Progressive had been leading the fourth position in the auto insurance market around the world, after losing third position in 2008 to GEICO. As the industry moved to online sales from an agency, GEICO’s direct selling model made the potential growth for the company.
As compared to the sales of 2006 to 36%, Progressive jumped to 42% in sales due to its direct sales mix that was quite ahead from the industry average of 25%. Ultimately, both of the companies, GEICO and Progressive continued to gain ground on industry leaders, State Farm and Allstate, who directly sold 5% of their policies.
Progressive decided to compete in the industry with Snapshot, a new usage-based pricing product, and expected to revolutionize the purchasing of auto insurance. Launched in 2011, Snapshot, due to low awareness among consumers, did not generate the desired results till 2012. During the next year, the company did her best to educate about the product’s benefits, as the product includes the savings of almost 30% for some drivers.
The company used a plane of sharing with its customers who have purchased various insurance policies since they tended to be more loyal and profitable. Should the company stick with these approaches to catch up with GEICO was unclear, but it had competed strongly to State Farm and Allstate.
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