Report of the Examination of
Progressive Northern Insurance Company
Cleveland, Ohio
As of December 31, 2022
TABLE OF CONTENTS
Page
I. INTRODUCTION ................................................................................................................... 2
II. HISTORY AND PLAN OF OPERATION ................................................................................ 4
III. MANAGEMENT AND CONTROL .......................................................................................... 6
IV. AFFILIATED COMPANIES .................................................................................................... 8
V. REINSURANCE ................................................................................................................... 12
VI. FINANCIAL DATA ................................................................................................................ 14
VII. SUMMARY OF EXAMINATION RESULTS ......................................................................... 23
VIII. CONCLUSION ..................................................................................................................... 24
IX. ACKNOWLEDGMENT ......................................................................................................... 25
Tony Evers, Governor of Wisconsin
Nathan Houdek, Commissioner of Insurance
125 South Webster Street, P.O. Box 7873 | Madison, WI 53707-7873
p: 608-266-3585 | 1-800-236-8517 | f: 608-264-6237
ocifinancial@wisconsin.gov | oci.wi.gov
April 26, 2024
Honorable Nathan D. Houdek
Commissioner of Insurance
State of Wisconsin
125 South Webster Street
Madison, Wisconsin 53703
Commissioner:
In accordance with your instructions, a compliance examination has been made of the affairs
and financial condition of:
PROGRESSIVE NORTHERN INSURANCE COMPANY
Cleveland, Ohio
and this report is respectfully submitted.
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I. INTRODUCTION
The previous examination of Progressive Northern Insurance Company (Progressive
Northern or the company) was conducted in 2018 as of December 31, 2017. The current
examination covered the intervening period ending December 31, 2022, and included a review of
such subsequent transactions as deemed necessary to complete the examination.
The examination of the company was conducted concurrently with the examination of
The Progressive Group. The Ohio Department of Insurance acted in its capacity as the lead state
for the coordinated examinations. Work performed by the Ohio Department of Insurance was
reviewed and relied on where deemed appropriate.
The examination was conducted using a risk-focused approach in accordance with
the National Association of Insurance Commissioners (NAIC) Financial Condition Examiners
Handbook. This approach sets forth guidance for planning and performing the examination of an
insurance company to evaluate the financial condition, assess corporate governance, identify
current and prospective risks (including those that might materially affect the financial condition,
either currently or prospectively), and evaluate system controls and procedures used to mitigate
those risks.
All accounts and activities of the company were considered in accordance with the
risk-focused examination process. This may include assessing significant estimates made by
management and evaluating management’s compliance with statutory accounting principles,
annual statement instructions, and Wisconsin laws and regulations. The examination does not
attest to the fair presentation of the financial statements included herein. If during the course of
the examination an adjustment is identified, the impact of such adjustment will be documented
separately at the end of the “Financial Data” section in the area captioned "Reconciliation of
Surplus per Examination."
The company is annually audited by an independent public accounting firm as
prescribed by s. Ins 50.05, Wis. Adm. Code. An integral part of this compliance examination was
the review of the independent accountant's work papers. Based on the results of the review of
these work papers, alternative or additional examination steps deemed necessary for the
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completion of this examination were performed. The examination work papers contain
documentation concerning the alternative or additional examination steps performed during the
examination.
Actuarial Review by the Ohio Department
The company is a participant in a comprehensive reinsurance pooling agreement
with Progressive Casualty Insurance Company and other affiliates (referred to as the Agency
Pool). The company’s net loss and loss adjustment expense reserves are the product of the
reserves of the Agency Pool, and the company’s participation percentage in the pool.
An actuary on the staff of the Ohio Department of Insurance reviewed the adequacy
of the company’s loss reserves and loss adjustment expense reserves, as a function of its
participation in the pool. The results of his work were reported to the examiner-in-charge.
