8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 14, 2004

THE PROGRESSIVE CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	1-9518	34-0963169
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6300 Wilson Mills Road, Mayfield Village, Ohio 44143

(Address of principal executive offices)     (Zip Code)

Registrant’s telephone number, including area code 440-461-5000

Not Applicable

(Former name or former address, if changed since last report)

TABLE OF CONTENTS

	Item 12. Results of Operations and Financial Condition.
SIGNATURES
EXHIBIT INDEX
NEWS RELEASE DATED JULY 14, 2004

Item 12. Results of Operations and Financial Condition.

On July 14, 2004, The Progressive Corporation and Subsidiaries (the “Company”) issued a News Release containing financial results of the Company for the month and year-to-date period ended June 2004 (the “News Release”). A copy of the News Release is attached hereto as Exhibit 99.

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.

Dated: July 14, 2004
	THE PROGRESSIVE CORPORATION
	By:	/s/ Jeffrey W. Basch
		Name:	Jeffrey W. Basch
		Title:	Vice President and Chief Accounting Officer

EXHIBIT INDEX

Exhibit No.
Under Reg. S-K	Form 8-K
Item 601	Exhibit No.		Description
99		99	News Release dated July 14, 2004, containing financial results of The Progressive Corporation and Subsidiaries for the month and year-to-date period ended June 2004

EX-99

Exhibit 99

News Release dated July 14, 2004,
containing financial results of
The Progressive Corporation
and Subsidiaries
for the month and year-to-date period
ended June 2004

	NEWS
	RELEASE

The Progressive Corporation	Company Contact:
6300 Wilson Mills Road	Thomas A. King
Mayfield Village, Ohio 44143	(440) 395-2260
http://www.progressive.com

On August 10, 2004 at 9:00 a.m. eastern time, subsequent to the posting of the Company’s Quarterly Shareholders Report online and the filing of its Form 10-Q with the SEC, the Company will hold a one-hour conference call to address questions. Visit the Company’s Web site at http://www.progressive.com/investors/events.asp to register and receive the details for the teleconference or webcast.

FOR IMMEDIATE RELEASE

MAYFIELD VILLAGE, OHIO – July 14, 2004 — The Progressive Corporation today reported the following results for June 2004:

	Month							Quarter
($ in millions, except
per share amounts)	2004		2003		Change			2004		2003		Change
Net premiums written	$	991.5	$	920.9		8	%	$	3,361.6	$	3,022.8		11	%
Net premiums earned		1,005.4		875.3		15	%		3,234.0		2,774.9		17	%
Net income		120.2		85.7		40	%		386.3		286.3		35	%
Per share		.55		.39		41	%		1.76		1.29		36	%
Combined ratio		86.0		89.8	3.8 pts.				85.4		88.8	3.4 pts.

See the “Income Statement” for further month and year-to-date information.

     Progressive’s Personal Lines business units write insurance for private passenger automobiles and recreation vehicles. Progressive’s 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 principally include writing directors’ and officers’ liability insurance and managing the Company’s run-off businesses. See “Supplemental Information” for the month and year-to-date results.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENT
June 2004
(millions – except per share amounts)
(unaudited)

	Current Month			Comments on Monthly Results1
Direct premiums written	$	1,019.3		Due to the Company’s use of a fiscal calendar, premiums written were unfavorably affected in June 2004, as compared to June 2003, since the Memorial Day holiday was reflected in fiscal June 2004 results but was included in fiscal May results for 2003.
Net premiums written	$	991.5
Revenues:
Net premiums earned	$	1,005.4
Investment income		46.2		Includes $2.4 million from infrequent and unscheduled income earned on the Company’s limited and discontinued alternative investment portfolio.
Net realized losses on securities		(3.1	)
Service revenues		3.6
Total revenues		1,052.1
Expenses:
Losses and loss adjustment expenses		660.2
Policy acquisition costs		108.3
Other underwriting expenses		96.1
Investment expenses		1.1
Service expenses		2.1
Interest expense		6.7
Total expenses		874.5
Income before income taxes		177.6
Provision for income taxes		57.4
Net income	$	120.2
COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding		216.2
Per share	$	.56
Diluted:
Average shares outstanding		216.2
Net effect of dilutive stock-based compensation		3.5
Total equivalent shares		219.7
Per share	$	.55

¹ See the Monthly Commentary at the end of this release for additional discussion. Also see the Company’s 2003 Annual Report at progressive.com/annualreport for a complete description of its reporting and accounting policies.

