Progressive Makes Big Claims

On the CRI, a score of 100 means that every customer reports a loss within 24 hours of when it occurs. Early on, just as Renwick expected, the CRI was high (around 130) -- which meant that many accident victims were filing claims after the 24-hour mark. A score that high created an incentive for Progressive to experiment with ways to change customer behavior. The most effective innovation was the Progressive Gold Card. It looks like a premium credit card, except that it features the company's toll-free claims number and a space to write in a policy number. It also breaks in half -- to facilitate the exchange of information after an accident. The card grew out of Progressive's research on credit cards, from which the company concluded that the durability and prestige of a physical card were important to consumers. In the six years since Progressive introduced the Gold Card, the CRI has dropped from 130 into the 70s.

"It's like FedEx: Customers know that it delivers overnight," Renwick says. "More and more people know that we handle auto-insurance claims differently -- and quickly."

Now, after a lifetime of doing things differently, Peter Lewis finds his company in a position that he never imagined for it: competing with the biggest names in the business. "We're in the big leagues now, up there with State Farm and Allstate," he says. "The question is, Can we win the pennant? Today 4 out of 100 cars in the U.S. are insured with Progressive. People laugh when I talk about 100% market share. But if we can get better than everybody else in every aspect of the business, why would anybody buy from another company? Of course, I'd settle for 25%. People tell me that 25% can't be done either, but people have been telling me things like that my whole life."

Chuck Salter (csalter@bcpl.net) is a Fast Company contributing editor based in Baltimore. For more information on Progressive Corp., visit the Web (www.progressive.com).