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II. HISTORY AND PLAN OF OPERATION
The company was incorporated in the state of Wisconsin on August 19, 1980, and
commenced business on March 8, 1981. The Progressive Corporation (TPC), the ultimate parent
company of The Progressive Group, was the parent and sole shareholder of the company until it
transferred ownership to a downstream holding company, Progressive Agency Holdings, Inc., on
January 1, 2004. On December 15, 2009, Progressive Northeastern Insurance Company, which
was domiciled in New York, was merged into the company with Progressive Northern as the
surviving entity. In 2022, the company wrote direct premium in the following states:
South Carolina
641,091,899
23.6%
Oklahoma
378,140,863
14.0
Illinois
349,404,641
12.9
Iowa
332,845,954
12.3
Nebraska
200,583,971
7.4
Nevada
187,465,097
6.9
Virginia
149,061,983
5.5
New Mexico
129,316,141
4.8
All others
342,293,564
12.6
Total
$2,710,204,113
100.0%
The company is licensed in the District of Columbia and all states except Alabama,
Arkansas, California, Florida, Massachusetts, Michigan, Missouri, New Jersey, North Dakota,
Tennessee, and Texas. The company is also a qualified or accredited reinsurer in the state of
Michigan.
The major products marketed by the company include private passenger auto
liability, auto physical damage, commercial auto liability and commercial auto physical damage,
inland marine, other liability – occurrence, homeowners, and commercial multiple peril. The major
products are marketed through a network of approximately 40,000 independent insurance agents.
The company also writes insurance through strategic business relationships with other insurance
companies, financial institutions, and national agencies.
The company does not have any employees or facilities. Management and
administrative services are provided to the company by affiliates, pursuant to services
agreements described in the “Affiliated Companies” section of this report.
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The company’s major operations are conducted in Mayfield Village, Ohio (the
corporate headquarters for The Progressive Group). Additional support services are provided by
Progressive Casualty Insurance Company’s personnel in a network of call and claim
administration centers.
The following table is a summary of the net insurance premiums written by the
company in 2022. The growth of the company is discussed in the “Financial Data” section of this
report.
Line of
Business
Direct
Premium
Reinsurance
Assumed
Reinsurance
Net
Premium
Homeowners multiple
peril
$13,596,251
$7,093,541
$7,093,541
Commercial multiple
peril (non-liability
portion)
1,194,687
452,178
452,178
Commercial multiple
peril (liability portion)
1,442,351
803,689
803,689
Inland marine
66,575,406
50,040,615
50,040,615
Medical professional
liability – claims made
4,007
4,007
Other liability –
occurrence
22,059,722
14,785,155
14,785,155
Other liability – claims
made
95,400
108,385
108,385
Private passenger auto
no-fault (personal
injury)
6,379,764
152,312,040
152,312,040
Other private passenger
auto liability
1,205,720,290
1,202,850,500
1,202,850,501
Commercial auto no-
fault (personal injury)
457,599
6,747,087
6,747,087
Other commercial auto
liability
351,098,728
365,114,022
365,114,022
Private passenger auto
physical damage
892,256,144
898,918,653
898,918,653
Commercial auto
physical damage
149,327,771
116,881,818
116,881,818
Surety
790
790
Total All Lines
$2,710,204,113
$2,816,112,481
$2,816,112,481
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III. MANAGEMENT AND CONTROL
Board of Directors
The board of directors consists of seven members. All directors are elected annually
to serve a one-year term. Officers are elected at the board's annual meeting. Members of the
company's board of directors may also be members of other boards of directors in the holding
company group. The board members currently receive no additional compensation for serving on
the board.
Currently, the board of directors consists of the following persons:
Name and Residence
Principal Occupation
Term
Expires
Charles Ernest Conover
Hudson, Ohio
Business Leader - Agent Engagement
The Progressive Group of Insurance
Companies
2024
James Michael DeVito
Shaker Heights, Ohio
Senior Director - Small Business Process
The Progressive Group of Insurance
Companies
2024
James David Williams
Personal Lines General Manager
2024
Solon, Ohio
The Progressive Group of Insurance
Companies
John Allen Curtiss, Jr.
National Product Development Leader
2024
Chagrin Falls, Ohio
The Progressive Group of Insurance
Companies
Kathryn Margaret Lemieux
Gates Mills, Ohio
Business Leader – Customer Relations Mgmt
Sales Experience
2024
The Progressive Group of Insurance
Companies
Heather Elizabeth Day
Cleveland Heights, Ohio
General Manager - Customer Experience
Strategy
2024
The Progressive Group of Insurance
Companies
Kanik Varma
El Dorado Hills, California
Personal Lines General Manager
The Progressive Group of Insurance
Companies
2024
Officers of the Company
The officers serving at the time of this examination are as follows:
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Name
Office
James David Williams
Chairman
Meghan Louise McArdle Friesen
President
Patrick Sean Brennan
Treasurer
Peter James Albert
Secretary and Vice President
Michelle Cristen Cavell
Vice President
Christina Lynn Crews
Assistant Secretary
James Lee Kusmer
Assistant Treasurer
Heather Elizabeth Day
Vice President
Ann Catherine Strasser
Assistant Vice President
Jennifer Elizabeth Mineo
Assistant Vice President
Committees of the Board
The company's bylaws allow for the formation of certain committees by the board of
directors. The committees at the time of the examination are listed below:
Executive Committee
investment Committee
Kanik Varma, Chair
Kanik Varma, Chair
John Allen Curtiss, Jr.
