UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 13, 2012
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) |
Registrants telephone number, including area code 440-461-5000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 Regulation FD Disclosure.
On June 13, 2012, The Progressive Corporation issued a news release containing financial results for the Company and its consolidated subsidiaries for the month of, and year-to-date period ended, May 2012. A copy of the news release is attached hereto as Exhibit 99.
Item 9.01 Financial Statements and Exhibits.
(d) | Exhibits |
See exhibit index on page 4.
- 2 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: June 13, 2012 | ||||||
THE PROGRESSIVE CORPORATION | ||||||
By: | /s/ Jeffrey W. Basch | |||||
Name: Jeffrey W. Basch | ||||||
Title: Vice President and Chief Accounting Officer |
- 3 -
EXHIBIT INDEX
Exhibit No. |
Form 8-K Exhibit No. |
Description | ||
99 | 99 | News release dated June 13, 2012, containing financial results of The Progressive Corporation and its consolidated subsidiaries for the month of, and year-to-date period ended, May 2012. |
- 4 -
Exhibit 99
![]() |
NEWS RELEASE |
The Progressive Corporation | Company Contact: | |||
6300 Wilson Mills Road | Matt Downing | |||
Mayfield Village, Ohio 44143 | (440) 395-4222 | |||
http://www.progressive.com |
PROGRESSIVE REPORTS MAY RESULTS
MAYFIELD VILLAGE, OHIO June 13, 2012 The Progressive Corporation today reported the following results for May 2012:
(millions, except per share amounts and ratios; unaudited) | May | May | Change | |||||||||
2012 | 2011 | |||||||||||
Net premiums written |
$ | 1,217.4 | $ | 1,134.6 | 7 | % | ||||||
Net premiums earned |
$ | 1,230.0 | $ | 1,142.1 | 8 | % | ||||||
Net income |
$ | 43.9 | $ | 74.1 | (41 | )% | ||||||
Per share |
$ | .07 | $ | .11 | (37 | )% | ||||||
Total pretax net realized gains (losses) on securities (including net impairment losses) |
$ | 2.7 | $ | (.4 | ) | NM | ||||||
Combined ratio |
97.5 | 93.1 | 4.4 | pts. | ||||||||
Average diluted equivalent shares |
608.6 | 648.3 | (6 | )% | ||||||||
NM = Not Meaningful
(thousands; unaudited) | May | May | Change | |||||||||
2012 | 2011 | |||||||||||
Policies in Force: |
||||||||||||
Agency auto |
4,863.2 | 4,596.9 | 6 | % | ||||||||
Direct auto |
4,018.5 | 3,759.4 | 7 | % | ||||||||
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|
|
|
|||||||||
Total personal auto |
8,881.7 | 8,356.3 | 6 | % | ||||||||
Total special lines |
3,939.2 | 3,750.4 | 5 | % | ||||||||
|
|
|
|
|||||||||
Total Personal Lines |
12,820.9 | 12,106.7 | 6 | % | ||||||||
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|
|
|||||||||
Total Commercial Auto |
521.7 | 510.3 | 2 | % | ||||||||
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|
|
Progressive offers insurance to personal and commercial auto drivers throughout the United States. Our Personal Lines business writes insurance for personal autos and recreational vehicles. Our Commercial Auto business writes primary liability, physical damage, and other auto-related insurance for autos and trucks owned by small businesses.
See the Comprehensive Income Statements and Supplemental Information for further month and year-to-date information and the Monthly Commentary at the end of this release for additional discussion.
