10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[ü]     Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended  March 31, 2004

or

[  ]      Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______  to ________

Commission File Number  1-9518

THE PROGRESSIVE CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	34-0963169
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

6300 Wilson Mills Road, Mayfield Village, Ohio	44143
(Address of principal executive offices)	(Zip Code)

(440) 461-5000

(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.           Yes [ü] No [  ]

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).           Yes [ü] No [  ]

     Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Shares, $1.00 par value: 217,407,029 outstanding at April 30, 2004

1

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
	Item 1. Financial Statements.
		Consolidated Statements of Income
		Consolidated Balance Sheets
		Consolidated Statements of Cash Flows
		Notes to Consolidated Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Item 3. Quantitative and Qualitative Disclosures About Market Risk.
	Item 4. Controls and Procedures.
PART II - OTHER INFORMATION
	Item 2. Changes In Securities, Use Of Proceeds And Issuer Purchase Of Equity Securities
	Item 4. Submission of Matters to a Vote of Security Holders.
	Item 5. Other Information.
	Item 6. Exhibits and Reports on Form 8-K.
SIGNATURES
EXHIBIT INDEX
EX-3(A) Code of Regulations
EX-10(A) 2003 Incentive Plan - Time Based
EX-10(B) 2003 Incentive Plan - Performance Based
EX-10(C) 2003 Directors Equity Incentive Plan
EX-12 Comp of Ratio of Earnings to Fixed Charges
EX-31(A) CEO 302 Cert
EX-31(B) CFO 302 Cert
EX-32(A) 906 CEO Cert
EX-32(B) 906 CFO Cert

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

The Progressive Corporation and Subsidiaries
Consolidated Statements of Income
(unaudited)

Three Months Ended March 31,	2004			2003			% Change
(millions - except per share amounts)
Revenues
Net premiums earned	$	3,093.5		$	2,598.3			19
Investment income		114.9			116.0			(1	)
Net realized gains (losses) on securities		59.5			(3.1	)	NM
Service revenues		12.6			8.8			43
Other income (expense)		(.2	)		—		NM
Total revenues		3,280.3			2,720.0			21
Expenses
Losses and loss adjustment expenses		1,962.1			1,733.5			13
Policy acquisition costs		334.0			287.7			16
Other underwriting expenses		276.2			232.2			19
Investment expenses		3.3			3.3			—
Service expenses		5.5			5.9			(7	)
Interest expense		20.5			24.1			(15	)
Total expenses		2,601.6			2,286.7			14
Net Income
Income before income taxes		678.7			433.3			57
Provision for income taxes		218.7			141.8			54
Net income	$	460.0		$	291.5			58
Computation of Earnings Per Share
Basic:
Average shares outstanding		216.4			217.9			(1	)
Per share	$	2.13		$	1.34			59
Diluted:
Average shares outstanding		216.4			217.9			(1	)
Net effect of dilutive stock-based compensation		3.6			3.4			6
Total equivalent shares		220.0			221.3			(1	)
Per share	$	2.09		$	1.32			59
Dividends per Share	$	.025		$	.025			—

NM = Not Meaningful

See notes to consolidated financial statements.

2

The Progressive Corporation and Subsidiaries
Consolidated Balance Sheets
(unaudited)

	March 31,						December 31,
(millions)	2004			2003			2003
							(audited)
Assets
Investments:
Available-for-sale:
Fixed maturities, at market (amortized cost: $9,008.6, $7,290.0 and $8,899.0)	$	9,297.3		$	7,556.7		$	9,133.4
Equity securities, at market
Preferred stocks (cost: $804.7, $747.0 and $751.3)		832.8			775.4			778.8
Common equities (cost: $1,600.1, $1,588.3 and $1,590.6)		2,004.0			1,499.5			1,972.1
Short-term investments, at amortized cost (market: $1,113.6, $828.3 and $648.0)		1,113.6			828.3			648.0
Total investments		13,247.7			10,659.9			12,532.3
Cash		23.1			23.3			12.1
Accrued investment income		96.8			80.0			97.4
Premiums receivable, net of allowance for doubtful accounts of $62.9, $54.4 and $66.8		2,248.2			1,938.6			2,079.6
Reinsurance recoverables, including $52.3, $36.7 and $41.4 on paid losses		294.5			227.1			271.3
Prepaid reinsurance premiums		120.1			101.6			114.7
Deferred acquisition costs		434.5			390.5			412.3
Income taxes		—			163.4			81.6
Property and equipment, net of accumulated depreciation of $498.3, $412.3 and $476.4		616.0			509.2			584.7
Other assets		81.0			60.4			95.5
Total assets	$	17,161.9		$	14,154.0		$	16,281.5
Liabilities and Shareholders’ Equity
Unearned premiums	$	4,083.9		$	3,590.2		$	3,894.7
Loss and loss adjustment expense reserves		4,703.9			3,908.9			4,576.3
Accounts payable, accrued expenses and other liabilities		1,386.0			1,212.1			1,290.1
Income taxes		156.4			—			—
Debt		1,289.9			1,489.2			1,489.8
Total liabilities		11,620.1			10,200.4			11,250.9
Shareholders’ equity:
Common Shares, $1.00 par value (authorized 300.0, issued 230.1, including treasury shares of 12.6, 13.1 and 13.7)		217.5			217.0			216.4
Paid-in capital		755.3			607.4			688.3
Unamortized restricted stock		(65.5	)		—			(28.9	)
Accumulated other comprehensive income (loss):
Net unrealized appreciation on investment securities		468.5			134.1			418.2
Net unrealized gains on forecasted transactions		10.5			11.4			10.7
Foreign currency translation adjustment		(3.9	)		(4.8	)		(3.9	)
Retained earnings		4,159.4			2,988.5			3,729.8
Total shareholders’ equity		5,541.8			3,953.6			5,030.6
Total liabilities and shareholders’ equity	$	17,161.9		$	14,154.0		$	16,281.5

See notes to consolidated financial statements.

3

The Progressive Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)

Three Months Ended March 31,	2004			2003
(millions)
Cash Flows From Operating Activities
Net income	$	460.0		$	291.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		22.8			20.2
Amortization of fixed maturities		38.4			14.1
Amortization of restricted stock		4.7			—
Net realized (gains) losses on securities		(59.5	)		3.1
Changes in:
Unearned premiums		189.2			285.9
Loss and loss adjustment expense reserves		127.6			95.9
Accounts payable, accrued expenses and other liabilities		95.9			29.2
Prepaid reinsurance premiums		(5.4	)		(4.9	)
Reinsurance recoverables		(23.2	)		(11.4	)
Premiums receivable		(168.6	)		(195.8	)
Deferred acquisition costs		(22.2	)		(27.0	)
Income taxes		210.9			71.1
Tax benefit from exercise/vesting of stock-based compensation		15.3			14.9
Other, net		14.6			(19.2	)
Net cash provided by operating activities		900.5			567.6
Cash Flows From Investing Activities
Purchases:
Available-for-sale: fixed maturities		(1,931.2	)		(3,294.1	)
equity securities		(229.1	)		(439.0	)
Sales:
Available-for-sale: fixed maturities		1,659.0			3,257.3
equity securities		129.4			111.4
Maturities, paydowns, calls and other:
Available-for-sale: fixed maturities		170.6			179.7
equity securities		50.0			8.8
Net purchases of short-term investments		(465.6	)		(260.5	)
Net unsettled security transactions		(13.1	)		(7.2	)
Purchases of property and equipment		(54.2	)		(26.3	)
Net cash used in investing activities		(684.2	)		(469.9	)
Cash Flows From Financing Activities
Proceeds from exercise of stock options		25.9			13.6
Payment of debt		(200.0	)		—
Dividends paid to shareholders		(5.4	)		(5.4	)
Acquisition of treasury shares		(25.8	)		(99.5	)
Net cash used in financing activities		(205.3	)		(91.3	)
Increase in cash		11.0			6.4
Cash, January 1		12.1			16.9
Cash, March 31	$	23.1		$	23.3

See notes to consolidated financial statements.

4

The Progressive Corporation and Subsidiaries
Notes to Consolidated Financial Statements
(unaudited)

Note 1 Basis of Presentation — These financial statements and the notes thereto should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2003.

The consolidated financial statements reflect all normal recurring adjustments which were, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of operations for the period ended March 31, 2004, are not necessarily indicative of the results expected for the full year.

Note 2 Stock-Based Compensation — The Company follows the provisions of Statement of Financial Accounting Standards (SFAS) 123, “Accounting for Stock-Based Compensation,” to account for its stock compensation activity in the financial statements. Prior to January 1, 2003, the Company followed the provisions of Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees,” to account for its stock option activity.

The change to the fair value method of accounting was applied prospectively to all non-qualified stock option awards granted, modified, or settled after January 1, 2003. No stock options were granted after December 31, 2002. As a result, there is no compensation cost for stock options included in net income for 2003 or 2004; however, compensation expense would have been recognized if the fair value method had been used for all awards since the original effective date of SFAS 123 (January 1, 1995). Prior to 2003, the Company granted all options currently outstanding at an exercise price equal to the market price at the date of grant and therefore, under APB 25, no compensation expense was recorded.

In 2003, the Company began issuing restricted stock awards. Compensation expense for restricted stock awards is recognized over their respective vesting periods. The current year expense is not representative of the effect on net income for future years since each subsequent year will reflect expense for additional awards.

See Item 5-Other Information in Part II of this Form 10-Q for details regarding the restricted stock awards granted by the Company during 2004.

The following table is presented in accordance with SFAS 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” and shows the effects on net income and earnings per share had the fair value method been applied to all outstanding and unvested stock option awards for the periods presented. The Company uses the Black-Scholes pricing model to calculate the fair value of the options awarded as of the date of grant.

5

	Three months
	Ended
	March 31,
(millions, except per share amounts)	2004			2003
Net income, as reported	$	460.0		$	291.5
Deduct: Total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects		(1.4	)		(1.9	)
Net income, pro forma	$	458.6		$	289.6
Earnings per share
Basic – as reported	$	2.13		$	1.34
Basic – pro forma		2.12			1.33
Diluted – as reported	$	2.09		$	1.32
Diluted – pro forma		2.09			1.31

Note 3 Supplemental Cash Flow Information — The Company paid income taxes of $54.0 million and $56.0 million during the three months ended March 31, 2004 and 2003, respectively. Total interest paid was $27.7 million for both the three months ended March 31, 2004 and 2003. Non-cash activity includes the liability for deferred restricted stock compensation and the changes in net unrealized appreciation on investment securities.

Note 4 Debt — Debt at March 31 consisted of:

	2004				2003
			Market
(millions)	Cost		Value		Cost		Market Value
6.60% Notes due 2004	$	—	$	—	$	199.8	$	207.3
7.30% Notes due 2006		99.9		110.9		99.8		112.3
6.375% Senior Notes due 2012		347.5		395.2		347.3		378.0
7% Notes due 2013		148.8		177.0		148.8		169.0
6 5/8% Senior Notes due 2029		294.1		323.6		294.0		303.6
6.25% Senior Notes due 2032		393.6		420.6		393.5		416.4
Other Debt		6.0		6.0		6.0		6.0
	$	1,289.9	$	1,433.3	$	1,489.2	$	1,592.6

Note 5 Comprehensive Income — Total comprehensive income was $510.1 million and $262.9 million for the quarters ended March 31, 2004 and 2003, respectively.

Note 6 Dividends — On March 31, 2004, the Company paid a quarterly dividend of $.025 per Common Share to shareholders of record as of the close of business on March 12, 2004. The Board of Directors declared the dividend on January 31, 2004.

On April 16, 2004, the Board of Directors declared a quarterly dividend of $.025 per Common Share. The dividend is payable June 30, 2004, to shareholders of record as of the close of business on June 11, 2004.

Note 7 Segment Information — The Company’s Personal Lines business units write insurance for private passenger automobiles and recreation vehicles. The Commercial Auto business unit writes primary liability, physical damage and other auto-related insurance for automobiles and trucks owned by small businesses. The Company’s other businesses primarily include directors’ and officers’ liability insurance and processing business for Commercial Auto Insurance Procedures (CAIP), which are state-supervised plans serving the involuntary market. The other businesses are also managing the wind-down of the Company’s lender’s collateral protection program. All revenues are generated from external customers.

6

Periods ended March 31,

	2004					2003
			Pretax
			Profit					Pretax
(millions)	Revenues		(Loss)			Revenues		Profit (Loss)
Personal Lines – Agency	$	1,871.4	$	294.5		$	1,600.5	$	209.8
Personal Lines – Direct		865.9		138.7			707.1		93.8
Total Personal Lines1		2,737.3		433.2			2,307.6		303.6
Commercial Auto Business		346.8		87.8			272.7		43.6
Other businesses2		21.8		7.1			26.8		.6
Investments3		174.4		171.1			112.9		109.6
Interest Expense		—		(20.5	)		—		(24.1	)
	$	3,280.3	$	678.7		$	2,720.0	$	433.3

¹Personal automobile insurance accounted for 94% of the total Personal Lines segment net premiums earned in the first quarters of 2004 and 2003.

²For 2004, both revenues and pretax profit include $(.2) million related to the over-accrual of estimated interest on an income tax refund the Company received in February 2004.

³Revenues represent recurring investment income and net realized gains (losses) on securities; pretax profit is net of investment expenses.

Note 8 Litigation —The Company is named as defendant in various lawsuits arising out of its insurance operations. All legal actions relating to claims made under insurance policies are considered by the Company in establishing its loss and loss adjustment expense reserves.

In addition, the Company is named as defendant in a number of class action or individual lawsuits, the outcomes of which are uncertain at this time. These cases include those alleging damages as a result of the Company’s total loss evaluation methodology, use of after-market parts, use of consumer reports, such as credit reports, in underwriting and related notice requirements under the federal Fair Credit Reporting Act, charging betterment in first party physical damage claims, the use of preferred provider rates for payment of personal injury protection claims, the use of automated database vendors to assist in evaluating certain first party bodily injury claims, offering alternative commission programs or the alleged diminution of value to vehicles which are involved in accidents, and cases challenging other aspects of the Company’s claims and marketing practices and business operations, including worker classification issues.

The Company plans to contest the outstanding suits vigorously, but may pursue settlement negotiations in appropriate cases. In accordance with generally accepted accounting principles (GAAP), the Company has established accruals for lawsuits as to which the Company has determined that it is probable that a loss has been incurred and the Company can reasonably estimate its potential exposure. Pursuant to GAAP, the Company has not established reserves for those lawsuits where the loss is not probable and/or the Company is currently unable to estimate the potential exposure.

