v3.26.1
Fair Value
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value FAIR VALUE
The composition of the investment portfolio by major security type and our outstanding debt was:
 Fair Value 
(millions)Level 1Level 2Level 3TotalCost
March 31, 2026
Fixed maturities:
U.S. government$44,417 $0 $0 $44,417 $44,676 
State and local government0 3,087 0 3,087 3,135 
Foreign government0 16 0 16 16 
Corporate and other debt0 20,982 4 20,986 20,994 
Residential mortgage-backed0 4,136 0 4,136 4,127 
Commercial mortgage-backed0 6,991 0 6,991 7,228 
Other asset-backed0 8,199 0 8,199 8,232 
Total fixed maturities44,417 43,411 4 87,832 88,408 
Short-term investments2,072 54 0 2,126 2,126 
    Total available-for-sale securities46,489 43,465 4 89,958 90,534 
Equity securities:
Nonredeemable preferred stocks0 191 49 240 259 
Common equities:
Common stocks3,891 0 5 3,896 802 
Other risk investments0 0 37 37 37 
Subtotal common equities3,891 0 42 3,933 839 
    Total equity securities3,891 191 91 4,173 1,098 
Total portfolio$50,380 $43,656 $95 $94,131 $91,632 
Debt$0 $7,728 $0 $7,728 $8,386 
 Fair Value 
(millions)Level 1Level 2Level 3TotalCost
March 31, 2025
Fixed maturities:
U.S. government$44,318 $0 $0 $44,318 $44,523 
State and local government0 2,604 0 2,604 2,688 
Foreign government0 16 0 16 16 
Corporate and other debt0 16,011 5 16,016 16,047 
Residential mortgage-backed0 2,183 0 2,183 2,172 
Commercial mortgage-backed0 4,825 0 4,825 5,144 
Other asset-backed0 7,139 0 7,139 7,164 
Total fixed maturities44,318 32,778 5 77,101 77,754 
Short-term investments2,595 0 0 2,595 2,595 
    Total available-for-sale securities46,913 32,778 5 79,696 80,349 
Equity securities:
Nonredeemable preferred stocks0 524 60 584 608 
Common equities:
Common stocks3,344 0 9 3,353 743 
Other risk investments0 0 31 31 31 
Subtotal common equities3,344 0 40 3,384 774 
    Total equity securities3,344 524 100 3,968 1,382 
Total portfolio$50,257 $33,302 $105 $83,664 $81,731 
Debt$0 $6,247 $0 $6,247 $6,894 
 Fair Value 
(millions)Level 1Level 2Level 3TotalCost
December 31, 2025
Fixed maturities:
U.S. government$43,298 $0 $0 $43,298 $43,114 
State and local government0 3,303 0 3,303 3,342 
Foreign government0 17 0 17 17 
Corporate and other debt0 19,987 4 19,991 19,773 
Residential mortgage-backed0 3,175 0 3,175 3,152 
Commercial mortgage-backed0 5,973 0 5,973 6,194 
Other asset-backed0 7,109 0 7,109 7,112 
Total fixed maturities43,298 39,564 4 82,866 82,704 
Short-term investments9,810 195 0 10,005 10,005 
    Total available-for-sale securities53,108 39,759 4 92,871 92,709 
Equity securities:
Nonredeemable preferred stocks0 344 60 404 419 
Common equities:
Common stocks4,057 0 5 4,062 783 
Other risk investments0 0 36 36 36 
Subtotal common equities4,057 0 41 4,098 819 
    Total equity securities4,057 344 101 4,502 1,238 
Total portfolio$57,165 $40,103 $105 $97,373 $93,947 
Debt$0 $6,345 $0 $6,345 $6,897 
Our portfolio valuations, excluding short-term investments valued at adjusted original cost, classified as either Level 1 or Level 2 in the above tables are priced exclusively by external sources, including pricing vendors, dealers/market makers, and exchange-quoted prices. We concluded there was sufficient market activity in the relevant sectors and securities, further supporting our Level 1 and Level 2 classifications.
Our short-term investments classified as Level 1 include commercial paper, U.S. Treasury Bills, and money market funds, which are highly liquid, actively marketed, and have short durations. These securities are valued at their original cost, adjusted for any accretion of discount, which approximates fair value because of the relatively short period of time until maturity. The remainder of our short-term investments with a trade date to maturity of less than a year are classified as Level 2. These securities are classified as Level 2 since they are valued using external pricing vendor prices or are securities that continually trade at par value because they contain either liquidity facilities or mandatory put features within one year and, as a result, are valued at their original cost.
At March 31, 2026 and 2025, and December 31, 2025, vendor-quoted prices represented 92%, 93%, and 91%, respectively, of our Level 1 classifications (excluding short-term investments valued at adjusted original cost). The securities quoted by vendors in Level 1 primarily represent our holdings in U.S. government securities, which are frequently traded, and the quotes are considered similar to exchange-traded quotes. The balance of our Level 1 pricing comes from quotes obtained directly from trades made on active exchanges.
