Progressive Insurance Drives Innovation with Customer-Focused Billing

When you work for a leading auto insurer that serves 10 million people across the United States, complexity comes with the territory. Progressive Insurance, which built its brand on giving customers more options, offers up to 10 different billing plans depending on the state. Consequently, as the company grew, the task of maintaining the technology to support all those billing options was growing increasingly challenging.

The old system had become unstable, and it was hampering the Mayfield Village, Ohio-based carrier’s ability to manage new rates, billing schedules, endorsements and collections across 50 states and the District of Columbia. Progressive, a pioneer at writing insurance over the Web, relies almost exclusively on its in-house IT organization for major technology initiatives. However, for the billing system, the company considered looking outside.

“We thought there was a good likelihood that there were solid billing software packages out there, and we evaluated a number of solutions on the market,” said Kimberly LaRicca, general manager of Billing in Progressive’s IT organization. “In the final round of evaluations, we determined that CSC’s software provided 80 percent of the business function we were looking for, which matched our requirements better than any of the other systems.”

Rolling Out Real-Time Capabilities

Progressive rolled out the new system for its personal auto business in 2004, followed by specialty lines in 2005 and commercial auto in 2006. In 2009, the company went into production with the Web-based version of the system, which features an open, service-oriented architecture. In order to support its operations, Progressive’s new billing system interfaced with approximately 150 related policy administration applications.

One of the immediate benefits of the new system was its ability to perform real-time transactions. “Real-time processing is very important,” LaRicca said. “The ability to provide accurate information and change the policy immediately is of primary importance to our customers.”

In addition, the new system interface proved to be easier to use for the 6,000 employees processing business with it. “This was a much simpler system to understand. It was very straightforward, so it ended up being easier for our users than the previous system,” she added. “Everyone likes the browser front end. Most of the people involved were primarily mainframe programmers. So this has been a new experience for them, but they found it to be easy to code and intuitive.”

Lowering Costs, Increasing Flexibility

The new software and CSC’s ongoing maintenance and enhancement program have also helped simplify the job of IT support. Over the past 5 years, the size of the team supporting the billing system has decreased from 150 to about 60 employees.

“The system has performed extremely well, and we’re spending much less time and resources on maintenance.”

The new system not only helped Progressive support 5 to 10 bill plans per state but also has given the company greater flexibility in allowing customers to customize payment schedules and take advantage of options for PAX mobile payments, penniless debit and PayPal transactions.

“We’re getting into a lot of methods of payment, along with very different types of scheduling payments,” LaRicca said. “Our retention data says that there are things that matter when it comes to billing for our customers.”

To fine-tune the system, Progressive participated in CSC’s Innovation Community program, which allows carriers to submit enhancements that can be included in the base software — and continually maintained by CSC. For example, among Progressive’s 51 enhancements to the system were features that automate the process of turning over unpaid, earned premiums to outside collection agencies as well as eliminating billing errors associated with third-party collections.

“We worked together on enhancements that were included in the CSC base system in various ways,” LaRicca said. “So, it was a very collaborative relationship.”

Positioned for the Future

Looking forward, Progressive is actively involved in CSC’s customer community, which helps guide the direction of both the features and underlying architecture of the software. This ongoing activity through advisory councils, users’ groups and operational boards has resulted in two recent advancements — a Java-based option and a Continuous Delivery process to accelerate release upgrades.

“These new developments are very exciting for us,” LaRicca said. “As part of the client community, I’ve met a lot of great people who are also in the insurance industry, and I’ve been able to network around solutions they have, why they chose them and what makes sense for them.”

In addition to the technology, LaRicca said she values the overall relationship with CSC. “What makes CSC such a good fit for us is that the people there are very accessible, and they have a great understanding of our business,” she said. “It’s a unique situation in that they really focus on insurance systems. So that requires them to be experts in the field, and that’s not always the case with technology solutions companies.”