Car Insurance

MAYFIELD VILLAGE, Ohio — The nation’s third largest auto insurance group, The Progressive Group of Insurance Companies, today announced its Web site - progressive.com - has been named number one by Keynote([R]) Systems (NASDAQ:KEYN) on the WebExcellence Q2 2007 Insurance Carrier Scorecard. Keynote Systems, The Mobile & Internet Performance Authority([R]), compares the best practices of leading auto insurance Web sites.

Progressive has taken top honors in 11 out of 12 Scorecard rankings (previously Watchfire([R]) GomezPro Scorecard) published since 2000.

“We’re thrilled to once again be recognized by Keynote as the Internet leader in the insurance industry,” said Toby Alfred, general manager, customer experience, Progressive. “Earning the top spot on the Scorecard in an increasingly competitive marketplace reinforces we’re doing the right things at progressive.com.”

The WebExcellence Insurance Carrier Scorecard compared the online offerings of 14 insurance carriers against industry best practices. Based on its evaluation of Progressive’s online offering, Keynote named Progressive #1 in all four category rankings–Functionality, Ease of Use, Privacy and Security, and Quality and Availability - and #1 in three of five task rankings–Get Insurance, Get Service, and Learn and Plan.

In analyzing Progressive’s continued strong performance on the Scorecard, the Keynote study cited many site improvements since the previous Scorecard, from an improved quote process to an “impressively functional Spanish-language site, www.progressiveseguros.com”. Online claims reporting and tracking, text messaging alerts, and expanded billing options also held Progressive out from the rest of the pack.

“The Keynote study proves that the sites that stand out are the ones that continuously innovate in order to make the online experience easier and more information-rich to site visitors,” said Alfred. “When we’re reviewing our site, we always put ourselves in our visitors’ shoes and ask ‘what would we like to be able to do, see, and find out?’ Receiving this top ranking tells us we continue to answer those questions correctly.”

Progressive was the first major car insurer in the world to introduce a Web site (1995), first to sell auto policies real-time online (1997) and first to give its customers online access and control of their policies via a customer service site (1998). In 2006, Progressive launched an interactive online claims reporting tool that allows customers to report a claim and track its status from start to finish; this functionality is now available countrywide.

Progressive.com also features the first-ever auto insurance “Rate Ticker,” showing Progressive rates side-by-side with those of other top insurers in real-time. The site also uses “Talk to Me” Voice Over Internet Protocol technology, allowing online shoppers to speak with a licensed sales representative immediately, over the Internet, with a click of the mouse.

About Progressive

The Progressive Group of Insurance Companies, now celebrating its 70th year in business, is the country’s third largest auto insurance group and largest seller of motorcycle and personal watercraft policies based on premiums written, and is a market leader in commercial auto insurance.

Progressive is committed to becoming consumers’ #1 choice for auto insurance by providing competitive products and rates that meet drivers’ needs throughout their lifetimes, superior online and in-person customer service, and best-in-class, 24-hour claims service, including its concierge level of claims service available at service centers throughout the United States.

Progressive companies offer consumers choices in how to shop for, buy and manage their auto insurance policies. The Agency Business sells Progressive Drive Insurance private passenger auto insurance through more than 30,000 independent agencies. To find an agent, go to www.driveinsurance.com. The Direct Business sells Progressive Direct([R]) private passenger auto insurance online at www.progressive.com and by phone at 1-800-PROGRESSIVE. Both businesses offer Progressive’s other insurance products, including Progressive Commercial, Progressive Motorcycle, Progressive Boat, etc. Each business makes independent decisions about private passenger car insurance product design and pricing. Progressive and Drive are registered trademarks.

It was a banner day for the city’s economic development community. On April 2, 2004, Progressive Insurance broke ground on a consolidated sales and customer service call center that will double its current square footage. After more than a year in negotiations and planning, the Ohio-based auto insurer announced that it will open its new Voyager Parkway facility in early 2004, and expects to double its workforce to as many as 1,700 employees in the next few years.

The local ceremony kicked off the construction phase of a new 300,000-square-foot facility off Voyager Parkway, at Sybilla Road. Company officials were joined by subcontractors who have already been finalizing the land plan and design features for the structure.

The 31-acre site was purchased for $4.8 million. Local NAI Highland Commercial brokers Randy Dowis and Michael Palmer were selected to serve as members of the brokerage team. Dowis estimates building construction will run at least $60 million, plus land costs.

