UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 14, 2008
THE PROGRESSIVE CORPORATION
(Exact name of registrant as specified in its charter)
         
Ohio   1-9518   34-0963169
 
(State or other   (Commission File   (IRS Employer
jurisdiction of   Number)   Identification
incorporation)       No.)
6300 Wilson Mills Road, Mayfield Village, Ohio 44143
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code 440-461-5000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

 

TABLE OF CONTENTS

Item 7.01 Regulation FD Disclosure
Item 9.01 Financial Statements and Exhibits
SIGNATURES
EXHIBIT INDEX
EX-99
Item 7.01 Regulation FD Disclosure
On May 14, 2008, The Progressive Corporation issued a news release containing financial results for the Company and its subsidiaries for the month of, and year-to-date period ended, April 2008. A copy of the news release is attached hereto as Exhibit 99.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
See exhibit index on page 4.

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: May 14, 2008
             
    THE PROGRESSIVE CORPORATION    
 
           
 
  By:   /s/ Jeffrey W. Basch    
 
           
 
  Name:   Jeffrey W. Basch    
 
  Title:   Vice President and    
 
      Chief Accounting Officer    

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EXHIBIT INDEX
             
Exhibit No.   Form 8-K    
Under Reg.   Exhibit    
S-K Item 601   No.   Description
(99)
    99     News release dated May 14, 2008, containing financial results of The Progressive Corporation and its subsidiaries for the month of, and year-to-date period ended, April 2008.

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Exhibit 99
     
(PROGRESSIVE LOGO)   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 APRIL RESULTS
MAYFIELD VILLAGE, OHIO — May 14, 2008 — The Progressive Corporation today reported the following results for April 2008:
                         
    April     April        
(millions, except per share amounts and ratios)   2008     2007     Change
Net premiums written
  $ 1,414.9     $ 1,437.4       (2 )%
Net premiums earned
  $ 1,311.5     $ 1,353.8       (3 )%
Net income
  $ 108.9     $ 136.7       (20 )%
Per share
  $ .16     $ .19       (13 )%
Pretax net realized gains (losses) on securities
  $ 16.6     $ 7.9       110 %
Combined ratio
    91.7       88.8     2.9 pts.
Average diluted equivalent shares
    673.9       733.8       (8 )%
                         
    April     April        
(in thousands)   2008     2007     Change
Policies in Force:
                       
Total Personal Auto
    7,122.0       7,036.0       1 %
Total Special Lines
    3,209.8       2,976.5       8 %
Total Commercial Auto
    552.2       522.9       6 %
Progressive offers insurance to personal and commercial auto drivers throughout the United States. Our Personal Lines Business writes insurance for private passenger automobiles and recreational vehicles. Our Commercial Auto Business writes primary liability, physical damage and other auto-related insurance for automobiles and trucks owned by small businesses.
See the “Income Statements” and “Supplemental Information” for further month and year-to-date information.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENT
April 2008
(millions – except per share amounts)
(unaudited)
                 
    Current        
    Month     Comments on Monthly Results 1  
Net premiums written
  $ 1,414.9          
 
             
 
               
Revenues:
               
Net premiums earned
  $ 1,311.5          
Investment income
    47.8          
Net realized gains (losses) on securities
    16.6          
Service revenues
    1.6          
 
             
Total revenues
    1,377.5          
 
             
Expenses:
               
Losses and loss adjustment expenses
    936.3          
Policy acquisition costs
    130.7          
Other underwriting expenses
    135.8          
Investment expenses
    1.0          
Service expenses
    2.4          
Interest expense
    11.5          
 
             
Total expenses
    1,217.7          
 
             
 
               
Income before income taxes
    159.8          
Provision for income taxes
    50.9          
 
             
Net income
  $ 108.9          
 
             
 
               
COMPUTATION OF EARNINGS PER SHARE
               
Basic:
               
Average shares outstanding
    668.1          
 
             
Per share
  $ .16          
 
             
Diluted:
               
Average shares outstanding
    668.1          
Net effect of dilutive stock-based compensation
    5.8          
 
             
Total equivalent shares
    673.9          
 
             
Per share
  $ .16          
 
             
 
1   For a description of our reporting and accounting policies, see Note 1 to our 2007 audited consolidated financial statements included in our 2007 Shareholders’ Report, which can be found at www.progressive.com/annualreport .
The following table sets forth the investment results for the month:
         
Fully taxable equivalent total return:
       
Fixed-income securities
    .6 %
Common stocks
    4.9 %
Total portfolio
    1.3 %
 
       
Pretax recurring investment book yield
    4.2 %

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENTS
April 2008 Year-to-Date
(millions – except per share amounts)
(unaudited)
                     
           
    Year-to-Date     %
    2008     2007     Change
Net premiums written
  $ 4,905.3     $ 5,084.1     (4)
 
               
 
                   
Revenues:
                   
Net premiums earned
  $ 4,701.5     $ 4,847.6     (3)
Investment income
    207.1       213.4     (3)
Net realized gains (losses) on securities
    48.8       31.2     56
Service revenues
    6.0       8.6     (30)
 
               
Total revenues
    4,963.4       5,100.8     (3)
 
               
Expenses:
                   
Losses and loss adjustment expenses
    3,420.3       3,316.2     3
Policy acquisition costs
    470.2       492.6     (5)
Other underwriting expenses
    520.1       520.9     0
Investment expenses
    2.5       4.0     (38)
Service expenses
    7.5       7.2     4
Interest expense
    45.8       25.1     82
 
