AM Best Affirms Credit Ratings of The Progressive Corporation and Most Members; Upgrades Issuer Credit Ratings of American Strategic Insurance Corp. and Its Affiliates

Business Wire

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa” of most members of The Progressive Corporation (Progressive) (Mayfield Village, OH). Concurrently, AM Best has upgraded the Long-Term ICRs to “aa” from “aa-” and affirmed the FSR of A+ (Superior) of American Strategic Insurance Corp. (American Strategic) (St. Petersburg, FL) and its affiliates that are now part of Progressive. Additionally, AM Best has affirmed the Long-Term ICR of “a” and all Long-Term Issue Credit Ratings (Long-Term IR) of all senior issuances and the preferred stock issuance of the parent holding company, Progressive. Also, AM Best has affirmed the FSR of A (Excellent) and the Long-Term ICR of “a+” 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 categorizes as strongest, as well as its strong operating performance, very favorable business profile and appropriate enterprise risk management (ERM).

Progressive’s risk-adjusted capitalization has benefited from consistently favorable underwriting results and high levels of investment income, as well as sizable realized and unrealized capital gains. Progressive continues to benefit from a seasoned and stable management team, brand name recognition, multiple channel distribution platform, and innovative underwriting and claims handling technology. In addition, Progressive continues to experience strong premium growth, reflective of its widespread 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 its 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 with very low levels of volatility.

The Long-Term ICR upgrade of American Strategic Insurance Corp. reflects its growing importance within the organization given Progressive’s efforts to increase the share of multi-product households through bundling. Bundled products are an integral part of Progressive’s offerings and an important part of the company’s strategic agenda.

The ratings of National Continental reflect the company’s balance sheet strength, which AM Best categorizes 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” have been affirmed with stable outlooks for the following members of The Progressive Corporation:

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
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 Garden State Insurance Company
United Financial Casualty Company
Artisan and Truckers Casualty Company
Progressive Express Insurance Company

The Long-Term ICRs have been upgraded to “aa” from “aa-” and the FSR of A+ (Superior) affirmed, with stable outlooks for American Strategic Insurance Corp. and the following affiliates:

ASI Assurance Corp.
ASI Home Insurance Corp.
ASI Lloyds
ASI Preferred Insurance Corp.
ASI Select Insurance Corp.
Progressive Property Insurance Company

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

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

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

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

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

-- “a” on $550 million 4.00% senior unsecured notes, due 2029

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

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

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

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

-- “a” on $600 million 4.2% senior unsecured notes, due 2048

-- “bbb+” on $500 million 5.375% cumulative preferred stock

This press release relates to Credit Ratings that have been published on AM 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 AM 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. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit www.ambest.com for more information.