S&P revises Progressive view to negative

Standard & Poor's said it revised its outlook on Progressive Corp. (PGR) to negative from stable.

At the same time, the agency affirmed the company’s A+ long-term counterparty credit rating and the AA financial strength rating on its core insurance operating subsidiaries. The outlook on the subsidiaries is stable.

"The outlook revision follows PGR's recent announcement to acquire a controlling interest in Florida-based property and liability insurance holding company ARX Holding Corp. and related subsidiaries for approximately $875 million in the first half of 2015," S&P credit analyst Laline Carvalho said in a news release.

"After the closing of the transaction, which the company expects to take place by April 1, 2015, we anticipate that PGR will own about 67% of ARX, up from its current 5% ownership interest. As a result of the proposed acquisition and expected use of a meaningful portion of PGR's holding-company liquid assets to finance the transaction, we expect liquid investments at the holding-company level to decline to less than $1 billion during the first half of 2015."

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