Good morning. Thank you for joining us today for Progressive's second quarter investor event. I am Juliana Patera, Director of Investor Relations, and I will be moderator for today's event. The company will not make detailed comments related to its results in addition to those provided in its annual report on Form 10-K, quarterly reports on Form 10-Q, and the letter to shareholders, which have been posted to the company's website. This quarter includes a presentation on a specific portion of our business, followed by a question-and-answer session with members of our leadership team. The introductory comments and the presentation were previously recorded. Upon completion of the previously recorded remarks, we will use the balance of the 90 minutes scheduled for this event for live questions-and-answers with leaders featured in our recorded remarks, as well as other members of our management team.
As always, discussions in this event may include forward-looking statements. These statements are based on management's current expectations and are subject to many risks and uncertainties that could cause actual events and results to differ materially from those discussed during today's event. Additional information concerning those risks and uncertainties is available in our annual report on Form 10-K for the year ended December 31, 2025, and supplemented by our Form 10-Q for the second quarter of 2026, where you will find discussions of the risk factors affecting our businesses, Safe Harbor statements related to forward-looking statements, and other discussions of the challenges we face. These documents can be found via the Investor Relations section of our website at investors.progressive.com. To begin today, I am pleased to introduce our CEO, Tricia Griffith, who will kick us off with some introductory comments. Tricia?
Thanks, everyone, for joining us today. At Progressive, one of the areas we really pride ourselves on is creating internal career paths and developing talent. Our ability to move people around the company to expand their experience and deepen their skillset is what helps us build an extremely strong bench. That approach leads to very robust and extensive succession plans that are created years in advance of need. As we previously announced, Pat Callahan will be retiring in January. Before we begin, I'd like to thank him for his extraordinary leadership and service to Progressive over nearly 24 years. He has certainly made a lasting impact on our business and our people. As we manage this transition, I've asked Lori Niederst to step into the newly created role of Chief Personal Lines Officer, overseeing both Personal Lines and CRM.
Lori's appointment reflects our deep bench. She brings a wealth of experience, having been CRM President, Chief Human Resources Officer, and In-Claims HR. I'm very excited to introduce Lori as she leads Personal Lines into the next chapter.
Thanks, Tricia. Good morning, and thank you for joining us. I recently assumed the role of Chief Personal Lines Officer, and while the title is new, many of our strategic priorities have been in place for quite some time. In fact, during a 2023 IR call, I presented our Robinsons agenda in the direct channel, and you'll get an update on these efforts today. Before we jump into the details, let me start with the foundation that guides our decision-making. As you know, Progressive segmentation capabilities have enabled us to outperform over the short and long term in a very competitive industry. Ask any Progressive person, and they'll tell you that our objective is to grow as fast as possible at or below a 96% while delivering high-quality customer service.
It's our reverence for data and ability to match rate to risk that have enabled us to grow twice as fast as a private passenger auto industry over the past 10 years at a combined ratio that's 7 points lower. That's a combination that no other carrier has delivered on a consistent basis. This discipline is supported by our four strategic pillars that have guided us since we formally established them in 2015, and they continue to serve us well today. First, people and culture. The positioning is intentional, as our people and our culture are our strongest and most durable competitive advantage, and everything else builds from this foundation. Second, broad needs. We're focused on serving customers across more of their insurance needs over their lifetime, not just in a single transaction or at a single point in time. This helps us build meaningful customer relationships and improves retention.
Third, our leading brand. The Progressive brand is widely recognized, and we support it with innovative products and experiences that give customers confidence. Fourth, competitive prices. This reflects the underwriting and operating discipline that is central to how we run the business, including strong segmentation, claims accuracy, and organizational efficiency that allows us to offer competitive rates. Taken together, these four pillars are how we compete in the marketplace, serve customers, and position the business for profitable growth. Today, we're focusing on two of these strategic pillars, broad needs and competitive prices, with the goal of having products to meet customer needs throughout their lifetime. Next up, Pat Callahan, our Personal Lines President, is going to set the stage for a detailed discussion of our auto and home products.