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
COMPREHENSIVE INCOME STATEMENT
May 2012
(millions)
(unaudited)
Current Month |
Comments on Monthly Results1 | |||||
Net premiums written |
$ | 1,217.4 | ||||
|
|
|||||
Revenues: |
||||||
Net premiums earned |
$ | 1,230.0 | ||||
Investment income |
38.3 | |||||
Net realized gains (losses) on securities: |
||||||
Other-than-temporary impairment (OTTI) losses: |
||||||
Total OTTI losses |
0 | |||||
Non-credit losses, net of credit losses recognized on previously recorded non-credit OTTI losses |
0 | |||||
|
|
|||||
Net impairment losses recognized in earnings |
0 | |||||
Net realized gains (losses) on securities |
2.7 | |||||
|
|
|||||
Total net realized gains (losses) on securities |
2.7 | |||||
Service revenues |
3.1 | |||||
|
|
|||||
Total revenues |
1,274.1 | |||||
|
|
|||||
Expenses: |
||||||
Losses and loss adjustment expenses |
930.2 | |||||
Policy acquisition costs |
112.1 | |||||
Other underwriting expenses |
157.1 | |||||
Investment expenses |
1.2 | |||||
Service expenses |
2.9 | |||||
Interest expense |
10.2 | |||||
|
|
|||||
Total expenses |
1,213.7 | |||||
|
|
|||||
Income before income taxes |
60.4 | |||||
Provision for income taxes |
16.5 | |||||
|
|
|||||
Net income |
43.9 | |||||
|
|
|||||
Other comprehensive income (loss), net of tax: |
||||||
Net unrealized gains (losses) on securities: |
||||||
Net non-credit related OTTI losses, adjusted for valuation changes |
.3 | |||||
Other net unrealized gains (losses) on securities |
(117.7 | ) | ||||
|
|
|||||
Total net unrealized gains (losses) on securities |
(117.4 | ) | ||||
Net unrealized gains on forecasted transactions |
(.1 | ) | ||||
Foreign currency translation adjustment |
(.4 | ) | ||||
|
|
|||||
Other comprehensive income (loss) |
(117.9 | ) | ||||
|
|
|||||
Total comprehensive income (loss) |
$ | (74.0 | ) | |||
|
|
1 | See the Monthly Commentary at the end of this release for additional discussion. For a description of our reporting and accounting policies, see Note 1 to our 2011 audited consolidated financial statements included in our 2011 Shareholders Report, which can be found at www.progressive.com/annualreport. |
- 2 -
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
COMPREHENSIVE INCOME STATEMENTS
May 2012 Year-to-Date
(millions)
(unaudited)
Year-to-Date | ||||||||||
2012 | 2011 | % Change | ||||||||
Net premiums written |
$ | 7,051.9 | $ | 6,575.0 | 7 | |||||
|
|
|
|
|||||||
Revenues: |
||||||||||
Net premiums earned |
$ | 6,619.7 | $ | 6,240.7 | 6 | |||||
Investment income |
188.9 | 203.8 | (7) | |||||||
Net realized gains (losses) on securities: |
||||||||||
Other-than-temporary impairment (OTTI) losses: |
||||||||||
Total OTTI losses |
(.5 | ) | (1.4 | ) | (64) | |||||
Non-credit losses, net of credit losses recognized on previously recorded non-credit OTTI losses1 |
(.4 | ) | 0 | NM | ||||||
|
|
|
|
|||||||
Net impairment losses recognized in earnings |
(.9 | ) | (1.4 | ) | (36) | |||||
Net realized gains (losses) on securities |
73.2 | 125.3 | (42) | |||||||
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|
|
|
|||||||
Total net realized gains (losses) on securities |
72.3 | 123.9 | (42) | |||||||
Service revenues |
15.1 | 9.2 | 64 | |||||||
Gains (losses) on extinguishment of debt |
(1.7 | ) | 0 | NM | ||||||
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|
|
|
|||||||
Total revenues |
6,894.3 | 6,577.6 | 5 | |||||||
|
|
|
|
|||||||
Expenses: |
||||||||||
Losses and loss adjustment expenses |
4,817.8 | 4,321.6 | 11 | |||||||
Policy acquisition costs |
612.4 | 587.8 | 4 | |||||||
Other underwriting expenses |
854.6 | 773.3 | 11 | |||||||
Investment expenses |
6.9 | 5.6 | 23 | |||||||
Service expenses |
14.6 | 7.1 | 106 | |||||||
Interest expense |
52.4 | 52.5 | 0 | |||||||
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|
|
|||||||
Total expenses |
6,358.7 | 5,747.9 | 11 | |||||||
