Moody’s rates Progressive notes A2

Moody's Investors Service said it assigned an A2 rating to $400 million of 30-year notes being issued by Progressive Corp.

The outlook is stable.

The company expects to use net proceeds for general corporate purposes.

Progressive's debt ratings and the Aa2 insurance financial strength ratings of its operating subsidiaries are based on the group's strong presence in the U.S. auto insurance market, superior underwriting and expense management, diversified distribution channels and sound balance sheet, according to Moody's. The company exhibits good risk-adjusted capitalization, with a high-quality, liquid investment portfolio and short-tail, granular insurance liabilities.

Moody’s said Progressive keeps ample liquidity within its insurance operations, and also holds liquid investments through a non-insurance investment subsidiary, Progressive Investment Co., Inc., which gives the parent company extra flexibility to manage its cash flows.

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