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Progressive Insurance By Aditya Patni - IIT Dhanbad


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This is a presentation made in an internship under Prof. Sameer Mathur, IIM Lucknow about a company called Progressive Insurance

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Progressive Insurance By Aditya Patni - IIT Dhanbad

  1. 1. “We are and we are progressive”
  2. 2. How the company came into existence Joseph Lewis and Jack Green started the company on 10th March 1937 with the aim of providing vehicle owners with security and protection From the beginning, their philosophy has been to approach auto insurance “like no other company had”
  3. 3. the pioneers Since its beginning, Progressive has taken innovative approach to auto insurance as being the first ones to provide various services  Offered drive-in claim services before any other company  Allowed customers to pay payments in instalments  Reduced rates for low risk drivers  First major insurance provider with presence on internet
  4. 4. Growth And innovation  In 1956, Progressive casualty Company was formed to write auto insurance for high-risk drivers  In 1971, Progressive had their IPO as they were launched as public company  In 1987, Progressive surpassed $1 billion in premiums  In 1990, Progressive introduced Immediate Response claims service, available 24x7  In 1992, Progressive was recognised as the largest auto seller of auto insurance  In 1994, Progressive introduced 1-800-AUTO-PRO, a cutting edge insurance rate comparison shopping service to get a quote and compare prices with other three competitors
  5. 5. 1-800-AUTO-PRO The Marketing Master-stroke When Progressive launched 1-800-AUTO-PRO (now 1-800- PROGRESSIVE) in 1994, a service which allowed costumers to get an immediate quote of price and compare it with three other companies of similar mould, consumers accepted it with open arms as it enhanced the credibility of Progressive and took it to a whole new level The sales of Progressive increased four times their nearest rival in the 90s
  6. 6. Progressive’s direct marketing
  7. 7. How Progressive mined their way to retrieving valuable data The company devised better ways of assessing an applicant’s risk profile to calculate the right rate to quote. Progressive’s computer systems automatically contact those of a credit agency, and the applicant’s credit score is factored into its pricing calculation. More accurate pricing translates into increased underwriting profit. Putting these all together, Progressive’s remarkable growth became comprehensible
  8. 8. Snapshotting their way to the top Progressive launched a device called ‘Snapshot’ which recorded the driving behaviours of their customers and charged accordingly. The drivers who drove safe were charged lower while the rash ones were charged relatively higher. This strategy worked like charm because the customers’ spending on insurance depended more on themselves than an external entity and in the self righteous belief of being a safe driver, many consumers clamoured towards Progressive and shot their sales higher. Its also helped Progressive mine data by themselves instead of relying on a data mining service thus cutting their costs massively and also getting reliable data.
  9. 9. Immediate Response Vehicles Making Progressive an immediate success Progressive gained massive foothold in the market when they launched Immediate Response Vehicles in which a claimant can reach a Progressive representative by phone 24 hours a day, and the representative then schedules a time when an adjuster will inspect the vehicle. Why it became massive success? Instead of taking between seven and ten days for an adjuster to see the vehicle, Progressive’s target was now just nine hours. Thus customers got service when they needed and Progressive became the first number to dial when in need.
  10. 10. How exactly the IRVs helped Progressive This approach has many benefits and cumulatively they massively helped Progressive, namely  Claimants could get faster service with less hassle, which means they’re less likely to abandon Progressive because of an unsatisfactory claims experience  Shortened cycle time reduced Progressive’s costs dramatically  Improved ability to detect fraud (because it is easier to conduct an accident investigation before skid marks wash away and witnesses leave the scene)  Lower operating costs (because fewer people are involved in handling the claim)  Reduction in claim payouts (because claimants often accept less money if it’s given sooner and with less travail)
  11. 11. Going with the Flo Apart from pioneering many services, they have used Flo, a quirky and witty employee as their face of all the advertisements and it paid off heavily as customers could now see the company in the form of a person rather than an institution and connect with them, thus reaffirming their trust in the brand and invest more thus generating more sales
  12. 12. Flo is everywhere The marketing team of Progressive have made sure to keep modern and relevant and thus she appear across all screens, including TV, internet, mobile apps, video games, animated Youtube videos and even has her own Facebook page This strategy made sure that the brand Progressive is represented almost everywhere in the form of a relatable person and triggered customers to stay connected with the brand wherever they went online. By getting her on board in the game SimsSocial, Progressive ensured that even the gaming community is also effectively targeted and this gimmick has paid off well in the long term.
  13. 13. Relevant commercials that attract If there is one thing that Progressive have done well, it is to make relevant commercials on the trending topics thus acquiring wider reach of their commercials and thus more effective promotion. The recent example is the commercial made with the upcoming movie ‘The Ghostbusters’ and the commercial is highly trending and getting rave reviews
  14. 14. Online insurance and beyond The site has evolved over years and now is available 24x7 for its consumers with following features  Policy Service and Management — Policyholders can log in to update information, make payments, get vehicle recall information and more  Online Claims Reporting — Policyholders can log in to report auto accidents and receive glass claims in minutes by just uploading the picture of broken glass, etc.  Rate Ticker — Scrolling rate ticker displays actual Progressive Direct auto insurance rates side- by-side with those of other top auto insurers  Agent Locator — If you prefer to buy insurance through an agent, you can search for local independent insurance agents by entering your ZIP code or by selecting the type of insurance you'd like to buy And many more features
  15. 15. The steep growth of the company began in the 90s as it proved to be a glorious period for the company In the first half of 90s, the company grew by an average of 15% per year with a peak of 39% in the year 1993 Between 1996 to 2005, the grew at an average of 17% per year, from $3.4 Billion to $14 Billion Progressive’s revenue in 2016 stands a whopping $21 Billion and it is bound to grow further Progressive on the rise (By numbers)
  16. 16. Customer Retention High efficiency Being a pioneer in technology gives an edge over competition Effective promotional campaigns Up-selling and cross selling insurance policies Limited area- Only in US Lack of privacy High premiums for customers who commute at night Potential to expand overseas Can couple Flo with sports teams for better promotion Focus on newer technology may make them lose sight of business Emergence of low cost companies
  17. 17. Progressive rose to prominence due to their innovative methodology and their successful launches that include IRVs, 1-800-PROGRESSIVE, first website of its kind, Snapshot etc and their marketing campaign have been helped by excellent strategy employed, as they projected their company in form of a person, Flo, and consumers were better able to connect themselves with the company. Progressive uses cutting edge technology and charge their costumers according to their usage of the automobiles thus gaining better foothold in the auto insurance business and are top auto insurance company in US as of August, 2016
  18. 18. Created by Aditya Patni, IIT Dhanbad, during a marketing internship by Prof. Sameer Mathur, IIM Lucknow