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|
|||||||
Income before income taxes |
535.6 | 829.7 | (35) | |||||||
Provision for income taxes |
172.9 | 274.7 | (37) | |||||||
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|
|
|
|||||||
Net income |
362.7 | 555.0 | (35) | |||||||
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|
|
|
|||||||
Other comprehensive income, net of tax: |
||||||||||
Net unrealized gains (losses) on securities: |
||||||||||
Net non-credit related OTTI losses, adjusted for valuation changes |
2.7 | (1.9 | ) | NM | ||||||
Other net unrealized gains (losses) on securities |
99.6 | 139.6 | (29) | |||||||
|
|
|
|
|||||||
Total net unrealized gains (losses) on securities |
102.3 | 137.7 | (26) | |||||||
Net unrealized gains on forecasted transactions |
(1.0 | ) | (1.3 | ) | (23) | |||||
Foreign currency translation adjustment |
(.1 | ) | .6 | NM | ||||||
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|
|
|
|||||||
Other comprehensive income |
101.2 | 137.0 | (26) | |||||||
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|
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Total comprehensive income |
$ | 463.9 | $ | 692.0 | (33) | |||||
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|
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NM = Not Meaningful
1 | A negative amount for the period reflects credit losses reclassified from other comprehensive income that exceeded the amount of non-credit OTTI losses recognized in other comprehensive income during the period. |
- 3 -
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME AND COMPREHENSIVE INCOME PER SHARE
&
INVESTMENT RESULTS
May 2012
(millions except per share amounts)
(unaudited)
The following table sets forth the computation of net income per share and comprehensive income (loss) per share:
Current Month |
Year-to-Date | |||||||||||
2012 | 2011 | |||||||||||
Net income |
$ | 43.9 | $ | 362.7 | $ | 555.0 | ||||||
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|
|
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|
|||||||
Per share: |
||||||||||||
Basic |
$ | .07 | $ | .60 | $ | .85 | ||||||
Diluted |
$ | .07 | $ | .59 | $ | .85 | ||||||
Comprehensive income (loss) |
$ | (74.0 | ) | $ | 463.9 | $ | 692.0 | |||||
|
|
|
|
|
|
|||||||
Per share: |
||||||||||||
Diluted |
$ | (.12 | ) | $ | .76 | $ | 1.06 | |||||
Average shares outstanding - Basic |
604.5 | 605.7 | 649.3 | |||||||||
Net effect of dilutive stock-based compensation |
4.1 | 3.9 | 4.2 | |||||||||
|
|
|
|
|
|
|||||||
Total equivalent shares - Diluted |
608.6 | 609.6 | 653.5 | |||||||||
|
|
|
|
|
|
The following table sets forth the investment results for the period:
Current Month |
Year-to-Date | |||||||||||
2012 | 2011 | |||||||||||
Fully taxable equivalent total return: |
||||||||||||
Fixed-income securities |
0 | % | 2.5 | % | 3.1 | % | ||||||
Common stocks |
(6.2 | )% | 5.0 | % | 8.5 | % | ||||||
Total portfolio |
(.8 | )% | 2.8 | % | 3.6 | % | ||||||
Pretax annualized investment income book yield |
3.0 | % | 3.1 | % | 3.4 | % |
- 4 -
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
May 2012
($ in millions)
(unaudited)
Current Month |
||||||||||||||||||||||||
Personal Lines Business | Commercial Auto Business |
Other Businesses1 |
Companywide Total |
|||||||||||||||||||||
Agency | Direct | Total | ||||||||||||||||||||||
Net Premiums Written |
$ | 622.9 | $ | 462.6 | $ | 1,085.5 | $ | 131.9 | $ | 0 | $ | 1,217.4 | ||||||||||||
% Growth in NPW |
7 | % | 7 | % | 7 | % | 10 | % | NM | 7 | % | |||||||||||||
Net Premiums Earned |
$ | 623.0 | $ | 481.4 | $ | 1,104.4 | $ | 125.5 | $ | 0.1 | $ | 1,230.0 | ||||||||||||
% Growth in NPE |
6 | % | 8 | % | 7 | % | 13 | % | NM | 8 | % | |||||||||||||
GAAP Ratios |
||||||||||||||||||||||||
Loss/LAE ratio |
76.8 | 74.8 | 76.0 | 72.1 | NM | 75.6 | ||||||||||||||||||
Expense ratio |