John Curtis will cover home, and because Jim Curtis, our National Auto Leader, couldn't be here today, I'll be back to explain how we're leveraging our strength in auto to create a compelling bundled offering. Pat, over to you.
Thanks, Lori. Today, we're going to cover three topics. I'll lead off setting up some context on the Robinsons opportunity. John Curtis, our National Property Leader, will provide an update on our property business turnaround and how we're working to deliver both broadly available
Competitively priced property products to meet the needs of Robinsons customers. Following John's update on property, we'll go back to Lori for some more details on how Jim's National Auto Team continues to leverage our scale, breadth of distribution, and auto product to create competitive advantage for our bundled home and auto offering. Let's begin with a quick level set on the incredible strength and momentum of our auto franchise. As Lori highlighted, our continued investment across all four strategic pillars enables us to profitably grow in the highly competitive U.S. auto market. Coming off an incredibly strong 2025, when we captured approximately 75% of the total industry premium growth, we recently achieved the milestone of becoming the largest U.S. personal auto writer in the trailing 12-month period, as measured by direct premiums written.
We're thrilled to continue to see how our focus on delivering a broad suite of competitively priced products enables us to help a growing share of U.S. households save money on their protection products by switching to Progressive. Today, nearly 1:4 U.S. households trust Progressive for at least one personal lines protection product, and we're just getting started. As you all know, we break down the U.S. personal auto market across four segments. Sams, who are inconsistently insured, which make up about 15% of the market, Dianes, who are continuously insured non-homeowners, and make up about 24% of the market, Wrights, who are consistently insured, unbundled auto home customers, and make up about 27% of the market, and Robinsons, who are consistently insured, bundled auto and home customers who make up almost 35% of the auto market.
Our number one position in auto is impressive, but it's even more impressive when you see that we achieve that position while primarily focusing on the Sams, Dianes, and Wrights segments, which represent roughly 2/3 of the total U.S. auto market. We continue to enjoy both strong double-digit market share and PIF growth in those three segments, while our single-digit market share and PIF growth in Robinsons highlights the significant growth opportunity that Robinsons represent. Going deeper and looking at the segment market share by distribution channel, the opportunity becomes even clearer. Today, the U.S. auto market is about 37% captive or exclusive agent, about 31% independent agent, and about 32% in the direct channel. Focusing on the left side for the direct channel, you'll see we enjoy solid-double-digit share and auto PIF growth across segments.
We estimate our share of direct Robinsons is roughly half our share of direct Wrights, demonstrating that the combination of our industry-leading auto product, combined with our direct multi-carrier property offering, is meeting the bundling needs of many direct auto customers who own their homes. We still have plenty of room to grow direct Robinsons share while the direct channel continues to grow share of the overall auto market. The right side shows the opportunity in agency Robinsons. 85% of Robinsons Auto premiums are sold through agents, roughly 2/3 captive, 1/3 independent agent. Given our auto leadership in the IA channel and customer migration from captive to IA, we see significant tailwinds to the size of the IA Robinsons market.
Our low market share and flat PIF growth in the agency Robinsons segment reinforces both the growth potential in agency Robinsons and how recent initiatives to reposition our property business for profitable growth halted Robinsons' PIF growth in 2025. Without stealing John and Lori's thunder, I believe we're investing in the right places to unlock the potential in the agency Robinsons segment. Beyond being a large and largely unpenetrated segment, the value of a Robinsons household is significantly higher than any other customer segment, generating about 70% higher lifetime premium than monoline Wrights and fivefold the lifetime premium of a Sam. In summary, we've become the largest writer of U.S. personal auto while significantly penetrating only about 2/3 of the overall market or the Sams, Dianes, and Wrights segments.
Our growth in Wrights PIFs across channels and in direct Robinsons demonstrate that our auto product is highly competitive for preferred households. A key area of focus in agency is having a broadly available, competitively priced property offering, we're aggressively investing to leverage broader Progressive segmentation, risk selection, and distribution strengths to address this opportunity. For more on where we are and where we're going with property, I'll turn it over to John Curtis.
