The Progressive Corporation investor relations material
GEICO’s worst enemy
The Progressive Group is one of America’s largest auto insurance groups, the largest motorcycle policy seller, the leader in commercial auto insurance, and one of the top homeowner carriers based on premiums written. The company was the first to use its customers’ driving behavior to help price its insurance policies.
Personalized rates based on drivers' driving habits
Telematics is Progressive’s pricing technology based on driving habits. It was rolled out in 2011 and has given the company a favorable head start in the digital race for better risk pricing. Telematics collects driving data from devices installed on cars or through mobile apps. This data consists of mileage, speed, and time of day. It also enables Progressive to develop personalized rates based on drivers' driving habits.
This telematics technology, however, has not passed competitors unseen, and Berkshire Hathaway’s GEICO launched its telematics program in 2019. Allstate is another company in the U.S. providing user-based insurance. But, with over ten years of data collection, Progressive has a major first-movers advantage.
Background and history
Progressive was founded in Cleveland during the late 1930s when two lawyers, Joseph Lewis and Jack Green, wanted to provide vehicle owners with security and protection. Progressive were pioneers in offering things like drive-in claims locations and selling auto insurance online.
If you invested in Progressive ten years ago, you would have earned an impressive compounded annual return of roughly 20 percent. Progressive also seems to be able to raise its premiums in the current high-inflationary environment, which is a sign of strength.
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