AM Best

A.M. Best Affirms Credit Ratings of The Progressive Corporation and Its Subsidiaries


Raymond Thomson, CPCU, ARe, ARM
Associate Director
+1 908 439 2200, ext. 5621

Greg Williams
Senior Director
+1 908 439 2200, ext. 5815

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Public Relations
+1 908 439 2200, ext. 5644


OLDWICK - MAY 11, 2017 10:53 AM (EDT)
A.M. Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” of the members of Progressive Agency Pool, Progressive Direct Pool and Progressive Commercial Auto Group (collectively known as Progressive). A.M. Best also has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” of National Continental Insurance Company (National Continental). Additionally, A.M. Best has affirmed the Long-Term ICR of “a” and all Long-Term Issue Credit Ratings (Long-Term IR) of the parent holding company, The Progressive Corporation [NYSE: PGR]. The outlook of these Credit Ratings (ratings) is stable. All companies are headquartered in Mayfield Village, OH. (See below for a detailed listing of the companies and ratings.)

The ratings of the Progressive auto writers (Progressive and National Continental) reflect their strong operating performance, adequate risk-adjusted capitalization and sustainable competitive advantages. Progressive’s risk-adjusted capitalization has benefited from consistently favorable underwriting results, consistent investment income and significant realized and unrealized capital gains in its investment portfolio given the favorable performance of equity markets in more recent years, though tempered somewhat over the past year. Progressive continues to benefit from a stable management team, brand name recognition, a multiple channel distribution platform, and innovative underwriting and claims handling technology. In addition, Progressive’s direct operations have continued to witness favorable growth, reflective of its improving brand recognition. Progressive’s auto results have outperformed competitors in recent years despite the impacts of frequency and severity throughout the automobile insurance industry, due mainly to their sophisticated data mining and pricing techniques.

These positive rating factors are offset partially by Progressive’s high underwriting leverage relative to industry averages. However, Progressive has operated historically with elevated underwriting leverage while consistently generating favorable underwriting results.

Progressive’s debt-to-adjusted capitalization remains within A.M. Best’s expectation consistent with the holding company’s current rating level. As of Dec. 31, 2016, the most recently available year-end data, The Progressive Corporation, along with its subsidiaries, had $33.4 billion in total assets and approximately $7.9 billion in total shareholder equity.

While Progressive’s ratings are well-positioned at the current rating level, negative rating actions could occur if operating performance and consequently risk-adjusted capitalization fall below A.M. Best’s expectation for its current ratings. In addition, negative rating actions could occur if capital erosion occurs due to investment volatility or increased risk appetite, or if there is a significant decline in the quality of support it receives from its parent. Alternatively, positive rating actions could occur if operating performance consistently exceeds its peer group by a significant margin over the next several years, and risk-adjusted capitalization improves significantly.

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

  • Progressive Casualty Insurance Company

  • Progressive Northern Insurance Company

  • Progressive Northwestern Insurance Company

  • Progressive Specialty Insurance Company

  • Progressive Preferred Insurance Company

  • Progressive Classic Insurance Company

  • Progressive American Insurance Company

  • Progressive Gulf Insurance Company

  • Progressive Bayside Insurance Company

  • Progressive Mountain Insurance Company

  • Progressive Southeastern Insurance Company

  • Progressive Hawaii Insurance Corp.

  • Progressive Michigan Insurance Company

  • Progressive Security Insurance Company

  • Progressive West Insurance Company

  • Drive New Jersey Insurance Company

  • Progressive County Mutual Insurance Company

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

  • Progressive Direct Insurance Company

  • Progressive Marathon Insurance Company

  • Progressive Max Insurance Company

  • Progressive Advanced Insurance Company

  • Progressive Universal Insurance Company

  • Progressive Premier Insurance Company of Illinois

  • Progressive Paloverde Insurance Company

  • Mountain Laurel Assurance Company

  • Progressive Select Insurance Company

  • Progressive Freedom Insurance Company

  • Progressive Garden State Insurance Company

The FSR of A+ (Superior) and the Long-Term ICRs of “aa” have been affirmed for the following members of Progressive Commercial Auto Group:

  • Artisan & Truckers Casualty Company

  • Progressive Express Insurance Company

  • United Financial Casualty Company

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

The Long-Term ICR of “a” and the following Long-Term IRs of The Progressive Corporation have been affirmed:

The Progressive Corporation

— “a” on $300 million 6.625% senior unsecured notes, due 2029

— “a” on $400 million 6.250% senior unsecured notes, due 2032

— “a” on $500 million 3.75% senior unsecured notes, due 2021

— “a” on $350 million 4.35% senior unsecured debentures, due 2044

— “bbb+” on $1 billion 6.7% junior subordinated debentures, due 2067 (of which $594.6 million remains outstanding)

— “a” on $400 million 3.7% senior unsecured notes, due 2045

— “a” on $500 million 2.45% senior unsecured notes, due 2027

— “a” on $850 million 4.125% senior unsecured notes, due 2047

This press release relates to Credit Ratings that have been published on A.M. Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see A.M. Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Understanding Best’s Credit Ratings.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source.

Related Companies

For information about each company, including the Best's Credit Reports, group members (where applicable) and news stories, click on the company name. An additional purchase may be required.