<SEC-DOCUMENT>0001193125-21-339963.txt : 20220224
<SEC-HEADER>0001193125-21-339963.hdr.sgml : 20220224
<ACCEPTANCE-DATETIME>20211124130259
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-21-339963
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20211124

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PROGRESSIVE CORP/OH/
		CENTRAL INDEX KEY:			0000080661
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				340963169
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		6300 WILSON MILLS RD
		CITY:			MAYFIELD VILLAGE
		STATE:			OH
		ZIP:			44143
		BUSINESS PHONE:		4404615000

	MAIL ADDRESS:	
		STREET 1:		6300 WILSON MILLS RD
		CITY:			MAYFIELD VILLAGE
		STATE:			OH
		ZIP:			44143
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
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<TITLE>Response Letter</TITLE>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">November&nbsp;24, 2021 </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Todd Schiffman </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Erin Purnell </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Finance </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E. </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD VALIGN="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="top"><B>Re:</B></TD>
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<TD VALIGN="top"><B>The Progressive Corporation</B></TD></TR>
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<TD VALIGN="top"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2020</B></TD></TR>
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<TD VALIGN="top"><B>Filed March&nbsp;1, 2021, File <FONT STYLE="white-space:nowrap">No.&nbsp;001-09518</FONT> (&#147;2020 <FONT STYLE="white-space:nowrap">10-K&#148;)</FONT></B></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Mr.&nbsp;Schiffman and Ms.&nbsp;Purnell: </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">I am writing in response to your letter dated November&nbsp;9, 2021. We acknowledge that references to prior comments refer to your September&nbsp;23, 2021
letter. For your information, as used in this letter, the term &#147;Prior Response&#148; refers to our letter to you dated October&nbsp;6, 2021. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><I><U>Background </U></I></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As mentioned in our Prior Response, we
operate almost exclusively in the United States, and the vast majority of our policies are written for individual consumers. Our principal business (about 82% of our revenue for 2020) is insuring autos and other vehicles (motorcycles, boats,
RV&#146;s, etc.) owned by individuals. Approximately 13% of our revenues relate to commercial insurance, principally covering vehicles owned by small businesses, with very limited exposures to commercial property and liability for our small business
customers. A smaller percentage of our business, about 5% of revenues, involves residential property insurance, including homeowners&#146; and renters&#146; policies. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We are mindful of the risks that may be posed by climate change. However, we note that our business model may be different than most other large, publicly
held insurance companies, which typically have broader geographic and product exposures. For example, because we do not have foreign locations or businesses, at this point we are not exposed to laws and regulations imposed by foreign governments or
other risks relating to such foreign operations, including climate related risks. Our <FONT STYLE="white-space:nowrap">non-vehicle</FONT> commercial business insurance, such as commercial property or business interruption insurance, constitutes a
very small percentage of our business and, as a result, we are not likely to experience significant losses unrelated to our vehicle and residential property insurance businesses, which we discussed in the Prior Response and again below. We also do
not provide insurance to large commercial companies that operate in environmentally sensitive industries and whose businesses could be significantly impacted by climate related developments. Lastly, we do not currently offer a life insurance product
and, therefore, we would not expect to be significantly impacted by potential climate change-related impacts on that business, such as changes in morbidity and mortality rates. Although our 2020 <FONT STYLE="white-space:nowrap">10-K</FONT> explained
and quantified the significant severe weather impacts that we saw during 2020, these differences may help explain why our disclosures do not address certain issues that can be seen in other insurers&#146; risk discussions. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">1 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the Fiscal Year Ended December&nbsp;31, 2020
</U></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">1. Your response to prior comment 1
states that you have not identified material litigation risks related to climate change. Please tell us whether you have identified any indirect litigation risks that could have a material impact. Please also tell us about your process for
identifying direct and indirect litigation risks and assessing materiality. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We did not identify any material litigation risks related to climate change, nor did we identify indirect litigation risk that could have a material impact to
the Company. We monitor and assess direct and indirect litigation risks in the ordinary course of our business. Attorneys in our Corporate Law Department and Claims Legal Group monitor legal trends and risks that could impact the Company, tracking
