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Exhibit No. 10(F)

                           THE PROGRESSIVE CORPORATION
                              2004 GAINSHARING PLAN

1.       The Progressive Corporation and its subsidiaries (collectively
         "Progressive" or the "Company") have adopted The Progressive
         Corporation 2004 Gainsharing Plan (the "Plan") as part of their overall
         compensation program. The Plan is performance-based and is administered
         under the direction of the Compensation Committee of the Board of
         Directors of The Progressive Corporation (the "Committee").

2.       Plan participants for each Plan year shall be selected by the Committee
         from those officers and regular employees of Progressive who are
         assigned primarily to the Core Business (as defined below), another
         operating business unit or a corporate support function. The
         gainsharing opportunity, if any, for those executive officers who
         participate in The Progressive Corporation 2004 Executive Bonus Plan
         ("Executive Plan") will be provided by and be a component of that plan,
         although participants in the Executive Plan may also participate in
         this Plan if and to the extent determined by the Committee. Plan years
         will coincide with Progressive's fiscal years.

3.       Annual Gainsharing Payments under the Plan will be determined by
         application of the following formula:

        Annual Gainsharing Payment = Paid Earnings x Target Percentage x
                               Performance Factor

4.       Paid Earnings for any Plan year means the following items paid to a
         participant during the Plan year: (a) regular, used Earned Time
         Benefit, sick, holiday, funeral and overtime pay, and (b) retroactive
         payments of any of the foregoing items relating to the same Plan year.

         For purposes of the Plan, Paid Earnings shall not include any
         short-term or long-term disability payments made to the participant,
         the earnings replacement component of any worker's compensation award,
         any lump sum merit award, payments from the merit cash pool or any
         other bonus or incentive compensation awards and unused Earned Time
         Benefit.

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         Notwithstanding the foregoing, if the sum of the regular, used Earned
         Time Benefit, sick, holiday and funeral pay received by a participant
         for a Plan year exceeds his/her salary range maximum for the Plan year
         (determined on an individual pay period basis as of the end of the 24th
         pay period), then his/her Paid Earnings for that Plan year shall equal
         his/her salary range maximum, plus any of the following items received
         by such participant for that Plan year: (a) overtime pay, and (b)
         retroactive payments of regular, used Earned Time Benefit, sick,
         holiday, overtime and funeral pay relating to that Plan year.

5.       Target Percentages vary by position. Target Percentages for Plan
         participants typically are as follows:

<TABLE>
<CAPTION>
                         POSITION                                       TARGET %
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<S>                                                                     <C>
Senior Executives, Executive Level Managers and Business Leaders         60-135%
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Directors of Large Functional Areas                                       45-60%
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Senior Managers                                                           35-45%
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Middle Managers                                                           15-35%
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Senior Professionals and Entry Level Managers                              9-15%
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Administrative Support and Entry Level Professionals                        0-8%
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</TABLE>

         Target Percentages will be established within the above ranges by, and
         may be changed with the approval of the following officers of The
         Progressive Corporation (collectively, the "Designated Executives"):
         (a) the Chief Executive Officer, and (b) either the Chief Human
         Resource Officer or the Chief Financial Officer. Target Percentages
         also may be changed from year to year by the Designated Executives.

6.       The Performance Factor

         A.       General

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                  The Performance Factor shall consist of one or more
                  Profitability and Growth Components, as described below
                  ("Performance Components"). The Performance Components may be
                  weighted to reflect the nature of the individual participant's
                  assigned responsibilities. The weighting factors may differ
                  among participants and will be determined, and may be changed
                  from year to year, by or under the direction of the Committee.

         B.       Profitability and Growth Components

                  The Profitability and Growth Components measure the overall
                  operating performance of Progressive's Core Business
                  (including the Agency Business Segment, the Direct Business
                  Segment and the Commercial Auto Business Segment, but
                  excluding Midland Financial Group, Inc.), or a designated
                  Business Segment or Sub-Unit thereof, for the Plan year for
                  which an Annual Gainsharing Payment is to be made. For
                  purposes of computing a Performance Score for these
                  Components, operating performance results are measured by one
                  or more Performance Matrices, as established by or under the
                  direction of the Committee for the Plan year, which assign a
                  Performance Score to various combinations of profitability and
                  growth outcomes. Except as provided below, under the
                  Performance Matrices, profitability is measured by the GAAP
                  Combined Ratio and growth is based on the year-to-year change
                  in Net Earned Premiums.

                  For 2004, and for each Plan year thereafter until otherwise
                  determined by the Committee, separate Performance Scores will
                  be determined, and separate Gainsharing Matrices will be used,
                  for the Agency Business Segment, the Direct Business Segment
                  and the Commercial Auto Business Segment. For purposes hereof,
                  the Agency Business Segment includes Agency Auto (including
                  Strategic Alliances Agency Auto) and Agency Special Lines. The
                  Direct Business Segment includes Auto Pro (including Strategic
                  Alliances Direct Auto), Internet and Direct Special Lines. For
                  purposes of this Plan, the Midland Financial Group, Inc.'s
                  results are excluded from the Agency, Direct and Commercial
                  Auto Business Segments and, thus, from Core Business results.
                  Net operating gains/losses from other Core products, if any,
                  will be apportioned among the Agency, Direct and Commercial
                  Auto Business Segments in accordance with the respective
                  amount(s) of Net Earned Premiums generated by such products in
                  each such Business Segment and the apportioned gains/losses
                  will be included in the calculation of the Combined Ratio.

