Progressive Talks Future with Snapshot Car Insurance Program

Progressive CEO Glenn Renwick said this week that the Snapshot program is strengthening new business figures for the car insurer, which he said plans to make it an integral part of its future in an evolving world of auto insurance that may see game-changing features like automated driving.

In a Thursday conference call with investors, Renwick said Snapshot has contributed new business to a year in which “demand has actually been picking up” in direct-to-consumer sales. Also this week, Progressive reported a 47 percent increase in October profits compared to the year-before period.

“Our advertising seems to be working. It seems to be bringing in not only good numbers but a good mix of customers … that’s turning into solid conversions,” he said. “We’re actually very, very comfortable with our growth.”

CEO: Most New Snapshot-ers Are New to Progressive

Snapshot, a usage-based insurance program that monitors driving habits and rewards safer drivers with discounts on auto coverage, has shown strength in both keeping its participants and drawing in new ones, Renwick said.

In fact, Renwick told investors, he just began a new Progressive policy with Snapshot on a vehicle of his own.

“Most of the customers that actually start with Snapshot are new to Progressive,” he said. “It is really offered as a new-business rating enhancement.”

In addition, Snapshot customers are “retaining longer than an equivalent mix of non-Snapshot customers,” according to Renwick, who added that “for those that get a substantial discount, we are seeing retention that can lift as much as 40 percent.”

Renwick said the figure was strong but “not that shocking.”

“You’ve probably taken someone to a price point in the marketplace that is simply not available,” he said, speaking about customer retention with Snapshot.

“You have a rate that truly reflects your driving behavior,” he said. “No one else can know that in the marketplace on a new quote.”

Renwick also said that he wasn’t offering more specific data because “we know that interest in this is high.” Competitors like Allstate and State Farm offer similar discount programs that have expanded over recent years.

Renwick was less glowing in his remarks about the Test Drive campaign, which Progressive had offered as a 30-day trial for drivers insured by other companies in a bid to lure in new business.

“Test Drive has not produced the numbers that we might have liked,” he said. “Doesn’t make it bad, just means it’s not something I talk about as much when I talk about Snapshot.”

‘As We Look Forward’

Renwick said long-term planning on Snapshot isn’t set in stone because of the lack of substantial data on policyholders who have had discounts with the program “for five and six and seven years.”

“As we evolve that product, like we evolve all of our product designs, we will likely do things that will be different five years from now than what we’re doing today and probably sooner,” he said.

But the evolution of concepts like vehicle-monitoring is putting Snapshot front-and-center for the company as it looks to the future.

Part of that future is the self-driving vehicle, and Snapshot technology is primed to provide “very direct insight to the vehicle,” Renwick told investors.

“That gives us opportunities to think about things differently, what might be insurable,” he said, adding that the prospect of a popularized, self-driving car has raised the question for Progressive: “What does an insurer look like in the future?”

The entire car insurance industry is already posing that question to itself, with state trade associations at a recent convention discussing the sea change that could be triggered if automated vehicles hit the roads as soon as 2017.

Renwick offered his own prediction, telling investors that prices for auto coverage will likely utilize more “information that comes from the car” instead of the driver.

But until then, Renwick said, driver-centric estimates will determine Progressive’s plans for the immediate future.

“We actually look forward to understanding what the long-term dynamics of those [Snapshot] customers will be,” he said. “And as we look forward, all the interim signs are very encouraging.”

Those encouraging signs, according to Renwick, include figures about new business.

“Between GEICO and ourselves, we capture a very significant part of the new business marketplace, somewhere over 50 percent of that, so I think on absolute numbers we are in a very good position [with] not only the growth that we’re experiencing but the absolute numbers that are coming in,” he said.

According to a report released last month from SNL Financial about the second quarter of 2013, competition is fierce among the top players in the car insurance market as the number of premiums written throughout the industry increases.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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