Progressive, USAA Enter UBI Licensing Agreement

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United Services Automobile Association (USAA) and Progressive Insurance have entered a licensing agreement for intellectual property related to Progressive’s usage-based car insurance programs.

“We have found that key driving behaviors predict the likelihood of a claim far better than traditional insurance rating variables alone,” said John Sauerland, Progressive’s personal lines group president. “As insurers realize the benefits UBI offers consumers, it’s critical they deliver programs that reflect responsible intellectual property practices, which includes licensing the appropriate IP.”

Progressive has been licensing intellectual property available to companies interested in implementing UBI programs since December 2012, subject to the following terms:

Agreement Commences the date license is executed through April 2022

Licensees will not rate insurance based on its customers' driving habits prior to April 1, 2015

Annual royalty payment equal to licensee’s countrywide Private Passenger Auto insurance direct written premiums for the most recently reported year, multiplied by two basis points (0.02 percent)

Progressive also has the right to licensor recognition

Progressive has more than one million UBI subscribers and six UBI patents, Progressive said. The company’s Snapshot UBI program accounts for more than $1 billion in premiums and is available in 44 states and the District of Columbia.

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