Progressive said Q3 2025 net income rose to $2.62 billion even after recording a $950 million charge for anticipated “excess profits” in Florida personal auto, a policyholder credit the carrier expects to distribute in early 2026 to customers active on Dec. 31.
The company reported a third-quarter combined ratio of 89.5 and net premiums written of $21.38 billion, both up year over year.
Florida’s excessive profits statute caps three-year underwriting gains in private passenger auto at the “anticipated underwriting profit plus 5% of earned premiums,” with any excess returned to customers via refunds or credits.
Progressive disclosed in its September results that it recognized a $950 million “policyholder credit expense” in the month, which flowed through the personal auto expense ratio. Excluding those Florida credits, Progressive said total Personal Lines would have reported an 86.5 combined ratio for September.
The carrier previously warned in its Q2 2025 disclosures that, following 2023 Florida insurance reforms, lower loss costs on certain claim types and favorable reserve development could push three-year profits over the statutory limit; management also noted hurricane uncertainty and reserving through Q1 2026 could affect the final calculation.
Under statute, any excess profit is returned on a pro-rata basis to the policyholders of record on Dec. 31 of the final year in the three-year test. Refunds may be issued in cash or as credits toward future premiums.
Progressive said it expects to provide credits to policyholders active on Dec. 31 in early 2026, with the ultimate amount refined for reserve adjustments and any late-season hurricane losses.
Progressive counts roughly 2.7 million Florida personal auto policyholders, a subset of its 38.1 million policies in force nationwide as of Sept. 30.
Florida regulators have also highlighted rate decreases among the state’s top auto carriers in 2025, citing the effect of recent reforms—context for why profits could test statutory caps even after some carriers cut prices.
