AM Best Affirms Credit Ratings of The Progressive Corporation and Subsidiaries

AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” (Superior) for the members of The Progressive Corporation (Progressive) (Mayfield Village, OH) [NYSE: PGR]. Additionally, AM Best has affirmed the Long-Term ICR of “a” (Excellent) for Progressive, the parent holding company, and all Long-Term Issue Credit Ratings (Long-Term IR) on Progressive’s senior and preferred stock issuances.

Concurrently, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) of Protective Insurance Company (Carmel, IN) and its wholly owned subsidiaries, collectively known as Protective Insurance Corporation Group (Protective). AM Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) of National Continental Insurance Company (National Continental) (Bohemia, NY). The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)

The ratings of Progressive reflect its balance sheet strength, which AM Best assesses as strongest, as well as its strong operating performance, very favorable business profile and appropriate enterprise risk management (ERM).

Progressive’s risk-adjusted capitalization benefits from consistently favorable underwriting results and reliable levels of investment income. These results reflect a seasoned and stable management team, efficient multi-channel distribution platform and innovative underwriting and claims-handling technology; the latter exemplified by the continued development and incorporation of usage-based technologies. In addition, Progressive continues to experience strong premium growth, reflective of its widespread brand recognition, sophisticated pricing schemes and expansion efforts namely through its recent acquisition of Protective. Based on its five-year average combined ratio, Progressive continues to outperform AM Best’s private passenger standard auto composite despite the impacts of increased frequency and severity trends throughout the automobile insurance industry, due mainly to its sophisticated data mining and risk-to-rate matching. However, recent loss reserve development trends have been modestly adverse due to the aforementioned auto challenges, as well as reopened personal injury protection claims and deficiencies in the property book. Furthermore, Progressive maintains high underwriting leverage relative to industry averages; however, it has traditionally done so while consistently producing favorable underwriting results with low levels of volatility.

The ratings of Protective reflect the group’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate ERM. Additionally, the ratings reflect strategic advantages gained through the affiliation with Progressive.

The ratings of National Continental reflect the company’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, limited business profile and appropriate ERM. Additionally, the ratings recognize the financial strength, infrastructure and technological capabilities afforded as a subsidiary of Progressive.

The FSR of A+ (Superior) and the Long-Term ICRs of “aa” (Superior) have been affirmed with stable outlooks for the following members of The Progressive Corporation:

Progressive Casualty Insurance CompanyProgressive Northern Insurance CompanyProgressive Northwestern Insurance CompanyProgressive Specialty Insurance CompanyProgressive Preferred Insurance CompanyProgressive Classic Insurance CompanyProgressive American Insurance CompanyProgressive Gulf Insurance CompanyProgressive Bayside Insurance CompanyProgressive Mountain Insurance CompanyProgressive Southeastern Insurance CompanyProgressive Hawaii Insurance Corp.Progressive Michigan Insurance CompanyProgressive Security Insurance CompanyProgressive West Insurance CompanyProgressive County Mutual Insurance CompanyProgressive Direct Insurance CompanyProgressive Marathon Insurance CompanyProgressive Max Insurance CompanyProgressive Advanced Insurance CompanyProgressive Universal Insurance CompanyProgressive Premier Insurance Company of IllinoisProgressive Paloverde Insurance CompanyProgressive Select Insurance CompanyProgressive Garden State Insurance CompanyProgressive Express Insurance CompanyProgressive Property Insurance CompanyProgressive Choice Insurance CompanyProgressive Freedom Insurance CompanyArtisan and Truckers Casualty CompanyAmerican Strategic Insurance Corp.ASI Assurance Corp.ASI Home Insurance Corp.ASI LloydsASI Preferred Insurance Corp.ASI Select Insurance CorpBlue Hill Specialty Insurance CompanyDrive New Jersey Insurance CompanyMountain Laurel Assurance CompanyUnited Financial Casualty Company

The FSR of A (Excellent) and the Long-Term ICRs of “a+” (Excellent) have been affirmed with stable outlooks for Protective Insurance Company and its wholly owned subsidiaries:

Sagamore Insurance CompanyProtective Specialty Insurance Company

The FSR of A (Excellent) and the Long-Term ICR of “a+” (Excellent) have been affirmed with a stable outlook for National Continental Insurance Company.

The Long-Term ICRs of “a” (Excellent) and the following Long-Term IRs of The Progressive Corporation have been affirmed with stable outlooks:

The Progressive Corporation—
— “a” (Excellent) on $500 million 2.45% senior unsecured notes, due 2027
— “a” (Excellent) on $300 million 6.625% senior unsecured notes, due 2029
— “a” (Excellent) on $550 million 4.00% senior unsecured notes, due 2029
— “a” (Excellent) on $500 million 3.20% senior unsecured notes, due 2030
— “a” (Excellent) on $400 million 6.250% senior unsecured notes, due 2032
— “a” (Excellent) on $350 million 4.35% senior unsecured notes, due 2044
— “a” (Excellent) on $400 million 3.7% senior unsecured notes, due 2045
— “a” (Excellent) on $850 million 4.125% senior unsecured notes, due 2047
— “a” (Excellent) on $600 million 4.2% senior unsecured notes, due 2048
— “a” (Excellent) on $500 million 3.95% senior unsecured notes, due 2050
— “bbb+” (Good) on $500 million 5.375% cumulative preferred stock