Based on currently available information, the Company believes that its reserves for these lawsuits are reasonable. However, if any one or more of these lawsuits results in a judgment against or settlement by the Company in an amount that is significantly in excess of the reserve established for such lawsuit (if any), the resulting liability could have a material impact on the Company’s financial condition, cash flows and results of operations.

For a further discussion on the Company’s pending litigation, see Item 3-Legal Proceedings in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

Note 9 Reclassifications — Certain amounts in the financial statements for prior periods were classified to conform to the 2004 presentation.

7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OVERVIEW

The Progressive Corporation and subsidiaries (the “Company”) continued the success achieved in 2003 into the first quarter 2004 with a 14% increase in net premiums written, an underwriting profit of 16.8% and net income of $460.0 million. All areas of the Company continued to function well, especially product pricing and claims resolution, as highlighted in the Company’s 2003 Annual Report to Shareholders. On the other hand, market conditions are changing and most of the Company’s competitors now have rates that are consistent with their profit objectives. As a result, consumers are not being dislocated by rate or underwriting shocks, thereby negatively impacting the number of new applications the Company is receiving. Nevertheless, the Company’s current absolute growth was very acceptable. The Company also continued to benefit from the low level of automobile accident frequency.

During the first quarter 2004, the Company’s companywide policies in force grew 17%, primarily supported by strong renewals. Although the Company did not experience any significant increases in its overall retention rate, it is seeing shifts in its books of business away from the nonstandard tiers, which favorably impacted retention. Given its strong underwriting margins, the Company remains in a position where it can focus on retaining customers and introduce new product improvements faster.

Despite the favorable underwriting margins in the first quarter, the Company experienced unfavorable reserve development of .7 points. This unfavorable development related to personal auto and was driven by several items discussed later in this report (see “Loss and Loss Adjustment Expense Reserves”). Nonetheless, the Company continued to experience a decline in accident frequency in every coverage on a quarter over prior year quarter basis. In addition, the Company has continued to maintain solid claims hiring and training and, as a result, has not had to restrict growth due to claims capacity in any state, as was the case in Texas in the first quarter 2003.

Based on these ongoing trends, the Company will continue to assess market conditions on a state-by-state basis and will consider, and has taken, some rate reductions in selected states to maintain attractive combinations of profit and growth. In the short term, the Company’s strategy is to maintain rate stability, with some margin reduction by absorbing future cost trends. The Company remains focused on building sustainable competitive advantages by providing longer-term price stability for customers.

The Company made no substantial changes in the allocation of its investment portfolio during the quarter. Both the fixed-income securities and common stocks produced positive total returns for the quarter. The Company continued to keep its credit quality high and exposure to interest rate risk low. At March 31, 2004, the fixed-income portfolio duration was 3.0 years with a weighted average credit quality of AA+.

FINANCIAL CONDITION

Capital Resources and Liquidity

Progressive’s insurance operations create liquidity by collecting and investing premiums written from new and renewal business in advance of paying claims. For the three months ended March 31, 2004, operations generated a positive cash flow of $900.5 million.

During the first quarter 2004, the Company retired all $200 million of its 6.60% Notes at their maturity using part of the proceeds from the $400 million of its 6.25% Senior Notes issued in November 2002; the remainder of the proceeds from that offering are available for general corporate purposes.

The Company has substantial capital resources and believes it has sufficient borrowing capacity and other capital resources to support current and anticipated growth and scheduled debt and interest payments. The Company’s existing debt covenants do not include any rating or credit triggers.

8

Commitments and Contingencies

The Company is currently constructing call centers in Colorado Springs, Colorado and Tampa, Florida and an office building in Mayfield Village, Ohio. These three projects are expected to be completed in 2004 at an estimated total cost of $128 million. These projects are being funded through operating cash flows. In addition, during the first quarter 2004, the Company opened one additional claims service center, bringing the total number of sites offering this concierge level service to 20. The Company plans to add additional sites at the appropriate times and locations based on internal analysis of the operating performance and cost parameters of the existing sites.

Off-Balance-Sheet Arrangements

Except for the open investment funding commitment and operating leases and service agreements discussed in the notes to the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, the Company does not have any off-balance-sheet leverage.

Contractual Obligations

During the first quarter 2004, the Company’s contractual obligations have not changed materially from those discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2003.

RESULTS OF OPERATIONS

Underwriting Operations

Growth

Companywide net premiums written, which represent the premiums generated from policies written during the period less any reinsurance, increased 14% over the first quarter 2003. Net premiums earned, which are a function of the premiums written in the current and prior periods, increased 19% over the first quarter 2003. Insurance premiums written in 2004 and forward are being earned into income using a daily earnings convention, as compared to a mid-month convention used previously, therefore, having no impact on amounts reported in prior periods. The change to a daily earnings method will improve the precision of the Company’s premium recognition on a monthly basis.

The Company analyzes its growth by reviewing rate levels, new customers and the retention characteristics of its books of business. During the first quarter 2004, the Company implemented 26 auto rate revisions in various states. The overall impact of these revisions was a slight reduction in rates for the year. The Company will continue to assess market conditions on a state-by-state basis and will consider rate reductions in states where it will be able to maintain an attractive combination of profit and growth while still maintaining service quality and will seek selective rate increases where it is necessary to maintain rate adequacy.

New business applications did not increase substantially in the first quarter 2004, and declined slightly in Agency auto, partially driven by the fact that fewer customers were in the marketplace shopping for insurance since competitors have achieved more rate adequacy.

Another important element affecting growth is customer retention. One measure of improvement in customer retention is policy life expectancy (PLE), which is the estimate of the average length of time that a policy will remain in force before cancellation or non-renewal. The Company measures PLE on a product and tier basis. The Company saw modest declines in PLE in the second half of 2003 after a period of increase in individual product tiers. The Company continues to refine its measurement and methodology, but for the first quarter of 2004, it appears as if PLE’s in the Agency channel are relatively unchanged and those in the Direct channel are lengthening modestly. Although the PLE’s are more positive than in prior quarters, this does not necessarily suggest that there are any significant changes in the Company’s customer retention by tier. On the other hand, the Company is seeing a shift in its books of business away from the nonstandard tiers toward tiers where the PLE’s have historically been longer, thus favorably impacting retention.

9

Profitability

For the first quarter 2004, the Company generated net income of $460.0 million, compared to $291.5 million for the same period last year. Net income per share was $2.09 for the first quarter 2004, compared to $1.32 for the same period last year. The GAAP combined ratio (CR) was 83.2 for the first quarter 2004, compared to 86.7 for the first quarter 2003, primarily driven by lower losses and loss adjustment expenses. Included in net income are net realized gains on securities of $59.5 million, or $.18 per share, for the first quarter 2004. First quarter 2003 results included net realized losses on securities of $3.1 million, or $.01 per share. Investment income, on a pretax basis net of investment and interest expenses, was $91.1 million, compared to $88.6 million in the first quarter 2003. The lower interest expense primarily reflects the retirement of all $200 million of the Company’s 6.60% Notes during the quarter.

During the first quarter 2004, the Company reduced its tax liability $7.1 million, or $.02 per share, for tax years 1993-1998, which years were settled concurrently with the receipt of a $58 million tax refund from the IRS during the quarter. Overall, the Company’s income taxes shifted to a net liability as of March 31, 2004, as compared to the same period last year, primarily driven by an increase in the Company’s deferred tax liability associated with the unrealized gains in the investment portfolio, reflecting equity returns after the first quarter 2003 and continuing into the first quarter 2004, as well as receipt of the above-mentioned tax refund; the shift from year end was primarily due to the provision for income taxes without a corresponding estimated tax payment.

10

Underwriting results for the Company’s Personal Lines, including its channel components, the Commercial Auto business and other businesses were as follows:

	THREE MONTHS ENDED MARCH 31,
(dollars in millions)	2004			2003			Change
NET PREMIUMS WRITTEN
Personal Lines – Agency	$	1,957.1		$	1,751.4			12	%
Personal Lines – Direct		937.9			795.3			18	%
Total Personal Lines		2,895.0			2,546.7			14	%
Commercial Auto Business		376.2			314.2			20	%
Other businesses		6.1			18.4			(67	)%
Companywide	$	3,277.3		$	2,879.3			14	%
NET PREMIUMS EARNED
Personal Lines – Agency	$	1,871.4		$	1,600.5			17	%
Personal Lines – Direct		865.9			707.1			22	%
Total Personal Lines		2,737.3			2,307.6			19	%
Commercial Auto Business		346.8			272.7			27	%
Other businesses		9.4			18.0			(48	)%
Companywide	$	3,093.5		$	2,598.3			19	%
PERSONAL LINES – AGENCY CR
Loss & loss adjustment expense ratio		64.7			67.2		2.5 pts.
Underwriting expense ratio		19.6			19.7		.1 pts.
		84.3			86.9		2.6 pts.
PERSONAL LINES – DIRECT CR
Loss & loss adjustment expense ratio		63.6			66.5		2.9 pts.
Underwriting expense ratio		20.4			20.2		(.2) pts.
		84.0			86.7		2.7 pts.
PERSONAL LINES – TOTAL CR
Loss & loss adjustment expense ratio		64.3			66.9		2.6 pts.
Underwriting expense ratio		19.9			19.9		– pts.
		84.2			86.8		2.6 pts.
COMMERCIAL AUTO BUSINESS – CR
Loss & loss adjustment expense ratio		56.2			64.7		8.5 pts.
Underwriting expense ratio		18.5			19.3		.8 pts.
		74.7			84.0		9.3 pts.
OTHER BUSINESSES – CR
Loss & loss adjustment expense ratio		69.8			67.4		(2.4) pts.
Underwriting expense ratio		28.3			45.5		17.2 pts.
		98.1			112.9		14.8 pts.
COMPANYWIDE GAAP CR
Loss & loss adjustment expense ratio		63.5			66.7		3.2 pts.
Underwriting expense ratio		19.7			20.0		.3 pts.
		83.2			86.7		3.5 pts.
COMPANYWIDE ACCIDENT YEAR
Loss & loss adjustment expense ratio		62.8			65.2		2.4 pts.
ACTUARIAL ADJUSTMENTS1 –
Favorable/(Unfavorable)
Prior accident years	$	11.4		$	5.2
Current accident year		.1			(.8	)
Calendar year actuarial adjustment	$	11.5		$	4.4			161	%
PRIOR ACCIDENT YEARS DEVELOPMENT –
Favorable/(Unfavorable)
Actuarial adjustment	$	11.4		$	5.2
All other development		(34.3	)		(44.2	)
Total development	$	(22.9	)	$	(39.0	)		(41	)%

POLICIES IN FORCE (thousands)	March 31, 2004		March 31, 2003
Agency – Auto		4,118		3,627	14	%
Direct – Auto		1,941		1,650	18	%
Other personal lines2		2,057		1,708	20	%
Total Personal Lines		8,116		6,985	16	%
Commercial Auto Business		380		304	25	%

NM = Not Meaningful

¹ Represents the net changes made by the Company’s actuarial staff to both current and prior accident year reserves based on regularly scheduled reviews. See the Company’s “Report on Loss Reserving,” filed in the Company’s Current Report on Form 8-K on June 27, 2003, for further discussion.

² Includes insurance for motorcycles, recreation vehicles, mobile homes, watercraft, snowmobiles, homeowners and similar items.

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Loss and Loss Adjustment Expense Reserves

Claims costs, the Company’s most significant expense, represent payments made, and estimated future payments to be made, to or on behalf of its policyholders, including adjusting expenses needed to settle claims. These costs include a loss estimate for future assignments, based on current business, under state-mandated automobile insurance programs. Claims costs are influenced by loss severity and frequency and inflation, among other factors. Accordingly, anticipated changes in these factors are taken into account when the Company establishes premium rates and loss reserves.

During the quarter, the Company continued to report favorable loss ratios, primarily reflecting low accident frequency. The Company experienced a decline in frequency in every coverage on a quarter over prior year quarter basis. Overall, the frequency decline was in the 6% range. The Company, however, did not anticipate a continuation of a negative frequency trend and even expected, and priced for, a slight rise in frequency.

In contrast to frequency trend, the Company saw severity rise slightly during the first quarter 2004 as it had expected. Comparing first quarter 2004 to first quarter 2003, the Company experienced an increase in bodily injury severity for the first time in five quarters. The Company continues to see severity increases in personal injury protection coverage as it did in 2003. For the first quarter 2004, property coverages’ severity comparisons with prior periods were slightly negative, contrary to the modest increases during the past year. Overall, for the twelve months ended March 31, 2004, the severity on the property coverages netted to about a positive 1.5%, or approximately half the comparable National Association of Independent Insurers (now known as Property Casualty Insurers Association of America) reported results. Across all coverages, the severity trend for the first quarter 2004 was a positive 1%. The Company plans to continue to be diligent about recognizing trend when setting rates.

During the first quarter 2004, the Company experienced $22.9 million, or .7 points, of unfavorable loss reserve development, compared to $39.0 million, or 1.5 points, of unfavorable development for the same period last year. The current year unfavorable development is comprised of $11.4 million of favorable adjustments based on regularly scheduled actuarial reviews and $34.3 million of unfavorable other development. The unfavorable other development, which related to personal auto, was a function of several items, including: $10 million development in both case and incurred but not reported (IBNR) property damage reserves; approximately $10 million of lower limit (less than $100,000) bodily injury IBNR emergence; a $5 million accrual for a pending class action lawsuit settlement; and almost $5 million of personal injury protection development in three states. The Company’s Commercial Auto and non-auto Personal Lines businesses experienced favorable development during the quarter. The Company continues to increase the analysis intensity in its loss reserves to increase accuracy and further understand its business.

Underwriting Expenses

Policy acquisition costs and other underwriting expenses were 19.7% and 20.0% of premiums earned for the first quarters 2004 and 2003, respectively. The Company continues to see some scale and technology benefits in its expenses.

Personal Lines

The Company’s Personal Lines business units write insurance for private passenger automobiles and recreation vehicles, and represent 88% of the Company’s total year-to-date net premiums written. Personal Lines net premiums written grew 14% over the first quarter 2003, and net premiums earned grew 19%, compared to the same period last year. The Personal Lines business is generated either by an agency or written directly by the Company. The Agency channel includes business written by our network of 30,000 independent insurance agencies, insurance brokers in several states and through strategic alliance business relationships (other insurance companies, financial institutions, employers and national brokerage agencies). The Direct business includes business written through 1-800-PROGRESSIVE, online at progressive.com and on behalf of affiliates.