               
Total expenses
    4,466.4       4,366.0     2
 
               
 
                   
Income before income taxes
    497.0       734.8     (32)
Provision for income taxes
    148.7       234.6     (37)
 
               
Net income
  $ 348.3     $ 500.2     (30)
 
               
 
                   
COMPUTATION OF EARNINGS PER SHARE
                   
Basic:
                   
Average shares outstanding
    670.7       734.9     (9)
 
               
Per share
  $ .52     $ .68     (24)
 
               
Diluted:
                   
Average shares outstanding
    670.7       734.9     (9)
Net effect of dilutive stock-based compensation
    5.7       7.5     (24)
 
               
Total equivalent shares
    676.4       742.4     (9)
 
               
Per share
  $ .51     $ .67     (24)
 
               
The following table sets forth the investment results for the year-to-date period:
                 
    2008   2007
Fully taxable equivalent total return:
               
Fixed-income securities
    .1 %     2.3 %
Common stocks
    (4.9 )%     5.7 %
Total portfolio
    (.7 )%     2.8 %
 
Pretax recurring investment book yield
    4.6 %     4.6 %

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
April 2008
($ in millions)
(unaudited)
                                                 
Current Month  
                            Commercial              
    Personal Lines     Auto     Other     Companywide  
    Agency     Direct     Total     Business     Businesses 1     Total  
Net Premiums Written
  $ 761.0     $ 445.7     $ 1,206.7     $ 206.3     $ 1.9     $ 1,414.9  
% Growth in NPW
    (3 )%     2 %     (2 )%     (1 )%   NM       (2 )%
Net Premiums Earned
  $ 711.9     $ 426.8     $ 1,138.7     $ 171.2     $ 1.6     $ 1,311.5  
% Growth in NPE
    (5 )%     1 %     (3 )%     (4 )%   NM       (3 )%
 
                                               
GAAP Ratios
                                               
Loss/LAE ratio
    71.9       71.9       71.9       68.9     NM       71.4  
Expense ratio
    20.7       19.0       20.0       21.6     NM       20.3  
     
Combined ratio
    92.6       90.9       91.9       90.5     NM       91.7  
     
 
                                               
Actuarial Adjustments 2
                                               
Reserve Decrease/(Increase)
                                               
Prior accident years
                                          $ (15.7 )
Current accident year
                                            .1  
 
                                             
Calendar year actuarial adjustment
  $ (7.3 )   $ (3.7 )   $ (11.0 )   $ (4.6 )   $ 0     $ (15.6 )
 
                                             
 
                                               
Prior Accident Years Development
                                               
Favorable/(Unfavorable)
                                               
Actuarial adjustment
                                          $ (15.7 )
All other development
                                            2.1  
 
                                             
Total development
                                          $ (13.6 )
 
                                             
 
                                               
Calendar year loss/LAE ratio
                                            71.4  
 
                                             
Accident year loss/LAE ratio
                                            70.4  
 
                                             
 
                                               
Statutory Ratios
                                               
Loss/LAE ratio
                                            71.5  
Expense ratio
                                            19.9  
 
                                             
Combined ratio
                                            91.4  
 
                                             
 
1   Primarily includes professional liability insurance for community banks and Progressive’s run-off businesses. The other businesses generated an underwriting profit of $.5 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 losses in, such businesses.
 
2   Represents adjustments solely based on our corporate actuarial reviews.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
April 2008 Year-to-Date
($ in millions) (unaudited)
                                                 
Year-to-Date  
                            Commercial              
    Personal Lines     Auto     Other     Companywide  
    Agency     Direct     Total     Business     Businesses 1     Total  
Net Premiums Written
  $ 2,629.8     $ 1,605.7     $ 4,235.5     $ 663.5     $ 6.3     $ 4,905.3  
% Growth in NPW
    (5 )%     0 %     (3 )%     (5 )%   NM       (4 )%
Net Premiums Earned
  $ 2,557.9     $ 1,520.8     $ 4,078.7     $ 615.9     $ 6.9     $ 4,701.5  
% Growth in NPE
    (5 )%     0 %     (3 )%     (4 )%   NM       (3 )%
 
                                               
GAAP Ratios
                                               
Loss/LAE ratio
    72.4       73.9       72.9       72.0     NM       72.7  
Expense ratio
    21.1       20.8       21.0       21.1     NM       21.1  
     
Combined ratio
    93.5       94.7       93.9       93.1     NM       93.8  
     
 
                                               
Actuarial Adjustments 2
                                               
Reserve Decrease/(Increase)
                                               
Prior accident years
                                          $ (23.8 )
Current accident year
                                            —  
 
                                             
Calendar year actuarial adjustment
  $ (7.5 )   $ (4.5 )   $ (12.0 )   $ (11.8 )   $ 0     $ (23.8 )
 
                                             
 
                                               
Prior Accident Years Development
                                               
Favorable/(Unfavorable)
                                               
Actuarial adjustment
                                          $ (23.8 )
All other development
                                            (22.4 )
 
                                             
Total development
                                          $ (46.2 )
 
                                             
 
                                               
Calendar year loss/LAE ratio
                                            72.7  
 
                                             
Accident year loss/LAE ratio
                                            71.7  
 
                                             
 
                                               
Statutory Ratios
                                               
Loss/LAE ratio
                                            72.8  
Expense ratio
                                            20.8  
 
                                             
Combined ratio