Bloomberg News

Progressive Agrees to License Use-Based Pricing Product to USAA

June 28, 2013

Progressive Corp (PGR:US), the fourth-largest U.S. auto insurer, agreed to license its usage-based pricing technology to United Services Automobile Association.

USAA would pay 0.02 percent of its annual direct written premiums on auto coverage, Mayfield Village, Ohio-based Progressive said today in a statement. USAA, which provides coverage to military members and their families, wrote more than $8 billion in 2012 auto premiums, according to data from the National Association of Insurance Commissioners.

“We’re offering an appropriate means for companies to lease our usage-based insurance,” Erin Hendrick, a Progressive spokeswoman, said in an interview. “We believe the industry can benefit from it.”

Progressive has patented a device that collects driving data and calculates coverage based on a motorist’s habits. The technology accounts for more than $1 billion in Progressive’s premiums, the insurer said.

“This licensing agreement allows us to determine if a comprehensive behavior-based insurance program will benefit our membership,” Rebecca Hirsch, a spokeswoman for San Antonio, Texas-based USAA, said in an e-mail.

USAA can begin using Progressive’s technology in April 2015, according to the statement.

To contact the reporter on this story: Megan Hickey in New York at mhickey18@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net


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Companies Mentioned

  • PGR
    (Progressive Corp/The)
    • $25.32 USD
    • -0.15
    • -0.59%
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