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The Agency Channel

	Growth over prior year
Net premiums written		12	%
Net premiums earned		17	%
Auto policies in force		14	%

The Agency auto business saw a slight decrease (about 1%) in new applications in the first quarter 2004, as compared to the same period last year. Conversions (i.e. converting a quote to a sale) were down slightly on a higher number of quotes. The PLE’s for Agency auto are relatively unchanged.

The Agency expense ratio fell slightly for the first quarter 2004, as compared to the same period last year, primarily attributable to the non-auto businesses. The Agency auto acquisition costs increased due to the Company’s continued migration to a single commission level for all independent agencies.

The Direct Channel

	Growth over prior year
Net premiums written		18	%
Net premiums earned		22	%
Auto policies in force		18	%

In the Direct channel, new applications are increasing on a relative basis as the Company is experiencing an increase in the conversion rate on fewer overall quotes. Total quotes are decreasing despite the Company’s increase in advertising spending (discussed below) primarily due to the fact that the Company’s competitors are increasing advertising at a greater pace, thus reducing the Company’s share of the total voice. The use of the Internet, either for complete or partial quoting, continues to grow and is the most significant driver of the new business activity in the Direct channel. Direct auto is also seeing a larger shift in the mix of its policies in force to the preferred and ultra-preferred tiers, which resulted in a positive impact on retention.

The Direct expense ratio increased .2 points for the first quarter 2004, as compared to the same period last year. Advertising costs increased nearly 55%. The Company is advertising on a national basis and supplements that coverage by local market media campaigns in over 100 designated market areas. The increase in the advertising expenses was partially offset by decreases in non-acquisition expenses.

Commercial Auto

	Growth over prior year
Net premiums written		20	%
Net premiums earned		27	%
Auto policies in force		25	%

The Company’s Commercial Auto business unit writes primary liability, physical damage and other auto-related insurance for automobiles and trucks owned by small businesses, with the majority of its customers insuring three or fewer vehicles. The Commercial Auto business represents 11% of the Company’s total year-to-date net premiums written. Although the Commercial Auto business differs from Personal Lines auto in its customer base and products written, both businesses require the same fundamental skills, including disciplined underwriting and pricing, as well as excellent claims service. The Company’s Commercial Auto business is primarily distributed through independent agencies.

The Company experienced strong growth in Commercial Auto during the quarter. Approximately 52% of the Company’s year-to-date Commercial Auto net premiums written were generated in the light and local commercial auto markets, which includes autos, vans and pick-up trucks used by contractors, landscapers and other artisans, and a variety of other small businesses. The remainder of the business was written in the

13

specialty commercial auto market, which includes dump trucks, logging trucks and other short-haul commercial vehicles. Since the commercial auto policies have higher limits than personal auto, the Company continues to monitor this segment closely.

Other Businesses

The Company’s other businesses, which represents less than 1% of year-to-date net premiums written, primarily include writing directors’ and officers’ liability insurance and processing business for Commercial Auto Insurance Procedures (CAIP), which are state-supervised plans serving the involuntary market. The other businesses are also managing the wind-down of the Company’s lender’s collateral protection program, which the Company decided to cease writing as of September 30, 2003. The remaining ongoing indemnity products in the Company’s other businesses are profitable, with a slight decrease in net premiums written in the first quarter 2004 compared to the same period last year.

Investments

Portfolio Allocation

The composition of the investment portfolio at March 31 was:

					Gross					% of
			Gross		Unrealized			Market		Total			Duration
(millions)	Cost		Unrealized Gains		Losses			Value		Portfolio			(Years)		Rating1
2004
Fixed Maturities	$	9,008.6	$	295.6	$	(6.9	)	$	9,297.3		70.2	%		3.3	AA+
Preferred stocks		804.7		36.6		(8.5	)		832.8		6.3			2.8		A-
Short-term investments2		1,113.6		—		—			1,113.6		8.4			<1	AA-
Total Fixed Income		10,926.9		332.2		(15.4	)		11,243.7		84.9			3.0	AA+
Common equities		1,600.1		413.7		(9.8	)		2,004.0		15.1		NM		NM
Total Portfolio3	$	12,527.0	$	745.9	$	(25.2	)	$	13,247.7		100.0	%		3.0	AA+
2003
Fixed Maturities	$	7,290.0	$	284.8	$	(18.1	)	$	7,556.7		70.9	%		3.3	AA+
Preferred stocks		747.0		38.8		(10.4	)		775.4		7.3			2.7		A-
Short-term investments2		828.3		—		—			828.3		7.7			<1	AA+
Total Fixed Income		8,865.3		323.6		(28.5	)		9,160.4		85.9			3.0	AA
Common equities		1,588.3		53.7		(142.5	)		1,499.5		14.1		NM		NM
Total Portfolio3	$	10,453.6	$	377.3	$	(171.0	)	$	10,659.9		100.0	%		3.0	AA

NM = Not Meaningful

¹ Credit quality ratings are assigned by nationally recognized securities rating organizations. To calculate the weighted average credit quality ratings, the Company weights individual securities based on market value and assigns a numeric score to each credit rating based on a scale from 0-5.

² Short-term investments include Eurodollar deposits, commercial paper and other securities purchased with a maturity within one year.

³ The Company had net unsettled security acquisitions of $62.0 million and $105.0 million at March 31, 2004 and 2003, respectively. March 31, 2004 and 2003 totals include $1.2 billion and $1.3 billion, respectively, of securities in the portfolio of a consolidated, non-insurance subsidiary of the holding company; composition is similar to the consolidated portfolio.

As of March 31, 2004, the Company’s portfolio had $720.7 million of net unrealized gains, compared to $206.3 million of net unrealized gains at March 31, 2003. The increase was primarily the result of the significant equity returns after the first quarter 2003, continuing into the first quarter 2004.

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Fixed-Income Securities

The fixed-income portfolio, which includes fixed-maturity securities, preferred stocks and short-term investments, had a duration of 3.0 years at March 31, 2004 and 2003. After adjustments to exclude unsettled securities transactions, the allocation of fixed-income securities at March 31, 2004, was 84.8% of the total portfolio.

The fixed-maturity securities, including short-term investments, as reported in the balance sheets, were comprised of the following:

(millions)	March 31, 2004				March 31, 2003
Investment-Grade Fixed Maturities:
Short/Intermediate Term	$	9,662.3	92.8	%	$	7,613.1	90.8	%
Long Term		486.0	4.7	%		530.6	6.3	%
Non-Investment-Grade Fixed Maturities		262.6	2.5	%		241.3	2.9	%
Total Fixed Maturities	$	10,410.9	100.0	%	$	8,385.0	100.0	%

The non-investment-grade fixed-maturity securities offer the Company higher returns and added diversification, but may involve greater risks generally related to creditworthiness and liquidity of the secondary trading market.

Included in the fixed-income portfolio are $3.1 billion of asset-backed securities. These asset-backed securities are comprised of residential mortgage-backed ($.8 billion), commercial mortgage-backed ($1.2 billion) and other asset-backed ($1.1 billion) securities, with a total duration of 2.5 years and weighted average credit quality of AA+. The largest component of other asset-backed securities are automobile receivable loans ($.5 billion) and home equity loans ($.3 billion). Substantially all asset-backed securities are liquid with available market quotes and contain no residual interests (i.e. the most subordinated class in a pool of securitized assets).

Common equities

Common equities, as reported in the balance sheets, were comprised of the following:

(millions)	March 31, 2004				March 31, 2003
Common Stocks	$	1,962.1	97.9	%	$	1,453.0	96.9	%
Other Risk Investments		41.9	2.1	%		46.5	3.1	%
Total Common Equities	$	2,004.0	100.0	%	$	1,499.5	100.0	%

Common equities comprise 15.2% of the total portfolio, excluding the net unsettled securities transactions, at March 31, 2004. Common stocks are the majority of the common equity portfolio and are managed externally to track the Russell 1000 index within +/- 50 basis points. To maintain high correlation with the Russell 1000, the Company holds approximately 700 of the common stocks comprising the index. Individual holdings are measured based on their contribution to the correlation with the index. The Company’s common equity allocation and management strategy are intended to provide diversification for the total portfolio and focuses on changes in value of the equity portfolio relative to the change in value of the index on an annual basis as noted in the following table:

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	Market Value at		Market Value at		Total
	March 31, 2004		December 31, 2003		Return1
Common Stocks2	$1,962.1 million		$1,929.7 million			1.9	%
Russell 1000 Index3	$	603.42	$	594.56		1.9	%

¹ Includes gross dividends reinvested and price appreciation/depreciation.

² The market value at March 31, 2004, includes appreciation/depreciation in the value of the underlying securities as well as dividend income received and net cash infusions/withdrawals made during the quarter needed to maintain the Company’s 85%/15% fixed income to equity allocation.

³ This broad-based index, which is used for comparative benchmarking, incepted December 31, 1986, with a base valuation of $130. Market values exclude dividends reinvested.

Other risk investments include private equity investments and limited partnership interests in private equity and mezzanine investment funds, which have no off-balance-sheet exposure or contingent obligations, except for the $7.6 million of open funding commitments at March 31, 2004.

Trading Securities

Trading securities are entered into for the purpose of near-term profit generation. At March 31, 2004 and 2003, the Company did not have any trading securities, with the exception of the derivatives classified as trading as discussed below. The Company had no trading security gains or losses during the first quarter 2004, compared to $.1 million of gains for the first three months of 2003. Gains from trading securities are immaterial to the financial condition, cash flows and results of operations of the Company and are reported as part of the available-for-sale portfolio.

Derivative Instruments

From time to time, the Company invests in derivative instruments, which are primarily used to manage the risks of the available-for-sale portfolio. This is accomplished by modifying the basis, duration, interest rate or foreign currency characteristics of the portfolio, hedge securities or hedge cash flows. The Company had no risk management derivatives at March 31, 2004 or 2003. The Company recognized no gains or losses during the first quarter 2004 or 2003 on risk management derivatives.

Derivative instruments may also be used for trading purposes or classified as trading derivatives due to characteristics of the transaction. The Company sold credit default protection using credit default swaps and matched the notional value with Treasury securities with an equivalent principal value and maturity to replicate a cash bond position. At March 31, 2004, the Company had three such derivatives with a net market value of $4.6 million classified as trading. The three derivative positions generated net losses of $1.1 million in 2004. At March 31, 2004, the net market value of these positions, including the Treasuries, was $138.6 million, with a net gain of $.4 million for the first three months of 2004. The Company had no gains or losses on trading derivatives during the first three months of 2003. The results of the derivative and Treasury positions are immaterial to the financial condition, cash flows and results of operations and are reported as part of the available-for-sale portfolio, with the net gains (losses) reported as a component of net realized gains (losses) on securities.

Investment Income

Recurring investment income (interest and dividends) decreased 1% for the first quarter 2004, compared to the same period last year. The decrease in the investment income was the result of investing new cash in securities with yields much lower than the average book yield of the first quarter 2003, offsetting income from growth in the portfolio. The Company is reporting total return to more accurately reflect the management philosophy of the portfolio and evaluation of the investment results. The fully taxable equivalent (FTE) total return includes recurring investment income, net realized gains (losses) on securities and changes in

16

unrealized appreciation/depreciation on investment securities. The Company reported the following investment results for the period ended March 31:

	Three Months
	2004			2003
Pretax recurring investment book yield		3.8	%		4.6	%
Weighted average FTE book yield		4.4	%		5.2	%
FTE total return:
Fixed-income securities		2.2	%		1.5	%
Common stocks		1.9	%		(3.2	)%
Total portfolio		2.2	%		.9	%

Realized Gains/Losses

The components of net realized gains (losses) were:

		Three Months Ended
		March 31,
(millions)		2004			2003
Gross Realized Gains:
Available-for-Sale:	Fixed maturities	$	47.5		$	44.7
	Preferred stocks		7.6			1.4
	Common equities		16.0			8.7
Short-term Investments			—			.1
			71.1			54.9
Gross Realized Losses:
Available-for-Sale:	Fixed maturities		1.1			7.4
	Preferred stocks		—			.1
	Common equities		10.4			50.5
Short-term Investments			.1			—
			11.6			58.0
Net Realized Gains (Losses) on Securities:
Available-for-Sale:	Fixed maturities		46.4			37.3
	Preferred stocks		7.6			1.3
	Common equities		5.6			(41.8	)
Short-term Investments			(.1	)		.1
		$	59.5		$	(3.1	)
Per Share		$	.18		$	(.01	)

During the first quarter 2004, gross realized gains were generated from fixed-maturity securities and from preferred and common stocks. Gains in the fixed-maturity securities and preferred stocks were the result of advantageous market conditions resulting from the low interest rate environment and were recognized across the categories of the portfolio. The largest gains were in corporate debt securities ($15.6 million), state and local government obligations ($12.0 million) and U.S. government obligations ($13.6 million). The gross realized gains and losses in the common stock portfolio were primarily attributable to rebalancing the equity-indexed portfolio.

Other-Than-Temporary Impairment (OTI)

From time to time, realized losses include write-downs of securities determined to have an other-than-temporary decline in market value. The Company routinely monitors its portfolio for pricing changes which might indicate potential impairments and performs detailed reviews of securities with unrealized losses based on predetermined criteria. In such cases, changes in market value are evaluated to determine the extent to which such changes are attributable to (i) fundamental factors specific to the issuer, such as financial conditions, business prospects or other factors or (ii) market-related factors, such as interest rates or equity market declines.

17

Fixed income and equity securities with declines attributable to issuer-specific fundamentals are reviewed to identify all available evidence, circumstances and influences to estimate the potential for and timing of recovery of the investment’s impairment. An other-than-temporary impairment loss is deemed to have occurred when the potential for and timing of recovery does not satisfy the guidance set forth in Staff Accounting Bulletin 59, “Noncurrent Marketable Equity Securities,” SFAS 115, “Accounting for Certain Investments in Debt and Equity Securities,” and other related guidance.

For fixed income investments with unrealized losses due to market or industry-related declines where the Company has the intent and ability to hold the investment for the period of time necessary to recover a significant portion of the investment’s original principal and interest obligation, declines are not deemed to qualify as other than temporary. The Company’s policy for common stocks with market-related declines is to recognize impairment losses on individual securities with losses that are not reasonably expected to be recovered under historical market conditions when the security has been in a loss position for three consecutive quarters.

