Jason Middlebrook Artwork - Light Way Down (detail)

The Progressive Corporation 2016 Shareholders’ Report

Black and white photo of Jason Middlebrook’s Studio

We write personal auto and other specialty property-casualty insurance and provide related services throughout the United States. Our Personal Lines segment writes insurance for personal autos and recreational vehicles. Our Commercial Lines segment writes primarily liability and physical damage insurance for automobiles and trucks owned and/or operated predominantly by small businesses in the business auto, for-hire transportation, contractor, for-hire specialty, tow, and for-hire livery markets. We distribute our Personal and Commercial Lines products through both the Agency and Direct channels.

Personal Lines

 Three Months
Ended March 31,		  
2016   2015   Change
Net premiums written (billions) $ 4.99 $ 4.54   10%
Net premiums earned (billions) $ 4.57 $ 4.20   9%
Loss and loss adjustment expense ratio 74.3   73.4   0.9 pts.
Underwriting expense ratio 20.2   20.3   (0.1 ) pts.
Combined ratio 94.5   93.7   0.8 pts.
Policies in force (thousands) 14,185.8   13,492.3   5%

Commercial Lines

 Three Months
Ended March 31,		  
2016 2015   Change
Net premiums written (billions) $ 0.66 $ 0.53   25%
Net premiums earned (billions) $ 0.55 $ 0.47   18%
Loss and loss adjustment expense ratio 66.4   61.0   5.4 pts.
Underwriting expense ratio 22.5   22.2   0.3 pts.
Combined ratio 88.9   83.2   5.7 pts.
Policies in force (thousands) 575.1   522.6   10%

Property

 Three Months
Ended March 31,		  
2016 2015 Change
Net premiums written (billions) $ 0.17 $ |||||||| ||||||||
Net premiums earned (billions) $ 0.20 $ |||||||| ||||||||
Loss and loss adjustment expense ratio 77.9   |||||||| ||||||||
Underwriting expense ratio 34.3   |||||||| ||||||||
Combined ratio 112.2   |||||||| ||||||||
Policies in force (thousands) 1,078.5   |||||||| ||||||||

Progressive acquired a controlling interest in ARX Holding Corp. in April 2015 and began separately reporting results for its Property business at that time. The combined ratio includes 22.7 points in catastrophe losses and 7.6 points of amortization/depreciation expense associated with the ARX acquisition.