According to the Wall Street Journal (WSJ), Progressive is now the No. 4 U.S. auto insurer, with a 7 percent market share, behind State Farm (18 percent), Allstate (10 percent) and GEICO (8 percent).
The company’s shares now trade around $16 – about 10 or 11 times estimated 2010 profits – and are predicted to hit $21 in the next year.
Progressive and GEICO have taken market share in the past five years and are viewed by many investors as the industry’s best-managed companies. However, they’re not viewed so well by collision repairers, ranking as some of the worst insurers to deal with. Of the top four insurers listed above, State Farm ranks the best with repairers, followed by GEICO, Allstate and Progressive (BodyShop Business Industry Profile, “How Shops Rate Insurers” May 2009).
According to WSJ, Progressive initially targeted drivers with a history of accidents and moving violations, a market many insurers stayed away from. It now is the forerunner in selling coverage directly to consumers. The direct-sales market, which makes up about 20 percent of total industry sales, is growing at the expense of insurance sold through agents.
Progressive’s concierge service has been well-received by customers, but panned by some repairers for removing the relationship between the body shop and the consumer as well as promoting sub-par repairs to the lowest bidder. Some repairers have even challenged that the concierge centers operate illegally because they’re not licensed as repair facilities yet perform teardowns and other repair-related activities.
Repairers also routinely complain about Progressive estimators’ lack of experience and knowledge of collision repair. Yet there are some shops that claim they work well with Progressive, do exclusive work repair for the insurer and actually use estimators’ lack of knowledge to their advantage.
WSJ commented that marketing and branding are paramount for a direct seller of insurance. It says that, for a long time, Progressive had a weaker advertising campaign than rival GEICO, whose TV commercials feature the popular gecko and cavemen. But Progressive finally fired back successfully with TV ads using Flo the Progressive Insurance Girl, described in the Houston Press as "babelicious" with "kissable red, red lips."
More information:
• Independent Auto Body Shops Sue Progressive
• Progressive Relationship Improving, Say Repairers at Midwest Collision Forum
