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2020 A N N U A L P R O G R A M U P D AT E

2020 ANNUAL MAILING

TO G E T H E R W E C A N M A K E 2 0 2 0 O U R B E S T Y E A R Y E T.

2020 ANNUAL MAILING

I N V E ST I N G I N YO U Since 1937, we’ve been partnering with independent agents to build a mutually beneficial business that offers distinctive value for our shared customers—value that includes trusted, expert advice and counsel from local agents like yourself, backed by Progressive’s competitive rates, caring claims service, and easy-to-use technology. I’m proud of our 82-year history with independent agents, but I’m even prouder of our move just over four short years ago into the preferred market space. Since launching Platinum in June of 2015, just over half of our property-appointed agents have joined the program. Whether you’re new to Platinum or have been with us since the beginning, I want to welcome you to what I know can be our best year yet. As a Platinum agent, you’ll enjoy our highest commissions, exclusive Platinum Performance Bonus opportunities, and complimentary Platinum Benefits (including our new Social Media Audit option provided by Search Influence). Check out the enclosed overviews for more information on everything 2020 holds in store for you. Plus, keep in mind that our latest Homeowners product will soon feature new and expanded coverages, unique features, and new discounts that will make our bundled offering even more competitive to help you grow your preferred book of business. Look for more details to arrive as we get ready to roll it out in your state soon! Our commitment to independent agents and our growing property business is stronger than ever. In fact, it’s so important to our future together that our CEO, Tricia Griffith, updated our company vision statement earlier this year to align everyone on our goals—we want to be consumers’ and agents’ #1 choice and destination for auto, home, and other insurance. History tells us we can realize this vision, and I believe Platinum agents like you will lead the way. We should take pride in everything we’ve accomplished over the years together. Now, let’s shape an even brighter future. I look forward to what we’re about to achieve in 2020 and beyond.

Heather Day, Agency Distribution General Manager

OVERVIEW

2 0 2 0 P L AT I N U M OV E RV I E W AND COMMISSION Enjoy exclusive benefits, enhanced bundle commissions, and the opportunity to cash in on your profitable

Blu

bundle production success with annual bonus opportunities.

Sil

ve r

Additional exclusive marketing benefits

Additional marketing benefits

15/12 on new Progressive Home and Auto bundle business

Pla

tin

Property product suite

Annual Bundle Bonus and Platinum PL Bonus

Annual policies

Earn a one-time $25,000, $15,000, or $10,000 payout if your agency achieves Blue-level status within three, four, or five years, respectively.

15/10 on new Progressive Home and Auto bundle business

Fast Pass priority agency service

Benefits

Blue Award*

Platinum endorsement

Marketing benefits

Enhanced Annual Bundle Bonus and Platinum PL Bonus

Enhanced bundle commission

Silver Award* Quarterly Bundle Bonus and Platinum PL Bonus

Performance Bonus

Earn a one-time $5,000 bonus if your agency achieves Silver-level status within two years.

Gainshare Supplement

Awards

* In the event of a merger, if any account within that new entity had already been paid the Silver Award, the account is no longer eligible for the Silver Award, but can still earn the Blue Award if it meets that criteria. If the Blue Award has already been paid to any account within the new entity, it is no longer eligible for the Blue Award.

2020 ANNUAL MAILING

2 0 2 0 P L AT I N U M B U N D L E AND MONOLINE COMMISSION Take advantage of our enhanced bundled commission structure and enjoy the highest commissions we offer for your preferred bundled business. In addition, youâ€™ll also receive our monoline Personal Auto commission schedule, which offers more rewards for more preferred business.

HOME/CONDO & AUTO BUNDLES

Platinum Blue

15/12

Platinum Silver

15/12

Platinum

15/10

MONOLINE PERSONAL AUTO

Safe Driver + Homeowner + POP (Earns Continuous Insurance, Homeowner, and 3-Year Safe Driver Discounts)

Proof of Prior Auto Insurance (Earns Continuous Insurance Discountâ€”no lapse in coverage)

No Proof of Prior Auto Insurance

14/10

12/10

10/10

Currently, California and Minnesota are not receiving the Platinum National Commission Schedule for monoline Personal Auto business. Any changes to the commission will be applied on a go-forward basis after the state has gone live.