lawsuits and claims made against the Company, other insurers, other types of financial services companies, and other large businesses in the U.S. This work involves monitoring filed cases and their resolutions, as well as emerging legal theories
that may impact us in the future. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">When such a risk is identified, it is elevated for further review to the appropriate business and legal personnel and,
if warranted, to the Chief Legal Officer. In addition, quarterly meetings between attorneys in our Corporate Litigation Group, attorneys responsible for SEC reporting, and our GAAP Financial Reporting Group are intended to ensure appropriate
consideration of litigation risks, including indirect litigation risks, for potential disclosure in filed reports. Many of these same attorneys, together with members of our risk management team and members of our Management Risk Committee (a
committee of senior managers that implements our enterprise risk management program), were also involved in the development of the Risk Factor section of our 2020 <FONT STYLE="white-space:nowrap">10-K.</FONT> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">When assessing whether to identify a specific risk in the Risk Factor section of our 2020 <FONT STYLE="white-space:nowrap">10-K,</FONT> we considered a number
of factors, including Item 105 of Regulation <FONT STYLE="white-space:nowrap">S-K</FONT> and SEC guidance regarding materiality. Among the many factors that are considered regarding litigation risks are the likelihood that a claim will be made
against us, our views of the legal merits of the claim, and our potential exposures if such a claim were to be successful, including quantitative and qualitative factors. This analysis is undertaken by the appropriate legal personnel (including
subject matter experts, litigators, and securities lawyers) and the GAAP Financial Reporting Group, in consultation with the appropriate business people at the Company. As a result of following these processes, we have not identified indirect
litigation risks relating to climate change that we believe could have a material impact on us. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">2 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Item 7. Management&#146;s Discussion and Analysis of Financial Condition and Results of Operations
(&#147;MD&amp;A&#148;)</U> </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">2. We note
your response to comment 2. Please further explain to us your process for monitoring developments in climate change-related legislation, regulations, or international accords and how you assessed potential materiality including with respect to
&#147;recent activity&#148; you identified in your response. In addition, explain how you considered providing disclosure addressing the difficulties involved in assessing the timing and effect of pending climate-related laws, regulations or
guidance. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As discussed in our 2020
<FONT STYLE="white-space:nowrap">10-K,</FONT> insurance is a highly regulated industry. In the ordinary course of our business, we monitor and comply with the laws and regulations of the Federal government and all 50 States and the District of
Columbia, including extensive and varying state insurance laws, and we monitor proposed changes and additions to laws and regulations that are expected to impact our operations. Like other types of regulation that impact our business, we consider
and will continue to consider climate change regulation as it develops. As indicated above, because our operations are primarily domestic, international accords are unlikely to have a direct impact on our business and thus far we have not identified
significant indirect impacts on us from <FONT STYLE="white-space:nowrap">non-domestic</FONT> regulation. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We monitor legislative and regulatory
developments at the Federal and State levels through our Government Affairs Group and business personnel whose jobs require them to monitor those developments in specific States. We belong to various trade associations and industry groups where
ongoing legislative and regulatory developments, including those related to climate change, are routinely monitored and addressed. When potential changes in the laws or regulations are identified, they are reviewed with the appropriate Company
business personnel, elevated as appropriate, and compliance efforts are planned and implemented. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We consider such laws and regulations, both in effect
and proposed, when drafting the Risk Factors and MD&amp;A sections of our Form <FONT STYLE="white-space:nowrap">10-K,</FONT> and we noted in the Risk Factors section of our 2020 <FONT STYLE="white-space:nowrap">10-K</FONT> that new federal or state
regulation could materially adversely affect our operations or ability to write business profitably (pages <FONT STYLE="white-space:nowrap">17-18).</FONT> Climate change regulation is one of several types of potential regulations that could fit that
description, although we have yet to observe proposed or enacted laws or regulations relating to climate change that we believe are likely to have a material impact on us. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">The &#147;recent activity&#148; referenced in our Prior Response primarily referred to regulatory proposals that at the time of the Prior Response were being
considered by the National Association of Insurance Commissioners (NAIC), an organization comprised of the state insurance commissioners that proposes model regulation for the insurance industry, and the New York Department of Financial Services
