Rewriting The Rules Of The Road

It's a steamy morning rush-hour in Queens, N.Y. Tempers are flaring, and Joseph Castillo is looking for trouble. That's his job. When there's a crash, he heads for the site--fast. In fact, Castillo, a claims adjuster for insurer Progressive Corp., often gets there before the police, before a wrecker tows the cars, and before cell phone-equipped drivers call their lawyers.

The insurance industry probably doesn't leap to mind when you think of Web-smart companies. But thanks to the triple-tech punch of satellites, software, and the Internet, 63-year-old Progressive is rewriting the insurance industry's rules of the road. Progressive keeps agents like Castillo on the streets with cell phones, wireless, Web-linked laptops, ready to deliver on-site counseling, crash-to-cash service, and towing help. The best part? Progressive provides it all in about the time most rivals take to investigate an accident. "We don't sell insurance anymore," quips CEO Peter Lewis. "We sell speed."

In the Net economy, fast can mean frugal. Using digital cameras and wireless Net links, Progressive field reps can analyze damage, tap into client files, check replacement values on the Web sites of service shops--and hand out claims payments on the spot, sometimes within 20 minutes. And what a payoff: Progressive's revenues have grown from $3.4 billion in 1996, the year before its Net initiative took off, to $6.1 billion last year--an average of 21.6% annually vs. 3.3% for the U.S. auto insurance industry as a whole. Progressive is now the No. 4 auto insurer in the U.S., up from No. 6 four years ago. Progressive is using "technology to reinvent itself," says David Bovet, vice president at Mercer Management Consulting.

Progressive has been a Web believer for years. In 1995, it was the first insurer to go online. Two years later, it became the first to sell over the Web. Now, it's introducing a policy that uses the Net and satellite devices to record how much a car is driven, then bills drivers for actual usage. Can Progressive keep revving it up? If the company's speed mantra is any indication, you can bet on it.