As Pat mentioned, my name is John Curtis, I'm the National Property Leader in personal lines at Progressive. I'm excited to give you an overview of our progress and plans in our property business. Since our last update in 2022, we have made meaningful progress. We have improved profitability, reduced volatility, strengthened core capabilities, positioned the business to better support Progressive's growth in the Robinsons bundled home and auto segment. Property plays a distinct and important role within Progressive strategy. Our focus is on owner-occupied homes that are bundled with Progressive Auto, supported by a broad property product portfolio and partner agents who understand and support our underwriting strategy. Our objective is to provide broadly available competitive property offerings that help grow Robinsons market share while meeting our financial and return objectives.
While Progressive broadly manages the business to grow as fast as possible at or below a 96% combined ratio, property's different. Given its greater volatility and higher capital requirements, we manage it to generate an appropriate return on capital while ensuring volatility does not create outsized pressure on Progressive's results. If we execute well, property can support meaningful bundled home and auto growth while delivering more consistent profitability and allow us to close the market share gap in the Robinson segment that Pat referenced a few minutes ago. Since 2015, property direct written premium has grown by 3.7x, and we are now a top 12 carrier in the industry. When ASI was acquired, it was a regional carrier with meaningful concentration in hurricane-exposed states.
Since then, we've expanded to 48 states and built a multi-channel distribution strategy, selling both through independent agents and as a leading carrier with our Progressive Advantage Agency. Scale alone is not the only objective. After several years of profitability pressure, we made deliberate choices to slow growth to improve profitability, reduce volatility, and enhance our capabilities to manage this business more effectively. The rest of this presentation is organized around two themes, what we did to restore profitability in our property business, and how we are now converting improved health into disciplined growth in support of our mission of becoming more broadly available with competitive offerings. First, I'll recap the progress we've made since our 2022 update when we outlined three key opportunities, improving profitability, reducing volatility, and advancing capabilities.
I'll shift to where we're headed, including the actions we are taking to become more broadly available with competitive property offerings while continuing to meet our financial objectives. The key message is that this turnaround is substantially complete, and the next phase is about disciplined and targeted growth. First, profitability has improved meaningfully. In 2022, we acknowledged that property had not achieved its target margin, largely because weather losses were running above expectations. Since then, we've improved results through rate increases, better pricing and segmentation, enhanced risk selection, and more disciplined exposure management. The improvement is summarized in the graph, which shows our net combined ratio broken out into three components, weather and catastrophic losses, attritional losses, and expense ratio. Through 2022, the net combined ratio was above 100%. In 2023 and 2024, we moved below 100%, but we're still above our targets. In 2025, we delivered a 75% combined ratio, which is a superior result. While 2025 benefited from a mild catastrophe season and favorable prior year development, underlying profitability was in line with our targets, even after accounting for these tailwinds. Our strong profitability is continuing into 2026 with a year-to-date combined ratio of a 78%.
The second opportunity was reducing volatility, and we have materially improved the risk profile of our overall property book. In 2022, we shared our goal to reduce Florida exposure and limit growth in states exposed to heavy cat risk to reduce volatility over time as the total property book grew. Today, we have right-sized our Florida exposure, reduced our exposure to other cat-prone states, and improved our portfolio metrics. The chart in the upper right shows high weather risk states as a percentage of total insured value in 2022 and 2025.
During this time, we reduced high weather risk state total insured value mix by 23%. We did this through a series of actions which included non-renewals in Florida focused on high-risk coastal properties and properties not compliant with recommended building codes, deliberate growth management in states with high severe convective storm and wildfire risk, and growing faster in lower weather risk markets. The graph on the bottom shows the cumulative change in our portfolio metrics over time. Since 2022, total insured value has increased 30%, while our modeled one-in-100 year probable maximum loss has declined by nearly 33%. Simply said, we have grown the book while reducing tail risk. This creates a stronger, less volatile portfolio and reduces the likelihood that severe weather events create outsized pressure on our results. The third opportunity we focused on was advancing our capabilities.
