What is Progressive and How Do You Compete Against Them ?

Yes it is true that the rates are not the same between agent rates and direct rates. There is a different pricing structure for each method of delivery to the customer.

As far as who charges broker fees goes, most agents that are allowed to charge broker fees (state specific) will charge fees on business like the non-standard customers, IE. no prior, DUI, too many accidents. The broker fee is the way many of the agencies are able to stay in business.
 
Penn National Also compares to them pretty favorably, in some cases they're cheaper. Try to get appointment from them, I'm not a P&C agent, I do Health/Life, just got my car ins through them because they were the cheapest option including progressive.
 
I did run it just to check, Penn National is actually 10 dollars per 6 months cheaper than progressive at exact same coverage. I know that isn't huge but it's definitely competitive.
 
I think you just managed to prove yet again Moonlight's point that auto insurance is a commodity. Unless your premium is rather small, $10 per six months is nothing.
 
Sorry I actually misread it, its actually almost 400 a year. I thought it was listing the 6 month rate and it was the annual. The yearly on progressive is 400 bucks higher than Penn.
 
Except when you get into an accident, then who would you rather have? Of course, $400 a year is a pain point, many will go with the less expensive option.

Progressive online (Progressive Direct) is a different company than Progressive through agents. This allows them to have different rates. Since a large part of the infrastructure is the same, I'm not sure how they get by with this, but they do.

Some interesting statistics for those who care:
All comparisons are May 2008 to May 2009
Agency auto is a larger book than Direct (online) auto.
Agency auto shrank year over year
Direct auto grew year over year.
Total auto (policies) grew 3%
Commercial auto shrank (but then, whose hasn't)

Combined ratio grew (wrong direction for those who don't know what combined ratio is), but it's around 95%, so not bad.

The expense ratio for the agency force is almost exactly the same as it is for direct. My guess is a lot of ads are split based on revenue, though they drive policies to direct.

Loss ratios are lower for agency sales.
Combined ratio (year to date) is lower for agency sales (90.8) compared to direct sales (91.6) (again, this is a year to date number, not just May to May as mentioned above.)

Basically, given that progressive has done almost everything that they can to move business online, they haven't been as successful at that as they are with agency sales.
Time will tell if this changes.

Dan
 
Except when you get into an accident, then who would you rather have? Of course, $400 a year is a pain point, many will go with the less expensive option.

I'm not sure I agree that Progressive's reputation and marketing makes them worth the extra money. Haven't had any problems with Penn. Just because they're cheaper it dosen't automatically mean they're worse, have you had some specific problem with that company?
 
I'm not sure I agree that Progressive's reputation and marketing makes them worth the extra money. Haven't had any problems with Penn. Just because they're cheaper it dosen't automatically mean they're worse, have you had some specific problem with that company?

I think you misunderstood djs. Would you rather call an 800 number and get someone in New Dehli to process your claim or would you rather go to your local agent (independent or captive) to file the claim?
 
I know nothing about Penn. Progressive has a decent (not outstanding) claims process.

When I know nothing about a company, I assume they use third party adjusters who are paid to keep claims down. Claims usually get delayed, etc, etc. This isn't always the case, but I've seen it happen enough times.

I have no problem with centralized claims handling. In fact, it tends to work well. It's available 24 hours a day usually and can take care of problems where the agent may be delayed.

My issue is more when a carrier doesn't have their own claim adjusters / centers to deal with the problem. When they outsource this, I've seen more problems then when it is done in house.

Dan
 
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