Progressive Corporation Announces Fourth Quarter Results

    MAYFIELD VILLAGE, Ohio, Jan. 24 The Progressive
Corporation today reported fourth quarter 2000 operating income
per share of $.67, which excludes net realized gains on security sales and
one-time items, compared to $.06 in the fourth quarter last year.  Operating
income for the fourth quarter was $50.1 million, compared to $4.7 million in
the fourth quarter of 1999.  For the fourth quarter 2000, one-time items
include the following:

    * a $20.0 million, $.17 per share or 1.2 points, accrual related to the
      termination of a Strategic Alliance partnership; this amount represents
      the Company's best estimate of the share of the net present value of the
      future profit on that business that its partner is entitled to receive
      upon this termination;

    * $3.2 million, $.03 per share or .2 points, of additional expense
      associated with the termination of the Company's defined benefit pension
      plan, which was frozen in 1993; and

    * a $4.2 million, $.06 per share, loss related to the realization of the
      foreign currency translation loss associated with the substantial
      liquidation of the Company's foreign subsidiary.

    For the fourth quarter 1999, one-time items include $7.5 million, $.07 per
share or .5 points, of additional expenses associated with previous
advertising commitments that would no longer be realized due to changes in the
Company's marketing strategy.

    The Company's GAAP combined ratio (CR) was 102.3 for the fourth quarter
2000, compared to 105.4 for the same period last year; excluding the one-time
items discussed above, the CR would have been 100.9 and 104.9 for the fourth
quarter 2000 and 1999, respectively.  Net premiums written for the quarter
decreased 4% to $1,322.0 million, compared to $1,381.6 million last year.

    Net income per share was $.64 for the fourth quarter 2000, compared to
$.05 per share earned in the same period last year.   Net income for the
quarter was $48.0 million, compared to $3.8 million in the fourth quarter
1999.  Investment income, including net realized gains on security sales, was
$127.4 million before taxes and $89.3 million after taxes, compared to
$97.8 million before taxes and $70.2 million after taxes for the fourth
quarter 1999.  Fourth quarter 2000 results include net realized gains on
security sales of $26.2 million, or $.23 per share, compared to $6.3 million,
or $.06 per share, last year.

    For the year ended December 31, 2000, operating income per share was $.75,
compared to $3.58 last year.  For 2000, operating income was $55.4 million,
compared to $266.7 million last year.  Net income was $46.1 million, or $.62
per share, compared to $295.2 million, or $3.96 per share, for 1999.  The CR
was 104.4 for 2000, compared to 98.3 in 1999.  Year-to-date net premiums
written increased 1% to $6,196.1 million, compared to $6,124.7 million last
year.  Investment income, including net realized gains on security sales, was
$402.1 million before taxes and $289.3 million after taxes, compared to
$387.9 million before taxes and $280.3 million after taxes last year.  Year-
to-date 2000 results include net realized gains on security sales of $16.9
million, or $.15 per share, compared to $47.2 million, or $.41 per share, last
year.  The change in the Company's net unrealized gains/losses was a net gain
of $112.4 million for 2000, compared to a net loss of  $179.7 million last
year.

    Progressive's Personal Lines business units write insurance for private
passenger automobiles and recreation vehicles.  For the fourth quarter 2000,
net premiums written in Personal Lines decreased 7% to $1,187.8 million,
compared to $1,277.8 million last year.  Standard and preferred automobile
risks accounted for $677.8 million, or 57%, of the Company's fourth quarter
Personal Lines net premiums written, compared to $675.7 million, or 53%, in
the fourth quarter last year.  The Personal Lines CR was 103.2 for the fourth
quarter 2000, compared to 105.4 last year.  For the year, net premiums written
in Personal Lines decreased 1% to $5,651.5 million, compared to $5,702.4
million in 1999.  Standard and preferred automobile risks accounted for
$3,032.5 million, or 54%, of the Company's Personal Lines net premiums written
for 2000, compared to $2,669.1 million, or 47%, last year.  The Personal Lines
CR was 105.2 for 2000, compared to 98.8 last year.

    Progressive's Personal Lines business is generated either by an agent or
written directly by the Company.  The Agent channel includes business written
by our network of more than 30,000 Independent Insurance Agencies and through
Strategic Alliance business relationships (other insurance companies,
financial institutions, employers and national brokerage agencies).  Direct
business includes business written through 1-800-AUTO-PRO(R), the Internet and
the Strategic Alliances business unit on behalf of affinity groups.

    In addition to its Personal Lines business, the Company's other lines of
business include writing insurance for small fleets of commercial vehicles,
lenders' collateral protection, and directors' and officers' liability, and
providing related services.  Fourth quarter 2000 revenues were $140.2 million,
compared to $111.2 million last year.  The pretax operating profit was $9.7
million for the fourth quarter 2000, compared to an operating loss of $4.0
million last year.  Revenues for 2000 were $504.9 million, compared to $437.0
million last year.  The pretax operating profit was $25.5 million for the
year, compared to $41.8 million in 1999.

    During the fourth quarter 2000, the Company sold put options and received
$.7 million of proceeds.  The Company did not repurchase any shares in the
open market during the quarter.

    Quarterly Story
    According to a recent survey on Progressive's password-protected Web site,
"For Agents Only," 83 percent of respondents reported saving up to five hours
a week as a result of using Progressive-developed technology in their offices.
But don't take our word for it.

    Here's what The Page Agency in Deland, Florida has to say:

    "I've completed a few endorsement/change requests online and I was
impressed with how easy it is to use.  I always say that if you make something
'user friendly' that it will get 'used.'  Great job on continuing to make our
jobs easier!"