James David Williams
James David Williams
Charles Ernest Conover
Kathryn Margaret Lemieux
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IV. AFFILIATED COMPANIES
Progressive Northern is a member of an insurance holding company system under
TPC, the ultimate parent company of The Progressive Group. The Progressive Group is
organized into segments under separate holding companies, including a Commercial Lines
segment (under Progressive Commercial Holdings, Inc.), and a Personal Lines segment. The
Personal Lines segment is subdivided into two channels: a Direct Channel, which includes
business written directly through the internet, mobile devices, or over the phone (organized under
Progressive Direct Holdings, Inc.), and an Agency Channel, which includes business written by a
network of over 40,000 independent agencies located throughout the U.S. (organized under
Progressive Agency Holdings, Inc.). Below is an abbreviated organizational chart, which depicts
the organization of the group’s key business segments, as well as the position of the other
Wisconsin-domiciled insurers in the group. A brief description of the significant affiliates follows
the organizational chart.
Organizational Chart (Abbreviated)
As of December 31, 2022
The Progressive
Corporation
(NYSE: "PGR")
Progressive Direct
Holdings, Inc.
[Direct Pool]
Progressive Universal
Ins Co (WI)
Progressive
Commercial Holdings,
Inc. [Commercial Auto
Segment]
Artisan and Truckers
Casualty Co (WI)
Progressive Agency
Holdings, Inc.
[Agency Pool]
Progressive Northern
Ins Co. (WI)
Progressive Classic Ins.
Co. (WI)
ARX Holding Corp.
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The Progressive Corporation (TPC)
The Progressive Corporation is an Ohio-domiciled insurance holding company that
was formed in 1965. TPC became publicly traded after an initial public offering in 1971, and its
common stock is currently listed on the New York Stock Exchange (ticker symbol PGR). As of
December 31, 2022, the audited financial statements of TPC reported assets of $75,465 million,
liabilities of $59,574 million, and shareholders’ equity of $15,891 million. Operations for 2022
produced net income of $721.5 million.
Progressive Agency Holdings, Inc. (Agency Pool)
Progressive Agency Holdings, Inc. is a Delaware-domiciled insurance holding
company that was formed in 2003. Agency Holdings has virtually no expenses, and revenue is
solely from dividends from its subsidiaries and any gain/loss on the investments in subsidiaries.
Progressive Casualty Insurance Company (Casualty)
Progressive Casualty Insurance Company provides a property casualty insurer
domiciled in Ohio, provides administrative services through affiliated agreements discussed
below. As of December 31, 2022, the audited financial statements of Casualty reported assets of
$14,818,868,026, liabilities of $11,236,156,887, and capital and surplus of $3,582,711,139.
Operations for 2022 produced net income of $ 922,984,033.
Agreements with Affiliates
In addition to common staffing and management control, various written agreements
affect Progressive Northern’s relationship with its affiliates. The pooling agreement is described in
the “Reinsurance” section of this report. A brief summary of the other agreements follows:
1. Type: Consolidated Tax Allocation Agreement
Parties: Progressive Northern along with other members of the Progressive holding
company system
Effective: August 1, 2005, Amended and Restated as of June 1, 2021
Terms: The agreement establishes that an estimated consolidated tax liability will be
computed quarterly for The Progressive Corporation, with each member
company’s recoverable or payable equal to the amount that the member
company would have reported on a nonconsolidated basis. Settlements are to
be made within 90 days of each quarter in which The Progressive Corporation
is required to make a federal income tax estimated payment.