The following table sets forth the total return on investments for the month:

Fully taxable equivalent total return:
Fixed income securities	.4	%
Common stocks	1.8	%
Total portfolio	.6	%

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
INCOME STATEMENTS
June 2004
(millions – except per share amounts)
(unaudited)

	Year-to-Date
	2004		2003		% Change
Direct premiums written	$	6,808.6	$	6,040.9		13
Net premiums written	$	6,638.9	$	5,902.1		12
Revenues:
Net premiums earned	$	6,327.5	$	5,373.2		18
Investment income		239.6		228.5		5
Net realized gains on securities		56.1		20.0		181
Service revenues		24.5		19.3		27
Total revenues		6,647.7		5,641.0		18
Expenses:
Losses and loss adjustment expenses		4,052.8		3,653.8		11
Policy acquisition costs		682.3		594.3		15
Other underwriting expenses		600.4		468.7		28
Investment expenses		6.2		5.6		11
Service expenses		12.1		12.7		(5	)
Interest expense		40.2		47.8		(16	)
Total expenses		5,394.0		4,782.9		13
Income before income taxes		1,253.7		858.1		46
Provision for income taxes		407.4		280.3		45
Net income	$	846.3	$	577.8		46
COMPUTATION OF EARNINGS PER SHARE
Basic:
Average shares outstanding		216.4		217.8		(1	)
Per share	$	3.91	$	2.65		47
Diluted:
Average shares outstanding		216.4		217.8		(1	)
Net effect of dilutive stock-based compensation		3.5		3.7		(5	)
Total equivalent shares		219.9		221.5		(1	)
Per share	$	3.85	$	2.61		48

The following table sets forth the total return on investments for the year-to-date period:

	2004			2003
Fully taxable equivalent total return:
Fixed income securities		.8	%		4.1	%
Common stocks		3.2	%		11.6	%
Total portfolio		1.2	%		5.2	%

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
June 2004
($ in millions)
(unaudited)

Current Month

	Personal Lines									Commercial			Other			Companywide
	Agency			Direct			Total			Auto Business			Businesses1			Total
Net Premiums Written	$	594.5		$	273.8		$	868.3		$	121.0		$	2.2		$	991.5
% Growth in NPW		6	%		13	%		8	%		6	%		(56	)%		8	%
Net Premiums Earned	$	603.2		$	283.0		$	886.2		$	116.5		$	2.7		$	1,005.4
% Growth in NPE		12	%		19	%		14	%		22	%		(50	)%		15	%
GAAP Ratios
Loss/LAE Ratio		66.4			65.8			66.3			60.8			99.1			65.7
Expense Ratio		20.0			20.7			20.2			19.9			69.4			20.3
Combined Ratio		86.4			86.5			86.5			80.7			168.5			86.0
Actuarial Adjustments2
Reserve Decrease/(Increase)
Prior accident years																$	3.4
Current accident year																	(1.5	)
Calendar year actuarial adjustment	$	.6		$	.4		$	1.0		$	1.0		$	(.1	)	$	1.9
Prior Accident Years Development
Favorable/(Unfavorable)
Actuarial adjustment																$	3.4
All other development																	14.1
Total development																$	17.5
Calendar year loss/LAE Ratio																	65.7
Accident year loss/LAE Ratio																	67.4
Statutory Ratios
Loss/LAE Ratio																	65.8
Expense Ratio																	19.7
Combined Ratio																	85.5

1	Ratios reflect the commutation of a reinsurance contract during the quarter, as well as the strengthening of the reserve position in the Company’s run-off businesses.
2	Represents adjustments solely based on the Company’s corporate actuarial review.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION

June 2004
($ in millions)
(unaudited)

Year-to-Date

	Personal Lines									Commercial			Other			Companywide
	Agency			Direct			Total			Auto Business			Businesses			Total
Net Premiums Written	$	3,964.6		$	1,866.2		$	5,830.8		$	795.9		$	12.2		$	6,638.9
% Growth in NPW		11	%		17	%		13	%		16	%		(67	)%		12	%
Net Premiums Earned	$	3,817.3		$	1,775.5		$	5,592.8		$	717.2		$	17.5		$	6,327.5
% Growth in NPE		15	%		21	%		17	%		26	%		(52	)%		18	%
GAAP Ratios
Loss/LAE Ratio		65.0			64.1			64.7			58.8			70.0			64.0
Expense Ratio		20.1			20.9			20.4			19.1			40.4			20.3
Combined Ratio		85.1			85.0			85.1			77.9			110.4			84.3
Actuarial Adjustments1
Reserve Decrease/(Increase)
Prior accident years																$	25.7
Current accident year																	(8.4	)
Calendar year actuarial adjustment	$	9.5		$	4.9		$	14.4		$	3.8		$	(.9	)	$	17.3
Prior Accident Years Development
Favorable/(Unfavorable)
Actuarial adjustment																$	25.7
All other development																	(11.5	)
Total development																$	14.2
Calendar year loss/LAE Ratio																	64.0
Accident year loss/LAE Ratio																	64.2
Statutory Ratios
Loss/LAE Ratio																	64.2
Expense Ratio																	19.5
Combined Ratio																	83.7
Statutory Surplus																$	5,351.6