(NYDFS), which regulates insurance companies and other financial institutions in New York. Following the procedures outlined above, we reviewed the draft NAIC and NYDFS regulations and concluded that the likely primary impacts to us would be
increased disclosure obligations, along with modest changes to enhance governance and risk </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">3 </P>

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management processes and to ensure appropriate compliance. Given our already robust compliance efforts, which include responding to an existing annual NAIC Climate Risk Disclosure Survey and
involve many organizations across the Company, we concluded that we would not incur material incremental expense or operational changes in complying with these regulations in the forms proposed. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As we face new laws and regulations of any kind, including those that might be related to climate change, we would engage in the process outlined above,
bringing in the appropriate legal and business resources to assess the scope, timing and expected impact of the new items. At this point, given the limited new climate change-related laws and regulations applicable to our business that we have
observed, we have not experienced significant difficulties in assessing the timing and effect of such laws and regulations. We will consider the need for additional disclosures related to these issues as additional laws and regulations are
introduced and promulgated. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">3. Your
response to comment 2 notes that you included various Risk Factors that implicate potential climate change-related impacts, although climate change may not be specifically mentioned. Tell us how you considered providing disclosure that specifically
mentions climate change. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Our Risk
Factors have evolved over time as new risks have arisen and we have thought about existing risks in new ways. Each year, a cross-functional group of high-level managers and internal subject matter experts reviews and updates our Risk Factors
language, taking into account our changing businesses, our operating environment, and emerging risks. This group includes representatives from various operating business units, as well as corporate functions (Legal, Finance, Internal Audit, HR, IT,
etc.) and individuals involved in our risk management processes. The revised draft is then reviewed by our Chief Executive Officer, Chief Financial Officer, and the rest of the executive team, who provide further insights. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As part of their responsibilities, our risk management group and our Management Risk Committee reviewed and considered the scientific evidence relating to
climate change and potential impacts on our business. Through these analyses and further internal discussions, we identified severe weather-related impacts as potentially significant to our business, and our disclosures focused on those items. As an
insurance company, losses and loss adjustment expenses are our largest liability, and severe weather such as catastrophe events can have a significant impact on those liabilities. In our 2020 <FONT STYLE="white-space:nowrap">10-K,</FONT> we
identified catastrophe events as potentially impacting our pricing risks (page 13) and the availability and cost of reinsurance (pages <FONT STYLE="white-space:nowrap">14-15).</FONT> We also included extensive disclosure to the effect that
catastrophe losses have had, and in the future could have, a material effect on our operating results, noted the unpredictability of catastrophe events, identified changing climate conditions as a potentially exacerbating factor (page 14), and that
changes in climate conditions may adversely impact the accuracy of the modeling tools that we use to estimate our exposures to catastrophe events. Read together, these risk factor disclosures indicate that our loss exposure, pricing and reinsurance
risks might be impacted by climate change. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">4 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Based on information then known to us and the analysis of our risk management groups and other senior
managers, we determined that other potential climate change-related risks, including those related to regulatory changes, investments, and other transitional risks, warranted continued monitoring, analysis and understanding as events develop, but
not specific internal risk management efforts or external disclosures at that time. Accordingly, our focus on such matters was on the existence and consequences of the risk rather than engaging in an imprecise effort to establish causation, because
we believe the former is most relevant to investors. For example, as mentioned above, the impact of climate-related laws and regulations affecting our business has not been significant up to this point. Similarly, in our 2020 <FONT
STYLE="white-space:nowrap">10-K,</FONT> we identify interrupted business operations for any reason as a potential risk but did not specify each of the various circumstances that could result in such an effect (page 19). Along the same lines, we
identified reliance on third parties, including counterparties under our significant contracts and reinsurance agreements, as a credit risk without attributing the many potential causes that could result in a third party&#146;s failure to perform
its obligations to us (page 22). We continue to believe that these disclosures were appropriate and responsive to our disclosure obligations under Item 105 of Regulation <FONT STYLE="white-space:nowrap">S-K.</FONT> </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">4. We note your response to comment 3.
