Progressive Looks to Lead the Pack of Multiline Insurers

By | March 18, 2019

With much of the property/casualty insurance industry’s attention focused on external threats from insurtechs and digital native companies, perhaps the greatest disruption is coming from within.

Following the past decade of impressive growth driven by direct-to-consumer providers, Progressive heads into 2019 with wind in its sales and shows no signs of slowing. The company’s recent Q3 earnings showed an 18 percent year-over-year gain in net written premium, with personal auto policies in force (PIF) up 15 percent, and total personal lines PIF up 11 percent year-over-year. Progressive’s commercial lines business turned in equally impressive numbers.

Growth in both direct and agency channels fueled these gains. Progressive’s resurgence in the agency channel has been one of the company’s highlights. January marked the 38th consecutive month in which Progressive’s agency channel PIF has achieved year-over year increases, while its direct business continues to realize double-digit, year-over year growth.

That’s not all. In the recently released J.D. Power 2019 Independent Agent Study, Progressive ranked second overall in terms of agent satisfaction and highest in overall independent agent relationship volumes. The carrier is not only taking the largest share of the independent agent market, but also succeeding in meeting the expectations of those agents.

Over a 15-year period, publicly traded insurance carriers broadly tracked the S&P 500, with the exception of Progressive (PRG) and GEICO (BERK). During the past two years, Progressive has accelerated its pace. Highlighting the company’s steady premium growth and higher investment income, Progressive’s top line has been witnessing a substantial rise in the past several years. As a result, the street has rewarded its stock price — up 100 percent in the past two years prior to the recent Q4 market correction.

Stock Performance – Progressive vs. Peer Group – 2 year

Progressive is showing no signs of resting on its laurels. Lost among the industry’s headlines, Progressive introduced three new offerings that take direct aim at perennial multiline insurance leaders, such as State Farm and Allstate.

Progressive’s new offerings target a market underserved relative to its digital expectations. The company has embraced a “build it and they will come” capability model that is designed to deliver an enhanced digital experience that attracts and retains the lucrative multiline insurance consumer.

Multiline Bundling

For consumers seeking to quote and buy home and auto at the same time, Progressive launched a multi-product quoting solution. While possible, the option of bundling home and auto bundling was not always clear. Customers typically needed to enter information separately for each quote. With Progressive’s new functionality, online quotes come bundled with pre-populated fields and discounts received are made clear throughout. This integrated experience simplifies the process and makes multi-product bundling easier and faster. We expect this technology to spread rapidly throughout the industry.

Home Quote Explorer

Progressive designed its HomeQuote Explorer to make the shopping and buying of homeowners policies intuitive and simple. This includes pre-fill, which personalizes customers’ online shopping experiences, as well as clear visuals and concise language to customize coverage options. Using Progressive’s online auto quoting model, customers are directed to a rate comparison tool at the point of purchase.

IA Portfolio Quoting

Progressive improved its agency platform to allow agents to quote and bind multiple products, including homeowners, special lines and auto. This makes it easier for agents to bundle quotes and view a customer at a portfolio versus product level.

According to the aforementioned J.D. Power Independent Agent Study, insurers’ inability to provide bundled solutions is a drag on overall agent satisfaction. Carriers that are often able to provide bundled solutions to their customers generate a 160-point gain (on a 1,000-point scale) in overall customer satisfaction over carriers that make the process unnecessarily difficult. Gains in satisfaction translate to a larger number of customer referrals and increased agent brand engagement.

With the combination of online bundling, enhanced home quote generation tools and agent portfolio management, Progressive is moving into 2019 with capabilities meant to attract and retain the lucrative multiline consumer market.

In what has become an intense battle to win the highly prized multiline consumer segment, Progressive has clearly made its presence known. The big question of 2019 is whether competitors can be as progressive as … Progressive.

With the combination of online bundling, enhanced home quote generation tools, and agent portfolio management, Progressive is moving confidently into 2019 with capabilities meant to attract and retain the lucrative multi-line consumer market.

About Tom Super

Tom Super (thomas.super@jdpa.com) is Director of J.D. Power’s P&C Insurance Practice and is based in Chicago. More from Tom Super

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Insurance Journal West March 18, 2019
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