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                  The GAAP Combined Ratio will be separately determined for each
                  of the Agency Business Segment, the Direct Business Segment
                  and the Commercial Auto Business Segment, and for any
                  designated Sub-Unit thereof (e.g., in the Agency Business
                  Segment, performance may also be separately measured for each
                  geographic region). The GAAP Combined Ratio of each such
                  Business Segment or Sub-Unit will then be matched with growth
                  in Net Earned Premiums for such Business Segment or Sub-Unit,
                  using the applicable Gainsharing Matrix, to determine a
                  Performance Score ("Standard Performance Computation").

                  For 2004 and for each Plan year thereafter until otherwise
                  determined by the Committee, a portion of the Annual
                  Gainsharing Payment earned by members of the Direct Business
                  Leadership Group (as defined below) will be determined by
                  measuring operating results achieved by the Direct Business
                  Segment in terms of certain modified profitability and growth
                  criteria (as described below) and by comparing the results
                  against pre-established targets that are set forth in a
                  performance matrix approved by the Committee ("Modified
                  Performance Computation"). The Modified Performance
                  Computation will apply only to members of the Direct Business
                  Leadership Group and only as and to the extent set forth
                  below.

                  The Direct Business Leadership Group includes the Direct
                  Business Leader, the IT Director for the Direct Business
                  Segment and all other employees assigned primarily to the
                  Direct Business Segment who are eligible to participate in the
                  Company's equity incentive plans.

                  For purposes of the Modified Performance Computation:

                  (a) profitability is measured by the variance between (i) the
                      GAAP Combined Ratio for premium earned during the Plan
                      year with respect to new private passenger auto policies
                      written by the Direct Business Segment, and (ii) a target
                      Combined Ratio, which is adjusted quarterly to reflect the
                      then current pricing targets established and business mix
                      (i.e. the percentage of new business earned in each risk
                      tier) for that product; and

                  (b) growth is measured by the year-to-year change in Lifetime
                      Earned Premium (as defined below) for private passenger
                      auto business written by the Direct Business Segment.
                      Lifetime Earned Premium is the amount of earned premium
                      that the

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                      Company expects to generate over time with respect to
                      policies written during a given Plan year or the previous
                      calendar year, as applicable (including any subsequent
                      renewals thereof), which is determined by a combination of
                      historical experience and statistical analysis.

         C.       Component Weighting

                  For most participants, the Performance Factor will be
                  determined solely by the performance results for the Core
                  Business, consisting of the Agency, Direct and Commercial Auto
                  Business Segments. The Performance Score for each such
                  Business Segment will be separately determined, as described
                  above, by application of the Standard Performance Computation
                  and the appropriate Gainsharing Matrix. The resulting
                  Performance Scores for each of the Agency, Direct and
                  Commercial Auto Business Segments will then be multiplied by a
                  weighting factor (based on the percentage of Net Earned
                  Premiums generated by each such Business Segment during the
                  Plan year), the weighted Performance Scores will be combined
                  and the sum of the weighted Performance Scores will be the
                  Performance Score for the Core Business.

                  As noted above, for most participants, the Performance Factor
                  will be the Performance Score for the Core Business. For
                  certain employees designated by or under the direction of the
                  Committee, however, the Performance Factor will be based on
                  the Performance Scores for both the Core Business, as a whole,
                  and their assigned Business Segment. Generally, for these
                  employees, the Performance Factor will be based 50% on the
                  Core Business Performance Score and 50% on their assigned
                  Business Segment's Performance Score. However, for those
                  employees assigned principally to the Agency Business Segment
                  who are designated by or under the direction of the Committee,
                  the Performance Factor will be based 50% on the Core Business
                  Performance Score, 25% on the Agency Business Segment
                  Performance Score and 25% on the Performance Score for his or
                  her assigned Sub-Unit of the Agency Business Segment. With
                  respect to each of the IT Business Leaders selected by the
                  Designated Executives, the Performance Factor will be based on
                  both the Core Business Performance Score and the Business
                  Segment Performance Score of his or her assigned Business
                  Segment, in such ratio or otherwise weighted as shall be
                  determined by or under the direction of the Committee.

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                  Except as otherwise determined by the Committee, for members
                  of the Direct Business Leadership Group, the Performance
                  Factor will be based 50% on the Core Business Performance
                  Score, 25% on the Direct Business Performance Score (Standard
                  Performance Computation) and 25% on the Direct Business
                  Performance Score (Modified Performance Computation).

                  The Performance Score for each Performance Component will be
                  multiplied by the assigned weighting factor to produce a
                  Weighted Performance Score. The sum of the Weighted
                  Performance Scores equals the Performance Factor. The final
                  Performance Factor can vary from 0 to 2.0, based on actual
                  performance versus the pre-established objectives. The
                  Performance Factor cannot exceed 2.0, regardless of results.

