- Embeds data-driven thinking as a core part of its business strategy and decisions
- Reinforces data culture mindset from leadership through to all employees
- Leverages Tableau for actionable insights across products and customer experiences
Progressive Insurance is the third largest insurer in the United States, serving 18 million customers with personal and commercial products for cars, homes, motorcycles, RVs, and boats, in addition to life policies and other insurance needs. The company is always on the leading edge of technology—from launching the very first insurance website to pioneering apps for rating and managing policies. The company also leads the way in data culture. From the beginning, they’ve relied on data analytics to make customer decisions, and Tableau helps them be more progressive than ever.
“Air, water… data.” That's how Pawan Divakarla, a Data and Analytics leader at Progressive, describes how essential data is as an element at his company. We caught up with him to find out more about his philosophy on using data as a foundation for leadership and innovation, including why and how data is so key to the company’s success.
What are some of the biggest challenges you face in the insurance industry?
We have many of the same challenges as financial services, but we have a product that customers may not want to use. It's the opposite of a phone where you want to buy it and you want to use it, which creates an interesting lens to view data. Another challenge is there's much more data coming nowadays. We've grown our customer base over the last few years and they’re staying with us longer. So we have more logins, more bill pays, more of everything, which leads to the sheer volume of data that’s growing and we have to manage it all.
Progressive had data culture before it was a concept. Tell us about that.
Data is in our DNA and insurance is data-driven. We believe in facts and in understanding the world through the lens of data. In the 1980’s one of our founders coined the term ‘reverence for data’ because he believed our core values, people, and reverence for data were three foundational pillars to the business. We believe answers to customer problems and needs are in the data, from getting the best rate for the customer, to user experiences, to helping people settle claims. So data follows the insurance value chain in Progressive.
How is that reverence for data built into your business strategy?
We have a four-step flywheel of data. It starts with our reverence for data and revolves around finding the answer in the data. Second, we hire people who believe in that idea and seek data for answers. Third, we mine the data we have to discover new insights. Lastly, we use those insights to build new products and services, and when they become successful and produce more data, that takes us back to the top. Our flywheel of data got us to this point and will get us to the next growth phase. Data is a vital element at Progressive. It's like: Air, water… data.
Our leaders have always led by example by reviewing data and asking us well-informed questions. Instead of asking, 'What's happening?' or 'What happened yesterday?' they ask, ‘Why is this happening?’ They always want more.
Pawan DivakarlaData and Analytics leader, Progressive Insurance
And how does your air–water–data philosophy get translated daily?
We all revolve around data and have this unwritten philosophy that you bring data “to the table”, and so often people review data analytics in meetings. They'll make a case using data so it’s more than opinions. Another example is my old boss, who presented me a hand-drawn stacked bar chart of data with numbers on it, like Tableau by hand. Those are just a few. When you see all these exhibits on a regular basis, you know this place oozes data. It's those experiences in just about every corner at Progressive tell me that we have reverence for data.
How does data culture start from the top at Progressive?
Our leaders have always led by example. They review data and then come to us with well-informed questions versus asking what's happening or what happened yesterday. They ask, ‘Why is this happening?’ They always want more. We try to pre-program commonly asked questions ahead of time and that is constantly changing because you've answered yesterday's questions. It creates another flywheel where we present interesting questions, which leads to them to think about other questions, and this turns into new insights that come out of that exercise.
How do you integrate technology in your quest to be data-driven?
We think of technology as a toolbox and we have several tools in it. It's about providing business value and whatever tool gets us there. Since we’re an older company, we have a lot of legacy products and new tools, and we use what works best. Our introduction to Tableau started with one user in 2006 and has grown to hundreds because we have so much data and every day we're collecting more and more. We really like Tableau's mission to help people see and understand data. We constantly combine the insights to produce the next business value, so Tableau fits into that picture. We also have databases like SQL server, Oracle, Snowflake and tools like Excel and others that complement Tableau.
What are some examples of using data to inform customer decisions?
We have so many of them, every minute, every day. One unique tool is called Snapshot that analyzes driving behavior, because we believe that's predictable. We can use that to price and rate our customers as one metric. We’re also in a very rate-sensitive environment, so it helps that customers get the right rate. Progressive also uses data for user experiences to make interactions as frictionless as possible. We know where pain points exist because of the data. We segment and look at the data in aggregate, but also disaggregate the data. You want to keep looking for the next needle in the haystack. Once you find it, then you can use it to improve the customer experience.
Data is in our DNA and insurance is data-driven. The fact that we manage everything through a data lens ultimately helps the customer and their user experience.
Pawan DivakarlaData and Analytics leader, Progressive Insurance
How else does data help Progressive make decisions?
There are many other data sets we watch and use for dashboards. Gasoline demand is correlated with the miles driven, so that’s an important metric to track and translates into rates, for example. We know that more miles driven leads to more claims. It's also a barometer on the economy. If people are driving more, they're probably going to be switching cars more, which means more car sales, and insurance shopping. We also track unemployment because if someone is unemployed, they’re not driving to work, which means they’re at home and not driving as much. All of these also translate back to something that we could use to put better products and services for our customers.
How does the emphasis on data help customer relationships?
Customers expect companies to look at data and find solutions for pain points. If you're not watching the data and you don't see it, customers won’t be happy, and they will show that by either not joining your company or leaving your company. Similarly to buying a house, you go to a real estate website, do a lot of research, and then meet with the realtor, you're going to ask more specific and pointed questions. Our data experience at Progressive is similar where folks use a self-service approach with a lot of information and data, and then they tend to ask really good questions, and that’s been very helpful.
How does data keep Progressive ahead of the competition?
It's a very competitive marketplace. A lot of insurance is regulated, which means we file our rates, so others know what you're working on. There’s an element of ‘which company comes up with ideas first.’ Our culture revolves around data and we're one of the leading institutions for data, but we don't take it for granted. Being aware that the first to find some of these insights does really matter. We've got a team who looks at what's next and new in the data that we didn't know yesterday. Hubris in this space isn’t good because there are many existing companies innovating with data. A lot can change and companies with newer and different business models can overtake incumbents as “insurtechs,” or insurance technology companies. That's something we think about and watch. In some ways we are our own insurtech, because we use data so much. I think we're on the leading edge, but you can fall off quickly if you're not focused on the mission that keeps you there.
What are new data trends Progressive is looking at and using?
There’s the next frontiers of data and real-time data is one of them. Artificial intelligence and machine learning is big, and up-and-coming. Because we're running data at scale, data quality and data drift are going to be more important. Also, responsible use of data is becoming more important because in some places the data has bias, and models and algorithms can feed off the data bias, which can cause unintended outcomes. That's an area that we have to watch for and put the customer, their experience, and bias in the center as we make the decisions.
Where does the data journey end at Progressive?
Digital transformation is like an endless road and every milestone on that road brings more business value and more satisfied customers, and that's keeping the eye on the prize. It’s definitely worth it because from the business value, it improves your bottom line, and from the customer standpoint, they will recommend your products and services to others.