This document introduces Snapshot Plus, an enhanced telematics device that builds upon Progressive's existing Snapshot program. Snapshot Plus utilizes additional sensors in mobile phones to more comprehensively monitor driving habits and risks. It is expected to provide more driving data to further incentivize safe driving through discounts, while addressing privacy concerns. The implementation plan involves a beta launch with Snapshot users before a public rollout. Financial projections estimate over $100 million in annual sales and millions in claim savings by monitoring risk. Assumptions and risks are also presented.

1. Michael Ezzat, Ethan Le,
Ye Na Lee, Ahraniya Ragavan
Introducing:
Snapshot Plus

3. Industry Trends
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet

4. Progressive Position
Industry Overview Snapshot Plus
Investment
Thesis
Valuation Risks & Catalysts Recommendation
The Current Model: Snapshot
Usage-based telematics device using GPS
Collects information about driving habits
PROS: Reward good driver up to 30% discount,
competitive pricing model and accurate information
CONS: Privacy concerns and Reservation to change

5. Snapshot Plus
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet
Accelerometer
• Speeding
• Breaking Pattern
Motion Sensor
• Hard Turn
• DUI
Light Sensor
• Night Driving
Environmental
Sensors
• Weather Condition
• Distracted Driver through Music
Position Sensor
• Distracted Driver through Phone Usage
Snapshot Plus

6. Rethink Insurance
Policy
Holders
Insurance
Company
Risk
Premium/
Restrictions
Reducing
Risk
Reducing Claim
Snapshot Plus
Watch your speed! Speed
Limit: 80km
SnapShot+
Driving Your Saving
Level of
Assisstance
Off
Minimal
Moderate
Recommended
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet

7. Benefits
Wecome to SnapShot+
Driving Your Saving
Ready to Save?
GO!
Reducing manufacturing costs
Utilizing build-in sensors of mobile phones
Monitoring the safety of your vehicle, home and more
Reducing privacy concern
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet

8. Implementation
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet
Beta launch to
Snapshot user
Open to
public
Covering
more
products
line
Developing
App
3-6 months 6 months -
1 year
1st year 2nd year

9. Industry Overview Snapshot Plus Implementation Forecast Risk Management
115,580,040$Sales Growth
800,000$Cost
42,576,929$Saving on Claim from 9,160 cases

10. Risk Management
Industry Overview Snapshot Plus Implementation Forecast Risk Management
Apps Hacking
• Audit
• Contract
• Incentives
• Patents
• Regulations
• Copy
Future Risks

12. Assumptions
Snapshot will be implemented on all products lines
In 2013, 11% people who shop Progressive, opt for Snapshot
We plan to increase number by 5-15% after Snapshot+
In 2013, 15% policies are closed by Progressive with the aid of Snapshot
We plan to increase this number by 2-10% after Snapshot+
We assume that Snapshot+ will reduce 1-5% number of claim due to safer driving
behaviors
cost of changing the apps is insignificant, less than 1 million
Appendix
https://www.jdpower.com/sites/default/files/InfluenceofTelematics%20JDPower%20Insights.pdf

13. Assumption Rationale

14. Cost of Making An Apps
http://www.formotus.com/14018/b
log-mobility/figuring-the-costs-of-
custom-mobile-business-app-
development
Appendix

15. Sensitivity Analysis
28.8951 10% 8% 6% 4% 2%
15% 289.0$ 231.2$ 173.4$ 115.6$ 57.8$
12% 231.2$ 184.9$ 138.7$ 92.5$ 46.2$
10% 192.6$ 154.1$ 115.6$ 77.1$ 38.5$
8% 154.1$ 123.3$ 92.5$ 61.6$ 30.8$
5% 96.3$ 77.1$ 57.8$ 38.5$ 19.3$
21.288465 5% 4% 3% 2% 1%
15% 106.4$ 85.2$ 63.9$ 42.6$ 21.3$
12% 85.2$ 68.1$ 51.1$ 34.1$ 17.0$
10% 71.0$ 56.8$ 42.6$ 28.4$ 14.2$
8% 56.8$ 45.4$ 34.1$ 22.7$ 11.4$
5% 35.5$ 28.4$ 21.3$ 14.2$ 7.1$
5% 4% 3% 2% 1%
15% 395.4$ 316.3$ 237.2$ 158.2$ 79.1$
12% 316.3$ 253.1$ 189.8$ 126.5$ 63.3$
10% 263.6$ 210.9$ 158.2$ 105.4$ 52.7$
8% 210.9$ 168.7$ 126.5$ 84.4$ 42.2$
5% 131.8$ 105.4$ 79.1$ 52.7$ 26.4$
Sales 19,263.4
Opt in Snapshot 5%
Policy Closed 3%
Claim 14,192.31
Opt in Snapshot 5%
Accident Reduction 3%

16. Revenue Forecast bases on historical performance
(In Millions) 2011A 2012 A 2013 A 2014 A 2015 A 2016 E 2017 E 2018 E 2019 E 2020 E
Agency 7,627$ 8,104$ 8,602$ 9,087$ 9,109$ 9,473$ 9,852$ 10,246$ 10,656$ 11,082$
Growth 6.2% 6.1% 5.6% 0.2% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Direct 5,804$ 6,264$ 6,740$ 7,474$ 8,159$ 8,812$ 9,517$ 10,278$ 11,100$ 11,988$
Growth 7.9% 7.6% 10.9% 9.2% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
Commercial Line 1,467$ 1,649$ 1,762$ 1,838$ 1,996$ 2,108$ 2,226$ 2,350$ 2,482$ 2,621$
Growth 12.4% 6.8% 4.3% 8.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6%
Loss Ratio 71.2 74.6 73.0 72.8 73.7 73.0 72.3 71.6 71.0 70.3
Growth 4.9% -2.2% -0.3% 1.2% -0.9% -0.9% -0.9% -0.9% -0.9% -0.9%
Expense Ratio 21.6 21.3 20.4 19.8 19.8 20.0 20.2 20.3 20.5 20.7
Growth -1.5% -4.3% -2.9% 0.3% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8%
Combine Ratio 92.8 95.9 93.4 92.6 93.5 93.0 92.5 92.0 91.5 91.0
Growth 3.4% -2.6% -0.9% 1.0% -0.5% -0.5% -0.5% -0.5% -0.5% -0.5%
Appendix: Company Financial Forecast

17. Earning Analysis and Forecast

18. Industry Comparison