Case | HBS Case Collection | May 2002 (Revised April 2004)

Innovation at Progressive (A): Pay-As-You-Go Insurance

by Frances X. Frei and Hanna Rodriguez-Farrar


Consumer auto insurance is a price-sensitive industry in which customers rarely pay a premium to a provider even for additional service features. Progressive spends more on additional service features than its competitors do; consumers don't pay extra for these features, yet the company makes money on a product its competitors often do not. Central to Progressive's success is its ability (a) to turn operational savings into value-added service and (b) to capitalize on its unique competencies through clever service design. Progressive is considering a national rollout of Autograph, a pay-as-you-go insurance service offering that recently completed a successful pilot in Texas.

Keywords: Technology; Service Operations; Service Delivery; Insurance; Brands and Branding; Product Development; Innovation and Invention; Insurance Industry; Texas;


Frei, Frances X., and Hanna Rodriguez-Farrar. "Innovation at Progressive (A): Pay-As-You-Go Insurance." Harvard Business School Case 602-175, May 2002. (Revised April 2004.)