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2. Type: Cash Management Agreement
Parties: Progressive Northern, Progressive Casualty Insurance Company (Casualty)
and other Progressive affiliates
Effective: January 1, 1998
Terms: All cash receipts or disbursements attributable to Progressive Northern and the
other affiliates named in the agreement are deposited in or withdrawn from a
centralized account (Cashier Account) that is managed by Casualty. Pursuant
to the terms of the agreement, Progressive Northern has a balance in this
account that reflects its claim against or obligation to the Cashier Account.
Casualty provides the Company with monthly statements that show the month-
end balances. Account balances are considered loans and interest is payable
to or receivable from the company’s account depending on the balance. The
provisions of an Interest Agreement to which Progressive Northern is a party
govern the rate of interest. Each participant in the agreement receives a
quarter-end balance that represents a net amount against any other
intercompany transaction. Settlements are to be in cash or readily marketable
securities valued at market value.
3. Type: Interest Agreement
Parties: Progressive Northern, Progressive Casualty Insurance Company and other
Progressive affiliates
Effective: The company became a party to this agreement on October 15, 1980,
retroactive to January 1, 1980. The original effective date of the agreement
was January 1, 1977.
Terms: This agreement establishes the variable interest rate that governs each entity’s
participation in Casualty’s Cashier Account as noted in the Cash Management
Agreement in #2 above. Interest is to be computed at the prevailing 90-day
U.S. Treasury bill rate on the last day of each month rounded to the nearest
quarter of a percent.
4. Type: Investment Services Agreement
Parties: Progressive Northern along with other participating affiliates and Progressive
Capital Management Corp. (Progressive Capital). (Progressive Capital was
formerly known as PPLP Corporation, then Progressive Partners, Inc., until it
changed its name to that currently used on June 8, 1998.)
Effective: July 16, 1992, Amended and restated as of March 1, 2023
Terms: Progressive Capital provides investment management services to members of
the Progressive holding company system named in the agreement. The
agreement requires each of the participating companies to reimburse
Progressive Capital for an equitable portion of the costs and expenses it incurs
in providing its services. Progressive Capital does not charge any additional
management fees to the participating companies.
5. Type: Joint Servicing (Cost Allocation) Agreement
Parties: Progressive Northern and Progressive Casualty Insurance Company
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Effective: July 1, 2007
Terms: The company provides Casualty with underwriting and loss adjustment
services for specific business produced, and Casualty provides the company
with similar services for other specific business provided. In exchange for these
services, the companies charge management fees based on each company’s
use of the other’s services.
6. Type: General Agency Agreement
Parties: Progressive Northern, Progressive Advantage Agency, Inc. (Agency), and
other Progressive affiliates
Effective: December 1, 2006
Terms: Agency will act as participating companies’ respective general agent in the
states of California, Kentucky, Louisiana, Washington, and other such states as
the parties may agree upon.
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V. REINSURANCE
Progressive Northern cedes 100% of its direct business (above minor underlying
coverages) to an intercompany reinsurance pool (the Agency Pool) and receives a 12% retrocession
back. The agreement became effective on January 1, 1988, and was last amended on January 1,
2019. The agreement contains proper insolvency provisions. The members of the Agency Pool, with
their respective pool percentages, are shown below.
Participation:
Progressive Casualty Insurance Company 49.0%
Progressive Northern Insurance Company 12.0
Progressive Northwestern Insurance Company 12.0
Progressive Specialty Insurance Company 7.0
Progressive Preferred Insurance Company 6.0
Progressive Michigan Insurance Company 4.0
Progressive Classic Insurance Company 3.0
Progressive American Insurance Company 2.0
Progressive Gulf Insurance Company 2.0
Progressive Mountain Insurance Company 1.0
Progressive Southeastern Insurance Company 1.0
Progressive Bayside Insurance Company 0.5
Progressive Freedom Insurance Company 0.5
Total 100.0%
Nonaffiliated Ceding Contracts
1. Type: Umbrella Excess of Loss
Reinsurer: Employers Mutual Casualty Company 15%
Waypoint Underwriting Management LLC
On Behalf of Accident Fund Insurance Company
Of America 15%
Waypoint Underwriting Management LLC
On Behalf of Insurance Company of the West 15%
Swiss Re 55%
Scope: Reinsurance of the excess liability under the Personal Umbrella
Liability for coverages required for non-resident drivers under the
motor vehicle financial responsibility law or the motor vehicle
compulsory insurance law following the provisions of the
Company’s Policies when they include or are deemed to include
so-called “Out of State Insurance” provisions
Retention: $1,000,000
Coverage: Each Loss Occurrence, Each Insured $ 4,000,000 in excess of
$1,000,000
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Maximum Liability - $16,000,000
Premium: Premium Rate 5.75%
Deposit Premium $1,289,155
Minimum Premium (80%) $1,031,324
Effective date: January 1, 2022, through January 1, 2023
Termination: The Company may terminate the share of the Reinsurer at any
time, either during the term or after the expiration of this
Contract, by giving written notice to the Reinsurer in the event
the Reinsurer experiences one or more Special Termination
Event(s). The effective date of termination shall be the date
selected by the Company, which may be a date that is
retroactively applied up to a maximum of 90 days prior to the
earliest of either the date of public announcement or the date of
discovery, as applicable, of the Reinsurer experiencing one or
more Special Termination Event(s), subject to the condition that
such selected date must be the last day of a calendar month.