BENEFITS

2 0 2 0 P L AT I N U M A N N UA L B E N E F I T S Take advantage of your free 2020 Platinum Benefits to help make it easier for your agency to find, write, and keep more Platinum bundles! Take a look at the exclusive benefits shown below, and then look for your benefits enrollment email to arrive soon to guide you through the opt-in and activation process. Discover more potential customers, maximize your online marketing opportunities, build beneficial community relationships, and more—your Platinum Benefits are ready to help!

P L AT I N U M B E N E F I T S OV E RV I E W BY L E V E L

All Platinum agents receive: SmartSell® Package

Trusted Choice®

Take advantage of easy-to-use, free CrossSell and ReConnect services to help you keep current customers and bring in new ones.

Save $500 off a Trusted Choice Personal Lines subscription. More than 140,000 independent agents count on Trusted Choice to generate leads, and with a Trusted Choice Personal Lines subscription, you’ll have a dedicated advocate working on your behalf to place promising business with your agency, too.

Create bigger bundles with our CrossSell campaign, and close the sale with recent quoters with ReConnect. Together, they make up a powerful SmartSell package designed exclusively to help increase revenue for Platinum agents like you.

Unlimited CE Now all of your agency codes can benefit! Maintain certifications and stay on top of the latest product information with more than 200 online courses for insurance, adjuster, and professional designation approved by state departments of insurance and key professional designation boards.

PLUS

Online Architect Easy online presence and review management. Consumers are searching for agents online—let our trusted partners at ListAgent Architect fuel your local digital leads while GatherUp helps you manage your online reputation. OR

Community Partnership Tools Strengthen your local ties. Raise your profile at local events with merchandise and co-branded items valued at up to $600.

2020 ANNUAL MAILING

P L AT I N U M B E N E F I T S OV E RV I E W BY L E V E L

All Platinum Silver-level agents receive the prior benefits one of the following:

Search Influence: SEO Audit Boost your website’s search result rankings and statistics. Take advantage of a free search engine optimization (SEO) audit with the experts at Search Influence. Because the easier it is for search engines to find your site, the easier it is for consumers to find you.

All Platinum Blue-level agents receive all of the prior benefits the following two additional benefits: Platinum 25 Exceptional Platinum performance can lead to exceptional Platinum destinations. Our top Platinum partners represent the best of the best … and that’s why we’re giving the 25 top-performing Platinum Bluelevel agents in 2020, along with a guest, a trip to say thanks for your efforts. Your hard work and dedication inspire us every day.

Search Influence: Social Media Audit Build a loyal social following. Let Search Influence’s social media professionals audit your agency’s social presence to uncover opportunities and optimize engagement with potential customers.

Annual “New-to-Blue” Celebration Cheer your success, gear up for more! If you’re a new Platinum Blue-level agent, you’ll enjoy an exclusive trip to celebrate your achievements with us. We’ll mix business and fun (OK … mostly fun!) so you come away refreshed, recharged, and ready to experience even more Platinum success in the days ahead.

Every Door Direct Mail® (EDDM) Simple, effective direct mail solutions. Created by the USPS, EDDM is a lowcost direct mail program that eliminates the need for mailing lists, permits, and postal processing.

For more information on Platinum or additional details on the benefits, visit your Platinum Hub on ForAgentsOnly.com (FAO) or speak with your local sales representative.

PERFORMANCE BONUS

2 0 2 0 P L AT I N U M P E R F O R M A N C E B O N U S With the Platinum Performance Bonus, you have two ways to earn more for building profitable bundles with us!* First, you can earn more based on your incremental bundle growth with the Platinum Bundle Bonus. Then, if you have already achieved Platinum Silver- or Blue-level status or your agency has at least 300 Progressive auto, home, and/or condo policies in force as of the preceding September month end, you may also qualify for the annual Platinum Personal Lines Bonus that pays on your entire Progressive personal lines book of business—including property! Together, these two pieces make up one very attractive—and lucrative—2020 Platinum Performance Bonus. For more details on how the Platinum Performance Bonus works, including how we address mergers and acquisitions in relation to this bonus, please see your addendum.

P L AT I N U M B U N D L E B O N U S As a Platinum agent, you can earn a Quarterly or Annual Bundle Bonus, depending on where you are in the program. It works like this: Q U A R T E R LY B U N D L E B O N U S

If you’re just getting started building your bundled book of business with us and are less than 75% of the way to your Silver-level bundled written premium goal, you’ll have the opportunity to earn a quarterly bonus based on your newly created bundles. It’s simple—create at least 12 Progressive home/condo and auto bundles in a quarter, and you’ll earn $50 for each of the Progressive bundles you create during that time period.

