Tricia Griffith
President and Chief Executive Officer at Progressive
Thanks, Doug. Good morning and thank you for joining us today. When our customers interact with us they're often doing so on their worst day, maybe their vehicle was just stolen, maybe they were injured in a car accident or their property damage was analyzed. This fact comes into even sharper focus during a major catastrophe such as Hurricane Ian.
While watching the footage of devastation, my heart went out to all those who were affected by the storm. For millions it was truly their worst day. And I'm proud of the part Progressive plays to help people recover from such a calamitous event.
Within hours after the storm, Progressive had over 1,500 people ready to help our customers start to rebuild their lives. And while we cannot always replace what was lost, our people are in place to make it as easy as possible for our customers to return to normalcy. Thank you to all the Progressive customers who trust us to make their worst day more manageable.
In my letter, I shared some of the Herculean efforts that our employees were making on behalf of our customers and there are many more where that came from. Needless to say, I'm very proud of so many.
While, Hurricane Ian was the largest single event in the third quarter, it was not the whole story. Excluding catastrophe losses, our third quarter company-wide combined ratio improved 1.9 points year-over-year and illustrates the significant work we've done to combat the effects of inflation and working towards achieving our goal of an underwriting margin of at least 4%, specifically in personal auto.
As we stated after the first quarter, with the exception of a few markets, our major personal auto rate revisions are behind us, so we continue to be vigilant and adjust rates as our loss experience develops.
In the third quarter, we increased personal auto rates in 20 states at average of about 5% per state for a total countrywide premium impact of plus 2%. The third quarter rate action brings our countrywide year-to-date rate increases to nearly 12%. We continue to closely monitor frequency and severity trends to ensure we stay true to our stated goal of profit before growth.
So we have continued to take rate. We believe we took rate earlier than the industry, which initially negatively impacted volume, but more recently has created opportunities for growth. Consumer shopping and quoting has increased more than 20% in both the agency and direct channels. In fact in both channels we had the best July, August and September in our company's history for quote volume. This prospect growth is despite a lower acquisition expense ratio as compared to 2021, allowing us to be a beneficiary, as competitors have pulled back on marketing spend. This combination of lower competitor spend and our continued advancement of the science of media planning and buying, led to an incredible increase in efficiency in our media spend and has helped propel this quarter's growth.
Auto quote growth coupled with continued improvement in conversion, as our competitors raised rates, led to auto new application growth of 20% in the quarter including the highest August and highest September combined to channel new application volume that we've seen in the company's history. Total personal auto year-over-year PIF growth is still negative, but we've now seen several months of sequential monthly PIF growth led by the growth in the direct channel and flattening in the agency channel. The sequential growth has been bolstered not only by new application growth but signs of improving retention.
In last quarter's call, we spent considerable time talking about our property business and efforts we are taking to return to profitable growth. The losses incurred from Hurricane Ian further highlight the need to shift our mix to less volatile state. As expected, PIF growth in properties slowed in the quarter, as we make progress in this multiyear goal. Our assets continue unabated with rate and non-rate actions, as we work towards a mix that is more reflective of the market.
Given this volatile backdrop, it's only natural that the insurance industry would be facing questions regarding capital. So we thought it would be useful to quickly summarize our strong capital position. As discussed in our annual report, we view our capital position as consisting of multiple layers. First, in our insurance operating subsidiaries, we maintain adequate surplus to support growing as fast as we can at or below a 96 combined ratio.
Our extreme contingency layer includes capital in excess of regulatory capital that ensures on a model basis, a less than 100 and 200 probability that we will need to raise additional capital. We have $4.2 billion that we held at quarter end in a non-insurance subsidiary of the holding company level, which is well access of that contingency layer and is highly liquid due to mostly being comprised of short-term securities and treasuries.
While we have incurred temporary losses in our investment portfolio due to the significant move in interest rates, our fixed portfolio is extremely conservative with over half of the portfolio in cash or treasuries and a portfolio duration at the end of the quarter at 2.7 years. Throughout the year, we have taken proactive measures to prepare the portfolio for various scenarios by reducing interest rate, credit and equity risk.
Another proactive measure we took was to raise $1.5 billion of 5, 10- and 30-year debt in March at an average 3% interest rate. Due to the highly uncertain outlook, we felt it was prudent to have extra capital at what we viewed as very attractive borrowing rates. As we sit, we have no near-term bond maturities that we have to address in this higher interest rate environment, the combination of the borrowing along with significant interest -- increase in interest rates have been the primary drivers in moving our debt to total capital ratio over 30% at September month end to 30.2%.
We expect underwriting gains changes in the value of our bond portfolio as bonds approach maturity and investment income to bring us back below 30% in time. We are currently taking no additional actions to bring the ratio below 30% and have no near-term plan or need for raising further capital.
Again, thank you for joining us and now we'll take your questions.