Itlscm Gurjeet Bhatia - Indore

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    Creating Value via Mobile Field Service

    Faculty : Prof. Ashis K. Pani

    Name : Gurjit Bhatia

    SMS ID : 101903

    Batch : PGCLSCM-3

    Centre : Indore (M.P.)


    e-Business Strategy in ProgressiveInsurance

    Creating Value via Mobile Field Service


    It is no secret that in every industry, consumer expectations are climbing. To meet these

    increased demands, companies need to run their business operations more efficiently. The

    current field service processes are loosing their ability to deliver first-rate customer

    service. To solve this problem, companies are beginning to invest in mobile field service

    processes that can serve customers faster and make it easier for customers to do business

    with them.

    Progressive Insurance is widely considered a best-practice company in customer Service. For some time, the company has been relentlessly executing against the focal Point of being Easy To Do Business With. In order to live up to this reputation, Progressive is an early adopter of and heavy investor in technology.


    Mobile Technology, Claims, Insurance, Customer satisfaction, Customer service



    Founded in 1937, The Progressive Corporation is the fourth-largest auto insurance company in the United States, with more than 8 million customers. The Progressive Corporation acts as an insurance holding company for 69 subsidiaries, one mutual insurance company affiliate, and one reciprocal insurance company affiliate. The company's subsidiaries and affiliates sell personal automobile insurance and other specialty property-casualty insurance and related services. (Property-casualty insurance protects customers from costs incurred from collisions and physical damage to their motor vehicles and from liability to others for personal injury or property damages from using others vehicles.) DESCRIPTION OF BUISNESS

    Personal Lines This segment writes insurance for private passenger automobiles, as well as recreational and other vehicles. Private passenger automobile insurance comprises preferred, standard, and nonstandard automobile risks. The first two account for about 80% of the U.S. personal automobile insurance market, while the third accounts for the remaining 20%. Progressive actively participates in the market for each of these risks, with the objective of offering a competitive rate for all risks. In addition to automobiles, Progressive also offers specialized personal line products for motorcycles, recreational vehicles, mobile homes, watercraft, snowmobiles, and similar items. Other Businesses The company's other lines of business include the commercial vehicle business unit, lenders' collateral protection group (LCPG), professional liability group (PLG), and motor carrier business unit. These businesses collectively contributed approximately 12% of 2002 revenues.


    Distribution Channels Progressive either directly writes the personal lines insurance itself or indirectly sells policies by an agent or broker. The companys agent channel spans a network of more than 30,000 independent U.S. insurance agencies, as well as insurance brokers in several states and other strategic alliances. Progressive also uses its agent channel to form alliances with other insurance companies, financial institutions, employers and national brokerage agencies. Direct business includes business written through 1-800-PROGRESSIVE, the company Web site, and on behalf of affinity groups. Progressives strategy is to become the low- cost provider of a full line of auto insurance products and related services, distributed through whichever channel the customer prefers. Progressives Focal Point Becoming Easy To Do Business With Always an innovative insurer, Progressive wanted to make it easy for average people to protect one of their most important investments their vehicles. Progressive was the first to allow customers to pay their premiums in installments an option that appealed to workers who could not afford annual premiums. ADVANCEMENTS OF COMPUTING ENVIRONMENT (ICT use) The company set a new standard for customer service in 1990 when it introduced, in combination with a full range of personal auto insurance products, the Immediate Response claims service, which is available 24 hours a day, 7 days a week. Help was just a phone call away, any time of the day or night. Progressives claims representatives, traveling in Immediate Response Vehicles (introduced in 1994), could even come right to the scene of an accident.

    The year 1992 brought 1-800-AUTOPRO, a cutting-edge auto insurance rate comparison shopping service. No longer would customers have to spend endless amounts of time

  • GURJEET BHATIA-INDORE Calling around to compare auto insurance rates. One phone call to AUTO PRO would give customers a Progressive quote and comparison rates for up to three competitors. If the customer was satisfied with the Progressive quote; he could buy the policy directly on the phone or locally through an independent agent. In 1995, the company stepped into the future with the launch of its Web site and became one of the first major auto insurance companies to establish a presence on the Web. By 1997, Progressive was offering real-time online sales of auto insurance to its customers. Taking this one step further, Progressive made it possible for customers to manage their policies online by making payments and changing coverage. In 2000, the company introduced its customers to an easier way to get their cars fixed after an accident. The aim of this new service is to lower the customers anxiety level, which is invariably at its highest after the persons car is damaged. Customers can now bring their vehicles to Progressives new claims centers directly following an accident and pick up a rental vehicle. Progressive will prepare the estimate, choose a qualified repair shop, and inspect the vehicle after the repairs are done. This service has reformed the vehicle repair process, raised consumer satisfaction, increased company productivity, and improved the cycle time and the quality of repairs. MOTIVATING FACTORS

    WHAT CHANGED? Initially slow to change, the decades-old auto insurance industry is finally beginning to adopt new technologies, namely wireless applications. Onboard and mobile technologies create a tremendous amount of possibilities that can benefit insurers and customers alike. In addition, the relative cost of this technology is becoming more affordable and, as a result, more companies are able to effectively utilize it. Claims processing, field force

  • GURJEET BHATIA-INDORE automation and policy pricing are just a few of the areas that can directly and quickly benefit from the integration and use of wireless applications. PROBLEM STATEMENT According to the Insurance Information Institute, insurers spend approximately $180 billion in claims payments each year. For every dollar spent on auto insurance, roughly 34% goes to claims processing and other claims-related costs (see Figure ). While many Auto insurers have focused on reducing payments for injuries, damage, and operational expenses, very few have found successful solutions for driving down the costs of claims and claims processing. $.34 Claims & Claims-Related Expenses $.24 $.50 Payments for operational Injuries and Expenses Damage

    Total = $1.08* *Includes interest, dividends,

    and realized capital gains.

    Figure: Dollar Cost Breakdown in the Insurance Industry