≥12 Newly Created Bundles

$50

Quarterly Bundle Bonus

ANNUAL BUNDLE BONUS

If you're already a Platinum Silver- or Blue-level agent, or at least 75% of the way to the Platinum Silver level, you’ll have the opportunity to earn our Annual Bundle Bonus when you grow your book of bundled business. The calculation works like this:

Annual Incremental Bundled Written Premium

Bundle Growth Factor**

Annual Bundled Bonus

Plus, Platinum Blue-level agents receive an enhanced Annual Bundle Bonus with higher bundle growth factors and the Gainshare Supplement. 2020 ANNUAL MAILING

Gainshare is Progressive’s annual bonus program that promotes our common culture and reinforces our annual business goals of growth and profitability. As a Platinum Blue-level agent, any Gainshare Supplement granted by the end of the year will be added to your Annual Bundle Bonus. We’ll calculate the Gainshare Supplement like so:

10% of Annual Bundle Bonus

Gainshare Factor

Gainshare Supplement

Then, we’ll add any Gainshare Supplement to your Annual Bundle Bonus to arrive at your grand total:

Annual Bundle Bonus

Gainshare Supplement

Total Annual Bundle Bonus

P L AT I N U M P E R S O N A L L I N E S B O N U S If you have already achieved Platinum Silver- or Blue-level status, or if your agency has at least 300 Progressive auto, home, and/or condo policies in force as of the preceding September month end, you may also qualify for an annual Platinum Personal Lines Bonus that pays on your entire Progressive personal lines book of business—including property! Note that you must have at least 300 home, condo, and/or auto PIFs at the end of the Bonus Period to earn a payout. The calculation is simple:

Personal Lines Earned Premium

Personal Lines Performance Factor**

Platinum Personal Lines Bonus

And, if you like where your potential 2020 Platinum Performance Bonus is headed, you can lock in a minimum payout with our Payout Protection option. If you elect this protection, we’ll pay 85% of your total estimated Platinum Performance Bonus payout amount (for both the Annual Bundle Bonus and the Personal Lines Bonus portions combined), calculated by using your total estimated bonus payout at September month end or December month end, whichever is larger. Finally, we’ve also included a stop-loss provision with this bonus to ensure one extreme individual or catastrophic (CAT) event won’t affect your entire bonus payout. We’ll cap claims like so: PL Written Premium

Single Claim

CAT Event

<$2.5M

$250,000

>$2.5M

$250,000

10% of written premium

* This description is a summary of the Progressive Platinum Bonus. The official terms, conditions, and obligations of this bonus program, including how mergers and acquisitions may affect it, will be provided to you in a separate agreement (the “Bonus Agreement"). If there is any conflict between this description and the Bonus Agreement, the Bonus Agreement will control.

See 2020 Platinum Performance Bonus Matrices section for more detail.

P E R F O R M A N C E B O N U S M AT R I C E S

2 0 2 0 P L AT I N U M P E R F O R M A N C E B O N U S M AT R I C E S P L AT I N U M A N N UA L B U N D L E B O N U S

Annual Incremental Bundled Written Premium

Bundle Growth Factor

Annual Bundle Bonus

To arrive at your Bundle Growth Factor, we’ll consult the following matrix:

B U N D L E G R O W T H M AT R I X Bundled Growth Factor Bundled Home & Auto PIF Growth

Silver

Blue

100%

6.0%

8.0%

75%

5.0%

7.0%

50%

4.0%

6.0%

45%

3.5%

5.5%

40%

3.0%

5.0%

35%

2.5%

4.5%

30%

2.0%

4.0%

25%

1.5%

3.5%

20%

1.0%

3.0%

15%

0.5%

2.5%

10%

0.0%

2.0%

0.0%

1.5%

0.0%

1.0%

GAINSHARE SUPPLEMENT (EXCLUSIVE TO BLUE-LEVEL AGENTS)

Platinum Blue-level agents may qualify for a Gainshare Supplement. We’ll calculate the Gainshare Supplement like so:

10% of Annual Bundle Bonus

Gainshare Factor

Gainshare Supplement

We report our Gainshare Factor on a monthly basis; you can find it with your Scorecard results on your Platinum Hub. 2020 ANNUAL MAILING