At March 31, 2026, vendor-quoted prices comprised 99% of our Level 2 classifications (excluding short-term investments valued at adjusted original cost), with the balance from dealer quotes, compared to 100% at March 31, 2025 and December 31, 2025. In our process for selecting a source (e.g., dealer or pricing service) to provide pricing for securities in our portfolio, we reviewed documentation from the sources that detailed the pricing techniques and methodologies used by these sources and determined if their policies adequately considered market activity, either based on specific transactions for the particular security type or based on modeling of securities with similar credit quality, duration, yield, and structure that were recently transacted. Once a source is chosen, we continue to monitor any changes or modifications to their processes by reviewing their documentation on internal controls for pricing and market reviews. We review quality control measures of our sources as they become available to determine if any significant changes have occurred from period to period that might indicate issues or concerns regarding their evaluation or market coverage.
As part of our pricing procedures, we obtain quotes from more than one source to help us fully evaluate the market price of securities. However, our internal pricing policy is to use a consistent source for individual securities in order to maintain the integrity of our valuation process. Quotes obtained from the sources are not considered binding offers to transact. Under our policy, when a review of the valuation received from our selected source appears to be outside of what is considered market level activity (which is defined as trading at spreads or yields significantly different than those of comparable securities or outside the
general sector level movement without a reasonable explanation), we may use an alternate source’s price. To the extent we determine that it may be prudent to substitute one source’s price for another, we will contact the initial source to obtain an understanding of the factors that may be contributing to the significant price variance.
To allow us to determine if our initial source is providing a price that is outside of a reasonable range, we review our portfolio pricing on a weekly basis. When necessary, we challenge prices from our sources when a price provided does not match our expectations based on our evaluation of market trends and activity. Initially, we perform a review of our portfolio by sector to identify securities whose prices appear outside of a reasonable range. We then perform a more detailed review of fair values for securities disclosed as Level 2. We review dealer bids and quotes for these and/or similar securities to determine the market level context for our valuations. We then evaluate inputs relevant for each class of securities disclosed in the preceding hierarchy tables.
For structured debt securities, including commercial, residential, and other asset-backed securities, we evaluate available market-related data for these and similar securities related to collateral, delinquencies, and defaults for historical trends and reasonably estimable projections, as well as historical prepayment rates and current prepayment assumptions and cash flow estimates. We further stratify each class of structured debt securities into more finite sectors (e.g., planned amortization class, first pay, second pay, senior, and subordinated) and use duration and credit quality to determine if the fair value is appropriate.
For corporate and other debt, nonredeemable preferred stock, and the notes issued by The Progressive Corporation (see Note 4 – Debt), we review securities by duration, credit quality, and coupon, as well as changes in interest rate and credit spread movements within that stratification. The review also includes recent trades, including: volume traded at various levels that establish a market; issuer specific fundamentals; and industry-specific economic news as it comes to light.
For state and local government (municipal) securities, we stratify the portfolio to evaluate securities by type, duration, credit quality, and coupon, to review price changes relative to credit spread and interest rate changes.
Additionally, we look to economic data as it relates to geographic location as an indication of price-to-call or maturity predictors. For municipal housing securities, we look to changes in cash flow projections, both historical and reasonably estimable projections, to understand yield changes and their effect on valuation.
For short-term investments valued at adjusted original cost, we look at acquisition price relative to the coupon or yield. Since most of these securities are 60 days or less to maturity, we believe that adjusted original cost is the best estimate of fair value. For short-term investments valued with external vendor prices, we review securities by duration, credit quality, and coupon, as well as changes in interest rate and credit spread movements within that stratification, and recent trade information.
We also review data assumptions as supplied by our sources to determine if that data is relevant to current market conditions. In addition, we independently review each sector for transaction volumes, new issuances, and changes in spreads, as well as the overall movement of interest rates along the yield curve to determine if sufficient activity and liquidity exists to provide a credible source for our market valuations.
During each valuation period, we create internal estimations of portfolio valuation (performance returns), based on current market-related activity (i.e., interest rate and credit spread movements and other credit-related factors) within each major sector of our portfolio. We compare our results to index returns for each major sector adjusting for duration and credit quality differences to better understand our portfolio’s results. Additionally, we review our external sales transactions and compare the actual final market sales prices to previous market valuation prices on a monthly basis. This review provides us further validation that our pricing sources are providing market level prices, and gives us additional comfort regarding the source’s process, the quality of its review, and its willingness to improve its analysis based on feedback from clients. We believe this effort helps ensure that we are reporting the most representative fair values for our securities.
After all the valuations are received and our review of Level 2 securities is complete, if the inputs used by vendors are determined to not contain sufficient observable market information, we will reclassify the affected securities to Level 3.

Except as described below, our Level 3 securities are priced externally; however, due to several factors (e.g., nature of the securities, level of activity, and lack of similar securities trading to obtain observable market level inputs), these valuations are more subjective in nature.
To the extent we receive prices from external sources (e.g., broker and valuation firm) for the Level 3 securities, we review those prices for reasonableness using internally developed assumptions and then compare our derived prices to the prices received from the external sources. Based on our review during the first three months of 2026 and for the full year of 2025, all prices received from external sources remained unadjusted.