Please tell us whether you identified any planned capital expenditures for climate-related projects and if so, how you considered providing disclosure. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As an insurance company with many
locations across the United States, primarily office space, we do not typically have significant capital expenditures for climate related projects, although we have been intentional in seeking to reduce our energy consumption over many years. For
example, as we replace aging equipment in the ordinary course of our business, we consider the use of more energy efficient systems. The types of projects contemplated in our Prior Response were capital improvements along these lines, such as
replacements of HVAC and lighting equipment. Similarly, we operate a fleet of vehicles in our Claims operations, and we consider the energy efficiency of those vehicles as we purchase replacements. Generally, we would not consider such projects or
acquisitions to be material, either individually or in the aggregate, given that the incremental cost of the energy efficient equipment would not be significant compared to Progressive&#146;s consolidated assets. In addition, the incremental <FONT
STYLE="white-space:nowrap">up-front</FONT> cost will often be offset in whole or in part over the new item&#146;s useful life due to lower operating costs resulting from the increased efficiency, further reducing the financial impact and materiality
of these investments, in our view. During 2020, our aggregate capital expenditures relating to the more energy efficient systems as described above were under $3&nbsp;million and funded through operating cash flows. Therefore, we believe that these
expenditures were not material. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">There is one recent exception to our general approach to replacing equipment in the ordinary course of business. During
2021, we installed a solar array at one of our properties in Mayfield Village, OH, that is capable of delivering up to 2.3&nbsp;million kilowatt hours of electricity. While the planning for this project was known when we were drafting our 2020 <FONT
STYLE="white-space:nowrap">10-K,</FONT> the capitalized costs of the installation were less than $3&nbsp;million, which we also funded through operating cash flows and viewed as immaterial given our consolidated revenues, cash flows and assets. </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As we consider further investments relating to climate change-related projects, we will keep in mind our
disclosure obligations related to material capital expenditures. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">5. We reissue in part comment 4. Please tell us in more detail how you considered providing a discussion of the significant physical effects of climate change
on your operations and results. As part of your response, address the potential indirect weather-related impacts that have affected or may affect performance by third parties of their responsibilities under various contractual or service
arrangements and government programs. In this regard, we note the second Risk Factor on page 22 of your Form <FONT STYLE="white-space:nowrap">10-K</FONT> for fiscal year ended December&nbsp;31, 2020. In addition, tell us whether you considered
catastrophe losses resulting from events such as hurricanes, hailstorms, tornadoes, and wind activity as being a physical effect of climate change and your basis for concluding that such losses have not or will not have a material impact on your
business, financial condition, results of operations, or cash flows. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In our Prior Response, we did not mean to suggest that we had concluded &#147;that such losses have not or will not have a material impact on [our] business,
financial condition, results of operations, or cash flows.&#148; As mentioned in our Prior Response and in our response to Question 3 above, loss and loss adjustment expense are our most significant liability, and we have specifically included Risk
Factor language informing investors that severe weather events, which can be caused or exacerbated by the impacts of climate change, are inherently unpredictable and can materially impact our financial results. Our 2020 <FONT
STYLE="white-space:nowrap">10-K</FONT> also disclosed that we had incurred $878.0&nbsp;million of losses during 2020 from hurricanes, hailstorms, tornadoes, and wind activity. We continue to believe that these disclosures were appropriate and
responsive to highlight the potential for material risks related to severe weather and the actual impacts in 2020. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">On the other hand, we did not make a
statement about what portion of the losses that we incurred during 2020, or for a specific storm, might have been caused or increased by climate change, which we believe would have been speculative. While we acknowledge the scientific evidence
indicating that climate change has resulted and will result in more frequent and severe weather, in our view, the current science would not support a statement that specific storms or specific portions of weather-related losses were caused by
climate change. Having said that, we further acknowledge the ongoing efforts by various researchers to attribute such events or their intensity to climate change-related factors, and we will continue to monitor that research, along with other
scientific advances, and the implications for our disclosures, as we move forward. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As mentioned above in response to Question 3, and as we have mentioned
in our Risk Factors, the unavailability of a critical vendor&#146;s system could materially impact our business, if not remedied quickly, regardless of the cause. Such an event could occur as the result of severe weather events, among other
potential causes, and as we have mentioned in our Risk Factors, severe weather can be caused or exacerbated by climate change. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">6. Your response to prior comment 4 states that you did not incur material weather-related damage to your properties or other disruptions of your operations
during the time periods covered by your <FONT STYLE="white-space:nowrap">10-K.</FONT> Please provide us with quantitative information to support this statement. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">During 2020, we estimate that damages
to our properties resulting from severe weather events amounted to less than $1&nbsp;million in the aggregate. Only a few smaller facilities were adversely impacted by weather events, and no significant disruption of our busines operations occurred
as a result of such events. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">7. In