Over the last three years, we have made meaningful progress building the property capabilities needed to complement Progressive's industry-leading auto position and support our bundled home and auto strategy. In 2022, we acknowledged that while we had invested in organizational capabilities and improved price segmentation, we were not best in class yet. Since then, we have doubled down on the investments needed to bring broadly available competitive property products to market. These investments are focused in six key areas, pricing accuracy, product segmentation with speed to market, risk selection models, cost-sharing, exposure management, and distribution strategy. Together, these are helping us strengthen segmentation, manage risk more effectively, and support disciplined growth going forward. Across the six capability areas, we have made meaningful progress, and I will quickly highlight our advancements on each.
The table on the following slides highlights a key tactic for each capability and the progress we have made deploying them since 2024. First, we improved pricing accuracy by implementing a by-peril pricing strategy that allows us to price at a more granular level and for differences in peril mix and target returns. This strategy has been deployed in all but one state, up significantly from states representing 39% of Progressive homes premium in 2024. Second, we advanced product segmentation and speed to market. In late 2023, we began deployment of our 5.0 product model, which was a significant advancement and included expanded bi-peril rate order of calculations and several new variables. Since then, we've introduced our 5.1 product model, and just last month we launched 6.0 product model, which adds new segmentation such as aerial imagery and predictive auto variables.
We also established a dedicated product model development team to increase speed to market, and we are actively reducing our model upgrade rate revision timelines. Through June, states representing 93% of Progressive homes premium are on our 5.0 product model or newer. Third, we deployed a new risk model countrywide to help identify segments we cannot profitably write and policies that require more information before binding coverage. Research on next-generation risk models is in development with plans to deploy later this year. Fourth, we expanded cost-sharing through higher wind/hail deductibles and roof material payment schedules where permitted, with a particular focus on severe convective storm states to help reduce volatility in our results. Fifth, we strengthened exposure management through targeted nonrenewals of wildfire and wind pool exposures where our modeled losses exceeded our risk appetite.
This is in addition to the work done to right-size Florida and reduce our cat exposure to other cat-prone states. These wildfire and wind pool nonrenewals are now 73% complete. We formalized our distribution strategy by removing property appointments from agents whose business models would make it difficult for them to be successful with us, given our volume, bundle, and other expectations. We're also working closely with many of our agents to make sure they have the resources to achieve our goals. Through June, nearly 92% of this remediation is complete or in progress. Together, these investments are allowing us to compete more confidently in more markets. The result of this work is a materially healthier homeowners business and a much broader set of markets where we can now confidently pursue growth. The maps on the right show the shift from May 2025 to June 2026.
In May 2025, 18 states were classified as healthy and well-positioned for growth. By June 2026, this number had increased to 41 states. This represents a significant expansion of our addressable growth opportunity, more than doubling from 40% to 82% of the property insurance market. Our green and yellow designations reflect both controllable business factors and external market conditions. Controllable factors include rate adequacy, segmentation, contract and cost-sharing terms, risk selection, and exposure management. External factors include the regulatory environment and broader market dynamics. A yellow designation does not necessarily indicate poor performance. It may reflect timing, regulatory constraints, or markets where we need to remain more selective. The broader point is that we now have a much larger set of markets where we can pursue growth with greater confidence and control. With the turnaround substantially complete, our focus now shifts to disciplined growth.
We are working to become more broadly available with competitive property offerings in markets where we have high confidence in the health of the business. This is an important enabler of Progressive's ability to grow share in the highly attractive Robinsons bundled home and auto segment. This phase is about converting improved business health into targeted growth while maintaining the same financial discipline that enabled the turnaround. As business health has improved, we have deliberately restored availability and expanded distribution in markets where the economics support growth. The chart on the left shows availability, which we define as the percentage of quotes eligible for a policy without additional underwriting review. During the turnaround, we intentionally reduced availability by requiring more underwriting reviews as a way to carefully control growth and protect profitability. As state health improved, we began restoring availability in a targeted way.