When a security in the Company’s investment portfolio has a decline in market value that is deemed to be other than temporary, the Company reduces the book value of such security to its current market value, recognizing the decline as a realized loss in the income statement. All other unrealized gains or losses are reflected in shareholders’ equity. The write-down activity for the period ended March 31 is as follows:

	Three Months
			Write-downs		Write-downs
	Total		On Securities		On Securities
(millions)	Write-downs		Sold		Held at Period End
2004
Fixed income	$	—	$	—	$	—
Common equities		—		—		—
Total portfolio	$	—	$	—	$	—
2003
Fixed income	$	5.2	$	—	$	5.2
Common equities		32.7		2.3		30.4
Total portfolio	$	37.9	$	2.3	$	35.6

The following table stratifies the gross unrealized losses in the Company’s portfolio at March 31, 2004, by length of time in a loss position and magnitude of the loss as a percentage of book value. The individual amounts represent the additional OTI the Company could have recognized in the income statement if its policy for market-related declines was different than that stated above.

(millions)

	Total Gross		Percent Decline in Investment Value
	Unrealized
Total Portfolio	Losses		>15%		>25%		>35%			>45%
Unrealized Loss for 1 Quarter	$	5.3	$	.2	$	—	$	—		$	—
Unrealized Loss for 2 Quarters		3.9		—		—		—			—
Unrealized Loss for 3 Quarters		1.3		.3		—		—			—
Unrealized Loss for > 3 Quarters		14.7		3.7		3.6		.9	1		.9	1
	$	25.2	$	4.2	$	3.6	$	.9		$	.9

¹The $.9 million represents an unrealized loss position in our alternative portfolio, comprised primarily of private equity and mezzanine funds. Due to the nature of these funds, the Company employs a fundamental review to impairment analysis. At this time, there is no evidence of OTI as it relates to these funds.

For example, if the Company decided to write down all securities in an unrealized loss position in excess of three quarters where the securities decline in value exceeded 25%, the Company would recognize an additional $3.6 million of OTI losses in the income statement.

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The Company also reviews securities in unrealized loss positions in accordance with Emerging Issues Task Force 03-1, “The Meaning of Other-Than-Temporary Impairments.” At March 31, 2004, the gross unrealized loss of $25.2 million (market value of $1,166.9 million) includes $9.7 million of unrealized losses on securities in a loss position for greater than 12 months (market value of $97.2 million). The Company determined that none of these securities met the criteria for other-than-temporary impairment write-downs.

Since total unrealized losses are already a component of the Company’s shareholders’ equity, any recognition of additional OTI losses would have no effect on the Company’s comprehensive income or book value.

Repurchase Transactions

During the quarter, the Company entered into repurchase commitment transactions, whereby the Company loans Treasury or U.S. Government agency securities to accredited brokerage firms in exchange for cash equal to the fair market value of the securities. These internally managed transactions are typically overnight arrangements. The cash proceeds are invested in AA or higher financial institution paper with yields that exceed the Company’s interest obligation on the borrowed cash. The Company is able to borrow the cash at low rates since the securities loaned are in short supply. The Company’s interest rate exposure does not increase or decrease since the borrowing and investing periods match. During the three months ended March 31, 2004, the Company’s largest single outstanding balance of repurchase commitments was $.8 billion open for three business days, with an average daily balance of $.5 billion for the quarter. The Company had no open repurchase commitments at March 31, 2004 and 2003. The Company earned income of $.3 million and $.7 million on repurchase commitments during the three months ended March 31, 2004 and March 31, 2003, respectively.

     Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Statements in this quarterly report on Form 10-Q 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 accuracy and adequacy of the Company’s pricing and loss reserving methodologies; pricing competition and other initiatives by competitors; the Company’s ability to obtain regulatory approval for requested rate changes and the timing thereof; the effectiveness of the Company’s advertising campaigns; legislative and regulatory developments; the outcome of litigation pending or that may be filed against the Company; weather conditions (including the severity and frequency of storms, hurricanes, snowfalls, hail and winter conditions); changes in driving patterns and loss trends; acts of war and terrorist activities; court decisions and trends in litigation and health care and auto repair costs; and other matters described from time to time by the Company in releases and publications, and in 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 a major contingency. Reported results therefore may appear to be volatile in certain accounting periods.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

At March 31, 2004, the duration of the financial instruments subject to interest rate risk was 3.0 years, compared to 3.3 years at December 31, 2003. At March 31, 2004, the weighted average beta of the equity portfolio was .99, compared to .95 at December 31, 2003. Although components of the portfolio have changed, no material changes have occurred in the total market risk since reported in the Annual Report on Form 10-K for the year ended December 31, 2003.

Item 4. Controls and Procedures.

The Company, under the direction of the Chief Executive Officer and the Chief Financial Officer, has established disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

The Chief Executive Officer and the Chief Financial Officer reviewed and evaluated the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on that review and evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effectively serving the stated purposes as of the end of the period covered by this report.

In addition, there has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 2. Changes In Securities, Use Of Proceeds And Issuer Purchase Of Equity Securities

(e) Share Repurchases

ISSUER PURCHASES OF EQUITY SECURITIES
					Total Number of		Maximum Number of
					Shares Purchased as		Shares That May Yet
					Part of Publicly		Be Purchased Under
	Total Number of		Average Price Paid		Announced Plans or		the Plans or
Calendar Month	Shares Purchased		per Share		Programs		Programs
January		50,089	$	82.64		3,168,596		11,831,404
February		51,149		83.78		3,219,745		11,780,255
March		200,000		86.92		3,419,745		11,580,255
Total		301,238	$	85.68

In April 2003, the Board of Directors authorized the repurchase of up to 15,000,000 Common Shares. The Company may purchase its shares from time to time, in the open market or otherwise, when opportunities exist to buy at attractive prices or for purposes which are otherwise in the best interest of the Company.

Item 4. Submission of Matters to a Vote of Security Holders.

At the April 16, 2004 Annual Meeting of Shareholders of the Company, 193,493,573 Common Shares were represented in person or by proxy.

At the meeting, shareholders elected the three directors named below. The votes cast for each director were as follows:

Director	Term Expires		For		Withheld
Peter B. Lewis		2007		186,904,993		6,588,580
Glenn M. Renwick		2007		187,063,590		6,429,983
Donald B. Shackelford		2007		188,193,068		5,300,505

The following are the directors whose terms continued after the Meeting:

Director	Term Expires
Milton N. Allen		2005
Charles A. Davis		2005
Bernadine P. Healy, M.D.		2005
Jeffrey D. Kelly		2005
Stephen R. Hardis		2006
Philip A. Laskawy		2006
Norman S. Matthews		2006
Bradley T. Sheares, Ph.D.		2006

Shareholders approved a proposal to amend the Company’s Code of Regulations to allow the Board of Directors to authorize the Company to issue shares without issuing physical certificates. This proposal received 191,826,930 affirmative votes and 626,015 negative votes. There were 1,040,628 abstentions and no broker non-votes with respect to this proposal.

21

Shareholders approved The Progressive Corporation 2004 Executive Bonus Plan. This proposal received 187,659,239 affirmative votes and 4,616,612 negative votes. There were 1,217,722 abstentions and no broker non-votes with respect to this proposal.

Shareholders ratified the appointment of PricewaterhouseCoopers LLP as the Company’s independent auditor for 2004. This proposal received 188,417,109 affirmative votes and 4,126,707 negative votes. There were 949,757 abstentions and no broker non-votes with respect to this proposal.

Item 5. Other Information.

On March 15, 2004, the Company granted time-based restricted stock awards covering a total of 378,840 Common Shares to approximately 660 management employees, including 12 executive officers, under the Company’s equity compensation plans. These awards were based on an $84.15 closing price, as reported on the New York Stock Exchange, on the date of grant. As a consequence, these awards had an aggregate dollar value of approximately $31.9 million. The time-based restricted stock awards vest in equal installments on January 1 of 2007, 2008 and 2009, respectively. Certain executive officers and employees may elect to defer receipt of their time-based restricted stock awards under The Progressive Corporation Executive Deferred Compensation Plan.

Pursuant to SFAS 123, “Accounting for Stock-Based Compensation,” the Company recognizes compensation expense monthly on a pro-rata basis over the applicable vesting period. For time-based restricted stock awards that are not deferred, the total compensation is fixed based on the market value of the Company’s Common Stock at the date of grant. For the time-based restricted stock awards that are deferred, the total compensation fluctuates based on the current market value at the end of the reporting period. Forfeitures will be recognized as they occur regardless of whether the awards are deferred or not.

In addition, on March 15, 2004, the Company granted performance-based restricted stock awards covering a total of 101,360 Common Shares to approximately 45 senior managers pursuant to the Company’s 2003 Incentive Plan. These performance-based awards will vest upon the attainment of pre-established profitability and growth objectives (see below). If the objectives are not achieved by December 31, 2013, these awards will be forfeited. At the date of grant, these performance-based restricted stock awards had an aggregate dollar value of approximately $8.5 million.

Certain officers and employees may also elect to defer the receipt of their performance-based restricted stock awards. Performance-based awards are expensed monthly on a pro-rata basis over the estimated vesting period. This vesting period can fluctuate based on the estimate of when the performance conditions will be achieved. For all performance-based restricted stock awards that are not deferred, the total compensation expense will be based on the market value of the Company’s Common Shares at the date of grant. For deferred performance-based restricted stock awards, the total compensation cost will be based on the current market value of the Company’s Common Shares at the end of the reporting period. Forfeitures will be recognized as they occur for all performance-based awards.

Subject to the terms and conditions of the applicable equity compensation plan and restricted stock award agreement, these performance-based restricted stock awards will vest on the date of a news release reporting earnings for the Company and its subsidiaries for a fiscal month which is the final month of a period of twelve (12) consecutive fiscal months during which the Company and its subsidiaries have generated net earned premiums of $15 billion or more and achieved an average combined ratio of 97 or less.

22

The Company also granted time-based restricted stock awards covering a total of 12,242 Common Shares to the Company’s non-employee directors on April 16, 2004. These awards are scheduled to vest on March 16, 2005, and had an aggregate dollar value of approximately $1.1 million at the date of grant. The non-employee directors have the option to defer receipt of their restricted stock awards pursuant to The Progressive Corporation Directors Restricted Stock Deferral Plan. All directors’ restricted stock awards are expensed monthly on a pro-rata basis over the vesting period based on the market value of the Company’s Common Shares at the date of grant regardless of whether the receipt of the award is deferred.

Dividends will be paid on both the time-based and performance-based restricted stock awards when declared by the Company’s Board of Directors. In addition, the participants have voting rights during the vesting period with respect to the Common Shares issued pursuant to all of the restricted stock awards granted .

The following table discloses the restricted stock awards granted during the first quarter 2004 to each of the named executive officers identified in the Company’s 2004 Proxy Statement dated March 11, 2004:

	Time-Based Award				Performance-Based Award
Name and Principal Position	Shares		Value1		Shares		Value1
Glenn M. Renwick President and Chief Executive Officer		44,565	$	3,750,145		44,565	$	3,750,145
W. Thomas Forrester Vice President and Chief Financial Officer		5,823		490,005		6,410		539,402
Robert T. Williams Group President of the Agency Business		5,289		445,069		5,425		456,514
Alan R. Bauer Group President of the Direct Business		4,932		415,028		4,930		414,860
Brian J. Passell Group President of Claims		4,635		390,035		4,685		394,243

(1) Based on the market value at the date of grant of $84.15 and without discount for risk of forfeiture.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits:

See exhibit index on page 25.

(b) Reports on Form 8-K during the quarter ended March 31, 2004:

On January 21, 2004, the Company filed a Current Report on Form 8-K containing financial results of the Company for the three months and twelve months ended December 31, 2003.

On February 13, 2004, the Company filed a Current Report on Form 8-K containing financial results of the Company for the month of January 2004.

On March 12, 2004, the Company filed a Current Report on Form 8-K, containing financial results of the Company for the month of February 2004.

23

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 thereunto duly authorized.

	THE PROGRESSIVE CORPORATION (Registrant)
Date: May 10, 2004	BY:	/s/ W. Thomas Forrester
		W. Thomas Forrester
		Vice President and Chief Financial Officer

24

EXHIBIT INDEX

					If Incorporated by
					Reference,
					Documents with
Exhibit No. Under	Form 10-Q				Which Exhibit was
Reg. S-K,	Exhibit				Previously Filed
Item 601	Number			Description of Exhibit	with SEC
(3)(ii)		3	(A)	Code of Regulations of The Progressive Corporation (as amended April 16, 2004)	Filed herewith
(10)		10	(A)	The Progressive Corporation 2003 Incentive Plan Restricted Stock Award Agreement (Time-Based Award)	Filed herewith
(10)		10	(B)	The Progressive Corporation 2003 Incentive Plan Restricted Stock Award Agreement (Performance-Based Award)	Filed herewith
(10)		10	(C)	The Progressive Corporation 2003 Directors Equity Incentive Plan Restricted Stock Award Agreement	Filed herewith
(12)		12		Computation of Ratio of Earnings to Fixed Charges	Filed herewith
(31)		31	(A)	Certification of the Principal Executive Officer, Glenn M. Renwick, of The Progressive Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
(31)		31	(B)	Certification of the Principal Financial Officer, W. Thomas Forrester, of The Progressive Corporation, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
(32)		32	(A)	Certification of the Principal Executive Officer, Glenn M. Renwick, of The Progressive Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
(32)		32	(B)	Certification of the Principal Financial Officer, W. Thomas Forrester, of The Progressive Corporation, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

25

EX-3.A

Exhibit No. 3(A)

                               CODE OF REGULATIONS

                                       OF

                           THE PROGRESSIVE CORPORATION
                           (as amended April 16, 2004)

                                    ARTICLE I

                            Meetings of Shareholders

            Section 1. Annual Meetings. The annual meeting of shareholders shall
be held at such time and on such date in the month of April of each year
(beginning in 1972) as may be fixed by the board of directors and stated in the
notice of the meeting, for the election of directors the consideration of
reports to be laid before such meeting and the transaction of such other
business as may properly come before the meeting.

            Section 2. Special Meetings. Special meetings of the shareholders
shall be called upon the written request of the president, the directors by
action at a meeting, a majority of the directors acting without a meeting, or of
the holders of shares entitling them to exercise twenty-five percent (25%) of
the voting power of the corporation entitled to vote thereat. Calls for such
meetings shall specify the time, place, and purposes thereof. No business other
than that specified in the call shall be considered at any special meeting.