If we do not receive prices from an external source, we perform an internal fair value comparison, which includes a review and analysis of market-comparable securities, to determine if fair value changes are needed. Based on this analysis, certain private equity investments included in the Level 3 category remain valued at cost or were priced using a recent transaction as the basis for fair value. At
least annually, these private equity investments are priced by an external source.
Our Level 3 other risk investments include securities accounted for under the equity method of accounting and, therefore, are not subject to fair value reporting. Since these securities represent less than 0.1% of our total portfolio, we include them in our Level 3 disclosures and report the activity from these investments as “other” changes in the summary of changes in fair value table and categorize these securities as “pricing exemption securities” in the quantitative information table.
During the first three months of 2026 and for the full year of 2025, there were no material assets or liabilities measured at fair value on a nonrecurring basis.
Due to the relative size of the Level 3 securities’ fair values, compared to the total portfolio’s fair value, any changes in pricing methodology would not have a significant change in valuation that would materially impact net or comprehensive income.
The following tables provide a summary of changes in fair value associated with Level 3 assets for the three months ended March 31, 2026 and 2025:
(millions)Fair Value at December 31, 2025Calls/
Maturities/
Paydowns/Other		PurchasesSalesNet Realized
(Gain)/Loss
on Sales
Change in
Valuation1
Net
Transfers
In (Out)		Fair Value at March 31, 2026
Fixed maturities:
Corporate and other debt$4 $0 $0 $0 $0 $0 $0 $4 
Equity securities:
Nonredeemable preferred stocks60 0 0 (5)(7)1 0 49 
Common equities:
Common stocks5 0 0 0 0 0 0 5 
Other risk investments36 1 0 0 0 0 0 37 
Total Level 3 securities$105 $1 $0 $(5)$(7)$1 $0 $95 
(millions)Fair Value at December 31, 2024Calls/
Maturities/
Paydowns/Other		PurchasesSalesNet Realized
(Gain)/Loss
on Sales
Change in
Valuation1
Net
Transfers
In (Out)		Fair Value at March 31, 2025
Fixed maturities:
Corporate and other debt$5 $0 $0 $0 $0 $0 $0 $5 
Equity securities:
Nonredeemable preferred stocks52 0 8 0 0 0 0 60 
Common equities:
Common stocks23 0 0 0 0 (14)0 9 
Other risk investments25 6 0 0 0 0 0 31 
Total Level 3 securities
$105 $6 $8 $0 $0 $(14)$0 $105 
1For fixed maturities, amounts included are unrealized gains (losses) reflected in accumulated other comprehensive income (loss) on our consolidated balance sheets. For equity securities, amounts included are net holding period gains (losses) on securities on our consolidated statements of comprehensive income.
The following tables provide a summary of the quantitative information about Level 3 fair value measurements for our applicable securities at March 31, 2026 and 2025, and December 31, 2025:
($ in millions)Fair Value at March 31, 2026Valuation
Technique		Unobservable InputRange of
Input Values
Increase
(Decrease)		Weighted
Average
Increase
(Decrease)
Fixed maturities:
Corporate and other debt$4 Market comparablesWeighted average market capitalization price change %
(1.0)%
(1.0)%
Equity securities:
Nonredeemable preferred stocks49 Market comparablesWeighted average market capitalization price change %
(23.6)% to 0%
(12.4)%
Common stocks5 Market comparablesWeighted average market capitalization price change %
(41.3)% to (12.9)%
(23.6)%
Subtotal Level 3 securities58 
Pricing exemption securities37 
Total Level 3 securities$95 


($ in millions)Fair Value at March 31, 2025Valuation
Technique		Unobservable InputRange of
Input Values
Increase
(Decrease)		Weighted
Average
Increase
(Decrease)
Fixed maturities:
Corporate and other debt$5 Market comparablesWeighted average market capitalization price change %
0.7% to 0.8%
0.8 %
Equity securities:
Nonredeemable preferred stocks60 Market comparablesWeighted average market capitalization price change %
(11.8)% to 16.1%
6.4 %
Common stocks9 Market comparablesWeighted average market capitalization price change %
(36.8)% to 41.5%
6.7 %
Subtotal Level 3 securities74 
Pricing exemption securities31 
Total Level 3 securities$105 


($ in millions)Fair Value at December 31, 2025Valuation
Technique		Unobservable InputRange of
Input Values
Increase
(Decrease)		Weighted
Average
Increase
(Decrease)
Fixed maturities:
Corporate and other debt$4 Market comparablesWeighted average market capitalization price change %
(0.1)% to 0.1%
0 %
Equity securities:
Nonredeemable preferred stocks60 Market comparablesWeighted average market capitalization price change %
(14.5)% to 7.6%
(4.5)%
Common stocks5 Market comparablesWeighted average market capitalization price change %
(40.9)% to 36.3%
7.6 %
Subtotal Level 3 securities69 
Pricing exemption securities36 
Total Level 3 securities$105