Progressive Insurance was founded in 1937 and pioneered innovations in the auto insurance industry, such as offering policies to high-risk drivers and 24/7 claims services. In the 1990s, Progressive launched further innovations like providing competitor quotes over the phone and using immediate response vehicles to quickly settle claims on-site. One major innovation was Autograph, launched in 2000, which used GPS technology to track vehicle usage and offer lower rates to drivers with good behavior. While innovations increased efficiency and customer service, they also increased costs and raised privacy concerns, so recommendations were made to expand technologies slowly and focus on research and larger cities first.

1. Pay-As-You-Go Insurance
Case Analysis

3. 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”

4. 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

5. 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

6. IMMEDIATE RESPONSE

7. 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”.

8. 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.

9. Autograph
GPS Satellites
Mapping
Technology
Internal
Computer
When and how
much a vehicle
was driven

10.  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.

11. APPLICATIONs
S Curve
Progressive
Progressive

12. 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

13. Recommendations
• DO NOT EXPAND RIGHT AWAY
• TIME FOR RESEARCH
• STAY IN TEXAS AND EXPAND SLOWLY
• FOCUS ON BIGGER CITIES ONLY

14. 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

15. THANK YOU!