Thanks, John. Building on Pat's framing of the Robinsons opportunity and John's overview of the progress we've made repositioning our property business, I'll now complete the picture. I'll cover what we're seeing in the auto marketplace, the progress we've made, and discuss how our market position and continued investments support future growth. I want to briefly come back to the market share view that Pat covered earlier. To reinforce why it's such an important page in the auto opportunity story. Pat showed how meaningful the Robinsons opportunity is across both direct and agency, Progressive's opportunity differs by channel. In direct, we have solid Robinsons share, but it remains well below Wrights, which tells us there's still meaningful upside. In agency, the opportunity is even greater.
Building on Pat's point that most Robinsons Auto premium is sold through agents, the opportunity is especially important because our relative share remains low. This reflects, in part, the intentional work John just covered. Repositioning property for improved business health, profitability, and disciplined growth, which creates more visible upside as our capabilities continue to advance. The reason to revisit this slide is simple. The Robinsons opportunity is large. It exists across our channels, and the market is moving in ways that will impact how Progressive pursues it. The next slide steps back to look at shifts in auto distribution, changes in consumer shopping behavior, and the relationship between auto and home premiums that influence how customers think about bundling. Before we move to Progressive's auto position and our investments to grow Robinsons, it's helpful to step back and look at the market dynamics shaping the opportunity.
Starting in the upper right, over the last 10 years, we've seen a shift in industry premium from the combined agency channels towards direct, with direct now representing nearly 1/3 of the private passenger auto market. In the lower right, we see a second important shift within the channel. Premium is moving from captive to independent agents, which matters because captive carriers have historically held a disproportionate share of bundled customers. Pat noted earlier, more than half of Robinsons were still with a captive carrier in 2025. More of that opportunity becomes reachable through direct and independent agents, the market backdrop becomes more favorable for Progressive. At the same time, consumer behavior is changing. Shopping has slowed somewhat from recent peaks, but remains elevated, with more customers comparing options and shopping annually.
We're also seeing older households represent a growing share of shoppers, which is particularly relevant for the Robinsons opportunity. The economics of the bundle also matter. Industry-wide, auto premiums represent roughly half of the combined auto and home premium. That means auto is often a large and highly visible part of the consumer's total insurance cost. That sets up the next question. When a customer is evaluating both home and auto, how do they think about the shopping experience? How does Progressive benefit when the experience starts with auto? This slide brings the market dynamics to life through a simple customer journey. When a household is shopping, the decision is not always a bundle-first comparison. Often, the customer starts with the most visible and costly product. In many cases, that starting point is auto.
Auto renewals are more frequent, with six-month policy terms, more visible, as in not embedded in escrow, and often a meaningful portion of the household budget. That can make auto a natural lead product when consumers are comparing options, especially when they're motivated by price, ease, and confidence in the carrier. When the journey is auto-led, Progressive is starting from a position of strength. Our auto brand competitive position, scale, and distribution reach allow us to enter the customer's consideration set early and find opportunities to extend the customer value proposition to the broader household relationship. The opportunity is to make that bridge from auto consideration to bundled consideration as seamless as possible. This is where property availability, product competitiveness, ease of quoting, and channel execution all matter. They determine whether an auto shopping moment can become a Robinson relationship.
Consistent with our business model of being available when, where, and how consumers choose to purchase, the point of this journey is straightforward. As more bundled customers become reachable through direct and independent agents, Progressive's ability to lead with auto and complement with a competitive property product is a critical path to increasing Robinson share. After framing the share opportunity, market backdrop, and the importance of an auto-led shopping experience, this slide brings the discussion back to our Robinson growth opportunity. Robinsons continue to grow in aggregate, but the results vary by channel because direct and agency have distinctly different business models. In direct, Robinson policy in force growth has remained positive. This is squarely in Progressive's wheelhouse. We've proven we can generate demand, offer consumers choice, and continually improve conversion. In agency, Robinson growth has slowed as we intentionally reposition property for profitability, business health, and long-term competitiveness.
