Progressive (PGR) risk factors, FY2025 10-K

Other

1. 01We have also included an “Other” section in the discussion below to identify risks that do not fit into one of the categories above

II. Insurance Risks

1. 02Our success depends on our ability to underwrite and price risks accurately and to charge adequate rates to policyholders
2. 03Our success depends on our ability to establish accurate loss reserves
3. 04Our insurance operating results have been and likely will continue to be materially adversely affected by severe weather and other catastrophe events, and climate change may be exacerbating these events and their impacts
4. 05Our success will depend on our ability to continue to accurately predict our reinsurance needs, obtain sufficient reinsurance coverage for our property and other businesses at reasonable cost, and collect under our reinsurance arrangements

III. Operating Risks

1. 06Our business depends on the secure and uninterrupted operation of our systems, facilities, and business functions and the operation of various third-party systems
2. 07Our business could be materially adversely affected by a security breach or other attack involving our technology systems or the systems of one or more of our vendors
3. 08We must maintain a brand and reputation that is recognized and trusted by consumers
4. 09Our success depends on our ability to innovate effectively and respond to our competitors’ initiatives
5. 10We must effectively manage complexity as we develop and deliver high-quality products and customer experiences
6. 11We compete in property and casualty insurance markets that are highly competitive
7. 12Our success depends on our ability to adjust claims accurately
8. 13We are subject to a variety of complex laws and regulations51% rewritten
9. 14Misconduct or fraudulent acts by employees, agents, and third parties may expose us to financial loss, disruption of business, and/or regulatory assessments
10. 15Our ability to attract, develop, and retain talent, including employees, managers, and executives, and to maintain appropriate staffing levels, is critical to our success30% rewritten
11. 16Our workplace policies or perceptions of those policies by current and potential employees, including policies with respect to virtual, hybrid, and in-person work protocols, could impact our ability to attract, onboard, and retain talent with desired experiences, knowledge, perspectives, and skills
12. 17Lawsuits challenging our business practices, and those of our competitors and other companies, are pending and more may be filed in the future
13. 18Our long-term business strategy and efforts to acquire or develop new products or enter new areas of business may not be successful and may create enhanced risks
14. 19Intellectual property rights could affect our competitiveness and our business operations
15. 20Our development and use of new technology, such as generative and agentic artificial intelligence, may present additional risks, may not be successful, and could have a material adverse effect on our business

IV. Market Risks

1. 21The performance of our fixed-income and equity investment portfolios is subject to a variety of investment risks
2. 22See Management’s Discussion and Analysis of Financial Condition and Results of Operations – IV29% rewritten
3. 23New regulations and societal pressures relating to Sustainability and other public policy matters could negatively impact our returns or cause us to change our investing strategies in ways that could negatively impact our results

V. Liquidity Risk

1. 24The inability to access our cash accounts or to convert investments into cash on favorable terms when we desire to do so may materially and adversely affect our business, cash flows, and capital position

VI. Credit and Other Financial Risks

1. 25Our financial condition may be adversely affected if one or more parties with which we enter into significant contracts or transact business (including under certain government programs) become insolvent, experience other financial difficulties, or default in the performance of contractual or reimbursement obligations
2. 26Our insurance subsidiaries may be limited in the amount of dividends that they can pay, which in turn may limit our ability to repay indebtedness, make capital contributions to other subsidiaries or affiliates, pay dividends to shareholders, repurchase securities, or meet other obligations
3. 27If we are unable to obtain capital when necessary to support our business, our financial condition and our ability to grow could be materially adversely affected
4. 28Our access to capital markets, ability to obtain or renew financing arrangements, obligations to post collateral under certain derivative contracts, and business operations are dependent on favorable evaluations and ratings by credit and other rating agencies
5. 29Our dividend policy likely will result in varying amounts being paid to our common shareholders, or no payment in some periods, and the dividend policy ultimately may be changed in the discretion of the Board of Directors
6. 30Our investments in certain tax-advantaged projects may not generate the anticipated tax benefits and related returns
7. 31Our goal is to maximize the long-term value of the enterprise and we do not manage to short-term earnings expectations, which may adversely affect short-term results
8. 32Our business and results of operations could be adversely affected by epidemics, pandemics, or other widespread health risks62% rewritten