PGR · 10-Q · 2026Q2 · Full report

Interest Rate Environment

PROGRESSIVE CORP/OH/ · 2026-08-03 · Importance 45 · Surprise 64

Rising U.S. Treasury yields during 2026 reduced the fair value of Progressive’s fixed-maturity portfolio, producing an after-tax net unrealized loss of $832 million at June 30, 2026, compared with an $81 million loss at June 30, 2025 and a $117 million gain at December 31, 2025. The company’s fixed-income portfolio duration was 3.5 years, within its acceptable 1.5-to-5.0-year range, and its weighted-average credit quality remained AA-. Management increased purchases of mortgage-backed, asset-backed, municipal, and corporate securities where it viewed risk-adjusted spreads as attractive, including $462 million of commercial mortgage-backed securities and $1.3 billion of other asset-backed securities during the second quarter.

Key facts

• The duration of our U.S. government securities total $43,781 million at June 30, 2026 with overall duration 4.5 years and specific lots: one to two years $2,333 million duration 1.8; two to three years $7,457 million duration 2.5; three to five years $13,289 million duration 4.3; five to seven years $12,872 million duration 5.4; seven to ten years $7,483 million duration 7.7. source
• Progressive modestly increased portfolio duration during 2026 to take advantage of higher yields available in the market. source
• Our duration was 3.5 years at June 30, 2026 and 3.4 years at both June 30, 2025 and December 31, 2025, which fell within our acceptable range of 1.5 to 5.0 years. source
• Fixed-income portfolio duration was 3.5 years at June 30, 2026, compared to 3.4 years at June 30, 2025 and December 31, 2025. source