Case Interview Questions #00114: Your client Progressive Corporation (NYSE: PGR), also known as Progressive Casualty Insurance Company through its subsidiaries, is a major insurance company that provides personal automobile insurance, and other specialty property-casualty insurance and related services in the United States.
Progressive has just learned that its major competitor GEICO has announced the initial roll-out of a new program in Texas. GEICO calls the new program “Pay as You Go” in which a GPS tracking device is installed in each insured car as part of the program, and reports the location of the insured vehicle on a minute-by-minute basis and records the miles traveled. Progressive wants to know whether it should respond and how.
- The client company Progressive is unremarkable in the industry, on par with the top five players (GEICO, State Farm, Allstate, Progressive, Nationwide Insurance).
- No particular competitive advantage exists. The auto insurance industry is rather commoditized.
- There is heavy price competition within the industry, and the industry is highly regulated.
The interviewee may focus on the following issues raised by this fact situation: