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Pay-As-You-Go Insurance
Case Analysis
About Progressive
 Joseph Lewis founded Progressive Insurance
Industry in Cleveland, Ohio.
 Motive was “to delight the c...
Progressive and
the Insurance Industry
 1956 - Progressive started to write auto insurance f or high risk
drivers and bec...
A History of innovation
1990
First insurance
provider to
provide 24
hour claims
service at the
accident site
Propositon 10...
IMMEDIATE RESPONSE
IMMEDIATE RESPONSE
 The major innovation was progressive’s
implementation of fast service.
 Progressive had rewired itse...
1800 AUTOPRO
 1-800-AUTOPRO - Auto Insurance Rate Comparison Shopping
Service.
 No longer would customers have to spend ...
Autograph
GPS Satellites
Mapping
Technology
Internal
Computer
When and how
much a vehicle
was driven
 Cost absorbed by Progressive were:
 GPS Transponder
 Cellular Communication System
 Small Computer
 Drivers who sign...
APPLICATIONs
S Curve
Progressive
Progressive
ADVANTAGES
• Increased efficiency
• Improved customer response
• More calls completed on the
first visit
• Improved paymen...
Recommendations
• DO NOT EXPAND RIGHT AWAY
• TIME FOR RESEARCH
• STAY IN TEXAS AND EXPAND SLOWLY
• FOCUS ON BIGGER CITIES ...
LEARNING OUTCOMES
How potential roles of incremental and disruptive
innovation helps in creating and sustaining firm
compe...
THANK YOU!
Progressive: Pay-As-You-Go Insurance
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Progressive: Pay-As-You-Go Insurance

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Progressive Insurance Industry in Cleveland, Ohio.
IMMEDIATE RESPONSE
1800 AUTOPRO
Autograph

Published in: Economy & Finance, Business
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Progressive: Pay-As-You-Go Insurance

  1. 1. Pay-As-You-Go Insurance Case Analysis
  2. 2. About Progressive  Joseph Lewis founded Progressive Insurance Industry in Cleveland, Ohio.  Motive was “to delight the customer, maybe even shock the consumer a little for competitive advantage by delivering the unexpected”
  3. 3. Progressive and the Insurance Industry  1956 - Progressive started to write auto insurance f or high risk drivers and became dominant player  1969 – Motor Insurance Business  1971 – Went Public with headquarter to Mayfield Village, Ohio Exhibits Details Exhibit 1 Property Casualty – Product Line Exhibit 3 Auto Insurance Distribution Channel Exhibit 4 Market Share Exhibit 10 Growth Rate of Progressive, Auto Insurance Industry and Property Casualty
  4. 4. A History of innovation 1990 First insurance provider to provide 24 hour claims service at the accident site Propositon 103 1992 First insurance provider to offer competitor quotes as well as its own. 1800 AUTOPRO 1994 Launched Immediate Response Vehicles (IRVs) allowing claims agents to settle many claims at the accident site. 1995 First major insurance provider with a presence on the Internet Website
  5. 5. IMMEDIATE RESPONSE
  6. 6. IMMEDIATE RESPONSE  The major innovation was progressive’s implementation of fast service.  Progressive had rewired itself for round-the-clock service and created new positions.  Advances in wireless technology and cell phones.  Seamless flow of information.  “Hire the best” and “Pay the most”.
  7. 7. 1800 AUTOPRO  1-800-AUTOPRO - Auto Insurance Rate Comparison Shopping Service.  No longer would customers have to spend endless amounts of time calling around to compare auto insurance rates. One phone call to AUTO PRO would give customers a Progressive quote and comparison rates for up to three competitors.  If the customer was satisfied with the Progressive quote; he could buy the policy directly on the phone or locally through an independent agent.
  8. 8. Autograph GPS Satellites Mapping Technology Internal Computer When and how much a vehicle was driven
  9. 9.  Cost absorbed by Progressive were:  GPS Transponder  Cellular Communication System  Small Computer  Drivers who signed up for Autograph were offered:  Theft Recovery  Remote Door Unlocking  Travel Directions  Low-battery Detection  Emergency Assistance Help  Around 1100 policy holder voluntary took Autograph program and found they are paying 25% less on premium than they paid using traditional system.
  10. 10. APPLICATIONs S Curve Progressive Progressive
  11. 11. ADVANTAGES • Increased efficiency • Improved customer response • More calls completed on the first visit • Improved payment cycle • Up-selling and cross-selling insurance policies • First-mover advantage DISADVANATAGES • Higher premiums for consumers who commute at night • High cost • Lack of privacy • Focus on new technologies, losing sight of the insurance business
  12. 12. Recommendations • DO NOT EXPAND RIGHT AWAY • TIME FOR RESEARCH • STAY IN TEXAS AND EXPAND SLOWLY • FOCUS ON BIGGER CITIES ONLY
  13. 13. LEARNING OUTCOMES How potential roles of incremental and disruptive innovation helps in creating and sustaining firm competitiveness. Understand the strengths and limitations of current technologies and apply them intelligently to meet the needs of each application. Develop the ability to assess and where necessary, improve the process of innovation. Integration of technology and innovation in a best possible way to provide better and improved services and satisfying the customers needs
  14. 14. THANK YOU!

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