Getting Personal

Progressive Insurance, a pioneer in online auto insurance sales and service, has developed an innovative new content offering for its existing policyholders -- personalized repair, maintenance and value information for their specific vehicles. Progressive's value proposition is providing valuable answers to questions that vehicle owners care about but rarely think to ask -- what their car is worth, what recalls and technical service bulletins exist for their car, and what routine maintenance should be performed on this model and when?

Ultimately what will drive this service's utilization is not simply the information but the manner in which it is provided. Unlike a vehicle portal site like Edmunds.com, Progressive already knows what its policyholder is driving and is able to deliver this information to the customer during routine online task paths (e.g. paying one's premium online) without requiring users to enter information about their car. This requires no proactive behavior on the customer's part beyond simply clicking one link on a site they are visiting already.

Once logged into one's account, the Progressive secure homepage's left-hand navigation features a color stock photo of the policyholder's make/model with the title "Your Vehicle" and a link such as "View recalls for your 1998 Pontiac Grand Am." Any of these links can be clicked on, and the user is taken to a page that lists the vehicle's approximate retail value, the number of current recalls and the number of technical service bulletins. Additionally, there is a link to view routine maintenance services at -- in this case -- 90,000 miles. Progressive estimates the mileage based on the age of the car, but also provides a field on this page to enter in the actual mileage.

From this overview page, a Progressive policyholder can click on any of these items to get further detail based on content and data from Edmunds, N.A.D.A. and the Department of Transportation. For instance recall details include the recall number, the number of vehicles affected, the manufactured dates of vehicles affected, the date on which the owner was notified, the details and consequences of the defect, the suggested corrective action and appropriate phone numbers.

When policyholders click on the link for scheduled maintenance, they are brought to a screen that features mileage increments across the top horizontally (e.g. 110,000, 112,500, 120,000). This page shows a table for the highlighted mileage increment that lists service items vertically (e.g. change engine oil, lubricate chassis, inspect/rotate wheels, etc.) with the corresponding parts and labor estimates in columns alongside. Subtotals are provided for labor costs and part costs along with a total cost figure. Users can then select the next mileage increment to learn what additional maintenance items they can expect in the future.

Because most drivers do not normally keep good track of this information does not mean that it is not useful information to have. In fact, this content is extremely useful to policyholders and the simplicity with which it can be obtained online will be appreciated. A vehicle owner who plans to sell their vehicle in the next couple of years will appreciate the ability to track the rate at which the value of the car is depreciating. This, along with the ability to know when your car's value is equal with or above what you owe on it, is important to a prospective seller. Being sure that no recalls exist for your car provides a level of comfort. Most drivers want to do regular maintenance, yet aside from oil changes few actually know what they should be doing and when. They either don't know what needs to be done, neglect it or are at the mercy of their mechanic's honesty and acumen. Knowing the exact maintenance schedule and details issued by their manufacturer for their specific make, model and year is extremely valuable. The ability to check the maintenance recommendations and prices issued by one's mechanic can provide vehicle owners with some level of assurance.

Progressive's strategy could prove to be as useful for the carrier as it is for its policyholders. Carriers have invested significantly in online technologies aimed at lowering reliance on more costly human channels such as call centers and branches. Carriers have invested in technologies like online claims servicing/status checking and online policy change requests. Yet adoption of these technologies to date has been disappointing -- largely because it doesn't typically occur to policyholders to do anything but pick up the phone for these types of interactions.

Most policyholders simply don't know that their carrier offers these online self-service features. For the most part, the ability to pay one's premiums online has been the sole anchor functionality that brings a carrier's online users back to the site for multiple visits per year. Carriers do not have the luxury of the number of times that a bank, broker or credit card company gets to touch the customer online and highlight a particular online service not currently being used. Carriers are eager to find additional features that will encourage more frequent online interaction and boost awareness of other convenience services that matter to their bottom line.

Further, there are additional reasons to court more frequent online usage by policyholders. Internal and external research has shown that a carrier's repeat online users stay with the firm longer and do more business than customers who do not visit its site. More touch points increase the likelihood that a customer will grow loyal and continue doing business with you. More importantly, if a carrier is providing a valuable service (even one unrelated to insurance), the policyholder will associate that value with the carrier and will factor its loss into the cost of doing business with a competitor who doesn't offer similar personalized content.

Insurance is not an overly exciting product -- neither is personalized recall and maintenance information. Yet personalized content tells the customer that you are innovating ways to make their life easier. In the age of the Internet, where there is no lack of available and free information, the new "cost" is the cost of effort and time. Progressive has set itself apart because few other companies, insurance-related or not, have delivered similar services to users with so little effort required of the user. Moving forward, Progressive should think about ways to further encourage awareness and use of this personalized content, such as e-mail alerts for recalls and maintenance schedules.

Tim Carpenter is an insurance industry analyst with Watchfire GómezPro in Waltham, Mass. He can be reached at [email protected].