21.3 | 22.3 | 21.7 | 23.3 | NM | 21.9 | ||||||||||||||||||
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|
|||||||||||||
Combined ratio |
98.1 | 97.1 | 97.7 | 95.4 | NM | 97.5 | ||||||||||||||||||
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|
|||||||||||||
Actuarial Adjustments2 |
||||||||||||||||||||||||
Reserve Decrease/(Increase) |
||||||||||||||||||||||||
Prior accident years |
$ | .6 | ||||||||||||||||||||||
Current accident year |
(4.2 | ) | ||||||||||||||||||||||
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|
|||||||||||||||||||||||
Calendar year actuarial adjustment |
$ | (.6 | ) | $ | .1 | $ | (.5 | ) | $ | (2.9 | ) | $ | (.2 | ) | $ | (3.6 | ) | |||||||
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|
|||||||||||||||||||||||
Prior Accident Years Development |
||||||||||||||||||||||||
Favorable/(Unfavorable) |
||||||||||||||||||||||||
Actuarial adjustment |
$ | .6 | ||||||||||||||||||||||
All other development |
(2.8 | ) | ||||||||||||||||||||||
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|
|||||||||||||||||||||||
Total development |
$ | (2.2 | ) | |||||||||||||||||||||
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|
|||||||||||||||||||||||
Calendar year loss/LAE ratio |
75.6 | |||||||||||||||||||||||
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|
|||||||||||||||||||||||
Accident year loss/LAE ratio |
75.4 | |||||||||||||||||||||||
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|
|||||||||||||||||||||||
Statutory Ratios |
||||||||||||||||||||||||
Loss/LAE ratio |
75.7 | |||||||||||||||||||||||
Expense ratio |
22.2 | |||||||||||||||||||||||
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|
|||||||||||||||||||||||
Combined ratio |
97.9 | |||||||||||||||||||||||
|
|
1 | The other businesses generated an underwriting loss of $0.8 million for the month. Combined ratios and % growth are not meaningful (NM) due to the low level of premiums earned by, and the variability of loss costs in, such businesses. |
2 | Represents adjustments solely based on our corporate actuarial reviews. |
- 5 -
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
May 2012 Year-to-Date
($ in millions)
(unaudited)
Year-to-Date | ||||||||||||||||||||||||
Commercial | ||||||||||||||||||||||||
Personal Lines Business | Auto | Other | Companywide | |||||||||||||||||||||
Agency | Direct | Total | Business | Businesses1 | Total | |||||||||||||||||||
Net Premiums Written |
$ | 3,542.7 | $ | 2,750.4 | $ | 6,293.1 | $ | 758.8 | $ | 0 | $ | 7,051.9 | ||||||||||||
% Growth in NPW |
6 | % | 7 | % | 6 | % | 14 | % | NM | 7 | % | |||||||||||||
Net Premiums Earned |
$ | 3,358.6 | $ | 2,593.4 | $ | 5,952.0 | $ | 667.0 | $ | 0.7 | $ | 6,619.7 | ||||||||||||
% Growth in NPE |
5 | % | 7 | % | 6 | % | 10 | % | NM | 6 | % | |||||||||||||
GAAP Ratios |
||||||||||||||||||||||||
Loss/LAE ratio |
73.3 | 72.9 | 73.1 | 69.3 | NM | 72.8 | ||||||||||||||||||
Expense ratio |
20.9 | 23.6 | 22.1 | 22.8 | NM | 22.1 | ||||||||||||||||||
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|
|
|
|
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|
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|
|||||||||||||
Combined ratio |
94.2 | 96.5 | 95.2 | 92.1 | NM | 94.9 | ||||||||||||||||||
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|
|||||||||||||
Actuarial Adjustments2 |
||||||||||||||||||||||||
Reserve Decrease/(Increase) |
||||||||||||||||||||||||
Prior accident years |
$ | 35.1 | ||||||||||||||||||||||
Current accident year |
7.9 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Calendar year actuarial adjustment |
$ | 16.4 | $ | 16.5 | $ | 32.9 | $ | 10.3 | $ | (.2 | ) | $ | 43.0 | |||||||||||
|
|
|||||||||||||||||||||||
Prior Accident Years Development |
||||||||||||||||||||||||
Favorable/(Unfavorable) |
||||||||||||||||||||||||
Actuarial adjustment |
$ | 35.1 | ||||||||||||||||||||||
