Earnings to Fixed Charges 2 THE PROGRESSIVE CORPORATION COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (millions) Years Ended December 31, ------------------------------------------ 1998 1997 1996 1995 1994 ------------------------------------------ Income before income taxes $661.1 $578.5 $441.7 $345.9 $379.8 ------------------------------------------ Fixed charges: Interest and amortization on indebtedness 64.6 64.6 61.5 57.1 56.9 Portion of rents representative of the interest factor 6.7 5.6 4.5 4.2 3.1 ------------------------------------------ Total fixed charges 71.3 70.2 66.0 61.3 60.0 ------------------------------------------ Total income available for fixed charges (1) $728.9 $648.7 $507.7 $407.2 $438.2 ========================================== Ratio of earnings to fixed charges 10.2 9.2 7.7 6.6 7.3 ========================================== (1) Excludes interest capitalized of $3.5 million for the year ended December 31, 1998 and $1.6 million for the year ended December 31, 1994; there was no interest capitalized in 1997, 1996 or 1995.