Group president of sales and service for Progressive, Richard Watts, said the Colorado Springs facility, which combines operations currently housed at 2075 Research Parkway and at 1110 Chapel Hills Drive, will open in early 2004. Progressive, whose companies comprise the country’s third largest auto insurance group, has had employees in Colorado for almost 20 years. The firm has grown exponentially, primarily through use of 1-800-PROGRESSIVE and online marketing programs - as well as through affiliation with more than 30,000 independent agents throughout the country. According to Watts, Progressive has experienced double-digit growth for nine of the last ten years.

He praised the EDC for providing the data and workforce information vital to a prospective employer and the city’s economic development and fast-track approval teams. “Other cities along the Front Range could learn much from the way Gary Cuddeback and Mike Masciola understand and streamline the process,” Watts added.

That point was seconded by Phillip McCurdy, vice president, Gensler/Denver, the project’s architect and interior space designer and by Doug McKinnon, vice president, Hines - an international real estate firm that handles all Progressive’s development and acquisition projects. “We can’t say enough about the responsiveness of the City of Colorado Springs to our requests and questions,” he said.

Of Gensler’s role in designing the new facility, just north of the new Compassion International campus, McCurdy also noted that Progressive had challenged his firm to use the extraordinary site to create a great workplace while being good neighbors for the adjacent residential neighborhoods. He also pointed out that the project’s land plan included a three-story building, only one story of which will rise above ground when viewed by nearby homeowners.

In his remarks, Watts also commented that the spacious new campus would not only ensure the firm’s ability to grow and service customers through the consolidation of its call centers but will “provide a great place for our area employees to work.”

As the operator of two other major call centers, Progressive Insurance has developed a reputation for employee-focused work environments. The Colorado Springs campus, for example, will include a number of amenities including a cafeteria, a primary care center, a fitness center, a wellness program featuring a variety of health screenings and educational opportunities and an employee assistance program providing counseling services to Progressive people and their families.

According to company officials, the direct sales center is one of six Progressive operates throughout the country. The Colorado Springs location sells auto, motorcycle, boat, all-terrain vehicle (ATV), recreation vehicle and personal watercraft insurance policies to consumers in 26 states. In addition, the firm’s call center is one of five the company operates throughout the U.S. It offers in-person customer service to customers and independent agents in 12 states on a 24/7 basis.

But a second, equally-significant story was that the Pikes Peak region’s first significant new ground-breaking and corporate expansion in over a year signals the possibility of brighter economic days ahead.

“Today we celebrate as Colorado Springs turns an important corner in a slow economy,” said Mayor Mary Lou Makepeace. “We look forward to growing together as a community with Progressive.” Makepeace noted that statistically, in addition to 1,700 primary jobs created by the employer, another 1,300 secondary jobs will likely be generated - bolstering the local job market.

More than fifty attendees including City Manager Lorne Kramer, Deputy City Manager Dave Nickerson, county commissioners Chuck Brown and Wayne Williams, new city councilman Jerry Heimlicher, EDC president Rocky Scott, and Gary Cuddeback, director of the city’s economic development department, headlined the list of local dignitaries attending.

Filippo Pola, president, and Steve Sharkey, vice president, of Picolan, Inc. were among the local business citizens who turned out to mark the occasion. As developers they have welcomed several major organizations to the 1200-acre Northgate Corporate Campus over the past two years.

“We closed with Progressive on April 1, 2003,” Sharkey said, “representing the culmination of more than a year of work and negotiation. Obviously, we are pleased that they [Progressive Insurance] chose our site over a number of other fine options.” He also pointed out that Progressive Insurance rounds out a number of major organizations including Oracle, FedEx, and Compassion International that have located on the city’s north side. “Progressive brings a financial services element to Northgate that we haven’t had.”

“This step is a sign of confidence in the area,” said Rocky Scott of Progressive’s decision to expand its presence in the Pikes Peak region. “We intend to help make them as successful as they can be.”

Kidnap and ransom, products recall and environmental exposures

This column is a continuation of September’s column about “unlikely” losses. In this one we’ll discuss three other coverages that are seldom talked about with clients, much less sold to policyholders. However, these exposures do exist. This will give you an opportunity to discuss these coverages with your clients. We continue to emphasize that it is better to discuss coverage that the insured may decline than say nothing and then have the client suffer an uninsured loss.

