Progressive Corporation Announces Second Quarter Results

    MAYFIELD VILLAGE, Ohio, July 18 The Progressive
Corporation today reported second quarter 2001 operating income
per share of $1.42, which excludes net realized losses on security sales and
nonrecurring items, compared to $.06 in the second quarter last year.  For the
current quarter, nonrecurring items consist of $2.1 million, or $.02 per
share, of severance and other costs related to the Company's reduction in
force in New York.  For the second quarter last year, nonrecurring items
included $1.7 million, or $.02 per share, of severance costs primarily
incurred due to the restructuring of the Company's organization at the general
manager level.  Operating income for the second quarter was $107.0 million,
compared to $4.0 million in the second quarter 2000.  Included in operating
results for the second quarter 2001, were $30.4 million, $.26 per share or
1.7 points, of catastrophe losses, compared to $11.3 million, $.10 per share
or .7 points, for the same period last year.  The GAAP combined ratio (CR) was
96.4 for the second quarter 2001, compared to 105.0 for the same period last
year.   Net premiums written for the quarter increased 10% to
$1,838.8 million, compared to $1,674.0 million last year.

    Net income per share was $1.38 for the second quarter 2001, compared to a
net loss of  $.19 per share earned in the same period last year.   Net income
for the quarter was $103.7 million, compared to a net loss of $14.1 million in
the second quarter 2000.  Investment income, including net realized losses on
security sales, was $100.9 million before taxes and $72.5 million after taxes,
compared to $67.9 million before taxes and $52.1 million after taxes for the
second quarter 2000.  Second quarter 2001 results include net realized losses
on security sales of $3.1 million, or $.03 per share, compared to net realized
losses of $26.2 million, or $.23 per share, last year.

    For the six months ended June 30, 2001, operating income per share was
$2.60 compared to an operating loss per share of  $.45 last year.  Year-to-
date operating income was $195.3 million, compared to an operating loss of
$32.6 million for the same period last year.  Net income was $190.3 million,
or $2.54 per share, compared to a net loss of $60.7 million, or $.83 per
share, for the first six months of 2000.  The CR was 96.9 for the first half
of 2001, compared to 106.9 in 2000.  Year-to-date net premiums written
increased 7% to $3,541.6 million, compared to $3,313.7 million last year.
Investment income was $195.9 million before taxes and $140.8 million after
taxes, compared to $143.2 million before taxes and $107.8 million after taxes
last year.  Year-to-date results include net realized losses on security sales
of $5.6 million, or $.05 per share, compared to net realized losses of
$41.6 million, or $.37 per share, last year.

    Progressive's Personal Lines business units write insurance for private
passenger automobiles and recreation vehicles.  For the second quarter 2001,
net premiums written in Personal Lines increased 7% to $1,632.1 million,
compared to $1,526.1 million last year.  The Personal Lines CR was 96.9 for
the second quarter 2001, compared to 105.6 last year.  For the six months
ended June 30, 2001, net premiums written in Personal Lines increased 4% to
$3,171.4 million, compared to $3,042.7 million last year.  The Personal Lines
CR was 97.3 for the six months ended June 30, 2001, compared to 107.8 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 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-PROGRESSIVE(SM), the Internet and the
Strategic Alliances business unit on behalf of affinity groups.  See
"Supplemental Information" for Agent and Direct results, which can be found at
http://www.progressive.com/investors/releases.htm .

    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.  Second quarter 2001 revenues were $163.7 million,
compared to $120.7 million last year.  The pretax operating profit was
$14.0 million for the second quarter 2001, compared to $3.5 million last year.
Revenues for the six months ended June 30, 2001 were $311.6 million, compared
to $232.9 million last year.  The pretax operating profit was $24.8 million
for the six months ended June 30, 2001, compared to $11.0 million last year.

    During the quarter, the Company repurchased 200,000 of its Common Shares
in the open market at an average cost of  $133.47 per share.