Basing Auto Insurance on Exact Odometer Readings: Another Pricing Innovation From Progressive Direct.

DES MOINES, Iowa -- (NYSE:PGR)

The Progressive Direct Group of Insurance Companies Continues to Advance the Science of Auto Insurance Pricing; Announces Driving Discount Program in Iowa

Many auto insurance companies ask customers to estimate their annual mileage when applying for a new policy; these up-front estimates generally have a minimal influence on the overall premium. And, these companies don't ask for updated mileage readings over time. But what if your insurance company asked you to report exact mileage readings over time and, by doing so, you could control how much you pay for car insurance by controlling the number of miles you drive?

The Progressive Direct Group of Insurance Companies today announced a pilot program in Iowa that gives drivers the ability to do just this.

Progressive Direct has data that supports that there is a correlation between the number of miles customers drive and the likelihood of their being involved in a crash - if you drive less, your chances of being involved in an accident are lower. This information, when combined with other information used to price car insurance policies, could help advance the science of insurance pricing making rates even more accurate and tailored to individual drivers' behavior.

How the Pilot Program Works

Progressive Direct customers who volunteer to participate will be asked to periodically submit odometer readings on the insured vehicle(s) they sign up for the program. It's easy - customers simply log in to a password-protected Web site and enter their current odometer reading. Customers will report odometer readings when buying a policy and again at each renewal of the policy, or once every six months. Customers have the option of signing up all or just some of the vehicles on their policy.

What Discounts are Available

All customers will receive a five percent "participation" discount on a vehicle's total premium simply for signing up the vehicle(s); this discount will be applied to every renewal policy as long as they continue to report their odometer readings. They may also receive an additional mileage discount of up to 10 percent, depending upon the number of miles driven, which will be applied to future policy terms. In all, customers could receive as much as 15 percent off a vehicle's total premium for a six-month policy. With the average Iowa driver paying about $670 a year for auto insurance, that's a potential savings of about $100 a year.

"This pilot is a win-win for everyone - all drivers can reduce their insurance costs simply by participating and, if they drive less over time, can save even more. We also have the opportunity to gather mileage data, which will help us better understand the correlation between how much a person drives and how likely they are to get into an accident," said Ian Forrester, Iowa product manager, Progressive Direct. "We're always looking for ways to more accurately price auto insurance and this program is just another way to achieve this goal."

How to Sign Up

New Progressive Direct customers in Iowa may sign up for the odometer discount within 30 days of buying the new policy; existing customers may sign up at or within 30 days of renewal. After signing up, they'll immediately receive the five percent participation discount which will be applied during the current policy term; this participation discount will continue on every renewal as long as they submit one mileage reading per policy term. Then, depending upon the miles they drive during that current term, they will be eligible for the additional mileage discount which will be applied during the next renewal term. Customers can share mileage data for as many consecutive policy terms as they'd like during the length of the pilot program.

As with all of Progressive Direct's product research and development efforts, drivers have the choice of participating in the odometer pilot program. All customers who sign up will receive a five percent discount just by sharing their odometer readings and no one in the program will wind up paying more for their insurance than they currently do. For example, if you think you drive 10,000 miles a year and therefore would be eligible for a seven percent discount (five percent participation discount and an additional two percent for driving between 10,000 and 11,000 miles; see chart below), but you actually drive 20,000 miles, you will not be charged more for your insurance. Instead, you'll receive just the five percent participation discount but no mileage discount. Progressive will continue to offer its traditional auto insurance policies to customers who choose not to sign up for the pilot.

This pilot is the latest effort by Progressive Direct to gather data with the goal of better understanding the correlation between driving behaviors and the risk of being involved in accidents. The Company is currently testing a usage-based auto insurance discount pilot program in Minnesota called TripSense(SM), in which drivers voluntarily share driving data in exchange for receiving discounts on their renewal policy. The data is collected by a small device called a TripSensor(TM) that records information about how often, how fast and when their vehicle is driven, along with information about acceleration and braking. In addition, a countrywide driving habits research study is underway that uses the same technology to gather the same kind of driving data; customers are reimbursed $50 for voluntarily sharing six months of data from each car in the program.

The Progressive Group of Insurance Companies, in business since 1937, ranks third in the nation for auto insurance and number one for motorcycle insurance based on premiums written and provides drivers with competitive rates and 24/7 in-person and online service. The products and services of the Progressive Direct Group of Insurance Companies, which is the ninth largest auto insurance group in Iowa, are marketed directly to consumers under the Progressive Direct(SM) brand by phone at 1-800-PROGRESSIVE and online at www.progressivedirect.com and www.progressiveseguros.com, a site for Spanish-speaking consumers. Progressive Direct offers consumers conveniences that help make car insurance easier, including comparison rates of other top companies and the ability to shop for, buy and manage their policies by phone or online, 24/7. The Common Shares of the Progressive Corporation, the Mayfield Village, Ohio-based holding company, are publicly traded at NYSE:PGR. More information can be found at www.progressive.com.

Ian Forrester, Iowa product manager, Progressive Direct, is available for interview.

Available Discounts:
              Progressive Direct Odometer Discount Pilot
----------------------------------------------------------------------
Participation discount                  5 %
----------------------------------------------------------------------
              If you drive               You will save an additional
----------------------------------------------------------------------
Less than 3,000 miles per year          10 %
----------------------------------------------------------------------
Less than 4,000 but more than 2,999     9 %
----------------------------------------------------------------------
Less than 5,000 but more than 3,999     8 %
----------------------------------------------------------------------
Less than 6,000 but more than 4,999     7 %
----------------------------------------------------------------------
Less than 7,000 but more than 5,999     6 %
----------------------------------------------------------------------
Less than 8,000 but more than 6,999     5 %
----------------------------------------------------------------------
Less than 9,000 but more than 7,999     4 %
----------------------------------------------------------------------
Less than 10,000 but more than 8,999    3 %
----------------------------------------------------------------------
Less than 11,000 but more than 9,999    2 %
----------------------------------------------------------------------
Less than 12,000 but more than 10,999   1 %
----------------------------------------------------------------------