S&P rates Progressive notes A+

Standard & Poor's said that it assigned an A+ senior debt rating to Progressive Corp.'s $500 million of senior notes due 2021. The ratings and outlook on Progressive, its insurance subsidiaries and its other outstanding debt issues remain unchanged.

The rating on the debt issuance is based on the A+ counterparty credit rating, which reflects the company's very strong competitive position, operating performance and financial flexibility; its well-recognized franchise and dominant market presence in the personal automobile insurance lines of business; and its dynamic multiple-channel distribution platform, the agency said.

However, offsetting these strengths are the company's aggressive capital management strategy at the operating companies, its relatively narrow line of business focus and its vulnerability to earnings volatility from significant exposure to common equities, preferred equities and other investments that have experienced credit impairments, the agency added.

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