Innovation at Progressive
... anything with significant value. Insurance is also available for health, life, disability and lose of income. Consumers have a choice of hundreds of companies to choose from like AllState “You are in good hands with AllState,” State Farm “like a good neighbor State farm is there,” and Progressive “Not what you expect from an insurance company but you should.” Progressive’s headquarters are in the suburbs of Cleveland, Ohio. They have become a major player in this billion-dollar industry; in fact they are the forth-largest auto insurance company, with a market value of over ten billion dollars. Shares in the company are traded on the prestigious New York Stock Exchange under the symbol PGR. Progressive has always done business differently than its competitors. Progressive’s core business was designed around high-risk drivers in the auto and motorcycle segments, which other companies would not write, allowing Progressive to charge higher premiums. They also focus solely on the auto insurance business and use unconventional methods of marketing such as the 1-800-AUTOPRO, and the internet www.800AUTOPRO.com and www.PROGRESSIVE.com which provides 24 hours customer service. Progressive has always strived to be on the cutting edge of technology with their emergency response vehicles. These vehicles are hooked up to global positioning satellites and equipped with a laptop, printer and cell phones. Designed for immediate response to claims for fast customer service. From these vehicles, came the idea for the Autograph product with the concept of Pay-as-you-go Auto Insurance. The Autograph, by Progressive, customizes a policyholder’s bill based on each individual situation. It bases the premium on the actual miles driven, when the car is driven, and the routes the driver takes. If a couple more sensors were added to the Autograph system, Progressive would know the driver’s speed, abrupt stops, traffic signal observance, and more. A surcharge would be placed on the monthly premium for each violation committed throughout the month. Progressive could charge their customers for every kind of violations – including driving under the influence (alcohol, and illegal drug usage) by having a breathalyzer built-in to the Autograph system. One advantage to this system is that it would give the lower-risk drivers a reward of paying less than the higher-risk drivers. The policyholder’s premium would be based on their actual habits, versus the traditional way of charging, which is based upon the company’s historical statistics for the policyholder’s particular “class”. Insurance companies traditionally charge for auto insurance based upon who (age, sex, gender; etc.) is driving the car and where (city, state) the car is being driven. The insurance companies have established rate classifications based on the driver’s age, gender, and previous driving record. Young male drivers have been labeled high risk divers based on the number of accidents this group is associated with. So, Sam a 17-year-old male driver would pay a higher premium than Susan a 17-year-old female with the...