Progressive Makes Big Claims

New Strategies, New Tools

"Progressive claims, this is Tina. How may I help you?"

Progressive receives about 25,000 phone calls per day. Calls about existing claims are routed to the appropriate local office. New loss-report calls are routed to one of the company's five call centers. The largest center, in Cleveland, is a maze of terminals operated by young claims representatives in baseball caps, ponytails, and jeans. These reps interview customers who have had accidents, enter data into Progressive's mainframe, and initiate Immediate Response -- all in a matter of minutes.

The Cleveland office employs 210 claims representatives. One of them, Tina McDuffee, is taking a claim. A 26-year-old with long brown hair, freckles, and a scrunchie on her wrist, McDuffee sits at a computer terminal with an intense, faraway look in her eyes: She's trying to picture an accident.

On the line, Sandra in Sacramento is describing what just happened to her 1995 Geo Prism. "I told the property manager that I was parked in the alley behind our townhouse. He comes out a half hour later and backs his truck right into me! He must have forgotten that I was there. I can't believe it. I'd just told him! I've never been in an accident before. I don't know what to do."

"That's okay," McDuffee reassures her, as she walks Sandra through the process -- verifying names, addresses, and phone numbers; the model, make, and year of the vehicles; the time and date of the accident; and Sandra's collision coverage with Progressive. Next she puts Sandra on hold and calls the Progressive office in Sacramento. She reaches a dispatcher named Anne, electronically transmits the claim file to her, and then transfers her to Sandra.

"That was a snap," McDuffee says.

The first stage of Immediate Response is designed to be quick and seamless, with "an unbroken flow of information" between the customer, Progressive's central database, and the local claims operation, Graves explains. When Anne in Sacramento dispatches a rep to Sandra's home, she'll also radio or page the corresponding claim number to him so that he can download Sandra's file onto his laptop. This sort of nifty handoff wasn't possible until Progressive's information-systems department developed the software to do it. Early on, reps relied on cell-phones to execute Immediate Response. They had to call dispatchers repeatedly to relay data or to retrieve coverage information from the mainframe. If reps didn't return to the office right away to update a file with their estimate, the job wouldn't get done until the end of the day or the following morning.

Claims Workbench, an object-oriented software application that Progressive spent four years developing, eliminated those kinks. With the help of a wireless modem and a Pentium laptop, the program allows reps to perform up to 20 separate transactions in the field -- everything from entering police-report information to downloading another rep's estimate from across town. Mark Smith, 41, head of claims for IS, is reluctant to reveal too much about the software, because he believes that it gives Progressive a major marketplace advantage. He knows of no other insurance company that can instantly move information back and forth between a laptop and a mainframe and keep claims moving toward resolution. That's the beauty of Claims Workbench: It provides what the company calls "concurrent information flow."

Progressive rolled out Claims Workbench in September 1997. Within three months, the company trained 2,500 reps in 200 offices nationwide to use the software. As a result, Immediate Response became much more immediate. In 1990, claims reps inspected vehicles within nine hours of the accident report only 15% of the time. Last year, the figure rose to 57%. Progressive also tracks the number of claims that are settled within seven days: That number is now at 50% -- a big increase from a few years earlier. "We're giving our reps the tools and information they need to do real-time decision making," says Smith. "They're empowered to settle claims in the field."

That's what Kristen Botello does. In a dusty storage lot in a run-down part of Houston, she examines a 1996 Chevy Cavalier that was broadsided earlier that morning. As if conducting an autopsy, she peels back a sheet of plastic covering the shattered rear window and studies the wreckage. The left rear door is caved in; the left front door won't budge. Although the trunk appears unharmed, she notices that the seam is uneven: The metal buckled on impact. The right rear wheel is slightly askew, a sign that the suspension is damaged. "This is a good hit," she says.