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

A.M. Best Co. has affirmed the financial strength ratings (FSR) of A+ (Superior) and issuer credit ratings (ICR) of “aa” of the Progressive Agency Pool, Progressive Direct Pool and Progressive Commercial Auto Group (collectively known as Progressive) and their respective members. A.M. Best also has affirmed the FSR of A (Excellent) and ICR of “a+” of National Continental Insurance Company. Additionally, A.M. Best has affirmed the ICR of “a” and all debt ratings of the parent holding company, The Progressive Corporation [NYSE: PGR]. The outlook for all ratings is stable. All companies are headquartered in Mayfield Village, OH. (See below for a detailed listing of the companies and ratings.)The ratings reflect Progressive’s solid capitalization, strong operating performance and sustainable competitive advantages. Progressive’s capitalization has benefitted from improved underwriting results in 2009 and a rebound in its investment portfolio. Progressive continues to benefit from an innovative management team, brand name recognition, a multiple channel distribution platform and innovative underwriting and claims handling technology.These positive rating factors are partially offset by Progressive’s high underwriting leverage relative to industry averages. In addition, although financial leverage at the holding company improved in 2009, financial leverage remains higher than 2006 and prior years. However, Progressive has historically operated with elevated underwriting leverage, and debt-to-adjusted capitalization remains within A.M. Best’s expectations.The FSR of A+ (Superior) and ICRs of “aa” have been affirmed for the Progressive Agency Pool and its following members:-- 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 Northeastern Insurance Company-- Progressive Security Insurance Company-- Progressive West Insurance Company-- Drive New Jersey Insurance Company-- Progressive County Mutual Insurance CompanyThe FSR of A+ (Superior) and ICRs of “aa” have been affirmed for the Progressive Direct Pool and its following members:-- 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 Choice Insurance Company-- Progressive Select Insurance Company-- Progressive Freedom Insurance Company-- Progressive Garden State Insurance CompanyThe FSR of A+ (Superior) and ICRs of “aa” have been affirmed for the Progressive Commercial Auto Group and its following members:-- Artisan & Truckers Casualty Company-- Progressive Express Insurance Company-- United Financial Casualty CompanyThe FSR of A (Excellent) and ICR of “a+” have been affirmed for National Continental Insurance Company.The ICR of “a” has been affirmed for The Progressive Corporation.The following debt ratings have been affirmed:The Progressive Corporation—-- “a” on $350 million 6.375% senior unsecured notes, due 2012-- “a” on $150 million 7.000% senior unsecured notes, due 2013-- “a” on $300 million 6.625% senior unsecured notes, due 2029-- “a” on $400 million 6.250% senior unsecured notes, due 2032-- “bbb+” on $1 billion 6.7% junior subordinated debentures, due 2067For Best’s Credit Ratings, an overview of the rating process and rating methodologies, please visit http://www.ambest.com/ratings.The principal methodologies used in determining these ratings, including any additional methodologies and factors that may have been considered, can be found at http://www.ambest.com/ratings/methodology.