	June		June
Policies in Force	2004		2003		Change
(in thousands)
Agency – Auto		4,187		3,797		10	%
Direct – Auto		1,996		1,732		15	%
Other Personal Lines2		2,252		1,884		20	%
Total Personal Lines		8,435		7,413		14	%
Commercial Auto Business		404		336		20	%

1	Represents adjustments solely based on the Company’s corporate actuarial review.
2	Includes insurance for motorcycles, recreation vehicles, mobile homes, watercraft, snowmobiles, homeowners and similar items.

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THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
BALANCE SHEET AND OTHER INFORMATION
(millions – except per share amounts)
(unaudited)

	June
	2004
CONDENSED GAAP BALANCE SHEET:1
Investments —
Available-for-sale:
Fixed maturities, at market (amortized cost: $9,651.3)	$	9,679.4
Equity securities, at market:
Preferred stocks (cost: $846.6)		846.7
Common equities (cost: $1,601.8)		2,026.8
Short-term investments, at amortized cost (market: $1,114.8)		1,114.8
Total investments2		13,667.7
Net premiums receivable		2,322.6
Deferred acquisition costs		449.8
Other assets		1,276.6
Total assets	$	17,716.7
Unearned premiums	$	4,220.7
Loss and loss adjustment expense reserves		4,925.0
Other liabilities2		1,559.8
Debt		1,290.0
Shareholders’ equity		5,721.2
Total liabilities and shareholders’ equity	$	17,716.7
Common Shares outstanding		217.3
Shares repurchased – June		.2
Average cost per share	$	85.92
Book value per share	$	26.33
Return on average shareholders’ equity		29.0	%
Net unrealized pre-tax gains on investments	$	453.2
Debt to total capital ratio		18.4	%

1	Pursuant to SFAS 113, “Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts,” loss and loss adjustment expense reserves are stated gross of reinsurance recoverables on unpaid losses of $245.0 million.
2	Amounts include net unsettled security acquisitions of $107.1 million.

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Monthly Commentary

• As previously mentioned, the 8% net premiums written growth rate was unfavorably affected by the timing of the Memorial Day holiday in 2004, as compared to 2003. If in 2004 the holiday had fallen in fiscal May as it did in 2003, the growth rate for June would likely have been in the range of 11%-13%.

• Industry auto rates for 2004 are expected to increase an average of 3.5%, the lowest increase in the past four years (as reported by the Insurance Information Institute), contributing to the slowing written premium growth.

• The Company continued to experience strong profitability. Only three markets in which the Company writes Personal Lines business were unprofitable for the month; for the quarter and year-to-date periods, all Personal Lines markets were profitable.

• Policies in force growth remained strong supported by strong renewals. In Personal Lines, 12 markets have year-to-date net premiums written growth of 20% or greater; these markets represent 22% of the total Personal Lines premiums. Fourteen states (38% of total Personal Lines) grew less than 10%.

• In general, the Company saw retention levels flatten for the month in most of the Agency and Direct auto tiers.

• The pretax recurring investment book yield of the portfolio was 4.3% for the month and 3.9% year-to-date, including the income from the alternative investment portfolio discussed on page 2 of $2.4 million for June and $5.1 million year-to-date.

• At June month-end, the net unrealized gains in the investment portfolio were $453.2 million, a decrease of $190.2 million from year-end 2003. In the fixed-income portfolio, the duration was 3.0 years and the weighted average credit quality remained AA.

The Progressive group of insurance companies ranks third in the nation for auto insurance based on premiums written, offering its products by phone at 1-800-PROGRESSIVE, online at progressive.com and through more than 30,000 independent agencies and insurance brokers. The Common Shares of The Progressive Corporation, the holding company, are publicly traded at NYSE:PGR.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this release 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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