Leading Auto Insurer Launches Research Program; Says There Could Be A Better Way To Price Policies

The Progressive Direct Group of Insurance Companies Launches A Research Program to Gather Driving Habit Data That Could Revolutionize How Policies are Priced

MAYFIELD VILLAGE, Ohio – August 29, 2005 – For as long as anyone can remember, car insurance policies have been priced in the same way, using information about you, your driving history and your vehicle�s make and model. And, why not? After all, this information helps auto insurance companies better understand your risk of being involved in an accident, it’s able to be gathered and it�s generally able to be verified.

But, what if there is information about how you drive that is far more predictive of your risk of being involved in a crash? For example, would knowing about the trips you take each day, or just the trips you take on Monday, help insurance companies price your policy more accurately? What about the amount of time you spend driving at highway speeds vs. slower? Does it matter that you drive short distances quickly or that you drive long distances more slowly? Or that you get up to the speed limit very quickly vs. gradually? Does it matter that you brake hard?

The reality is that, today, no one knows because no one has ever gathered this information before. That�s why Progressive Direct is taking what it believes to be the next big step in the evolution of auto insurance pricing by inviting its customers throughout the country to participate in a voluntary research program that will gather driving habit information. Customers who choose to participate will install in their car a small device called a TripSensorTM that will record information about how often, how fast and when their vehicle is driven, along with information about acceleration and braking.

Using the information collected by the TripSensor, Progressive Direct expects to find data that will help it to continue to advance the science of auto insurance pricing.

For helping with its product research and development efforts, Progressive will reimburse customers $50 for six months of data from each car in the program. Customers may install a device in as many cars as are insured with Progressive Direct and may sign up for multiple six-month terms. Progressive Direct�s goal is to collect a substantial amount of information from a representative sample of U.S. drivers in the next couple of years. All driving information is shared voluntarily with Progressive and will not affect the cost of the customer�s current auto insurance policy.

�Today, auto insurance pricing is all about using data about you and people like you to determine a price that will cover the cost of the risk you present,� said Dave Huber, product development manager, Progressive Direct. �We�ve been constrained in the types of data we can use because it�s the only information we could gather. We�re breaking through that barrier and using technology to gather different data to see what it tells us.�

This research program is the latest in Progressive Direct�s product research and development efforts and uses technology currently deployed in a usage-based auto insurance discount pilot program underway in Minnesota. Called TripSenseSM , drivers in the program are eligible for a discount on their renewal policy if they choose to send their driving data to Progressive.

�We are continuously looking for ways to make car insurance more competitively priced and easier to use,� said Huber. �We believe that if we could know more about how you drive, we could charge you a rate that more accurately reflects your driving characteristics and, therefore, your insurance needs.�

For more information about the research project or to sign up to participate go to http://gettripsense.progressive.com.

The Progressive Group of Insurance Companies, in business since 1937, ranks third in the nation for auto insurance based on premiums written and provides drivers with competitive rates and 24/7 in-person and online service. The products and services of the Progressive Direct Group of Insurance Companies are marketed directly to consumers by phone at 1-800-PROGRESSIVE and online at progressive.com through the Progressive DirectSM brand. Progressive Direct offers consumers conveniences that help make car insurance easier, including comparison rates of other top companies and the ability to shop for, buy and manage their policies by phone or online, 24/7. The Common Shares of The Progressive Corporation, the holding company, are publicly traded at NYSE:PGR. progressive.com