            Section 3. Notices of Meetings. Unless waived, written notice of
each annual or special meeting stating the time, place, and the purposes
thereof, and the means, if any, by which shareholders can be present and vote at
the meeting through the use of communications equipment, shall be given by
personal delivery, by mail, by overnight delivery service or by any other means
of communication authorized by the shareholder to whom the notice is given, to
each shareholder of record entitled to vote at or entitled to notice of the
meeting, not more than sixty (60) days nor less than seven (7) days before any
such meeting. If mailed or sent by overnight delivery service, such notice shall
be directed to the shareholder at his address as the same appears upon the
records of the corporation. If sent by any other means of communication
authorized by the shareholder, the notice shall be sent to the address furnished
by the shareholder for those transmissions. Any shareholder, either before or
after any meeting, may waive any notice required to be given by law or under
these Regulations.

            Section 4. Place of Meetings. Meetings of shareholders shall be held
at the principal office of the corporation unless the board of directors
determines that a meeting shall be held at some other place within or without
the State of Ohio and causes the notice thereof to so state. Notwithstanding the
foregoing, the board of directors may determine that a meeting of shareholders
shall not be held at any physical place, but instead may be held solely by means
of communications equipment as authorized in the following paragraph.

                                       1



         If authorized by the board of directors, the shareholders and
proxyholders who are not physically present at a meeting of shareholders may
attend a meeting of shareholders by use of communications equipment that enables
the shareholder or proxyholder an opportunity to participate in the meeting and
to vote on matters submitted to the shareholders, including an opportunity to
read or hear the proceedings of the meeting and to speak or otherwise
participate in the proceedings contemporaneously with those physically present.
Any shareholder using communications equipment will be deemed present in person
at the meeting, whether the meeting is to be held at a designated place or
solely by means of communications equipment. The directors may adopt guidelines
and procedures for the use of communications equipment in connection with a
meeting of shareholders to permit the corporation to verify that a person is a
shareholder or proxyholder and to maintain a record of any vote or other action.

         Section 5. Quorum. The holders of shares entitling them to exercise a
majority of the voting power of the corporation entitled to vote at any meeting,
present in person or by proxy, shall constitute a quorum for the transaction of
business to be considered at such meeting; provided, however, that no action
required by law or by the Articles of Incorporation or these Regulations to be
authorized or taken by the holders of a designated proportion of the shares of
any particular class or of each class may be authorized or taken by a lesser
proportion. The holders of a majority of the voting shares represented at a
meeting, whether or not a quorum is present, may adjourn such meeting from time
to time, until a quorum shall be present.

         Section 6. Record Date. The board of directors may fix a record date
for any lawful purpose, including, without limiting the generality of the
foregoing, the determination of shareholders entitled to (i) receive notice of
or to vote at any meeting, (ii) receive payment of any dividend or distribution,
(iii) receive or exercise rights of purchase of or subscription for, or exchange
or conversion of, shares or other securities, subject to any contract right with
respect thereto, or (iv) participate in the execution of written consents,
waivers or releases. Said record date, which shall not be a date earlier than
the date on which the record date is fixed, shall not be more than sixty (60)
days preceding the date of such meeting, the date fixed for the payment of any
dividend or distribution or the date fixed for the receipt or the exercise of
rights, as the case may be.

         If a record date shall not be fixed, the record date for the
determination of shareholders who are entitled to notice of, or who are entitled
to vote at, a meeting of shareholders, shall be the close of business on the
date next preceding the day on which notice is given, or the close of business
on the date next preceding the day on which the meeting is held, as the case may
be.

         Section 7. Proxies. A person who is entitled to attend a shareholders'
meeting, to vote thereat, or to execute consents, waivers or releases, may be
represented at such meeting or vote thereat, and execute consents, waivers and
releases, and exercise any of his other rights, by proxy or proxies appointed by
a writing signed by such person or appointed by a verifiable communication
authorized by the person.

                                        2



                                   ARTICLE II

                                    Directors

         Section 1. Number and Classification of Directors. The number of
directors of the corporation, none of whom need to be a shareholder or resident
of the State of Ohio, shall be ten, and such directors shall be divided into
three classes as nearly equal in number as possible, to be known as Class I,
Class II and Class III. The classes shall be elected to staggered terms. The
shareholders, acting by the affirmative vote of the holders of record of shares
representing 75% of the voting power of the corporation on such proposal, may,
from time to time, increase or decrease the number of directors, but in no case
shall the number of directors be fewer than five or more than twelve nor shall
any decrease in the number of directors shorten the term of any director then in
office. In case of any increase in the number of directors, the directors then
in office may select the class or classes to which the additional directors
shall be assigned, provided that the directors shall be distributed among the
several classes as nearly equally as possible.

         Section 2. Election of Directors. Directors shall be elected at the
annual meeting of shareholders, but when the annual meeting is not held or
directors are not elected thereat, they may be elected at a special meeting
called and held for that purpose. Such election shall be by ballot whenever
requested by any shareholder entitled to vote at such election; but, unless such
request is made, the election may be conducted in any manner approved at such
meeting.

         At each meeting of shareholders for the election of directors, the
persons receiving the greatest number of votes shall be directors.

         Section 3. Term of Office. The term of office for each director shall
be three years and the members of one class of directors shall be elected
annually to serve for such term; except that, initially or whenever necessary, a
director may be elected for a shorter term in order to provide for a proper
rotation of directors. At the 1997 Annual Meeting of Shareholders, Class I
directors shall be elected for a term expiring at the 1998 Annual Meeting of
Shareholders, Class II directors shall be elected for a term expiring at the
1999 Annual Meeting of Shareholders and Class III directors shall be elected for
a term expiring at the 2000 Annual Meeting of Shareholders. Each director shall
hold office until the annual meeting of shareholders coinciding with the
termination of the term of the class of directors to which he or she was elected
and until his or her successor shall be elected and qualified or until his or
her earlier resignation, removal from office or death.

         Section 4. Removal. All directors, or all directors of a particular
class, or any individual director may be removed from office, without assigning
any cause, by the affirmative vote of the holders of record of shares
representing 75% of the voting power of the corporation with respect to the
election of directors, provided that unless all the directors, or all the
directors of a particular class, are removed, no individual director shall be
removed if the votes of a sufficient number of shares are cast against his or
her removal which, if cumulatively voted at an election of all the directors, or
all the directors of a particular class, as the case may be, would be sufficient
to elect at least one director. In case of any such removal, a new director may
be elected at the same meeting for the unexpired term of each director removed.

                                       3



         Section 5. Vacancies. Vacancies in the board of directors may be filled
for the remainder of the unexpired term by a majority vote of the remaining
directors. The directors appointed to fill such vacancies shall be assigned to
such class or classes as the directors then in office shall determine, provided
that the directors shall be distributed among the several classes as nearly
equally as possible. Any director appointed to fill a vacancy in the board shall
serve until the expiration of the term of the class of directors to which he or
she has been appointed and until his or her successor shall be elected and
qualified.

         Section 6. Quorum and Transaction of Business. A majority of the whole
authorized number of directors shall constitute a quorum for the transaction of
business, except that a majority of the directors in office shall constitute a
quorum for filling a vacancy on the board. Whenever less than a quorum is
present at the time and place appointed for any meeting of the board, a majority
of those present may adjourn the meeting from time to time, until a quorum shall
be present. The act of a majority of the directors present at a meeting at which
a quorum is present shall be the act of the board.

         Section 7. Annual Meeting. Annual meetings of the board of directors
shall be held immediately following annual meetings of the shareholders, or as
soon thereafter as is practicable. If no annual meeting of the shareholders is
held, or if directors are not elected thereat, then the annual meeting of the
board of directors shall be held immediately following any special meeting of
the shareholders at which directors are elected, or as soon thereafter as is
practicable. If such annual meeting of directors is held immediately following a
meeting of the shareholders, it shall be held at the same place at which such
meeting of shareholders was held.

         Section 8. Regular Meetings. Regular meetings of the board of directors
shall be held at such times and places, within or without the State of Ohio, as
the board of directors may, by resolution or by-law, from time to time,
determine. The secretary shall give notice of each such resolution or bylaw to
any director who was not present at the time the same was adopted, but no
further notice of such regular meeting need be given.

         Section 9. Special Meetings. Special meetings of the board of directors
may be called by the chairman of the board or the president to be held at such
times and places within or without the State of Ohio as the person calling such
meeting shall specify. In addition, any two members of the board of directors
may call special meetings of the board of directors to be held at the principal
office of the corporation at such times as they may specify.

         Section 10. Notice of Annual or Special Meetings. Notice of the time
and place of each annual or special meeting shall be given to each director by
the secretary or by the person or persons calling such meeting. Such notice need
not specify the purpose or purposes of the meeting and may be given in any
manner or method and at such time so that the director receiving it may have
reasonable opportunity to attend the meeting. Such notice shall, in all events,
be deemed to have been properly and duly given if mailed at least forty-eight
(48) hours prior to the meeting and directed to the residence of each director
as shown upon the secretary's records. The giving of notice shall be deemed to
have been waived by any director who shall attend and participate in such
meeting and may be waived, in a writing, by any director either before or after
such meeting.

                                       4



         Section 11. Compensation. The directors, as such, shall be entitled to
receive such reasonable compensation for their services as may be fixed from
time to time by resolution of the board, and expenses of attendance, if any, may
be allowed for attendance of each annual, regular or special meeting of the
board. Nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor. Members of the executive committee or of any standing or special
committee may by resolution of the board be allowed such compensation for their
services as the board may deem reasonable, and additional compensation may be
allowed to directors for special services rendered.

         Section 12. By-laws. For the government of its actions, the board of
directors may adopt by-laws consistent with the Articles of Incorporation and
these Regulations.

         Section 13. Notification of Nominations. Subject to the rights of the
holders of any class or series of stock of the corporation having a preference
over the Common Shares as to dividends or upon liquidation to elect directors
under specified circumstances, nominations for the election of directors may be
made only by the Board of Directors or a committee of the Board of Directors or,
subject to this Section 13, by any shareholder of record entitled to vote in the
election of directors generally. A shareholder of record entitled to vote in the
election of directors generally may nominate one or more persons for election as
directors at a meeting of shareholders only if written notice of such
shareholder's intent to make such nomination or nominations has been given,
either by personal delivery or by United States mail, postage prepaid, to the
Secretary of the corporation and has been received by the Secretary of the
corporation on or before the following dates, as applicable: (i) with respect to
an election to be held at an annual meeting of shareholders, 60 days in advance
of such meeting, or (ii) with respect to an election to be held at a special
meeting of shareholders, the close of business on the tenth day following the
date on which notice of such meeting is first given to shareholders. For
purposes of this Section 13, notice shall be deemed to be first given to
shareholders when disclosure of such date is first made in a press release
reported by the Dow Jones News Services, Associated Press or comparable national
news service or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Securities Exchange Act of 1934, as amended.

         Each such notice shall set forth:

         (a)      the name and address of the shareholder who intends to make
the nomination or nominations;

         (b)      a representation that the shareholder is a holder of record of
shares of the corporation entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons specified
in the notice;

         (c)      the name, address and principal occupation or employment of
each person to be so nominated;

         (d)      a description of all arrangements or understandings between
the shareholder and

                                       5



each nominee and any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be made by the
shareholder; and

         (e)      such other information regarding each nominee proposed by such
shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, as then
in effect, had the nominee been nominated, or intended to be nominated, by the
Board of Directors.

         To be effective, each notice of intent to make a nomination given
hereunder must be accompanied by the written consent of each such nominee to
serve as a director of the corporation if elected.

         The presiding officer at the meeting may refuse to acknowledge the
nomination of any person or persons not made in compliance with the provisions
hereof and may declare at such meeting that any such nomination was not properly
brought before the meeting and shall not be considered.

                                   ARTICLE III

                                   Committees

         Section 1. Executive Committee. The board of directors may from time to
time, by resolution passed by a majority of the whole board, create an executive
committee of three or more directors, the members of which shall be elected by
the board of directors to serve during the pleasure of the board. If the board
of directors does not designate a chairman of the executive committee, the
executive committee shall elect a chairman from its own number. Except as
otherwise provided herein and in the resolution creating an executive committee,
such committee shall, during the intervals between the meetings of the board of
directors, possess and may exercise all of the powers of the board of directors
in the management of the business and affairs of the corporation, other than
that of filling vacancies among the directors or in any committee of the
directors. The executive committee shall keep full records and accounts of its
proceedings and transactions. All action by the executive committee shall be
reported to the board of directors at its meeting next succeeding such action
and shall be subject to control, revision and alteration by the board of
directors, provided that no rights of third persons shall be prejudicially
affected thereby. Vacancies in the executive committee shall be filled by the
directors, and the directors may appoint one or more directors as alternate
members of the committee who may take the place of any absent member or members
at any meeting.

         Section 2. Meetings of Executive Committee. Subject to the provisions
of these Regulations, the executive committee shall fix its own rules of
procedure and shall meet as provided by such rules or by resolutions of the
board of directors, and it shall also meet at the call of the president, the
chairman of the executive committee or any two members of the committee. Unless
otherwise provided by such rules or by such resolutions, the provisions of
Section 10 of Article II relating to the notice required to be given of meetings
of the board of directors shall also apply to meetings of the executive
committee. A majority of the executive committee shall be

                                       6



necessary to constitute a quorum. The executive committee may act in a writing,
or by telephone with written confirmation, without a meeting, but no such action
of the executive committee shall be effective unless concurred in by all members
of the committee.

         Section 3. Other Committees. The board of directors may by resolution
provide for such other standing or special committees as it deems desirable, and
discontinue the same at pleasure. Each such committee shall have such powers and
perform such duties, not inconsistent with law, as may be delegated to it by the
board of directors. The provisions of Section 1 and Section 2 of this Article
shall govern the appointment and action of such committees so far as consistent,
unless otherwise provided by the board of directors. Vacancies in such
committees shall be filled by the board of directors or as the board of
directors may provide.

                                   ARTICLE IV

                                    Officers

         Section 1. General Provisions. The board of directors shall elect a
president, such number of vice presidents as the board may from time to time
determine, a secretary and a treasurer and, in its discretion, a chairman of the
board of directors. The board of directors may from time to time create such
offices and appoint such other officers, subordinate officers and assistant
officers as it may determine. The president, any vice president who succeeds to
the office of the president, and the chairman of the board shall be, but the
other officers need not be, chosen from among the members of the board of
directors. Any two of such offices, other than that of president and vice
president, may be held by the same person, but no officer shall execute,
acknowledge or verify any instrument in more than one capacity.