P L AT I N U M P E R S O N A L L I N E S B O N U S If you have already achieved Platinum Silver- or Blue-level status, or if your agency has at least 300 Progressive auto, home, and/or condo policies in force (PIF) as of the preceding September month end, you may also qualify for an annual Platinum Personal Lines Bonus that pays on your entire Progressive personal lines book of business—including property! Note that you must have at least 300 home, condo, and/or auto PIFs at the end of the Bonus Period to earn a payout. The calculation is simple:

Personal Lines Earned Premium

Personal Lines Performance Factor

Platinum Personal Lines Bonus

To arrive at your Personal Lines Performance Factor, we’ll consult the Personal Lines Growth and Profitability matrix that corresponds to how many auto, home, and/or condo policies you have in force:

P E R S O N A L L I N E S G R O W T H A N D P R O F I TA B I L I T Y M AT R I X— 3 0 0 + 55% Target

PL Loss Ratio PL PIF Growth

64.01 to 65.00%

63.01 to 64%

62.01 to 63%

61.01 to 62%

60.01 to 61%

57.01 to 60%

53.01 to 57%

48.01 to 53%

44.01 to 48%

40.01 to 44%

35.01 to 40%

30.01 to 35%

30.00% & Less

40%

1.50%

2.00%

2.30%

2.70%

2.90%

3.00%

3.10%

3.30%

3.60%

4.00%

4.25%

4.50%

5.00%

35%

1.35%

1.70%

2.00%

2.20%

2.30%

2.40%

2.50%

2.70%

3.00%

3.40%

3.70%

4.25%

4.50%

30% 1.20%

1.40%

1.60%

1.80%

1.90%

2.00%

2.10%

2.30%

2.60%

3.00%

3.30%

3.70%

4.25%

25% 1.05%

1.20%

1.30%

1.50%

1.60%

1.70%

1.80%

2.00%

2.30%

2.70%

3.00%

3.40%

4.00%

20% 0.90%

1.00%

1.10%

1.20%

1.30%

1.40%

1.50%

1.70%

2.00%

2.30%

2.60%

3.00%

3.50%

17% 0.60%

0.70%

0.80%

0.90%

1.00%

1.10%

1.20%

1.40%

1.70%

2.00%

2.30%

2.80%

3.30%

15% 0.50%

0.60%

0.70%

0.80%

0.90%

1.00%

1.10%

1.30%

1.60%

1.80%

2.10%

2.60%

3.10%

12% 0.35%

0.45%

0.55%

0.65%

0.75%

0.90%

1.05%

1.15%

1.35%

1.60%

1.90%

2.40%

2.75%

10%

0.30%

0.40%

0.50%

0.60%

0.70%

0.85%

1.00%

1.10%

1.25%

1.50%

1.80%

2.20%

2.60%

9% 0.00%

0.00%

0.25%

0.35%

0.45%

0.60%

0.75%

0.85%

1.10%

1.30%

1.50%

1.90%

2.30%

0.00%

0.40%

0.60%

0.70%

0.95%

1.10%

1.40%

1.70%

2.10%

0.00%

0.30%

0.40%

0.50%

0.75%

1.00%

1.30%

1.60%

1.90%

6% 0.00%

0.00%

0.50%

0.80%

1.00%

1.20%

1.50%

0.00%

0.40%

0.60%

0.80%

1.00%

1.20%

0.00%

0.40%

0.60%

0.80%

1.00%

0.00%

0.40%

0.60%

0.80%

P E R F O R M A N C E B O N U S M AT R I C E S

P E R S O N A L L I N E S G R O W T H A N D P R O F I TA B I L I T Y M AT R I X— 5 0 0 + 55% Target

PL Loss Ratio PL PIF Growth 35%

64.01 to 65.00%

63.01 to 64%

62.01 to 63%

61.01 to 62%

60.01 to 61%

57.01 to 60%

53.01 to 57%

48.01 to 53%

44.01 to 48%

40.01 to 44%

35.01 to 40%

30.01 to 35%

30.00% & Less

1.75%

2.30%

2.70%

3.10%

3.30%

3.50%

