Instant Binding Now in the Picture for Progressive

There may be more than death and taxes that are proven certainties in today’s world: the exponential growth of mobile technology and the number of individuals using it to shop for auto insurance.

This certainty has not been lost on Progressive, which announced today an application for the iPhone that is designed to radically change the auto insurance buyer’s experience.

Positioned for the direct-to-consumer space, Progressive’s mobile app uses image capture technology designed to provide an accurate auto insurance rate that is customized to the user, and upon acceptance, to actually bind coverage.

The number-one driver behind Progressive’s mobile plan is to determine how prospects and clients can use technology to make purchasing easier, says Matt Lehman, Progressive’s mobile business leader, Image Capture mobile technology. “We can’t get a shortcut around the information we need, and we need lots of pieces of data, so keying in that data can be challenging at best. What’s unique about a mobile device is that it’s faster and more convenient—so we are taking the next step.”

Progressive will be the first P&C company to use image capture in this manner, Lehman says. “This is real time in front of the customer.”

And for the user, it’s transparent; on the back end Progressive’s technology strips the data from the photo and populates it into an app for personal auto insurance. Progressive’s mobile app is tied to the insurer’s ratings engine and ultimately to its underwriting system.

The idea is similar to the type of technology banks use in remote deposit capture in which the photo that is taken of a check will populate the deposit amount, allowing the user to send the check off electronically for deposit.

In Progressive’s case, that technology is made possible by Mitek Systems.

“We are building Mitek’s technology into our ratings engine and around the user interface, embedded into our i-Phone app and soon into Android,” confirmed Lehman.

Best known in the banking industry, Mitek’s entrance into the insurance space is relatively new; the company offers Mobile Quote, Claims, Payment and Document Capture/Send to a number of carriers.

Mike Nelson, Mitek’s director, Mobile Imaging Platform, says benefits exist beyond just using the app to replace the long-form application for insurance. “Without the image capture technology you still have to fat-finger in all the information,” he says. “There are benefits even as a tool for first notice of loss; you can now take a photo of the other driver’s license, VIN and insurance card, so we enhance that existing functionality.”

Although Mitek offers the foundational technology to the image capture capabilities, the app itself is highly customized. Playing off Progressive’s summer release of its VIN scan capability, the technology is part of the insurer’s vehicle cost-to-insure ratings app, which allows the user to select up to three vehicles to view and compare their estimated cost-to-insure ratings, and extends it to the new mobile app. “Simply by scanning those VINs, which takes a couple of seconds, we pre-populate all the year/make/model information, and then by bridging it to the image capture capability—we can work with all the information, such as vehicle, driver, and more,” notes Lehman.

Jim DeBello, Mitek’s CEO, compares it to consumers and users having a financial kiosk in their pockets. “Consumers will demand new ways to interact with carriers. We’ve seen this in the banking  industry first-hand – we are seeing banks wake up and insurers will wake up as well.”

At a basic level, Progressive competes with the likes of Geico, State Farm and USAA for mobility and customer engagement bragging rights, as these companies a regularly appear in marketing study results naming top mobile presences based on user preference, capability and usability.

And the market is ripe. Three are now more mobile phones in this country than there are people, notes Glen Reardon, head of Industry Financial Services at Google. “Of all the Google searches last year among people looking for banking and financial services, 18% of those seeking auto insurance used mobile phones to conduct their search,” he says.

Not surprisingly, Progressive’s plan to add the Android platform is next on the horizon. Currently, there are 600,000 Google Android devices being activated per day, making it a huge and growing untapped market.

For now, however, Progressive’s iPhone app is being deployed in 15 states: Arizona, Colorado, Florida, Iowa, Illinois, Minnesota, Missouri, Nebraska, New Hampshire, Nevada, Ohio, Oregon, Texas, Virginia and Wisconsin. Plans are already in place to make the app available to additional states throughout the year.

To avoid the possibility that fickle consumers will download the app in a once-and-done fashion, Progressive will apply the same kinds of metrics that are applied to its other consumer quoting and buying experiences, Lehman says. “It’s on the continuum--are they using it, converting it at a high level? Are they seeing accurate results? The goal is to deliver an accurate rate that is the best rate possible for that individual, so they’ll go ahead and purchase it.”

Although the insurer has high expectations for the new mobile app, Lehman says Progressive doesn’t project conversion rates or increased sales. “We see the market adopting mobile in a rapid way. But when you are first to market with something brand new, we recognize there will be optimization measures that will no doubt be taken along the course of the year to continually improve the experience.”

To date, the company’s efforts to engage the customer have paid off, as A.M. Best this week gave Progressive an “A+” Superior credit rating, and an issuer rating of and issuer credit ratings “aa.”

In Progressive style, the insurer has launched a multifaceted marketing campaign to educate users on the benefits of scanning VINs to get real-time price quotes. On YouTube as well as their own site, customers can even hear Flo Chat with herself about how the mobile app works.