The company has an Allocation Agreement (Umbrella XOL) with several affiliates and
Waypoint Underwriting Management LLC for and on behalf of Insurance Company of the West,
with respect to the Umbrella Excess of Loss Reinsurance Contract, for the period January 1,
2021, to January 1, 2022, and any renewals thereof. The Umbrella XOL Contract applies for any
liability exceeding $16,000,000 for all losses occurring during any term of the Umbrella XOL
Contract. Each party to the contract is responsible for a portion of that excess liability.
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VI. FINANCIAL DATA
The following financial statements reflect the financial condition of the company as
reported to the commissioner of insurance in the December 31, 2022, annual statement.
Adjustments made as a result of the examination are noted at the end of this section in the area
captioned "Reconciliation of Surplus per Examination." Also included in this section are
schedules that reflect the growth of the company and the compulsory and security surplus
calculation.
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Progressive Northern Insurance Company
Assets
As of December 31, 2022
Net
Admitted
Assets
Assets
Bonds
$2,492,622,348
$2,492,622,348
Stocks:
Preferred stocks
5,500,000
5,500,000
Common stocks
221,663,781
221,663,781
Cash, cash equivalents, and short-term
investments
145,361
145,361
Receivable for securities
1,053,375
1,053,375
Investment income due and accrued
13,789,323
13,789,323
Premiums and considerations:
Uncollected premiums and agents'
balances in course of collection
85,142,850
73,932,343
Deferred premiums, agents'
balances, and installments booked
but deferred and not yet due
485,740,010
485,740,010
Reinsurance:
Amounts recoverable from reinsurers
18,856,041
18,856,041
Net deferred tax asset
28,307,361
28,307,361
Guaranty Funds receivable or on
deposit
114,000
114,000
Receivable from parent, subsidiaries,
and affiliates
124,954,161
124,954,161
Write-ins for other than invested
assets:
State Unearned Surcharge
Recoverable
104,834
104,834
VA Uninsured Motorist Refund
25,777
25,777
Prepaid expense
1,421,828
Overflow page
16,602
____________
Total Assets
$3,479,457,652
$3,466,808,715
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Progressive Northern Insurance Company
Liabilities, Surplus, and Other Funds
As of December 31, 2022
Losses
$1,136,890,915
Reinsurance payable on paid loss and loss adjustment
expenses
11,077,546
Loss adjustment expenses
208,290,875
Commissions payable, contingent commissions, and other
similar charges
2,612,951
Other expenses (excluding taxes, licenses, and fees)
107,934,640
Taxes, licenses, and fees (excluding federal and foreign
income taxes)
20,044,725
Current federal and foreign income taxes
13,038,892
Unearned premiums
957,696,720
Advance premium
15,926,615
Ceded reinsurance premiums payable (net of ceding
commissions)
147,008
Drafts outstanding
96,037,548
Write-ins for liabilities:
State Plan liability
13,336,447
Escheatable property
729,057
Other liabilities
384,208
Total Liabilities
2,584,148,147
Common capital stock
$ 3,008,000
Gross paid in and contributed surplus
239,551,402
Unassigned funds (surplus)
640,101,166
Surplus as Regards Policyholders
