Progressive, 2007-2013

John R. Wells; Galen  Danskin

Case | HBS Case Collection | October 2014

Progressive, 2007-2013

by John R. Wells and Galen Danskin

Abstract

In 2013, Progressive was the fourth largest player in the auto insurance market, having lost the third position to GEICO in 2008. As the industry shifted from agency to online sales, GEICO's direct selling model positioned it strongly for growth. Progressive's direct sales mix had increased from 36% of total sales in 2006 to 42% in 2012, well ahead of the industry average of around 25%. As a result, both Progressive and GEICO continued to gain ground on industry leaders State Farm and Allstate, who sold less than 5% of their policies direct. In 2013, Progressive hoped to revolutionize the purchasing of auto insurance and to build its competitive position with Snapshot, a new usage-based pricing product. First introduced in 2011, Snapshot had low rates of adoption through 2012, but Progressive was redoubling its efforts in 2013 to educate consumers about the product's benefits, which included potential savings of as much as 30% for some drivers. Progressive was also intent on building share with customers who purchased multiple insurance policies since they tended to be more loyal and profitable. Whether these moves would be sufficient to catch up with GECIO was unclear, but they seemed to be working well against State Farm and Allstate.

Keywords: strategic change; strategy; Insurance; insurance companies; Insurance; Strategy; Insurance Industry; North America;

Language: English

Format: Print

24 pages

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Citation:

Wells, John R., and Galen Danskin. "Progressive, 2007-2013." Harvard Business School Case 715-427, October 2014.

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Progressive, 2007-2013

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