Inference on Autograph National Launch

The following Prepare Case about Progressive Insurance: Pay-as-you-go Insurance is about a

new hi-tech method of calculating car auto insurance which could possibly influence the

premiums received through other insurance in various industries. It goes on to talk about the

Insurance industry itself giving key points on property casualty (P/C) insurance industry,

components of the expenses when receiving premium and break up of premium as seen in

Exhibit 2. Progressive is seen as a fast acting, optimistic company looking for opportunities

even when facing the wall of skepticism. Constantly rewiring inner management and being

on their toes for efficiency, tries its best to stay ahead.

Autograph: Autograph, born in 1994 helped customers in a novel way to accelerate

computation of insurance premium. It calculated premium based of actual usage rather than

relying on historical data. The voluntary program for application use of Autograph was

launched highlighting the satisfaction in customer use and reduction on paying premiums.

Where Progressive stands: Progressive contemplates on the institutionalization of the

Autograph system nation-wide after seeing successful gains in the largest US state, Texas.

With one adverse effect of data mining, Progressive wonders to portray or sell itself as a

company with 25% less premiums or not.

Inference: Progressive’s select financials are seen to be at a steady rate but with a decline in

its Net Income cause through the almost halving in Pre-tax Operating Income. But on the

contrary, other leading insurance companies have seen to be taken a reduction in Net income

as well. This could cause to reason if loss in all companies is correlated to external factors.

Progressive’s growth pattern also seems to be in hills and valleys which could be a cause of

research and implementation of newer management styles and software. Although

Progressive has a niche insurance policy, after reading the report one questions if it has the
capability of educating its clients of their products to sell in other states. In my opinion,

Progressive should not implement Autograph since it would require extensive time duration

to implement this system in each state. Texas was a state with no regulatory oversight but, in

other states, Progressive would have to comply to policies and other regulatory restrictions. It

would have lagged customer service in a longer time frame and hence, would not be able to

solve premium issues in a short duration of time. With expansion, the whole operation would

be stretched out which in turn would require hiring of more independent agents. It would be a

high-risk play in term of liquidity as well. The product should be researched for longer

duration of time since past historical data does not provide enough evidence to support

Autograph in its mission. With rivals with higher market shares to tackle, Progressive should

take its time and have sound judgement on each step.