Progressive is
zooming ahead in
the race to deliver
usage-based
insurance rates.
WHEN GLENN Renwick, the
chief executive of insurance giant
Progressive, sits down to dinner
with his wife in the suburbs of
Cleveland, he has, of late, been
inclined to chide her about braking.
In March, Renwick plugged a
device called Snapshot into the
onboard diagnostic computer in
the couple’s shared car. Through a
wireless network, the palm-size
gadget sends Progressive a real-time driving report, including the
number and time of miles driven,
incidents of hard braking or
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DATA
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LEONELLO CALVET TI
quick acceleration, and speed.
When he logged on to monitor the
couple’s stats, he saw “more hard
brakes than I expected.”
Luckily for Renwick, bad
driving does not result in higher
rates. Good driving, however, can
bring in discounts of up to 30%
on insurance premiums.
Snapshot is the latest bold
attempt by Progressive to base
policy pricing more on individual
behavior than population-wide
statistics. Some analysts say the
device represents a leap for ward
for the usage-based insurance
movement, one that could
revolutionize the industry.
“The insurance industry is
a very slow-moving, boring
business,” says Gregory Locraft,
an insurance analyst with Morgan
Stanley. “Snapshot and usage-
based insurance are the bleeding
edge of under writing trends.”
Typically, to assess the cost of a
driver’s premiums, insurance pro-
viders compare people with simi-
lar characteristics, such as age and
gender. Single 18-year-old men
“They had big
antennae and wires
going every where,”
says Progressive’s
Richard Hutchinson
of Snapshot
predecessors.
The device is now
roughly the size of a
deck of cards.
GREG RUFFING
