Progressive 2012 Annual Report Download - page 19

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Determining the fair value of the investment portfolio is the responsibility of management. As part of the responsibility, we
evaluate whether a market is distressed or inactive in determining the fair value for our portfolio. We review certain market
level inputs to evaluate whether sufficient activity, volume, and new issuances exist to create an active market. Based on
this evaluation, we concluded that there was sufficient activity related to the sectors and securities for which we obtained
valuations.
The composition of the investment portfolio by major security type was:
Fair Value
(millions) Level 1 Level 2 Level 3 Total Cost
December 31, 2012
Fixed maturities:
U.S. government obligations $2,896.5 $ 0 $ 0 $ 2,896.5 $ 2,806.4
State and local government obligations 0 1,964.4 0 1,964.4 1,914.4
Corporate debt securities 0 3,113.0 0 3,113.0 2,982.9
Subtotal 2,896.5 5,077.4 0 7,973.9 7,703.7
Asset-backed securities:
Residential mortgage-backed 0 382.7 45.5 428.2 413.4
Commercial mortgage-backed 0 2,023.4 25.3 2,048.7 1,963.9
Other asset-backed 0 948.6 0 948.6 936.0
Subtotal asset-backed securities 0 3,354.7 70.8 3,425.5 3,313.3
Redeemable preferred stocks:
Financials 0 129.7 0 129.7 110.7
Utilities 0 66.7 0 66.7 64.9
Industrials 0 178.3 0 178.3 181.3
Subtotal redeemable preferred stocks 0 374.7 0 374.7 356.9
Total fixed maturities 2,896.5 8,806.8 70.8 11,774.1 11,373.9
Equity securities:
Nonredeemable preferred stocks:
Financials 259.6 494.5 31.9 786.0 383.3
Utilities 0 26.4 0 26.4 20.7
Subtotal nonredeemable preferred stocks 259.6 520.9 31.9 812.4 404.0
Common equities:
Common stocks 1,887.0 0 0 1,887.0 1,367.2
Other risk investments 0 0 12.0 12.0 3.1
Subtotal common equities 1,887.0 0 12.0 1,899.0 1,370.3
Total fixed maturities and equity securities 5,043.1 9,327.7 114.7 14,485.5 13,148.2
Short-term investments:
Other short-term investments 1,679.9 310.1 0 1,990.0 1,990.0
Total portfolio $6,723.0 $9,637.8 $114.7 $16,475.5 $15,138.2
Debt $ 0 $2,394.4 $ 0 $ 2,394.4 $ 2,063.1
App.-A-19