Progressive announced Monday it has been issued a fourth patent for
its usage-based car insurance program, Snapshot, which electronically
tracks driving behavior and offers policyholders an opportunity to earn
discounts by showing safe habits and low mileage.
The
insurer said in a news release that the latest patent “relates, in
part, to producing a driver safety score based on monitored driving
data.”
The voluntary Snapshot program, which officials say is used by
250,000 Progressive customers in 39 states and the District of
Columbia—making it far larger than similar programs offered by other
coverage providers—relies on data that is collected by a device inserted
into the diagnostic port of an insured vehicle and relayed to the
company.
Policyholders can earn savings of as much as 30 percent if the
feedback shows they log relatively few miles and operate the vehicle
safely when it comes to factors such as acceleration and braking.
“For more than 15 years we have invested a great deal into the
research, development, testing and piloting of usage-based insurance
programs and will continue to do so,” Glenn Renwick, Progressive’s
president and chief executive officer, said in a news release. “It’s
gratifying to know that the U.S. Patent (and Trademark, or USPTO) office
recognizes the uniqueness of our system technologies.”
The USPTO confirmed on its website that the patent had been issued on Jan. 3.
Industry insiders credit the Ohio-based insurer with leading the way
on usage-based vehicle coverage programs that electronically monitor how
insured vehicles are driven. The programs provide insurers with data
that is more reliable than information such as a driver’s mileage
estimates or publicly available data on policyholders.
Experts call the programs a win-win for both insurers and their
customers. The data allows coverage providers to calculate risk and
price coverage more accurately, and discount car insurance is awarded to drivers who are shown to be safe behind the wheel.
“Progressive has been an industry pioneer,” a recent report by information technology consulting firm Celent states.
Progressive Holds Important ‘Pay as You Drive’ Patents
According to a report from the Brookings Institution, Progressive has
“aggressively sought” telematics-related patents since the late 1990s.
The title “pay as you drive” is itself registered to Progressive.
The authors of the Brookings Institution report–which was published
in 2008, before many of the country’s major insurers began launching
their own usage-based programs–wrote that Progressive’s patent
collection could end up being a barrier to implementation of similar
programs by smaller insurers, who may be concerned about sparking
infringement suits.
They went on to say, though, that Progressive has expressed a
willingness to license pay as you drive and that “there is legitimate
question about the extent to which Progressive’s patents would be upheld
in a patent-infringement suit.”
Celent Predicts Further Growth of Telematics Programs
The Celent report predicts that programs such as Snapshot will grow
significantly in the future, drawing both forward-thinking insurers and
motorists seeking more affordable rates.
According to Celent, 55 percent of the top 20 property and casualty
insurers in the United States now offer such programs, along with 50
percent of those in the United Kingdom. The report’s author says lower
manufacturing costs and other factors are making the programs more
cost-effective for companies.
Snapshot allows participants to track their progress and eligibility
for discounts by visiting Progressive’s website. A policyholder’s
eligibility for savings is determined after the first month of his or
her participation in the program, and the electronic device remains
installed in the vehicle until the end of the six-month policy term in
order to determine a renewal discount.
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