Progressive Insurance: Not Your Standard Insurance Story

10 Pages Posted: 16 Jun 2009

See all articles by Paul Farris

Paul Farris

University of Virginia - Darden School of Business

Phillip E. Pfeifer

University of Virginia - Darden School of Business

Alan Zimmerman

City University of New York/College of Staten Island

Abstract

Progressive Insurance, a leader in the automotive insurance market, has succeeded through innovation. This case describes the company's strategies for differentiating its service through programs such as Immediate Response Vehicles and Express Quote. Through these programs and a series of creative advertising campaigns, Progressive has built a strong brand in a relatively short time.

Excerpt

UVA-M-0758

PROGRESSIVE INSURANCE:

NOT YOUR STANDARD INSURANCE STORY

Founding and Early History: 1937 to 1960

Joseph Lewis and Jack Green founded the Progressive Mutual Insurance Company in Ohio in March 1937. From the beginning, the company sought to grow through innovation, and by 2005, Progressive was the third largest auto-insurance group in the United States, behind State Farm Mutual and Allstate Insurance.

The earliest example of innovation from Progressive came shortly after WWII. At the time, there was relatively little rate competition among automobile insurers, and prepayment of policies was the norm.[a] Progressive, however, decided to target blue-collar drivers with a less expensive premium,[a] “[offering] drive-in claims service before any other auto-insurance company and, in [an] industry first … allowed customers to pay their premiums in installments.”[q] During the 1950s postwar boom, Progressive found another opportunity to innovate. At that time, insurance companies began to price auto insurance using categories (e.g., age and driving record) designed to measure risk. Under this system, the lowest risk drivers were known as “standard risk,” and most insurers competed for their business.[a] Progressive, on the other hand, decided to serve the segment ignored by most of the industry, forming Progressive Casualty Company in 1956 to write auto insurance for high-risk drivers. The policies were known, logically enough, as nonstandard policies.[a]

. . .

Keywords: Branding, Pricing, Advertising

Suggested Citation

Farris, Paul and Pfeifer, Phillip E. and Zimmerman, Alan, Progressive Insurance: Not Your Standard Insurance Story. Darden Case No. UVA-M-0758. Available at SSRN: https://ssrn.com/abstract=1420590

Paul Farris (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-0524 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/farris.htm

Phillip E. Pfeifer

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4803 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/Pfeifer.htm

Alan Zimmerman

City University of New York/College of Staten Island ( email )

NY
United States

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