882,660,568
Total Liabilities and Surplus
$3,466,808,715
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Progressive Northern Insurance Company
Summary of Operations
For the Year 2022
Underwriting Income
Premiums earned
$2,719,472,736
Deductions:
Losses incurred
$1,835,818,464
Loss adjustment expenses incurred
235,375,879
Other underwriting expenses incurred
508,122,010
Total underwriting deductions
2,579,316,353
Net underwriting gain (loss)
140,156,383
Investment Income
Net investment income earned
54,559,381
Net realized capital gains (losses)
31,265,234
Net investment gain (loss)
85,824,615
Other Income
Net gain (loss) from agents' or premium balances charged
off
(18,818,822)
Finance and service charges not included in premiums
30,905,926
Write-ins for miscellaneous income:
Miscellaneous Other Income
3,801,231
Interest Income on Intercompany Balances
3,497,031
Service Business Revenue
464
Total other income
19,385,830
Net income after dividends to policyholders but before
federal and foreign income taxes
245,366,828
Federal and foreign income taxes incurred
51,090,844
Net Income
$ 194,275,984
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Progressive Northern Insurance Company
Cash Flow
For the Year 2022
Premiums collected net of
reinsurance
$2,748,996,060
Net investment income
52,427,458
Miscellaneous income
20,099,714
Total
2,821,525,232
Benefit- and loss-related
payments
$1,691,506,322
Commissions, expenses paid,
and aggregate write-ins for
deductions
733,974,557
Federal and foreign income
taxes paid (recovered)
52,476,952
Total deductions
2,477,957,831
Net cash from operations
343,567,401
Proceeds from investments sold,
matured, or repaid:
Bonds
$724,191,523
Stocks
76,089,392
Net gains (losses) on cash,
cash equivalents, and
short-term investments
(1,558)
Total investment proceeds
800,279,357
Cost of investments acquired
(long-term only):
Bonds
1,109,937,712
Stocks
4,081,482
Miscellaneous applications
1,053,375
Total investments acquired
1,115,072,569
Net cash from investments
(314,793,212)
Cash from financing and
miscellaneous sources:
Capital and paid in surplus
less treasury stock
10,170
Dividends to stockholders
50,000,000
Other cash provided (applied)
18,546,970
Net cash from financing and
miscellaneous sources
(31,442,860)
Reconciliation:
Net Change in Cash, Cash
Equivalents, and Short-Term
Investments
(2,668,670)
Cash, cash equivalents, and
short-term investments:
Beginning of year
2,814,031
End of Year
$ 145,361
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Progressive Northern Insurance Company
Compulsory and Security Surplus Calculation
December 31, 2022
Assets
$3,466,808,715
Less liabilities
2,584,148,147
Adjusted surplus
882,660,568
Annual premium*:
Lines other than accident and health
$2,816,744,271
Factor
20%
Compulsory surplus (subject to a minimum of $2 million)
563,348,854
Compulsory Surplus Excess (Deficit)
$319,311,714
Adjusted surplus (from above)
$882,660,568
Security surplus (140% of compulsory surplus, factor
reduced 1% for each $33 million in premium written in
excess of $10 million, with a minimum factor of 110%)
619,683,739
Security Surplus Excess (Deficit)
$ 262,976,829
*Adjusted for premiums ceded to unauthorized
reinsurers.