         Section 2. Term of Office. The officers of the corporation shall hold
office during the pleasure of the board of directors, and, unless sooner removed
by the board of directors, until the organization meeting of the board of
directors following the date of their election and until their successors are
chosen and qualified. The board of directors may remove any officer at any time,
with or without cause. A vacancy in any office, however created, shall be filled
by the board of directors.

                                    ARTICLE V

                               Duties of Officers

         Section 1. Chairman of the Board. The chairman of the board, if one be
elected, shall preside at all meetings of the board of directors and shall have
such other powers and duties as may be prescribed by the board of directors.

         Section 2. President. The president shall be the chief executive
officer of the corporation and shall exercise supervision over the business of
the corporation and over its several officers, subject, however, to the control
of the board of directors. He shall preside at all meetings of

                                       7



shareholders, and, in the absence of the chairman of the board, or if a chairman
of the board shall not have been elected, shall also preside at meetings of the
board of directors. He shall have authority to sign all certificates for shares
and all deeds, mortgages, bonds, agreements, notes, and other instruments
requiring his signature; and shall have all the powers and duties prescribed by
Chapter 1701 of the Revised Code of Ohio and such others as the board of
directors may from time to time assign to him.

         Section 3. Vice Presidents. The vice presidents shall have such powers
and duties as may from time to time be assigned to them by the board of
directors or the president. At the request of the president, or in the case of
his absence or disability, the vice president designated by the president (or in
the absence of such designation, the vice president designated by the board)
shall perform all the duties of the president and, when so acting, shall have
all the powers of the president. The authority of vice presidents to sign in the
name of the corporation certificates for shares and deeds, mortgages, bonds,
agreements, notes and other instruments shall be coordinate with like authority
of the president.

         Section 4. Secretary. The secretary shall keep minutes of all the
proceedings of the shareholders and board of directors and shall make proper
record of the same, which shall be attested by him; shall have authority to sign
all certificates for shares and all deeds, mortgages, bonds, agreements, notes,
and other instruments executed by the corporation requiring his signature; shall
give notice of meetings of shareholders and directors; shall produce on request
at each meeting of shareholders a certified list of shareholders arranged in
alphabetical order; shall keep such books as may be required by the board of
directors; and shall have such other powers and duties as may from time to time
be assigned to him by the board of directors or the president.

         Section 5. Treasurer. The treasurer shall have general supervision of
all finances; he shall receive and have in charge all money, bills, notes,
deeds, leases, mortgages and similar property belonging to the corporation, and
shall do with the same as may from time to time be required by the board of
directors. He shall cause to be kept adequate and correct accounts of the
business transactions of the corporation, including accounts of its assets,
liabilities, receipts, disbursements, gains, losses, stated capital and shares,
together with such other accounts as may be required, and upon the expiration of
his term of office shall turn over to his successor or to the board of directors
all property, books, papers and money of the corporation in his hands; and shall
have such other powers and duties as may from time to time be assigned to him by
the board of directors or the president.

         Section 6. Assistant and Subordinate Officers. The board of directors
may appoint such assistant and subordinate officers as it may deem desirable.
Each such officer shall hold office during the pleasure of the board of
directors, and perform such duties as the board of directors or the president
may prescribe.

         The board of directors may, from time to time, authorize any officer to
appoint and remove subordinate officers, to prescribe their authority and
duties, and to fix their compensation.

         Section 7. Duties of Officers May be Delegated. In the absence of any
officer of the corporation, or for any other reason the board of directors may
deem sufficient, the board of

                                       8



directors may delegate, for the time being, the powers or duties, or any of
them, of such officers to any other officer or to any director.

                                   ARTICLE VI

                          Indemnification and Insurance

         Section 1. Indemnification. The corporation shall indemnify each
director, officer and employee and each former director, officer and employee of
the corporation, and each person who is serving or has served at its request as
a director, officer or employee of another corporation, against expenses,
judgements, decrees, fines, penalties or amounts paid in settlement in
connection with the defense of any past, pending or threatened action, suit or
proceeding, criminal or civil, to which he was, is or may be made a party by
reason of being or having been such director, officer or employee, provided a
determination is made (i) by the directors of the corporation acting at a
meeting at which a quorum consisting of directors who neither were nor are
parties to or threatened with any such action, suit or proceeding is present, or
(ii) by the shareholders of the corporation at a meeting held for such purpose
by the affirmative vote of the holders of shares entitling them to exercise a
majority of the voting power of the corporation on such proposal or without a
meeting by the written consent of the holders of shares entitling them to
exercise two-thirds of the voting power on such proposal, that (a) such
director, officer or employee was not, and has not been adjudicated to have
been, negligent or guilty of misconduct in the performance of his duty to the
corporation of which he is or was a director, officer or employee, (b) he acted
in good faith in what he reasonably believed to be the best interest of such
corporation, and (c) in any matter the subject of a criminal action, suit or
proceeding, he had no reasonable cause to believe that his conduct was unlawful.

         Expenses of each person indemnified hereunder incurred in defending a
civil, criminal, administrative or investigative action, suit or proceeding
(including all appeals) or threat thereof, may be paid by the corporation in
advance of the final disposition of such action, suit or proceeding as
authorized by the board of directors, whether a disinterested quorum exists or
not, upon receipt of an undertaking by or on behalf of the director, officer or
employee to repay such expenses unless it shall ultimately be determined that he
is entitled to be indemnified by the corporation.

         The foregoing rights of indemnification shall not be deemed exclusive
of, or in any way to limit, any other rights to which any person indemnified may
be, or may become, entitled apart from the provisions of this Article VI.

         Section 2. Liability Insurance. The corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or designated agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or designated agent
of another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of this Article or of Chapter 1701 of the Ohio Revised Code.

                                       9



                                   ARTICLE VII

                 Certificates for Shares; Uncertificated Shares

         Section 1. Form and Execution. Except as provided in Section 2 hereof,
certificates for shares, certifying the number of full-paid shares owned, shall
be issued to each shareholder in such form as shall be approved by the board of
directors. Such certificates shall be signed by the president or a vice
president and by the secretary or an assistant secretary or the treasurer or an
assistant treasurer; provided however, that if such certificates are
countersigned by a transfer agent and/or registrar the signatures of any of said
officers and the seal of the corporation upon such certificates may be
facsimiles, which are engraved, stamped or printed thereon. If any officer or
officers, who shall have signed, or whose facsimile signature shall have been
used, printed, engraved or stamped on any certificate or certificates for
shares, shall cease to be such officer or officers, because of death,
resignation or otherwise, before such certificate or certificates shall have
been delivered by the corporation, such certificate or certificates, if
authenticated by the endorsement thereon of the signature of a transfer agent or
registrar, shall nevertheless be conclusively deemed to have been adopted by the
corporation by the use and delivery thereof and shall be as effective in all
respects as though signed by a duly elected, qualified and authorized officer or
officers, and as though the person or persons who signed such certificate or
certificates, or whose facsimile signature or signatures shall have been used
thereon, had not ceased to be an officer or officers of the corporation.

         Section 2. Uncertificated Shares. The board of directors, subject to
the immediately succeeding paragraph, may provide by resolution that some or all
of any or all classes and series of shares of the corporation shall be
uncertificated shares, provided that the resolution shall not apply to shares
represented by a certificate until the certificate is surrendered to the
corporation and the resolution shall not apply to a certificated security issued
in exchange for an uncertificated security. Within a reasonable time after the
issuance or transfer of uncertificated shares, the corporation shall send to the
registered owner of the shares a written notice containing the information
required to be set forth or stated on share certificates in accordance with all
applicable laws. Except as expressly provided by law, the rights and obligations
of the holders of uncertificated shares and the rights and obligations of the
holders of certificates representing shares of the same class and series shall
be identical.

         Notwithstanding the foregoing provisions of this Section 2, a
shareholder of record shall at all times have the right to receive one or more
certificates for some or all of the shares held of record by such shareholder in
accordance with Section 1 hereof by making a written request therefor to the
corporation or any transfer agent for the applicable class of shares,
accompanied by such assurances as the corporation or such transfer agent may
require as to the genuineness of such request; provided, however, that
shareholders holding shares of the corporation under one or more of the
corporation's benefit plans for officers, directors and/or employees shall have
no such right to have certificates issued unless such a right is provided for
under the applicable benefit plan or otherwise ordered by the board of directors
or a committee thereof.

                                       10



         Section 3. Registration of Transfer. Any certificate for shares of the
corporation shall be transferable in person or by attorney upon the surrender
thereof to the corporation or any transfer agent for the class of shares
represented by the certificate surrendered of a certificate, properly endorsed
for transfer or accompanied by a duly endorsed stock power, together with such
assurances as the corporation or such transfer agent may require as to the
genuineness and effectiveness of each necessary endorsement or executed stock
power. Any uncertificated shares of the corporation shall be transferable in
person or by attorney upon written request in form and substance acceptable to
the corporation or any transfer agent for the applicable class of shares,
accompanied by a duly endorsed stock power and/or such other assurances as the
corporation or such transfer agent may require as to the genuineness and
effectiveness thereof.

         Section 4. Lost, Destroyed or Stolen Certificates. Subject to the
provisions of Section 2 hereof, a new share certificate or certificates may be
issued in place of any certificate theretofore issued by the corporation which
is alleged to have been lost, destroyed or wrongfully taken upon (i) the
execution and delivery to the corporation by the person claiming the certificate
to have been lost, destroyed or wrongfully taken of an affidavit of that fact,
specifying whether or not, at the time of such alleged loss, destruction or
taking, the certificate was endorsed, and (ii) the furnishing to the corporation
of indemnity and other assurances satisfactory to the corporation and to all
transfer agents and registrars of the class of shares represented by the
certificate against any and all losses, damages, costs, expenses or liabilities
to which they or any of them may be subjected by reason of the issue and
delivery of such new certificate or certificates or in respect of the original
certificate.

         Section 5. Registered Shareholders. A person in whose name shares are
of record on the books of the corporation, whether such shares are evidenced by
a certificate or are uncertificated, shall conclusively be deemed the
unqualified owner and holder thereof for all purposes and to have capacity to
exercise all rights of ownership. Neither the corporation nor any transfer agent
of the corporation shall be bound to recognize any equitable interest in or
claim to such shares on the part of any other person, whether disclosed upon any
such certificate or otherwise, nor shall they be obliged to see to the execution
of any trust or obligation.

                                  ARTICLE VIII

                                   Fiscal Year

         The fiscal year of the corporation shall end on the 31st day of
December in each year, or on such other date as may be fixed from time to time
by the board of directors.

                                   ARTICLE IX

                                      Seal

         The board of directors may provide a suitable seal containing the name
of the corporation. If deemed advisable by the board of directors, duplicate
seals may be provided and kept for the purposes of the corporation.

                                       11



                                    ARTICLE X

                                   Amendments

         These Regulations may be amended or repealed at any meeting of
shareholders called for that purpose by the affirmative vote of the holders of
record of shares entitling them to exercise a majority of the voting power of
the corporation with respect to such proposal, except that the affirmative vote
of the holders of record of shares representing 75% of the voting power of the
corporation with respect to any such proposal shall be required to amend, alter,
change or repeal Sections 1, 3, 4, 5 or 13 of Article II or this Article X.

                                       12

EX-10.A

Exhibit No. 10(A)

                           THE PROGRESSIVE CORPORATION
                               2003 INCENTIVE PLAN
                        RESTRICTED STOCK AWARD AGREEMENT
                       ( TIME-BASED AWARD)

         This Agreement ("Agreement") is made this  by and between
 ("Participant") and The Progressive Corporation (the
"Company").

         1.       Award of Restricted Stock. The Company hereby grants to
Participant an award (the "Award") of restricted stock (the "Restricted Stock")
consisting of <# of Shares> of the Company's Common Shares, $1 Par Value
("Common Shares"), pursuant and subject to The Progressive Corporation 2003
Incentive Plan (the "Plan").

         2.       Condition to Participant's Rights under this Agreement. This
Agreement shall not become effective, and Participant shall have no rights with
respect to the Award or the Restricted Stock, unless and until the Participant
has fully executed this Agreement and delivered it to the Company (in the
Company's discretion, such execution and delivery may be accomplished through
electronic means).

         3.       Restrictions; Vesting. The Restricted Stock shall be subject
to the restrictions and other terms and conditions set forth in the Plan, which
are hereby incorporated herein by reference, and in this Agreement. Subject to
the terms and conditions of the Plan and this Agreement, Participant's rights in
and to the shares of Restricted Stock shall vest according to the following
schedule:

         a.       One-third of the shares of Restricted Stock shall vest on
.

         b.       One-third of the shares of Restricted Stock shall vest on
.

         c.       The final one-third of the shares of Restricted Stock shall
vest on .

         The shares of Restricted Stock awarded under this Agreement shall vest
in accordance with the schedule set forth above unless, prior to the vesting
date set forth above, the Award and the applicable shares of Restricted Stock
are forfeited or have become subject to accelerated vesting under the terms and
conditions of the Plan. Until the shares of Restricted Stock vest, Participant
shall not sell, transfer, pledge, assign or otherwise encumber such shares of
Restricted Stock or any interest therein.

         4.       Manner In Which Shares Will Be Held. Subject to the provisions
of this Paragraph 4, stock certificates evidencing the shares of Restricted
Stock awarded under this Agreement shall be registered in the name of
Participant and shall be delivered to and held in custody by the Company, or its
designee, until the restrictions thereon shall have lapsed or any conditions to
the vesting of such Award, or a portion thereof, have been satisfied. Such
certificates shall bear an appropriate legend referring to the terms, conditions
and restrictions applicable to such Award.

         In the discretion of the Company, any or all shares of Restricted Stock
awarded to Participant hereunder may be issued in, or after issuance may be
transferred to, book-entry form and held by the Company, or its designee, in
such form. In such event, no stock certificates evidencing such shares will be
held, the applicable restrictions will be noted in the records of the Company's
transfer agent and in the book-entry system.

         Participant hereby irrevocably authorizes the Company and the
Compensation Committee of the Board of Directors (the "Committee") to take any
and all appropriate action with respect to the evidence

                                      -1-


of Participant's Restricted Stock, including, without limitation, issuing
certificates for such Restricted Stock, issuing such Restricted Stock in
book-entry form, transferring any previously issued certificates into book-entry
form, transferring any Restricted Stock (whether held in certificate or
book-entry form) into unrestricted form at vesting, or canceling any Restricted
Stock (whether held in certificate or book-entry form) as and when required by
this Agreement or the Plan, or undertaking any other action which may be done
lawfully by the Company or the Committee in the administration of the Plan and
this Agreement. Participant specifically acknowledges and agrees that such
certificates and/or book-entry evidence of Participant's Restricted Stock may be
transferred or cancelled pursuant to this Agreement and the Plan without
requiring that a Stock Power be executed and delivered by the Participant or
requiring any other action on the part of Participant, and Participant
authorizes the Company to undertake each such action without such Stock Powers.

