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Progressive Insurance

Progressive Insurance

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Published by Shidrokh Goudarzi

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Published by: Shidrokh Goudarzi on Jun 21, 2012
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12/28/2012

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Case description
It’s a steamy Saturday in Houston, a day so piping hot that one would gladly con- sider diving into a vat of Texas chili for relief. But chili is a messy business, so instead, half the population seems to have taken refuge in their air-conditioned cars,choking Houston’s freeways as a result. For Kristen Botello, all those cars mean just one thing: lots of accidents.She’s not rooting for wrecks. But she knows from experience that accidents hap-  pen. And when they do, she wants to be on the scene immediately – before the police arrive, before a wrecker tows away the cars. Why all the urgency? Because Botello,28, settles claims for Progressive Corporation, an auto-insurance maverick that has built a prosperous, fast-growing company around speed, service, and software.Around lunchtime, Botello’s two-way radio crackles with a message. “Kristen, we’ve got a scene,” says the dispatcher. She heads for the freeway in a Ford Explorer with the label “Progressive” emblazoned on both sides. Accidents are like mysteries, she says. And like any good detective, Botello doesn’t want the scene disturbed. Sometimes she shows up so quickly that all the clues are still in place: skid marks, witnesses, cars resting in  post-collision chaos. Botello inspects the vehicles, assesses the damage, does her analysis,whips out her laptop, downloads a claim file, and cuts a check on the spot. Case closed.
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A support to business strategy
Progressive Insurance Inc. figures among the top four auto-insurance companies in the U.S. and represents the nation’s
Chapter 6
Progressive delivers the unexpected – ProgressiveInsurance
 
largest writer of private passenger auto insurance through inde-pendent agents. Progressive is also the number one writer of motorcycle insurance in the U.S. In business since 1937, thecompany provides all drivers with competitive rates and 24h,in-person, and online services. The company sells its products(automobile, motorcycle, recreation vehicle, commercial vehicle,personal watercraft, boat, and all-terrain vehicle) over the phone,online, and through more than 30,000 independent agents
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nationwide. Today, the company has nearly 19,490 employees inover 350 offices serving about 8 million customers.Progressive’s culture is one of high energy, continuous innova-tion, and dynamic growth. The corporate web site (www.progressive.com) presents some of the elements that make Progressive aunique place to work:
Business casual dress 
: Progressive’s philosophy is to allowpeople to dress in a style consistent with their personaltastes, but which also presents a neat appearance to cus-tomers and other contacts;
Art collection 
: To foster creative thinking, all large Pro-gressive offices feature works from Progressive’s contem-porary art collection, regarded as one of the best in thecountry;
Safety and wellness 
: Most major Progressive locations fea-ture a collegial campus setting and atmosphere, includ-ing cafeterias, Progressive-operated fitness centers andprimary care facilities;
Innovation 
: Progressive prides itself on being the techno-logical leader in the auto-insurance industry. The com-pany has implemented a wide variety of technologies andhas received a great deal of recognition surrounding itsefforts.From its beginnings in 1937, Progressive valued innovation. It introduced the industry’s first drive-in claims office. In 1956,Progressive’s Safe Driver Plan lowered rates for low-risk drivers,setting an industry policy standard. More recently, the Immedi-ate Response claims service was introduced and became the first and only 24h, in-person claims service that serves customers when and where they need it most at the accident scene. Tocomplement the Immediate Response program, the ImmediateResponse Vehicle (IRV) was then introduced. The IRV is a
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Putting the puzzle together 
Part III
 
specially-marked vehicle that carries trained claims professionalsto wherever the customer needs them. Outfitted with the latest technology, the claim representative in an IRV is able to com-plete a damage estimate and write a check right on the spot. Toensure continuous innovation within the company, good ideasfrom anyone are always sought out. The corporate attitude is totry almost everything that makes sense and to stop it when it stops making sense. In the words of Peter Lewis, Progressive’s for-mer chief executive officer (CEO):
 We’ve spent a lot of money on dumb ideas, but we had the flexi-bility to stop it early. (…) It’s ingrained in the culture to experi-ment, but to do so responsibly. We reward people for taking risksbut punish them for not spotting bad ones early enough to pullthe plug.
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Progressive’s two largest competitors are State Farm and Allstate. State Farm Insurance insures about 20 percent of U.S.automobiles, making it the nation’s leading insurer of cars. It provides auto insurance as well as homeowners, non-medicalhealth, and life insurance. State Farm operates throughout theU.S. and Canada and has some 16,200 agents. The company alsohas 37,800 employees, almost half of State Farm’s workforce, whodeal with claims in some fashion (www.statefarm.com). AllstateInsurance, the “good hands” company is the second largest U.S.personal lines insurer behind State Farm. Its core auto linesaccount for 75 percent of sales; the company also sells otherproperty/casualty (homeowners and specialty lines) and lifeinsurance in North America and Asia. The company operatesthrough some 13,000 exclusive agents in the U.S. and Canada(www.allstate.com).
History
 Joseph Lewis and Jack Green co-founded Progressive Insurance with the objective to provide vehicle owners with security andprotection. They also thought it was a good investment for a cou-ple of lawyers who were just beginning. It was not until the endof Second World War that auto insurance became more popular,and Progressive emerged small but solid. The company grewsteadily throughout the next decade, moving to new offices in
Chapter 6
Progressive delivers the unexpected – Progressive Insurance
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