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Progressive Northern Insurance Company
Analysis of Surplus
For the 5-Year Period Ending December 31, 2022
The following schedule details items affecting surplus during the period under
examination as reported by the company in its filed annual statements:
2022
2021
2020
2019
2018
Surplus, beginning of
year
$829,427,908
$777,877,510
$716,414,162
$624,573,578
531,397,382
Net income
194,275,984
157,659,954
309,741,862
233,466,477
209,004,033
Net transfers (to) from
protected cell accounts
Change in net unrealized
capital gains/losses
(96,545,035)
58,301,108
37,909,927
41,663,962
(26,210,307)
Change in net deferred
income tax
7,778,477
8,331,222
10,640,033
2,523,366
4,084,034
Change in non-admitted
assets
(2,286,936)
4,958,114
(3,826,233)
(737,312)
(2,389,120)
Surplus Adjustments:
Paid in
10,170
(2,241)
(75,909)
687,556
Dividends to
stockholders
(50,000,000)
(177,700,000)
(293,000,000)
(185,000,000)
(92,000,000)
Surplus, End of Year
$882,660,568
$829,427,908
$777,877,510
$716,414,162
$624,573,578
Growth of Progressive Northern Insurance Company
Year
Admitted
Assets
Liabilities
Surplus as
Regards
Policyholders
Net
Income
2022
$3,466,808,715
$2,584,148,147
$882,660,568
$194,275,984
2021
3,148,639,485
2,319,211,577
829,427,908
157,659,954
2020
2,753,341,758
1,975,464,248
777,877,510
309,741,862
2019
2,482,902,289
1,766,488,127
716,414,162
233,466,477
2018
2,180,121,207
1,555,547,629
624,573,578
209,004,033
2017
1,866,478,948
1,335,081,566
531,397,382
91,699,145
Year
Gross Premium
Written
Net
Premium
Written
Premium
Earned
Loss and
LAE
Ratio
Expense
Ratio
Combined
Ratio
2022
$5,526,316,593
$2,816,112,481
$2,719,472,736
76.2%
17.4%
93.6%
2021
5,152,394,993
2,612,129,230
2,498,722,741
74.6
18.0
92.6
2020
4,595,438,991
2,333,964,662
2,258,844,672
63.2
22.5
85.7
2019
4,271,259,582
2,185,886,041
2,114,909,485
69.3
19.0
88.3
2018
3,739,021,261
1,913,279,414
1,818,661,929
68.7
18.9
87.6
2017
3,181,752,131
1,612,585,352
1,526,426,983
72.8
19.1
91.9
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P&CBLK_02-19.dotm
During the period under examination, Progressive Northern Insurance Company
reported an 85.7% increase in assets, a 93.5% increase in liabilities, and a 66.1% increase in
surplus. The company remained profitable and financially stable despite the natural catastrophes,
the COVID-19 pandemic, and the increasing cost of insurance losses. The company reported a
substantial increase in net income of 237.8%, or $309.7 million in 2020 compared to year 2017 of
$91.7 million and dropped to $194.3 million in 2022. The unusual change in net income was due
to the increase in premium growth in the commercial segments due to the greater demand for
shipping services during the pandemic. The loss and LAE ratio remained in a stable range and
was at its lowest in 2020 at 63.2% to offset the highest expense ratio of 22.5% in that year,
resulting in a combined ratio of 85.7%, which was at the lowest in its range within the examined
period. In 2022, the combined ratio was 93.6% compared to the industry average of 102.5%,
according to the NAIC US Property & Casualty Industry Report published on the NAIC website.
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P&CBLK_02-19.dotm
Reconciliation of Surplus per Examination
No adjustments were made to surplus as a result of the examination. The amount of
surplus reported by the company as of December 31, 2022, is accepted.
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P&CBLK_02-19.dotm
VII. SUMMARY OF EXAMINATION RESULTS
Compliance with Prior Examination Report Recommendations
The were no specific comments or suggestions in the previous examination report.
Summary of Current Examination Results
The current examination resulted in no adverse comments or recommendations.
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P&CBLK_02-19.dotm
VIII. CONCLUSION
Progressive Northern was incorporated in the state of Wisconsin on August 19, 1980,
and commenced business on March 8, 1981. TPC was the parent and sole shareholder of the
company until it transferred ownership to Progressive Agency Holdings, Inc. (formerly Drive
Insurance Holdings, Inc.), on January 1, 2004. All operations are conducted by employees of
Progressive subsidiaries in accordance with affiliated agreements.
The company participates in an affiliated reinsurance pooling agreement with certain
affiliates (the Agency Pool), whereby the company assumes a 12% share of the pooled business.
The business is written primarily through independent insurance agencies that represent the
Agency Pool, as well as brokerages in New York and California.
The current examination resulted in no adverse comments or recommendations. No
adjustments were made to surplus as a result of the examination. The amount of surplus reported
by the company as of December 31, 2022, is accepted.
25
P&CBLK_02-19.dotm
IX. ACKNOWLEDGMENT
The courtesy and cooperation extended by the officers and employees of the
company during the course of the examination are acknowledged.
In addition to the undersigned, the following representatives of the Office of the
Commissioner of Insurance, State of Wisconsin, participated in the examination:
Name Title
Takoda Boyd
Insurance Financial Examiner
Nick Hartwig, AFE
Quality Control Specialist
Jerry DeArmond, CFE
Reserve Specialist
Respectfully submitted,
Ana Careaga
Examiner-in-Charge