response to prior comment 4 you state that you did not experience a material constraint on the availability of weather-related reinsurance or a material increase in the cost of your reinsurance program. In your response, you also refer to disclosure
in your June&nbsp;30, 2021 Form <FONT STYLE="white-space:nowrap">10-Q</FONT> regarding the rising costs of reinsurance. Please provide us with additional information quantifying the weather-related impacts on the cost of reinsurance and explain your
materiality assessment. In addition, tell us how your disclosure specifically addresses the effects of climate change on the availability of reinsurance. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We do not purchase reinsurance for our
personal vehicle insurance businesses. Although we reinsure a portion of our commercial lines businesses, this reinsurance does not cover weather-related losses. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We purchase three types of reinsurance related to severe weather for our Property business, which writes personal residential property insurance policies and
comprised approximately 5% of our 2020 annual written premium: (i)&nbsp;per occurrence excess of loss policies protecting us against individual &#147;named&#148; storms, typically hurricanes impacting the Gulf Coast and East Coast; (ii)&nbsp;an
aggregate excess of loss policy protecting against the cumulative effect of other catastrophe events (as defined by an industry association), which can include hailstorms, wind, fire, etc.; and (iii)&nbsp;a mandatory Florida-specific reinsurance
facility for Florida residential property insurers. Further information concerning our reinsurance program can be found in our 2020 <FONT STYLE="white-space:nowrap">10-K</FONT> starting on page 4, as supplemented by the information provided in our
Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the second quarter of 2021 at page 39. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In our Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for
the second quarter of 2021, we stated: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">During the second quarter 2021, we entered into new reinsurance contracts under our per occurrence
excess of loss program for our Property business. The new reinsurance policies carry retention thresholds for losses and allocated loss adjustment expenses (ALAE) from a single catastrophic event of $200&nbsp;million, an increase from the retention
threshold on the prior contracts of $80&nbsp;million. The increase in the threshold from the prior contract primarily reflects our ability to assume more direct risk on a companywide basis, while balancing this risk against the rising costs for
these types of contracts. </P>
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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We judged that, for investors, the meaningful change was the increase in our retention thresholds, and that
is what we reported on. Although rates being charged by reinsurers for such contracts were seen as increasing during our renewal discussions, the actual premium costs to Progressive for the <FONT STYLE="white-space:nowrap">one-year</FONT> term (June
1, 2021 to May&nbsp;31, 2022) ended up being lower than the premium costs we agreed to pay for the prior annual period, by about $15&nbsp;million, as a result of our retention decision. As noted in our disclosure, this decision was
&#147;primarily&#148; a capital management decision (our ability to assume more direct risk in view of our growing balance sheet), while the increasing rates was a factor that was being balanced in our decision making. Given that our <FONT
STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">out-of-pocket</FONT></FONT> costs for the new reinsurance contracts decreased by an amount that we do not consider material, we did not include further discussion of the premiums. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As to the factors that might have been driving up reinsurance costs, because we are the consumer, not the writer, of the reinsurance products being
referenced, we are not in a position to quantify the weather-related or the climate change-related impacts on the costs of these products. These comparisons can be complicated by many factors, including the increase in our book of Property business
from year to year, changes in the mix of our Property business (e.g., the value of homes insured in hurricane-prone coastal areas, which can change over time), and changes in our reinsurance program from year to year, as described above. We also
note that such pricing decisions could be impacted by many factors extraneous to our business, including, for example, reinsurers&#146; loss experiences for these and other reinsurance products, their projections for future losses and other costs
that they will incur, their views of their own capital adequacy, and their profit expectations (all of which can vary from reinsurer to reinsurer). We do not have visibility into the complex considerations and calculations that reinsurers undertake
in pricing these reinsurance products or their views of how climate change has impacted these considerations. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In response to the last sentence of your
comment, our disclosure does not specifically address the effects of climate change on the availability of reinsurance, because a change in availability was not apparent to us as we shopped and negotiated for our reinsurance coverages, either in the
periods covered by the 2020 <FONT STYLE="white-space:nowrap">10-K</FONT> or our Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the second quarter of 2021. We do, however, include Risk Factor disclosure addressing the availability and cost of
reinsurance and note the impact that catastrophe events may have on them. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">8. Your response to comment 5 indicates that you have not identified material transition risks related to climate change that had affected, or were expected to
materially affect, your business, financial condition, or results of operations. Please tell us how you assess potential transition risks and why you concluded that disclosure was not required. Your response should specifically address the different
types of transition risks related to climate change you considered, including those noted in our prior comment, and explain your basis for concluding that they will not have a material impact on your business, financial condition, results of
operations, or cash flows. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company Response </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">In the
process of drafting and finalizing our 2020 <FONT STYLE="white-space:nowrap">10-K,</FONT> we did not identify current impacts from climate change or related transition risk that materially affected our business. As to transition risk that we
