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.

Case | HBS Case Collection | May 2019

State of Charge: The Massachusetts Energy Storage Initiative

John R. Wells and Benjamin Weinstock

In early 2017, Judith Judson (Harvard Business School MBA, 2000), Commissioner of the Massachusetts Department of Energy Resources (DOER), was reflecting on the results of the initiative she had led to identify the contribution advanced electricity storage could make to electricity generation and distribution in the Commonwealth of Massachusetts. The study was the first major output from the $10 million Energy Storage Initiative (ESI) launched by Massachusetts Governor Charlie Baker’s administration in May 2015. The advanced simulation techniques employed in the study indicated that over a ten-year period, the optimal deployment of storage capacity would cut the cost of electricity for consumers in the Commonwealth by $230 million per year, deliver $110 million in annual revenues for storage providers, and reduce CO2 emissions by 100,000 tons a year, the equivalent of taking 22,000 cars off the road. Moreover, neighboring states would benefit from $250 million in lowered wholesale prices. To deliver these benefits, 1.77 GWh of advanced storage would be required across the grid, costing between $970 million and $1.35 billion. Incorporating the perspectives of a wide body of stakeholders (from utilities to municipalities to generators), the study wound up recommending a suite of policies that would facilitate the installation of 600 MWh of storage capacity by 2025, representing about six minutes of the state’s daily electricity consumption and delivering $800 million in benefits to ratepayers. It would also make the Commonwealth a leader in advanced storage technology and deliver substantial greenhouse gas reductions. At the end of 2015, according to figures from the Department of Energy, Massachusetts ranked 23rd in the United States in energy storage deployment, well behind the leader, Arizona, with nearly 300 MWh, and Texas, with over 150 MWh. However, with advances in storage technology, California promised to become the leader and had plans for nearly 1 GWh of storage capacity over the next five years. The ESI was seeking input on how to spend the balance of its $10 million budget and whether to authorize an additional $10 million on proof-of-concept deployments of the technology. Commissioner Judson pondered. Was this aggressive enough? And where did advanced storage stand in the priorities for the energy future of the Commonwealth?

Keywords: energy storage; Energy Generation; Programs; Policy; Strategy; Energy Industry; Utilities Industry; Massachusetts;

Citation:

Wells, John R., and Benjamin Weinstock. "State of Charge: The Massachusetts Energy Storage Initiative." Harvard Business School Case 719-448, May 2019. View Details

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Electric cars had long been championed by environmentalists as a superior solution to the internal combustion engine (ICE), but, despite large government incentives and strong pioneering efforts by a few automakers over the years, electric and hybrid cars and light trucks still accounted for less than 1% of total global production in 2016. However, events took a turn in 2017 and 2018, when many governments committed to banning ICE vehicles. In response, leading automakers announced plans to launch hundreds of electric vehicle models within five years. Early pioneer Tesla, which, in 2017, had built a stock market valuation exceeding that of General Motors (GM), despite only delivering 103,000 cars compared to GM’s 9 million, looked as if it were about to be engulfed by this new competition. But not all were convinced that electric cars would soon displace conventional ICE vehicles. It was not clear that the infrastructure was in place to charge all these electric vehicles. There were also questions concerning the electrical generating capacity to meet the new demand. Would battery prices fall enough to make mass-market demand a possibility? In low gasoline cost jurisdictions, such as the United States, the economics of owning an electric vehicle didn’t appear justified, unless subsidies were maintained indefinitely. In Europe, where gasoline taxes were high, the case for electric vehicles was stronger. But European governments depended on those taxes to meet their budget needs. Would a significant uptake of electric vehicles necessitate higher taxes on electricity? In 2018, electric cars were an expensive novelty for the rich subsidized by the poor. Would the sudden rush of new models change the balance?

On January 6, 2019, HelloSelf, a London-based “BrainTech” company, founded a year earlier by Charles Wells, soft launched. The proposition was simply to help its members “Be your Best Self.” The company provided its registered members with access to a clinical psychotherapist, a life coach, and an AI engine that personalized advice. The platform provided members with the ability to set goals, track progress, and discover new things about themselves. Throughout the previous nine months, over 500 people had registered interest in the proposition, price points had been tested, competitors analyzed, members and specialists interviewed, and wireframes developed, but there were several questions still crossing Wells’ mind. Did the subscription LifeCoach bot model combined with pay-as-you-go therapist sessions make sense? How could he attract an early cohort of users? How would HelloSelf interact with the broken mental health solutions in the UK? How quickly would the platform scale and learn to provide meaningful AI support for both therapists and the LifeCoach bot? And most importantly, would the platform deliver on the mission “to help everyone discover, understand and experience their Best Self”?

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Progressive, 2007-2013

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