Kidnap and ransom

More than 20 years ago I worked with an insurance agency on a claim. It took place in a town of about 40,000 people. The following details are altered somewhat.

One Friday afternoon, just prior to quitting time, a business owner received a phone call. A voice said, “I have your wife and children. For $500,000 you can have them back.”

Many thoughts raced through the man’s head. “Is my family okay? Who has them? I cannot call the police. If I give them the money will they return my family? Where is my family being held? Who would do this?”

After thinking many, highly-emotionally charged thoughts, he began to consider more practical things, such as “Where am I going to get $500,000 in less than 48 hours?”

The business owner did not have that much ready cash. In fact, his business would not be able to borrow that much money, and he could not borrow that amount of cash in his own name. Even if he could borrow that much money, it could not be done in 48 hours. Adding to the normal problems associated with raising large amounts of money was the fact that it was a weekend. Even though banks function on Saturdays, typically their large commercial loan departments don’t. And, many banks are not open on Sundays.

Besides the issue of raising the money, the business owner had no experience in dealing with kidnappers.

This business owner was very lucky. He had purchased kidnap and ransom insurance. The insurance company was used to dealing with this type of a situation. It provided the necessary expertise to deal with the kidnappers. Besides that, they furnished the $500,000. The claim department of the kidnap and ransom insurance company functioned 24 hours per day, seven days per week. They were ready to act on a moment’s notice. They have to be ready to operate at any time. It is highly unlikely that kidnappers are going to operate during normal business hours.

We will share no other details, other than to say that with the aid of the insurance company, the family was returned unharmed.

Products recall

The following loss occurred during the 1970s in a large metropolitan area. A friend of mine was the risk manager for a large manufacturing firm where the loss occurred. This firm produces many products, one of which is so common that I suspect every reader has used it at one time or another. However, that is not the product that caused the loss.

The company also manufactured and sold smoke detector units. Because they were a household commodity, these smoke detectors were sold by many types of stores: hardware stores to discount stores, on a countrywide basis.

The company had been selling the smoke detectors successfully for many years and was unaware of any problems with them. Then, the government informed the company that all of their smoke detectors were defective. They would have to recall and replace all of them.

To comply with the government order, they had to advertise to tell people to return their smoke detector(s) to the store where they bought it. They would be given a new smoke detector to replace the old one. To give reasonable coverage to the entire country, they advertised the recall in major newspapers in every area of the country.

In addition, they sent letters to every buyer who had sent in a guarantee card.

The manufacturing firm incurred a lot of expense. The cost of the new machines to replace the defective ones was the smallest one. This author’s memory is that the smoke detectors cost about $.50 each to manufacture.

Running the advertisements was the highest cost. Full-page ads are expensive. Each ad was run several times.

This firm got an above-average return on its recall request. About 20% of the smoke detectors were turned in for replacement. Typical recalls result in about 2% of defective items being returned.

Products recall insurance covered the recall expenses incurred by the manufacturing firm.

We certainly cannot predict what any insurance company would charge for products recall insurance. You might have to go to the specialty market to find this coverage. When I was last handling products recall insurance, it was relatively easy to write. A large, old, mainline insurance company provided the coverage for a premium of 20% of the product’s liability premium for the insured.

Pollution

The following is about an account for which I did consulting work many years ago. The description of the operations is essentially true. The loss is fictitious, but plausible.

We’ll call the company Painting, Inc. Its business was painting motorcycle fenders and gas tanks. It occupied its own 100,000 square-foot building, doing customized trim work. It painted the tanks and fenders in unusual colors and did pin striping also. When completed, the fenders and gas tanks would become part of motorcycles in the $25,000 price range.

This firm spray-painted continuously during the time that it was operating, using a state-of-the– art spraying booth. Air was drawn into the booth from the top. The air exited through the bottom. On its way out, the air passed through a water bath. This water bath was about three feet deep and the size of a swimming pool. Because the paint particles were captured by the water bath, only clean air came out of the booth. Thus, the air from the spray booth did not contaminate the outside air.

Eventually, the paint particles would sink to the bottom of the water bath, which periodically would be cleaned to get rid of the accumulated paint particles.

A licensed hazardous waste disposal firm would pick up the water with the paint in it and dispose of it at an approved waste disposal site.