expected to materially affect our business, financial condition, or results of operations in the future, our story is much the same. The cross-functional group that discussed </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">8 </P>

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and updates the Risk Factor section of our 2020 <FONT STYLE="white-space:nowrap">10-K,</FONT> which includes members of our risk management group monitoring the impacts and potential impacts of
climate change as referenced above, identified weather impacts on our business potentially resulting from climate change as a known, potentially material risk, but did not identify climate change as a specific driver of other risks at that time. We
have addressed above potential changes in laws and regulations, and the limited impacts that had then been observed when our 2020 <FONT STYLE="white-space:nowrap">10-K</FONT> was being developed. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We also did not identify specific auto insurance market trends that we expect to arise in a climate-change impacted world or that we expect to materially
impact us. For example, it is likely that electric vehicle sales will increase in the future. Even if that occurs, at this point it is not clear to us how long that change will take to significantly impact our business or whether there are material
risks or opportunities associated with it. Even if such changes result in increased vehicle repair costs (which is speculative at this time), we note that in the past, we have been able to adapt to increasing costs from technological changes in
vehicles, such as airbags, enhanced safety features, emissions controls, computers and other electronics, etc., without such material impacts. These changes typically take time to work their way into the U.S. vehicle fleet, and our experience has
been that we are able to adjust pricing to accommodate any increased repair costs, taking into account reduced accident frequency that may occur due to improving vehicle safety, based on our ability to price newly purchased vehicles to reflect such
repair costs and to reprice frequently given that our policies are issued for <FONT STYLE="white-space:nowrap">6-month</FONT> terms (the vast majority) or <FONT STYLE="white-space:nowrap">1-year</FONT> terms. Accordingly, we saw no reason to
conclude that a potential trend favoring electric vehicles would have a material impact on our business. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">We identify a number of risks related to our
investment portfolio in the Risk Factor section of our 2020 <FONT STYLE="white-space:nowrap">10-K</FONT> (pages <FONT STYLE="white-space:nowrap">20-21),</FONT> including market conditions, general economic conditions, sector concentration risk, and
the prices and liquidity of securities that we hold. Many of these risks could be impacted by climate change over time, although we did not identify, and therefore did not disclose, specific climate-driven outcomes that we considered likely to occur
and potentially material to us. We also identified a risk that our shareholders, regulators and other stakeholders may seek to limit our investment activities to certain socially responsible companies or industries (page 21), which could involve
companies that are more directly impacted by climate change considerations. As we further disclosed, such restrictions on our investments could result in lower returns than we have historically achieved without those restrictions, whether they are
driven by climate change or other environmental or social considerations. As we discussed in our Prior Response, we focus on relatively shorter-term, highly liquid fixed-income securities, with a small portion (less than 9% as of December&nbsp;31,
2020) in index equity investments. In addition, as of <FONT STYLE="white-space:nowrap">year-end</FONT> 2020, we expected approximately 75% of our fixed-maturity portfolio to be repaid over the ensuing five years (see Note 2 to our 2020 Consolidated
Financial Statements, Exhibit 13 to our 2020 <FONT STYLE="white-space:nowrap">10-K,</FONT> at page <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">App.-A-13).</FONT></FONT> This composition of the portfolio provides significant
flexibility to address changing circumstances, including those that might be caused by climate change, supporting our belief that risks to our portfolio were manageable and not material to us. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">9 </P>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>SEC Comment </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">9. Your response to comment 6 states that you have not incurred material compliance costs related to climate change. Describe the nature of the compliance
costs you have incurred and provide us with quantitative information supporting your statement that the related amounts were not material. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Company
Response </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As noted above, insurance is a heavily regulated industry, and we incur compliance costs in the ordinary course of our business. We have not
yet observed proposed climate change regulation that we expect to have a significant impact on our operations. As a result, compliance costs specifically related to climate change to date have been minimal, and we have not seen a need to separately
track such costs. Nonetheless, our judgment is that aggregate costs incurred for climate change compliance efforts was less than $1&nbsp;million during 2020. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*&nbsp;&nbsp;&nbsp;&nbsp;* &nbsp;&nbsp;&nbsp;&nbsp;*&nbsp;&nbsp;&nbsp;&nbsp;* </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">As we enhance our understanding of risks associated with climate change and their potential impacts on us, we will continue to consider whether additional
disclosures should be added to our public filings. Please do not hesitate to contact me if you have further comments or questions. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
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<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Sincerely,</TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ John P. Sauerland</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">John P. Sauerland</TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Vice President and Chief Financial Officer</TD></TR>
</TABLE></DIV> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">S. Patricia Griffith, Chief Executive Officer </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman">Daniel P. Mascaro, Chief Legal Officer </P>
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