That slowdown was expected given the choices John described earlier, and it creates a stronger foundation for disciplined growth going forward. The key message is that growth in direct and agency will take different paths. Direct is growing and operating in continuous improvement mode, while agency represents a meaningful upside as property health allows for targeted investments that help us compete more effectively in the independent agent channel. I'll use that distinction to organize the next few slides to go deeper in each channel. Let's start with direct, where HomeQuote Explorer, our distinctive platform for quoting property and bundles, provides customer choice. The HQX proposition is simple. When consumers come to Progressive for auto and home or just home, HQX provides options to ensure consumers get the coverage they need at a fair price. In a 2023 Investor Relations call, I discussed the HQX business model in detail.
I described our in-house agency, our ability to quote both affiliated and unaffiliated carriers, and the win-win-win proposition it creates. Customers are provided choice, Progressive is able to satisfy more household insurance needs, and partner carriers benefit from our acquisition engine. HQX also meaningfully contributes to our Robinson growth. The model combines digital and voice experiences. Customers can shop online, compare options based on price, coverage, and service preferences, and they can call to receive guidance from nearly 2,000 Progressive in-house agents when they have questions or they need help. Since launching online quoting in 2017, quote starts have grown at a 27% compound annual growth rate, increasing from just under a million annual quotes to more than 6 million today. A key driver of that growth has been expanding choice. We began with one carrier in 2007 and now offer 26 product options across 19 carriers.
This expanded network increases our capacity and supports the broader customer-first value proposition. Our success in direct is creating momentum with Progressive's brand consideration among Robinsons, having increased 13% over the last three years in our proprietary brand tracking study. The opportunity in direct is continuous improvement. At our scale, minor modifications can produce meaningful improvement in conversion, while offering adjacent products like umbrella and renters strengthen the household relationship. With that direct foundation established, let's shift to agency where the model and investment needs are different. With the progress John described in property, we believe Progressive is uniquely positioned to expand the value proposition we bring to independent agents and their customers. We're not starting from scratch. With decades of experience, we've built a broad network of valued independent agents that creates a durable distribution channel.
Today, we estimate that more than 40,000 agencies represent Progressive, with over 90,000 storefronts. To put that in context, this footprint is larger than the U.S. presence of several of the most recognizable national restaurant and coffee brands combined. This distribution breadth provides incredible market access. When combined with Progressive's national brand and the broad acceptability of our auto product, we've got all the right ingredients to scale. In the independent agent channel, scale matters. We estimate that Progressive is roughly three times the size of our largest competitor in the channel. Our scale gives us a differentiated data advantage, creating producer-level insights that help shape the capabilities we build for agents, which strengthens our position in the channel and feeds the flywheel over time.
Said simply, we have the infrastructure, brand, product breadth, scale, and data advantage to make targeted property and bundled acquisition investments from a position of strength. Next, I'll focus on two areas of investment in property and bundled acquisition, improving ease of use for agents, and strengthening the value proposition we bring to the channel. Ease of use is central to how agents operate, and it's an area where Progressive has invested for many years. In auto, that investment includes desktop quoting, server-based rating, ForAgentsOnly, and integration with third-party comparative raters, all with the goal of making it easier for agents to quote, sell, and service Progressive customers. The results of a blind survey of independent agents highlights our advantage. Agents consistently rate our auto sales and service functionality more favorably than competitors, which gives us confidence that we've built strong infrastructure on the agent desktop.
The opportunity now is to extend this ease of use in property and bundling. We've already made meaningful progress by investing in property quoting, providing adjacent products such as umbrella and renters, improving integration with the FAO portal, and continued refinement of the property experience. The next phase is focused on providing seamless bundled quoting for agents. That includes improving how auto and property are presented together, simplifying the sales flow, and making the benefits of Progressive easy for agents to explain to customers. The broader point is that this investment builds on a proven auto platform. We're not creating agent-facing infrastructure from scratch. We're extending capabilities that agents already know and use into the property and bundled experience. The second area of investment is the value proposition we provide agents, and compensation is an important part of that equation.