Progressive 2012 Annual Report Download - page 47

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III. RESULTS OF OPERATIONS – UNDERWRITING
A. Growth
(millions) 2012 2011 2010
NET PREMIUMS WRITTEN
Personal Lines
Agency $ 8,247.0 $ 7,705.8 $ 7,490.2
Direct 6,389.8 5,906.4 5,534.2
Total Personal Lines 14,636.8 13,612.2 13,024.4
Commercial Auto 1,735.9 1,534.3 1,449.5
Other indemnity 0 .1 2.9
Total underwriting operations $16,372.7 $15,146.6 $14,476.8
Growth over prior year 8% 5% 3%
NET PREMIUMS EARNED
Personal Lines
Agency $ 8,103.9 $ 7,627.4 $ 7,419.7
Direct 6,264.2 5,803.7 5,407.2
Total Personal Lines 14,368.1 13,431.1 12,826.9
Commercial Auto 1,649.0 1,467.1 1,474.2
Other indemnity .9 4.6 13.7
Total underwriting operations $16,018.0 $14,902.8 $14,314.8
Growth over prior year 7% 4% 2%
Net premiums written represent the premiums generated from policies written during the period less any premiums ceded to
reinsurers. Net premiums earned, which are a function of the premiums written in the current and prior periods, are earned
as revenue over the life of the policy using a daily earnings convention.
We generated an increase in total written and earned premiums during each of the last three years. The increase in
premiums reflects our continued work on several initiatives aimed at providing consumers with distinctive new insurance
options (discussed below) and our marketing efforts, as well as rate increases taken during 2012 in response to rising
claims costs. The Commercial Auto business generated an increase in written premium, reflecting rate increases taken over
the last several years and shifts in our mix of business.
Policies in force, our preferred measure of growth, represents all policies under which coverage was in effect as of the end
of the period specified. As of December 31, our policies in force were:
(thousands) 2012 2011 2010
POLICIES IN FORCE
Personal Lines
Agency auto 4,790.4 4,648.5 4,480.1
Direct auto 4,000.1 3,844.5 3,610.4
Total auto 8,790.5 8,493.0 8,090.5
Special lines13,944.8 3,790.8 3,612.2
Total Personal Lines 12,735.3 12,283.8 11,702.7
Growth over prior year 4% 5% 7%
POLICIES IN FORCE
Commercial Auto 519.6 509.1 510.4
Growth over prior year 2% 0% 0%
1Includes insurance for motorcycles, ATVs, RVs, mobile homes, watercraft, snowmobiles, and similar items, as well as a personal umbrella product.
App.-A-47