Post on 12-May-2015
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Pay-As-You-Go InsuranceCase Analysis
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”
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
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
IMMEDIATE RESPONSE
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”.
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.
Autograph
GPS Satelli
tes
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 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.
APPLICATIONs
S Curve
Progressive
Progressive
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
Recommendations
• DO NOT EXPAND RIGHT AWAY
• TIME FOR RESEARCH
• STAY IN TEXAS AND EXPAND SLOWLY
• FOCUS ON BIGGER CITIES ONLY
LEARNING OUTCOMES
How
pote
ntial r
oles
of i
ncre
me
ntal a
nd
disr
uptive i
nnovati
on
hel
ps i
n creati
ng a
nd s
ustai
ni
ng fir
m c
ompetitive
ness.
Understa
nd t
he stre
ngt
hs a
nd li
mitati
ons
of c
urre
nt tec
hnol
ogies a
nd a
pply t
he
m i
ntellige
ntly t
o
meet t
he
nee
ds
of eac
h a
pplicati
on.
Develop the ability to assess and where necessary, improve the process of innovation.
THANK YOU!