COVER STORY

Progressive
Raising the Bar in RV Insurance Programs

by Don Magary

Progressive (NYSE:PGR) is one of those businesses that radiates excitement and is a vibrant innovator when it comes to insurance programs. Yes, I know . . . insurance companies are supposed to be dull, stodgy and aloof, but you don't have to spend much time around the Progressive team to discover this myth doesn't apply here - at least on the RV side of its business and I suspect throughout the company. RV News started researching this article a couple months ago, and throughout the process, we met a variety of professionals all of whom were bright, motivated and focused on customer service. We talked to key people such as Michael Bissler, Progressive's Product Manager - RVs; John Pierson, RV Specialist/Corporate Claims Training; Wayne Sharrah, Corporate Claims Training; visited a class where claims representatives were being trained in writing claims on RVs that were involved in an accident, and spent a day riding along with Robert Volling, Claims Representative II, in a Progressive Immediate Response Vehicle (IRV), as he made his rounds. All in all, it gave this writer a great appreciation for a process that starts with writing a policy through seeing how Progressive responds when one of their insured suffers an accident.

On the RV side, Progressive has a whole division specializing in RV coverage and has been writing policies for 25 years. Michael "Mike" Bissler, who is national product manager of RVs, exemplifies that enthusiasm we alluded to in the opening. Mike says the best way to describe his job when it comes to RVs, is the buck stops here.

Bissler said, "I'm in charge of delivering on everything we promise to the customer - making sure we have competitive prices, making sure we have a product that offers all the coverages people are looking for and making sure from a customer service standpoint that we're offering best-in-class services."

Bissler's background, prior to joining Progressive to head the RV division, includes management consulting and Harvard Business School.

What sets Progressive apart from other companies that insure RVs? He said, "Probably the first thing that we think is important in terms of what differentiates us out in the RV insurance market is that we are a large national company - the fifth largest writer of vehicle insurance in the nation."

Headquartered in Cleveland OH, Progressive has been in business since 1937 and writes auto, motorcycle, recreation vehicle, personal watercraft and commercial vehicle insurance in 48 states and the District of Columbia. Progressive also insures financial institutions.

In 1998, Progressive reported net written premiums in excess of $5.3 billion, an increase of 14 percent from the previous year. Its success can be demonstrated by the example of a shareholder who purchased 100 shares of Progressive for $1,800 in its first public stock offering on April 15, 1971. On December 31, 1998, that shareholder would own 7,689 shares with a market value of $1,302,000, for a 26.8% compounded annual return, significantly outperforming the 9.5% return achieved by investors in the Standard & Poor's 500 in the same period. In addition, that shareholder would have received dividends of $1,922 in 1998, bringing total dividends received to $18,266 since the shares were purchased.

That success can be traced to a large degree to the company's underlying philosophy to "reduce the human trauma and economic costs associated with accidents, and do this by providing policyholders with services designed to help them get their lives back in order again as quickly as possible."

Bissler continued, "We offer our RV program in 46 states, and our program is broad in terms of our acceptance criteria. We designed it to accommodate virtually every RV risk out there."

On the motorized side, Progressive accepts all three kinds - Class A, Class B and Class C with coverage up to $1 million; on the towable side Progressive accepts all four types with coverage up to $150,000. Bissler added, "We pride ourselves on the fact we don't turn drivers away because of poor driving records or poor claims histories. We adhere to a philosophy called "broad acceptance." By that I mean Progressive can provide a rate for every risk out there - driver combined with vehicle. So the concept of being a large national company is important not only because it allows us to accommodate virtually any kind of risk, but it also provides us the capabilities to provide service advantages to our customers ."

Bissler cited Progressive's more than 350 claims offices nationwide as an example. "If a customer ever has a claim, it's almost certain that we're going to have a claims office within that general vicinity. I believe this helps reduce the trauma because they are dealing with someone locally. In addition since we're a large national company that spans several time zones we're able to provide our customers with 24-hour, 7-day-a-week access to us.

"The second thing that sets us a part from the marketplace is that we're also experienced and financially stable. We've been writing business since 1937 and we've been writing specialized RV insurance for more than a quarter of a century."

As evidence of that financial stability, Bissler pointed to Progressive's A++ rating by AM Best, the organization that ranks insurance companies and their financial stability nationally. "That's their highest rating," Bissler continued. "When we talk to consumers they say they want to be able to trust a brand name and a company, and they want to know specifically when they are insuring that vehicle and their family, we're going to be there when they need us most. And that's when they have a claim.

"But we think what truly sets us apart in the marketplace is the fact that we offer the customers an unparalleled value proposition. What does that mean? It's the combination of extremely competitive prices, one of the most comprehensive packages of customized RV coverages in the market place and what we believe to be unparalleled service. continued