All other development |
(101.0 | ) | ||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Total development |
$ | (65.9 | ) | |||||||||||||||||||||
|
|
|||||||||||||||||||||||
Calendar year loss/LAE ratio |
72.8 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Accident year loss/LAE ratio |
71.8 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Statutory Ratios |
||||||||||||||||||||||||
Loss/LAE ratio |
72.8 | |||||||||||||||||||||||
Expense ratio |
21.3 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Combined ratio |
94.1 | |||||||||||||||||||||||
|
|
|||||||||||||||||||||||
Statutory Surplus |
$ | 5,732.6 | ||||||||||||||||||||||
|
|
NM = Not Meaningful
1 | Year to date, the other businesses generated an underwriting loss of $2.2 million. |
2 | Represents adjustments solely based on our corporate actuarial reviews. |
- 6 -
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
BALANCE SHEET AND OTHER INFORMATION
(millions except per share amounts)
(unaudited)
May | ||||
2012 | ||||
CONDENSED GAAP BALANCE SHEET: |
||||
Investments Available-for-sale, at fair value: |
||||
Fixed maturities1 (amortized cost: $11,712.7) |
$ | 12,073.6 | ||
Equity securities: |
||||
Nonredeemable preferred stocks1 (cost: $431.0) |
799.0 | |||
Common equities (cost: $1,486.8) |
1,968.1 | |||
Short-term investments (amortized cost: $1,649.2) |
1,649.2 | |||
|
|
|||
Total investments2, 3 |
16,489.9 | |||
Net premiums receivable |
3,241.6 | |||
Deferred acquisition costs |
452.2 | |||
Other assets4 |
2,378.5 | |||
|
|
|||
Total assets |
$ | 22,562.2 | ||
|
|
|||
Unearned premiums |
$ | 5,014.0 | ||
Loss and loss adjustment expense reserves4 |
7,502.6 | |||
Other liabilities3 |
1,751.6 | |||
Debt |
2,062.6 | |||
Shareholders equity |
6,231.4 | |||
|
|
|||
Total liabilities and shareholders equity |
$ | 22,562.2 | ||
|
|
|||
Common shares outstanding |
609.7 | |||
Shares repurchased May |
0 | |||
Average cost per share |
$ | 0 | ||
Book value per share |
$ | 10.22 | ||
Trailing 12-month return on average shareholders equity |
||||
Net income |
13.5 | % | ||
Comprehensive income |
11.4 | % | ||
Net unrealized pretax gains (losses) on investments |
$ | 1,207.9 | ||
Increase (decrease) from April 2012 |
$ | (180.6 | ) | |
Increase (decrease) from December 2011 |
$ | 157.4 | ||
Debt-to-total capital ratio |
24.9 | % | ||
Fixed-income portfolio duration |
1.9 years | |||
Weighted average credit quality |
AA- | |||
Year-to-date Gainshare factor |
1.42 |
1 | As of May 31, 2012, we held certain hybrid securities and recognized a change in fair value of $2.3 million as a realized gain during the period we held these securities. |
2 | Includes $4.7 billion of short-term investments and U.S. Treasury securities prior to settling $13.0 million of net security transactions outstanding as of month-end. |
3 | Includes $13.0 million of net unsettled security transactions (as discussed in note 2 above). |
4 | Loss and loss adjustment expense reserves are stated gross of reinsurance recoverables on unpaid losses of $803.0 million, which are included in other assets. |
- 7 -
Monthly Commentary
| During May, the Company incurred catastrophe losses of about $24 million, or 1.9 combined ratio points, compared to $48 million, or 4.2 points, last year. Oklahoma, Kansas, Texas, South Dakota, Minnesota, and Kentucky accounted for 75% of the total catastrophe losses incurred during the month. |
Events
As previously announced, Progressive will host a simultaneous webcast of its 2012 Investor Relations Meeting on Thursday, June 14, 2012 at 9:00 a.m. eastern time. This meeting will last approximately three hours and will include a question and answer session following the presentations. The meeting will also be available simultaneously, in a listen-only format, by phone. Participants via the phone will not be able to submit questions during the question and answer session. To attend the webcast or to receive the call-in instructions, visit our website at http://investors.progressive.com/phoenix.zhtml?c=81824&p=irol-calendar. Information that is distributed at the meeting will be made available on the website on the morning of the meeting.