The commercial lot next to Painting, Inc., was undeveloped. A firm decided to purchase the lot with the intention of constructing a new manufacturing facility. Prior to buying it, the firm had the ground tested to be sure that there were no old environmental problems to contend with. The environmental tests revealed a pollution problem at the site. Further checking showed that the polluting material was coming from Painting’s plant.

A government agency became involved. Painting had to pay for the removal of the contaminated soil from the lot next door. They also had to pay for the removal of contaminated soil on their own lot.

Painting determined that the source of the pollution was a leak in one of their water bath holding tanks. Some cement at the bottom of the vessel had cracked, letting out the contaminated water.

One of the most expensive parts of the situation was that part of the building had to be torn out so that they could get at the leaky water bath and remove contaminated soil from the tank to the exterior of the building.

There were several components to Painting’s loss. Coverage for removing the contaminated soil from the neighboring property would most likely be covered by environmental impairment liability. Removal of contaminated soil from Painting’s lot might be covered by pollution remediation coverage.

Environmental insurance seems to have its own language. Two environmental insurers might use entirely different names for identical coverages. With one insurer, a given coverage feature will be included in its main insurance form. Another environmental insurer will provide identical coverage by using an endorsement.

When working with environmental insurers, do not assume that you know the coverage based upon the name on a given form. To be sure of your coverages, you will need to look at their specimen policies to be sure proper insurance will be provided.

NEW YORK — Automotive Web sites often are thought of as a man’s domain, but women are the majority to several sites delivering information about automotive finance, registration and vehicle insurance.

According to Hitwise, the world’s leading online competitive intelligence service, women comprised 40 percent of visits to automotive Web sites for the four weeks ending March 19, 2005. While they are slightly underrepresented in the overall auto category, women are far more likely to visit sites like AmeriCredit (www.americredit.com), AAA (www.aaa.com), NASCAR Store (store.nascar.com), Department of Motor Vehicles Guide (www.dmv.org), and Esurance (www.esurance.com).

In contrast to women’s preferences, men are more likely to visit online auctions, forums and enthusiast groups. For the four weeks ending March 19, 2005, men comprised more than 70 percent of visitors to three major auto auction sites: Manheim Online (www.manheim.com), Insurance Auto Auctions (www.iaai-bid.com), and Copart Salvage Auto Auctions (www.copart.com). Males comprised 63 percent of the audience to eBay’s auto-auction site.

Also claiming a large share of male visitors were Honda-tech.com, a technical forum for Honda and Acura, and VW Vortex (www.vwvortex.com), a Volkswagen enthusiast site.

“The higher tendency of men to seek out car sites geared to knowledgeable enthusiasts would be expected, however the fact that women are comprising the clear majority to many other major auto segments is a valuable insight,” said Bill Tancer, vice president of research, Hitwise. “Marketers must take note of these nuances, and adapt their products and messaging accordingly.”

Women Attracted to Web Sites of Practical Car Brands

When it comes to auto manufacturers, women comprise the majority of visitors to the sites of Saturn (www.saturn.com), Hyundai (www.hyundai-motors.com) and Kia (www.kia.com). Conversely, men comprise a majority of visitors to sites of luxury brands: Ferrari (www.ferrariworld.com), Land Rover (www.landroverusa.com), Porsche (www.us.porsche.com), BMW (www.bmwusa.com), and Jaguar (www.jaguarusa.com). The one exception to this division is the BMW Mini (www.mini.com), whose audience is mostly women.

———————————————————————-
Top 5 Automotive & Manufacturers Web Sites* with the highest
proportion of Males and Females
Period - 4 Weeks Ending March 19, 2005

———————————————————————-
MALE
———————————————————————-
Auto Manufacturer Male
Automotive Sites Male Visitors Sites Visitors
———————————————————————-
www.manheim.com 75.90% www.ferrariworld.com 72.78%
———————————————————————-
www.iaai-bid.com 73.80% www.landroverusa.com 67.47%
———————————————————————-
www.honda-tech.com 73.65% www.us.porsche.com 66.75%
———————————————————————-
www.VWvortex.com 72.44% www.bmwusa.com 64.26%
———————————————————————-
www.copart.com 70.38% www.jaguarusa.com 61.44%
———————————————————————-
FEMALE
———————————————————————-
Auto Manufacturer Female
Overall Automotive Sites Female Visitors Sites Visitors
———————————————————————-
www.americredit.com 60.94% www.mini.com 57.48%
———————————————————————-
www.aaa.com 57.21% www.saturn.com 53.13%
———————————————————————-
www.hyundai-
store.nascar.com 56.24% motor.com 52.59%
———————————————————————-
www.dmv.org 56.23% www.kia.com 51.09%
———————————————————————-
www.mercedes-
www.esurance.com 53.99% benz.com 49.66%
———————————————————————-

Hitwise is the world’s leading online competitive intelligence service. Each day, Hitwise monitors how more than 25 million Internet users interact with over 500,000 Web sites across 160 industry categories.