7.       Subject to Paragraph 8 below, no later than December 31 of each Plan
         year, each participant will receive an initial payment in respect of
         his or her Annual Gainsharing Payment for that Plan year equal to 75%
         of an amount calculated on the basis of Paid Earnings for the first 24
         pay periods of the Plan year, estimated earnings for the remainder of
         the Plan year, performance data through the first 11 months of the Plan
         year (estimated, if necessary) and forecasted operating results for the
         remainder of the Plan year. No later than February 15 of the following
         year, each participant will receive the balance of his or her Annual
         Gainsharing Payment, if any, for such Plan year, based on his or her
         Paid Earnings and performance data for the entire Plan year.

         Any Plan participant who is then eligible to participate in The
         Progressive Corporation Executive Deferred Compensation Plan ("Deferral
         Plan") may elect to defer all or a portion of the Annual Gainsharing
         Payment otherwise payable to him/her under this Plan, subject to and in
         accordance with the terms of the Deferral Plan.

8.       Unless otherwise determined by the Committee, and except as expressly
         provided herein, in order to be entitled to receive an Annual
         Gainsharing Payment for any Plan year, the participant must be assigned
         to the Core Business or a participating business unit or support
         function, and be an active employee of the Company, on November 30 of
         the Plan year ("Qualification Date"). Individuals who are hired on or
         after December 1 of any Plan year are not entitled to an Annual
         Gainsharing Payment for that Plan year.

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         Any participant who is on a leave of absence covered by the Family and
         Medical Leave Act of 1993, personal leave of absence with the approval
         of the Company, military leave or short or long-term disability on the
         Qualification Date with respect to any Plan year will be entitled to
         receive an Annual Gainsharing Payment for such Plan year, calculated as
         provided in Paragraphs 3 through 6 above and based on the amount of
         Paid Earnings received by such participant during the Plan year.

         Annual Gainsharing will be net of any legally required deductions for
         federal, state and local taxes and other items.

9.       The right to any Annual Gainsharing Payment hereunder may not be sold,
         transferred, assigned or encumbered by any participant. Nothing herein
         shall prevent any participant's interest hereunder from being subject
         to involuntary attachment, levy or other legal process.

10.      The Plan shall be administered by or under the direction of the
         Committee. The Committee shall have the authority to adopt, amend,
         revise and repeal such rules, guidelines, procedures and practices
         governing the Plan as it shall, from time to time, in its sole
         discretion, deem advisable.

         The Committee shall have full authority to determine the manner in
         which the Plan will operate, to interpret the provisions of the Plan
         and to make all determinations hereunder. All such interpretations and
         determinations shall be final and binding on Progressive, all Plan
         participants and all other parties. No such interpretation or
         determination shall be relied on as a precedent for any similar action
         or decision.

         Unless otherwise determined by the Committee, all of the authority of
         the Committee hereunder (including, without limitation, the authority
         to administer the Plan, select the persons entitled to participate
         herein, interpret the provisions thereof, waive any of the requirements
         specified herein and make determinations hereunder and to select,
         establish, change or modify Performance Components and their respective
         weighting factors, performance targets and Target Percentages) may be
         exercised by the Designated Executives. In the event of a dispute or
         conflict, the determination of the Committee will govern.

11.      The Plan may be terminated, amended or revised, in whole or in part, at
         any time and from time to time by the Committee, in its sole
         discretion.

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12.      The Plan will be unfunded and all payments due under the Plan shall be
         made from Progressive's general assets.

13.      Nothing in the Plan shall be construed as conferring upon any person
         the right to remain a participant in the Plan or to remain employed by
         Progressive, nor shall the Plan limit Progressive's right to discipline
         or discharge any of its officers or employees or change any of their
         job titles, duties or compensation.

14.      Progressive shall have the unrestricted right to set off against or
         recover out of any Annual Gainsharing Payment or other sums owed to any
         participant under the Plan any amounts owed by such participant to
         Progressive.

15.      This Plan supersedes all prior plans, agreements, understandings and
         arrangements regarding bonuses or other cash incentive compensation
         payable to participants by or due from Progressive. Without limiting
         the generality of the foregoing, this Plan supersedes and replaces The
         Progressive Corporation 2003 Gainsharing Plan (the "Prior Plan"), which
         is and shall be deemed to be terminated as of December 27, 2003 (the
         "Termination Date"); provided, that any bonuses or other sums earned
         and payable under the Prior Plan with respect to any Plan year ended on
         or prior to the Termination Date shall be unaffected by such
         termination and shall be paid to the appropriate participants when and
         as provided thereunder.

16.      This Plan is adopted, and is to be effective, as of December 28, 2003,
         which is the commencement of Progressive's 2004 Plan year. This Plan
         shall be effective for the 2004 Plan year (which coincides with
         Progressive's 2004 fiscal year) and for each Plan year thereafter
         unless and until terminated by the Committee.

17.      This Plan shall be interpreted and construed in accordance with the
         laws of the State of Ohio.

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