         Participant hereby further irrevocably appoints the Secretary of the
Company and any employee of the Company who may be designated by the Secretary,
and each of them, my true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for me and in my name, place and stead, in
any and all capacities, to execute and deliver each and every document
(including, without limitation, any such Stock Powers) which may be necessary or
appropriate in connection with the issuance, transfer, cancellation or other
action taken in connection with the Restricted Stock awarded hereunder pursuant
to this Agreement or the Plan. The rights granted by Participant under this
paragraph shall automatically expire as to shares of Restricted Stock awarded
hereunder upon the transfer of such shares into unrestricted form at vesting or
upon the cancellation of such shares at any time, as applicable, pursuant to
this Agreement and the Plan.

         5.       Rights of Shareholder. Except as otherwise provided in this
Agreement or the Plan, Participant shall have, with respect to the shares of
Restricted Stock awarded hereunder, all of the rights of a shareholder of the
Company, including the right to vote the shares and the right to receive any
dividends as declared by the Company's Board of Directors.

         6.       Shares Non-Transferable. No shares of Restricted Stock shall
be transferable by Participant other than by will or by the laws of descent and
distribution. In the event any Award is transferred or assigned pursuant to a
court order, such transfer or assignment shall be without liability to the
Company, and the Company shall have the right to offset against such Award any
expenses (including attorneys' fees) incurred by the Company in connection with
such transfer or assignment.

         7.       Executive Deferred Compensation Plan. If Participant is
eligible, and has made the appropriate election, to defer the Restricted Stock
awarded hereunder into The Progressive Corporation Executive Deferred
Compensation Plan (the "Deferral Plan"), upon vesting, the shares of Restricted
Stock awarded hereunder shall be considered to be deferred pursuant to the
Deferral Plan, subject to and in accordance with the terms and conditions of the
Deferral Plan and any deferral agreement entered into by Participant thereunder.

         8.       Termination of Employment. Except as otherwise provided in the
Plan or as determined by the Committee, if Participant's employment with the
Company is terminated for any reason other than death, Disability or Qualified
Retirement, all Restricted Stock held by Participant which is unvested or
subject to restriction at the time of such termination shall be automatically
forfeited.

         9.       Taxes. No later than the date as of which an amount first
becomes includable in the gross income of Participant for federal income tax
purposes with respect to shares of Restricted Stock awarded under this
Agreement, Participant shall pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of, all federal, state or
local taxes or other items of any kind required by law to be withheld with
respect to such amount. The obligations of the Company under the Plan shall

                                      -2-



be conditional on such payment or arrangements and the Company and its
Subsidiaries and Affiliates, to the extent permitted by law, shall have the
right to deduct any such taxes from any payment of any kind otherwise due to
Participant. At vesting, shares of Restricted Stock awarded hereunder will be
valued at Fair Market Value, as defined in the Plan.

         Participant must satisfy the minimum statutory tax withholding
obligations resulting from the vesting of shares of Restricted Stock ("Minimum
Withholding Obligations") either (a) by surrendering to Company shares of
Restricted Stock which are then vesting in an amount sufficient to satisfy the
Minimum Withholding Obligations, (b) by surrendering to the Company other
unrestricted Common Shares of the Company owned by Participant in an amount
sufficient to satisfy the Minimum Withholding Obligations, or (c) by paying the
appropriate amount in cash or, if acceptable to the Company, by check or other
instrument. Unless Participant advises the Company of his or her election to use
an alternative payment method, Participant shall be deemed to have elected to
surrender to the Company shares of Restricted Stock which are then vesting in an
amount sufficient to satisfy the Minimum Withholding Obligations. If Participant
requests that the Company withhold taxes in addition to the Minimum Withholding
Obligations, such additional withholding must be satisfied by Participant either
(x) by paying the appropriate amount in cash or, if acceptable to the Company,
by check or other instrument, or (y) provided that Participant has obtained the
approval of either the Company or the Committee (as required under rules adopted
by the Committee) prior to the date of vesting, by surrendering unrestricted
Common Shares which are not part of the Restricted Stock then vesting and which
have then been owned by the Participant in unrestricted form for more than six
(6) months.

         Under no circumstances will Participant be entitled to satisfy any such
additional withholding by surrendering shares of Restricted Stock which are then
vesting or other Common Shares which have then been owned by Participant in
unrestricted form for six months or less. In addition, under no circumstances
will Participant be entitled to satisfy any Minimum Withholding Obligations or
additional withholding hereunder by surrendering shares of Restricted Stock
which are not then vesting or any Restricted Stock which Participant has elected
to defer under Paragraph 7 hereof. All payments, surrenders of shares, elections
or requests for approval hereunder must be made by Participant in accordance
with such procedures as may be adopted by the Company in connection therewith,
and subject to such rules as have been or may hereafter be adopted by the
Committee with respect thereto.

         10.      Dividends. Participant acknowledges and agrees that the
Company will pay, or cause to be paid, any cash dividends payable in respect of
Restricted Stock through such method(s) of payment as the Company deems
advisable, on or promptly after the date established by the Board of Directors
for the payment of such cash dividend to holders of the Company's Common Shares
(the "Dividend Payment Date"), including, but not limited to: (i) payment by the
Company's transfer agent through the procedures established generally for
shareholders of record; or (ii) payment by the Company to Participants directly
either through the Company's payroll system in the first payroll check which is
issued to the Participant after the Dividend Payment Date or by appropriate
check, draft or automatic deposit.

         11.      Entire Agreement: This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or in writing, between the parties
hereto relating to subject matter hereof, provided that the Agreement shall be
at all times subject to the Plan as provided above.

         12.      Amendment. The Committee, in its sole discretion, may
hereafter amend the terms of this Award, but no such amendment shall be made
which would impair the rights of Participant, without Participant's consent.

                                      -3-



         13.      Definitions: Unless otherwise defined in this Agreement, each
capitalized term in this Agreement shall have the meaning given to it in the
Plan.

         Participant hereby: (i) acknowledges receiving a copy of the Plan
Description relating to the Plan, and represents that he or she is familiar with
all of the material provisions of the Plan, as set forth in such Plan
Description; (ii) accepts this Agreement and the Restricted Stock awarded
pursuant hereto subject to all provisions of the Plan and this Agreement; and
(iii) agrees to accept as binding, conclusive and final all decisions and
interpretations of the Committee relating to the Plan, this Agreement or the
Restricted Stock awarded hereunder.

         Participant evidences his or her agreement with the terms and
conditions of this Agreement, and his or her intention to be bound hereby, by
electronically accepting the Award granted hereunder pursuant to the procedures
adopted by the Company. UPON SUCH ACCEPTANCE BY PARTICIPANT, THIS AGREEMENT WILL
BE IMMEDIATELY BINDING AND ENFORCEABLE AGAINST PARTICIPANT AND THE COMPANY.

                                     THE PROGRESSIVE CORPORATION

                                     By: /s/ Charles E. Jarrett
                                         ---------------------------------------
                                             Vice President & Secretary

                                      -4-

EX-10.B

Exhibit No. 10(B)

                           THE PROGRESSIVE CORPORATION
                               2003 INCENTIVE PLAN
                        RESTRICTED STOCK AWARD AGREEMENT
                    ( PERFORMANCE-BASED AWARD)

         This Agreement ("Agreement") is made this  by and between
 ("Participant") and The Progressive Corporation (the
"Company").

         1.       Award of Restricted Stock. The Company hereby grants to
Participant an award (the "Award") of restricted stock (the "Restricted Stock")
consisting of <# of Shares> of the Company's Common Shares, $1 Par Value
("Common Shares"), pursuant and subject to The Progressive Corporation 2003
Incentive Plan (the "Plan").

         2.       Condition to Participant's Rights under this Agreement. This
Agreement shall not become effective, and Participant shall have no rights with
respect to the Award or the Restricted Stock, unless and until the Participant
has fully executed this Agreement and delivered it to the Company (in the
Company's discretion, such execution and delivery may be accomplished through
electronic means).

         3.       Restrictions; Vesting. The Restricted Stock shall be subject
to the restrictions and other terms and conditions set forth in the Plan, which
are hereby incorporated herein by reference, and in this Agreement. Subject to
the terms and conditions of the Plan and this Agreement, Participant's rights in
and to the shares of Restricted Stock shall vest on the date .

         The shares of Restricted Stock awarded under this Agreement shall vest
in accordance with the foregoing unless, prior thereto, the Award and the
applicable shares of Restricted Stock are forfeited or have become subject to
accelerated vesting under the terms and conditions of the Plan. Until the shares
of Restricted Stock vest, Participant shall not sell, transfer, pledge, assign
or otherwise encumber such shares of Restricted Stock or any interest therein.

         4.       Expiration of Award. Notwithstanding anything to the contrary
in this Agreement, if Participant's rights in and to the shares of Restricted
Stock granted hereunder have not vested in accordance with Section 3 of this
Agreement on or before , this Award shall expire on that date.
Upon such expiration, the Common Shares issued pursuant to this Agreement shall
automatically be forfeited, and Participant shall have no further rights with
respect thereto.

         5.       Manner In Which Shares Will Be Held. Subject to the provisions
of this Paragraph 5, stock certificates evidencing the shares of Restricted
Stock awarded under this Agreement shall be registered in the name of
Participant and shall be delivered to and held in custody by the Company, or its
designee, until the restrictions thereon shall have lapsed or any conditions to
the vesting of such Award have been satisfied. Such certificates shall bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Award.

         In the discretion of the Company, any or all shares of Restricted Stock
awarded to Participant hereunder may be issued in, or after issuance may be
transferred to, book-entry form and held by the Company, or its designee, in
such form. In such event, no stock certificates evidencing such shares will be
held and the applicable restrictions will be noted in the records of the
Company's transfer agent and in the book-entry system.

         Participant hereby irrevocably authorizes the Company and the
Compensation Committee of the Board of Directors (the "Committee") to take any
and all appropriate action with respect to the evidence

                                      -1-



of Participant's Restricted Stock, including, without limitation, issuing
certificates for such Restricted Stock, issuing such Restricted Stock in
book-entry form, transferring any previously issued certificates into book-entry
form, transferring any Restricted Stock (whether held in certificate or
book-entry form) into unrestricted form at vesting, or canceling any Restricted
Stock (whether held in certificate or book-entry form) as and when required by
this Agreement or the Plan, or undertaking any other action which may be done
lawfully by the Company or the Committee in the administration of the Plan and
this Agreement. Participant specifically acknowledges and agrees that such
certificates and/or book-entry evidence of Participant's Restricted Stock may be
transferred or cancelled pursuant to this Agreement and the Plan without
requiring that a Stock Power be executed and delivered by the Participant or
requiring any other action on the part of Participant, and Participant
authorizes the Company to undertake each such action without such Stock Powers.

         Participant hereby further irrevocably appoints the Secretary of the
Company and any employee of the Company who may be designated by the Secretary,
and each of them, my true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for me and in my name, place and stead, in
any and all capacities, to execute and deliver each and every document
(including, without limitation, any such Stock Powers) which may be necessary or
appropriate in connection with the issuance, transfer, cancellation or other
action taken in connection with the Restricted Stock awarded hereunder pursuant
to this Agreement or the Plan. The rights granted by Participant under this
paragraph shall automatically expire as to shares of Restricted Stock awarded
hereunder upon the transfer of such shares into unrestricted form at vesting or
upon the cancellation of such shares at any time, as applicable, pursuant to
this Agreement and the Plan.

         6.       Rights of Shareholder. Except as otherwise provided in this
Agreement or the Plan, Participant shall have, with respect to the shares of
Restricted Stock awarded hereunder, all of the rights of a shareholder of the
Company, including the right to vote the shares and the right to receive any
dividends as declared by the Company's Board of Directors.

         7.       Shares Non-Transferable. No shares of Restricted Stock shall
be transferable by Participant other than by will or by the laws of descent and
distribution. In the event any Award is transferred or assigned pursuant to a
court order, such transfer or assignment shall be without liability to the
Company, and the Company shall have the right to offset against such Award any
expenses (including attorneys' fees) incurred by the Company in connection with
such transfer or assignment.

         8.       Executive Deferred Compensation Plan. If Participant is
eligible, and has made the appropriate election, to defer the Restricted Stock
awarded hereunder into The Progressive Corporation Executive Deferred
Compensation Plan (the "Deferral Plan"), upon vesting, the shares of Restricted
Stock awarded hereunder shall be considered to be deferred pursuant to the
Deferral Plan, subject to and in accordance with the terms and conditions of the
Deferral Plan and any deferral agreement entered into by Participant thereunder.

         9.       Termination of Employment. Except as otherwise provided in the
Plan or as determined by the Compensation Committee of the Company's Board of
Directors, if Participant's employment with the Company is terminated for any
reason other than death, Disability or Qualified Retirement, all Restricted
Stock held by Participant which is unvested or subject to restriction at the
time of such termination shall be automatically forfeited.

         10.      Taxes. No later than the date as of which an amount first
becomes includable in the gross income of Participant for federal income tax
purposes with respect to shares of Restricted Stock awarded under this
Agreement, Participant shall pay to the Company, or make arrangements
satisfactory to the Committee regarding the payment of, all federal, state or
local taxes or other items of any kind required

                                      -2-



by law to be withheld with respect to such amount. The obligations of the
Company under the Plan shall be conditional on such payment or arrangements and
the Company and its Subsidiaries and Affiliates, to the extent permitted by law,
shall have the right to deduct any such taxes from any payment of any kind
otherwise due to Participant. At vesting, shares of Restricted Stock awarded
hereunder will be valued at Fair Market Value, as defined in the Plan.

         Participant must satisfy the minimum statutory tax withholding
obligations resulting from the vesting of shares of Restricted Stock ("Minimum
Withholding Obligations") either (a) by surrendering to Company shares of
Restricted Stock which are then vesting in an amount sufficient to satisfy the
Minimum Withholding Obligations, (b) by surrendering to the Company other
unrestricted Common Shares of the Company owned by Participant in an amount
sufficient to satisfy the Minimum Withholding Obligations, or (c) by paying the
appropriate amount in cash or, if acceptable to the Company, by check or other
instrument. Unless Participant advises the Company of his or her election to use
an alternative payment method, Participant shall be deemed to have elected to
surrender to the Company shares of Restricted Stock which are then vesting in an
amount sufficient to satisfy the Minimum Withholding Obligations. If Participant
requests that the Company withhold taxes in addition to the Minimum Withholding
Obligations, such additional withholding must be satisfied by Participant either
(x) by paying the appropriate amount in cash or, if acceptable to the Company,
by check or other instrument, or (y) provided that Participant has obtained the
approval of either the Company or the Committee (as required under rules adopted
by the Committee) prior to the date of vesting, by surrendering unrestricted
Common Shares which are not part of the Restricted Stock then vesting and which
have then been owned by the Participant in unrestricted form more than six (6)
months.