3.60%

3.80%

4.20%

4.60%

4.90%

5.35%

6.00%

30% 1.55%

2.00%

2.30%

2.50%

2.70%

2.80%

2.90%

3.10%

3.50%

3.90%

4.20%

4.70%

5.35%

25% 1.40%

1.60%

1.80%

2.00%

2.20%

2.30%

2.40%

2.60%

3.00%

3.40%

3.70%

4.20%

4.85%

20% 1.20%

1.40%

1.50%

1.70%

1.80%

1.90%

2.00%

2.20%

2.60%

3.00%

3.30%

3.90%

4.55%

15% 1.00%

1.20%

1.30%

1.40%

1.50%

1.60%

1.70%

1.90%

2.30%

2.70%

3.00%

3.50%

4.10%

12% 0.70%

0.90%

1.00%

1.10%

1.20%

1.30%

1.40%

1.60%

1.90%

2.30%

2.60%

3.20%

3.80%

10% 0.50%

0.70%

0.80%

0.90%

1.00%

1.10%

1.20%

1.40%

1.70%

2.10%

2.40%

3.00%

3.60%

0.40%

0.55%

0.65%

0.75%

0.85%

0.95%

1.05%

1.25%

1.55%

1.95%

2.25%

2.75%

3.35%

0.30%

0.40%

0.50%

0.60%

0.70%

0.85%

1.00%

1.15%

1.40%

1.80%

2.10%

2.60%

3.20%

0.00%

0.40%

0.50%

0.60%

0.70%

0.80%

1.00%

1.20%

1.45%

1.75%

2.20%

2.80%

0.00%

0.50%

0.70%

0.90%

1.10%

1.30%

1.60%

2.00%

2.50%

2% 0.00%

0.00%

0.35%

0.45%

0.65%

0.85%

1.10%

1.40%

1.75%

2.25%

1% 0.00%

0.00%

0.70%

0.90%

1.10%

1.40%

1.90%

0% 0.00%

0.00%

0.50%

0.70%

0.90%

1.10%

1.40%

-1% 0.00%

0.00%

0.50%

0.70%

0.90%

1.10%

-2% 0.00%

0.00%

0.50%

0.70%

0.90%

30.01 to 35%

30.00% & Less

P E R S O N A L L I N E S G R O W T H A N D P R O F I TA B I L I T Y M AT R I X— 1 0 0 0 + 55% Target

PL Loss Ratio PL PIF Growth

64.01 to 65.00%

63.01 to 64%

62.01 to 63%

61.01 to 62%

60.01 to 61%

57.01 to 60%

53.01 to 57%

48.01 to 53%

44.01 to 48%

40.01 to 44%

35.01 to 40%

30% 2.00%

2.60%

3.00%

3.45%

3.70%

3.90%

4.00%

4.20%

4.55%

4.95%

5.30%

6.00%

7.00%

25% 1.85%

2.25%

2.55%

2.80%

3.00%

3.20%

3.30%

3.50%

3.85%

4.25%

4.70%

5.35%

6.00%

20% 1.65%

1.80%

2.00%

2.30%

2.45%

2.65%

2.75%

2.95%

3.30%

3.70%

4.10%

4.75%

5.45%

15% 1.50%

1.65%

1.80%

2.00%

2.15%

2.30%

2.40%

2.60%

2.95%

3.35%

3.80%

4.45%

5.15%

10% 1.30%

1.50%

1.60%

1.70%

1.80%

1.95%

2.05%

2.25%

2.60%

3.00%

3.35%

3.95%

4.65%

1.10%

1.20%

1.30%

1.40%

1.50%

1.60%

1.80%

2.15%

2.55%

3.00%

3.60%

4.20%

6% 0.60%

0.90%

0.75%

0.85%

0.95%

1.10%

1.20%

1.30%

1.50%

1.85%

2.25%

2.70%

3.30%

3.90%

0.50%

0.60%

0.70%

0.80%

0.90%

1.00%

1.10%

1.30%

1.65%

2.05%

2.50%

3.10%

3.70%

0.40%

0.50%

0.60%

0.70%

0.80%

0.90%

1.00%

1.20%

1.55%

1.95%

2.25%

2.85%

3.45%

2% 0.00%

0.00%

0.45%

0.55%

0.65%

0.75%

0.85%

1.05%

1.25%

1.55%

1.90%

2.40%

3.00%

1% 0.00%

0.00%

0.60%

0.75%

0.95%

1.15%

1.45%

1.80%

2.20%

2.70%

0% 0.00%

0.00%

0.40%

0.50%

0.70%

0.90%

1.25%

1.55%

1.90%

2.40%

-1% 0.00%

0.00%

0.75%

1.00%

1.25%

1.50%

2.00%

-2% 0.00%

0.00%

0.50%

0.75%

1.00%

1.25%

1.50%

0.00%

0.50%

0.75%

1.00%

1.25%

-4% 0.00%

-3%

0.00%

0.50%

0.75%

1.00%

2020 ANNUAL MAILING