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ProgressiveLesson 1 of 4

Part 1 of 3, 0 done
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2025 report · 9 min

How insurance works

Drivers pay for car insurance hoping they'll never use it. We'll follow one insurer, Progressive, to see how a company makes money from crashes.

Ticket 01 · The guess

What's left of each premium dollar?

Progressive says it's the second-biggest car insurer in the US by premiums, and it's the one insurer this lesson follows. In 2025 drivers and businesses paid it $81.7Bsec.gov ·2025 for a year of coverage.

Then came the claims: crashes, stolen cars, hail. Of every $100example (example number: Simplified example: a round amount of premiums, to show Progressive's averages.) that customers paid, how much do you think was left after paying claims and running the company?

$30
$0$50
Words to know

Spot something wrong?

Tell us what looks off. No name or email needed.

What kind of problem?

0 / 1000

We'll also send this page, the lesson, ticket 1, so we can find it. Nothing else. Privacy

·
Sources and every number (2)

Sources

  • The Progressive Corporation 2025 Annual Report to Shareholders (Exhibit 13 to the Form 10-K) · The Progressive Corporation (filed with the U.S. SEC), 2025
  • The Progressive Corporation Form 10-K for the fiscal year ended December 31, 2025 · The Progressive Corporation (filed with the U.S. SEC), 2025

Every number

  • $81.7Bsec.gov ·2025 · Net premiums earned, 2025 (income statement).
  • $100example (example number: Simplified example: a round amount of premiums, to show Progressive's averages.) · Simplified example: a round amount of premiums, to show Progressive's averages.
  • $12.60sec.gov ·2025 · Applied to the example amount of premiums, from Progressive's 2025 underwriting results. The underwriting profit margin, as printed in the MD&A.
  • 96%sec.gov ·2025 · Progressive's long-standing goal: grow as fast as it can at or below this companywide combined ratio (Item 1A).
  • $4sec.gov ·2025 · Worked out: the example amount of premiums minus Progressive's combined ratio goal applied to it (Item 1A).
  1. Lessons›
  2. Big companies›
  3. Insurance
  • ·Next: How Progressive is organized
  • ·Free guide: How insurance companies make money
Skip to the lesson

ProgressiveLesson 1 of 4

Part 1 of 3, 0 done
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

2025 report · 9 min

How insurance works

Drivers pay for car insurance hoping they'll never use it. We'll follow one insurer, Progressive, to see how a company makes money from crashes.

Ticket 01 · The guess

What's left of each premium dollar?

Progressive says it's the second-biggest car insurer in the US by premiums, and it's the one insurer this lesson follows. In 2025 drivers and businesses paid it $81.7Bsec.gov ·2025 for a year of coverage.

Then came the claims: crashes, stolen cars, hail. Of every $100example (example number: Simplified example: a round amount of premiums, to show Progressive's averages.) that customers paid, how much do you think was left after paying claims and running the company?

$30
$0$50
Words to know

Spot something wrong?

Tell us what looks off. No name or email needed.

What kind of problem?

0 / 1000

We'll also send this page, the lesson, ticket 1, so we can find it. Nothing else. Privacy

·
Sources and every number (2)

Sources

  • The Progressive Corporation 2025 Annual Report to Shareholders (Exhibit 13 to the Form 10-K) · The Progressive Corporation (filed with the U.S. SEC), 2025
  • The Progressive Corporation Form 10-K for the fiscal year ended December 31, 2025 · The Progressive Corporation (filed with the U.S. SEC), 2025

Every number

  • $81.7Bsec.gov ·2025 · Net premiums earned, 2025 (income statement).
  • $100example (example number: Simplified example: a round amount of premiums, to show Progressive's averages.) · Simplified example: a round amount of premiums, to show Progressive's averages.
  • $12.60sec.gov ·2025 · Applied to the example amount of premiums, from Progressive's 2025 underwriting results. The underwriting profit margin, as printed in the MD&A.
  • 96%sec.gov ·2025 · Progressive's long-standing goal: grow as fast as it can at or below this companywide combined ratio (Item 1A).
  • $4sec.gov ·2025 · Worked out: the example amount of premiums minus Progressive's combined ratio goal applied to it (Item 1A).
  1. Lessons›
  2. Big companies›
  3. Insurance
  • ·Next: How Progressive is organized
  • ·Free guide: How insurance companies make money