We are currently scheduled to release June results on Thursday, July 12, 2012, before the market opens.
About Progressive
Celebrating its 75th anniversary in 2012, The Progressive Group of Insurance Companies makes it easy to understand, buy, and use auto insurance. Progressive offers choices so consumers can reach it whenever, wherever, and however its most convenientonline at http://www.progressive.com, by phone at 1-800-PROGRESSIVE, or in-person with a local agent.
Progressive offers insurance for personal and commercial autos and trucks, motorcycles, boats, recreational vehicles, and homes. Its the fourth largest auto insurer in the country, the largest seller of motorcycle insurance, and a leader in commercial auto insurance. Progressive also offers car insurance online in Australia at http://www.progressiveonline.com.au.
Founded in 1937, Progressive continues its long history of offering shopping tools and services that save customers time and money, like Name Your Price®, the Snapshot Discount®, and a concierge level of claims service.
The Common Shares of The Progressive Corporation, the Mayfield Village, Ohio-based holding company, trade publicly 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 possible failure of one or more governmental entities to make scheduled debt payments or satisfy other obligations; the potential or actual downgrading of governmental, corporate, or other securities by a rating agency; the financial condition of, and other issues relating to the strength of and liquidity available to, issuers of securities held in our investment portfolios and other companies with which we have ongoing business relationships, including counterparties to certain financial transactions; the accuracy and adequacy of our pricing and loss reserving methodologies; the competitiveness of our pricing and the effectiveness of our initiatives to retain more customers; initiatives by competitors and the effectiveness of our response; our ability to obtain regulatory approval for requested rate changes and the timing thereof; the effectiveness of our brand strategy and advertising campaigns relative to those of competitors; legislative and regulatory developments, including, but not limited to, health care reform and tax law changes; disputes relating to intellectual property rights; the outcome of litigation pending or that may be filed against us; weather conditions (including the severity and frequency of storms, hurricanes, snowfalls, hail, and winter conditions); changes in driving patterns and loss trends; acts of war and terrorist activities; our ability to maintain the uninterrupted operation of our facilities, systems (including information technology systems), and business functions; court decisions and trends in litigation and health care and auto repair costs; and other matters described from time to time in our releases and publications, and in our periodic reports and other documents filed with the United States Securities and Exchange Commission. In addition, investors should be aware that generally accepted accounting principles prescribe when a company may reserve for particular risks, including litigation exposures. Accordingly, results for a given reporting period could be significantly affected if and when a reserve is established for one or more contingencies. Also, our regular reserve reviews may result in adjustments of varying magnitude as additional information regarding claims activity becomes known. Reported results, therefore, may be volatile in certain accounting periods.
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