By monitoring more people, more Web sites, more often, Hitwise provides marketers with timely and actionable marketing insights on how their online presence compares to competitive Web sites. Companies use this information to maximize the return on their online investment, in efforts such as search marketing, affiliate programs, online advertising, visitor segmentation, content development and lead generation.

Hitwise collects Internet usage information via a combination of ISP data partnerships and opt-in mega panels, and complies with local and international privacy legislation as audited by PricewaterhouseCoopers. Founded in 1997, Hitwise is a privately held company, headquartered in New York City and operates in the US, UK, Australia, New Zealand, Hong Kong and Singapore.

SCOTTSDALE, Ariz. — Integral to the National Motorcycle Dealers Association’s (NMDA) successful implementation of rental program services has been the development of our proprietary software suite, Road Master(C). The blue chip participation of a soon to be announced leading insurer backing the NMDA’s rental insurance program was dependent on the successful development of this cutting edge management software program. A mandatory software for all NMDA rental operators, Road Master(C) facilitates the rental process from beginning to end. Through its use, dealers will maintain an interactive and secure database tracking all inventory, fleet scheduling & maintenance, customer transactions, insurance & identification records and compliance with NMDA guidelines to document all bikes under contract, including the processing of any subsequent claims. Road Master(C) serves as each rental operator’s internet portal to the NMDA.

The developer of Road Master(C) is Wildside Motorcycles, Inc. This sophisticated software is the operational foundation of the NMDA’s goal of building a world class motorcycle rental services program and was a requirement for securing the high level participation of a major insurance partner. NMDA has entered into a partnership with Wildside which will be a minority 20% owner of the NMDA. MBAH retains 80% ownership of the NMDA with no plans for granting any additional ownership stake in the association. MBAH will be the sole recipient of NMDA account receivables and shall be wholly responsible for disbursing to Wildside their share of NMDA revenues strictly on a net profit basis. NMDA now owns 20% of Wildside and will be entitled to 20% of the net proceeds disbursed to Wildside. This formula allocates 84% of the NMDA’s net profits to MBAH. No share warrants or cash payments have been issued under the terms of the partnership agreement. Revenues generated by MBAH’s auto and recreational vehicle divisions and any income not under the purview of the NMDA will still accrue 100% to MBAH. We look forward to the benefits our partnership will provide both for the ongoing success of the NMDA and the prospects this dedicated developer relationship may generate for further insurance industry software products. The participation of Wildside has been fundamental to our goal of establishing a uniform professional standard of operations for the motorcycle dealer and rental business.

Recruitment of participants in the motorcycle rental program is proceeding at a rapid pace. There are already twenty applicants for the NMDA’s motorcycle rental program currently being processed. Our marketing team is closing deals for the rental program each week, with seven new deals initiated just this past Friday alone. These new rental operator applicants are situated in a wide range of states, including Texas, Hawaii, California, Utah, Alabama and Florida. Upon successful completion of the rental program agreement, these rental operators will be obligated to join the NMDA. A rigorous training program for our rental operators is in place and will cover all aspects of the rental business, including complete training in their use of the Road Master(C) software program.

Upon enrollment in the current rental program, this important revenue stream for the NMDA will commence. Due to the scarcity of viable sources of insurance providers dedicated to serving the motorcycle rental business, the NMDA is now well positioned to capitalize on one of the most compelling growth opportunities to be found in the motorsports insurance industry today. The comprehensive package of services we now offer to existing and potential motorcycle rental operators establishes the NMDA as the sole full service organization available to those rental operators intent on gaining a competitive edge in the marketplace.

With the positive response of dealers to the NMDA and the present and imminent participation of major partners, MBAH management is now confident the pending value of the company requires greater prudence in the issuance of its shares to protect the future valuation of MBAH stock for both the company and its shareholders.

NMDA program partnerships with major finance and insurance companies will be disclosed imminently and in the weeks ahead.