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.
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