         Under no circumstances will Participant be entitled to satisfy any such
additional withholding by surrendering shares of Restricted Stock which are then
vesting or other Common Shares which have then been owned by Participant in
unrestricted form for six months or less. In addition, under no circumstances
will Participant be entitled to satisfy any Minimum Withholding Obligations or
additional withholding hereunder by surrendering shares of Restricted Stock
which are not then vesting or any Restricted Stock which Participant has elected
to defer under Paragraph 8 hereof. All payments, surrenders of shares, elections
or requests for approval hereunder must be made by Participant in accordance
with such procedures as may be adopted by the Company in connection therewith,
and subject to such rules as have been or may hereafter be adopted by the
Committee with respect thereto.

         11.      Dividends. Participant acknowledges and agrees that the
Company will pay, or cause to be paid, any cash dividends payable in respect of
Restricted Stock through such method(s) of payment as the Company deems
advisable, on or promptly after the date established by the Board of Directors
for the payment of such cash dividend to holders of the Company's Common Shares
(the "Dividend Payment Date"), including, but not limited to: (i) payment by the
Company's transfer agent through the procedures established generally for
shareholders of record; or (ii) payment by the Company to Participants directly
either through the Company's payroll system in the first payroll check which is
issued to the Participant after the Dividend Payment Date or by appropriate
check, draft or automatic deposit.

         12.      Entire Agreement: This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or in writing, between the parties
hereto relating to subject matter hereof, provided that the Agreement shall be
at all times subject to the Plan as provided above.

         13.      Amendment. The Committee, in its sole discretion, may
hereafter amend the terms of this Award, but no such amendment shall be made
which would impair the rights of Participant, without Participant's consent.

                                      -3-



         14.      Definitions: Unless otherwise defined in this Agreement, each
capitalized term in this Agreement shall have the meaning given to it in the
Plan.

         Participant hereby: (i) acknowledges receiving a copy of the Plan
Description relating to the Plan, and represents that he or she is familiar with
all of the material provisions of the Plan, as set forth in such Plan
Description; (ii) accepts this Agreement and the Restricted Stock awarded
pursuant hereto subject to all provisions of the Plan and this Agreement; and
(iii) agrees to accept as binding, conclusive and final all decisions and
interpretations of the Committee relating to the Plan, this Agreement or the
Restricted Stock awarded hereunder.

         Participant evidences his or her agreement with the terms and
conditions of this Agreement, and his or her intention to be bound hereby, by
electronically accepting the Award granted hereunder pursuant to the procedures
adopted by the Company. UPON SUCH ACCEPTANCE BY PARTICIPANT, THIS AGREEMENT WILL
BE IMMEDIATELY BINDING AND ENFORCEABLE AGAINST PARTICIPANT AND THE COMPANY.

                                         THE PROGRESSIVE CORPORATION

                                         By:  /s/ Charles E. Jarrett
                                             -----------------------------------
                                                  Vice President & Secretary

                                      -4-

EX-10.C

Exhibit No. 10(C)

                           THE PROGRESSIVE CORPORATION
                      2003 DIRECTORS EQUITY INCENTIVE PLAN
                        RESTRICTED STOCK AWARD AGREEMENT

         This Agreement ("Agreement") is made this  by and between
 ("Participant") and The Progressive Corporation (the
"Company").

         1.       Award of Restricted Stock. The Company hereby grants to
Participant an award (the "Award") of restricted stock (the "Restricted Stock")
consisting of <# of Shares> of the Company's Common Shares, $1 Par Value
("Common Shares"), pursuant and subject to The Progressive Corporation 2003
Directors Equity Incentive Plan (the "Plan").

         2.       Condition to Participant's Rights under this Agreement. This
Agreement shall not become effective, and Participant shall have no rights with
respect to the Award or the Restricted Stock, unless and until the Participant
has fully executed this Agreement and delivered it to the Company (in the
Company's discretion, such execution and delivery may be accomplished through
electronic means).

         3.       Restrictions; Vesting. The Restricted Stock shall be subject
to the restrictions and other terms and conditions set forth in the Plan, which
are hereby incorporated herein by reference, and in this Agreement. Subject to
the terms and conditions of the Plan and this Agreement, Participant's rights in
and to the shares of Restricted Stock shall vest on .

         The shares of Restricted Stock awarded under this Agreement shall vest
as set forth above unless, prior to such vesting date, the Award and the
applicable shares of Restricted Stock are forfeited or have become subject to
accelerated vesting under the terms and conditions of the Plan. Until the shares
of Restricted Stock vest, Participant shall not sell, transfer, pledge, assign
or otherwise encumber such shares of Restricted Stock or any interest therein.

         4.       Manner In Which Shares Will Be Held. Subject to the provisions
of this Paragraph 4, stock certificates evidencing the shares of Restricted
Stock awarded under this Agreement shall be registered in the name of
Participant and shall be delivered to and held in custody by the Company, or its
designee, until the restrictions thereon shall have lapsed or any conditions to
the vesting of such Award have been satisfied. Such certificates shall bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Award.

         In the discretion of the Company, any or all shares of Restricted Stock
awarded to Participant hereunder may be issued in, or after issuance may be
transferred to, book-entry form and held by the Company, or its designee, in
such form. In such event, no stock certificates evidencing such shares will be
held, the applicable restrictions will be noted in the records of the Company's
transfer agent and in the book-entry system.

         Participant hereby irrevocably authorizes the Company and the
Compensation Committee of the Board of Directors (the "Committee") to take any
and all appropriate action with respect to the evidence of Participant's
Restricted Stock, including, without limitation, issuing certificates for such
Restricted Stock, issuing such Restricted Stock in book-entry form, transferring
any previously issued certificates into book-entry form, transferring any
Restricted Stock (whether held in certificate or book-entry form) into
unrestricted form at vesting, or canceling any Restricted Stock (whether held in
certificate or book-entry form) as and when required by this Agreement or the
Plan, or undertaking any other action which may be done lawfully by the Company
or the Committee in the administration of the Plan and this Agreement.
Participant specifically acknowledges and agrees that such certificates and/or
book-entry

                                       -1-



evidence of Participant's Restricted Stock may be transferred or cancelled
pursuant to this Agreement and the Plan without requiring that a Stock Power be
executed and delivered by the Participant or requiring any other action on the
part of Participant, and Participant authorizes the Company to undertake each
such action without such Stock Powers.

         Participant hereby further irrevocably appoints the Secretary of the
Company and any employee of the Company who may be designated by the Secretary,
and each of them, my true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for me and in my name, place and stead, in
any and all capacities, to execute and deliver each and every document
(including, without limitation, any such Stock Powers) which may be necessary or
appropriate in connection with the issuance, transfer, cancellation or other
action taken in connection with the Restricted Stock awarded hereunder pursuant
to this Agreement or the Plan. The rights granted by Participant under this
paragraph shall automatically expire as to shares of Restricted Stock awarded
hereunder upon the transfer of such shares into unrestricted form at vesting or
upon the cancellation of such shares at any time, as applicable, pursuant to
this Agreement and the Plan.

         5.       Rights of Shareholder. Except as otherwise provided in this
Agreement or the Plan, Participant shall have, with respect to the shares of
Restricted Stock awarded hereunder, all of the rights of a shareholder of the
Company, including the right to vote the shares and the right to receive any
dividends as declared by the Company's Board of Directors.

         6.       Shares Non-Transferable. No shares of Restricted Stock shall
be transferable by Participant other than by will or by the laws of descent and
distribution. In the event any Award is transferred or assigned pursuant to a
court order, such transfer or assignment shall be without liability to the
Company, and the Company shall have the right to offset against such Award any
expenses (including attorneys' fees) incurred by the Company in connection with
such transfer or assignment.

         7.       Restricted Stock Deferral Plan. If Participant is eligible,
and has made the appropriate election, to defer the Restricted Stock awarded
hereunder into The Progressive Corporation Directors Restricted Stock Deferral
Plan (the "Deferral Plan"), upon vesting, the shares of Restricted Stock awarded
hereunder shall be considered to be deferred pursuant to the Deferral Plan,
subject to and in accordance with the terms and conditions of the Deferral Plan
and any deferral agreement entered into by Participant thereunder.

         8.       Dividends. Participant acknowledges and agrees that the
Company will pay, or cause to be paid, any cash dividends payable in respect of
Restricted Stock through such method(s) of payment as the Company deems
advisable, on or promptly after the date established by the Board of Directors
for the payment of such cash dividend to holders of the Company's Common Shares
(the "Dividend Payment Date"), including, but not limited to: (i) payment by the
Company's transfer agent through the procedures established generally for
shareholders of record; or (ii) payment by the Company to Participants directly
by appropriate check, draft or automatic deposit.

         9.       Termination of Service. Except as otherwise provided in the
Plan or as determined by the Committee, if Participant resigns or is removed
from the Board of Directors for any reason other than death or Disability or
does not stand for re-election, all Restricted Stock held by Participant which
is unvested or subject to restriction at the time of such resignation or
removal, or at the time Participant leaves the Board, shall be automatically
forfeited.

         10.      Entire Agreement: This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or in

                                       -2-



writing, between the parties hereto relating to subject matter hereof, provided
that the Agreement shall be at all times subject to the Plan as provided above.

         11.      Amendment. The Committee, in its sole discretion, may
hereafter amend the terms of this Award, but no such amendment shall be made
which would impair the rights of Participant, without Participant's consent.

         12.      Definitions: Unless otherwise defined in this Agreement, each
capitalized term in this Agreement shall have the meaning given to it in the
Plan.

         Participant hereby: (i) acknowledges receiving a copy of the Plan
Description relating to the Plan, and represents that he or she is familiar with
all of the material provisions of the Plan, as set forth in such Plan
Description; (ii) accepts this Agreement and the Restricted Stock awarded
pursuant hereto subject to all provisions of the Plan and this Agreement; and
(iii) agrees to accept as binding, conclusive and final all decisions and
interpretations of the Committee relating to the Plan, this Agreement or the
Restricted Stock awarded hereunder.

         Participant evidences his or her agreement with the terms and
conditions of this Agreement, and his or her intention to be bound hereby, by
electronically accepting the Award granted hereunder pursuant to the procedures
adopted by the Company. UPON SUCH ACCEPTANCE BY PARTICIPANT, THIS AGREEMENT WILL
BE IMMEDIATELY BINDING AND ENFORCEABLE AGAINST PARTICIPANT AND THE COMPANY.

                                          THE PROGRESSIVE CORPORATION

                                          By:  /s/ Charles E. Jarrett
                                              ----------------------------------
                                                   Vice President & Secretary

                                       -3-

EX-12

                                                                               .
                                                                               .
                                                                               .

Exhibit No. 12

                           THE PROGRESSIVE CORPORATION
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                                   (millions)
                                   (unaudited)



                                                                 Three Months Ended
                                                                      March 31,
                                                             ---------------------------
                                                                 2004           2003
                                                             ------------   ------------
                                                                      
Income before income taxes                                   $      678.7   $      433.3
                                                             ------------   ------------
Fixed Charges:
    Interest and amortization on indebtedness                        21.6           24.3
    Portion of rents representative of the interest factor            2.0            1.7
                                                             ------------   ------------
Total fixed charges                                                  23.6           26.0
                                                             ------------   ------------
Total income available for fixed charges(1)                  $      701.3   $      459.2
                                                             ============   ============
Ratio of earnings to fixed charges                                   29.7           17.7
                                                             ============   ============


(1) Excludes interest capitalized, net of amortized interest, of $1.0 million
and $.1 million for the three months ended March 31, 2004 and 2003,
respectively.

EX-31.A

Exhibit No. 31(A)

                                  CERTIFICATION

I, Glenn M. Renwick, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of The Progressive
         Corporation;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
         registrant and have:

         a)       Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         b)       Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

         c)       Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

5.       The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation of internal control over financial
         reporting, to the registrant's auditors and the audit committee of the
         registrant's board of directors (or persons performing the equivalent
         function):

         a)       All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         b)       Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

Date: May 10, 2004                        /s/ Glenn M. Renwick
                                          -----------------------------------
                                          Glenn M. Renwick
                                          President and Chief Executive Officer

                                       1

EX-31.B

Exhibit No. 31(B)

                                  CERTIFICATION

I, W. Thomas Forrester, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of The Progressive
         Corporation;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the
         registrant and have:

         a)       Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         b)       Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

         c)       Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

5.       The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation of internal control over financial
         reporting, to the registrant's auditors and the audit committee of the
         registrant's board of directors (or persons performing the equivalent
         function):

         a)       All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         b)       Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.

Date: May 10, 2004

                                     /s/ W. Thomas Forrester
                                     ------------------------------------------
                                     W. Thomas Forrester
                                     Vice President and Chief Financial Officer

                                       2

EX-32.A

Exhibit No. 32(A)

     CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         I, Glenn M. Renwick, President and Chief Executive Officer, of The
Progressive Corporation (the "Company"), certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

         (1) the Quarterly Report on Form 10-Q of the Company for the period
         ended March 31, 2004 (the "Report"), which this certification
         accompanies, fully complies with the requirements of section 13(a) or
         15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d));
         and

         (2) information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.

/s/ Glenn M. Renwick
- -------------------------------------------------
Glenn M. Renwick
President and Chief Executive Officer
May 10, 2004

                                       3

EX-32.B

Exhibit No. 32(B)

     CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

         I, W. Thomas Forrester, Vice President and Chief Financial Officer, of
The Progressive Corporation (the "Company"), certify, pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:

         (1) the Quarterly Report on Form 10-Q of the Company for the period
         ended March 31, 2004 (the "Report"), which this certification
         accompanies, fully complies with the requirements of section 13(a) or
         15(d) of the Securities Exchange Act of 1934 (U.S.C. 78m or 78o(d));
         and

         (2) information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.

/s/ W. Thomas Forrester                             _
- ----------------------------------------------------
W. Thomas Forrester
Vice President and Chief Financial Officer
May 10, 2004

                                       4