It’s never easy following a legend. And while Glenn Renwick, president and CEO of The Progressive Group of Insurance Companies, will never make people forget his colorful predecessor and current chairman, Peter Lewis — son of company co-founder Joseph Lewis — he has put his own indelible stamp on the business.
Since 2001, when Renwick was named president and CEO, Progressive has become the third-largest U.S. private passenger auto insurer, serving more than 11 million customers and generating more than $13 billion in annual premiums. He has undertaken numerous initiatives that have expanded the company’s reach and product offerings.
One recent initiative is a claim service center that provides clients with a one-stop shop following an accident, from estimates to claim services to car rental to repairs. The prototype, which was redesigned from existing models over several years, in May launched in Parma.
The center consolidates multiple operations into a single location, saving Progressive time, money and overlapping services while getting customers back on the road quicker after an accident.
“Time is a valuable commodity for all of us today,” says Renwick. “Businesses that respect the consumer’s time will win.” Smart Business spoke with Renwick about how progressive ideas are generated and what it takes to keep expansion constant.
How do you identify opportunities for growth?
We focus on the product and how you can improve it. And we have two things that we need to do — allocate costs accurately in insurance and, where possible, control and take inefficiencies out of the system. It’s not that we’re going to repair a car cheaply, but if you can reorganize the repair of a car so that the day it goes to a body shop it’s being worked on, that’s critically important.
If, on the other hand, it’s sitting, then the customer is presumably using a rental car. So if we can take out a lot of the time, we also are taking out a proportion of the cost.
The second level of cost is accuracy. When you talk about growth opportunities, growth in an insurance company is somewhat interesting because you have a level of quality of adjusting. We have 13,000 people settling claims for us, all with a checkbook, in effect. You must maintain a level of quality and never degrade that.
How does it get degraded? It degrades potentially through growth when you have to add to that 13,000. They may not have the experience. The service centers represent an opportunity to consolidate some of the experience, do more of the work in a controlled environment, which leads to the opportunity to grow without degradation of quality.
So how do we look for these types of opportunities? It’s really being passionate about business. Progressive is extraordinarily focused. We don’t do 150 things. We do automobile insurance. We understand automobile insurance, we understand what a high-frequency, low-severity business is all about, and the level of customer interactions that we have.
In the last decade or so, we’ve become a lot more attuned to creating customer experiences that are meaningful, to go along with our car strategies and pricing allocation strategies.
Who do you include in the strategic planning process?
I have a division claims president, a president of direct operations, a president of agency operations, and I have a relatively small direct reporting staff on a line basis — chief legal officer, chief financial officer, chief investment officer and chief IT officer. Progressive isn’t much of a committee organization. We have ideas, we socialize them with those that need to contribute.
We are very collegial in the way we operate, but it doesn’t get hung up with a lot of committee decision-making. When we embark on a strategy, we talk about the strategy a great deal, not just at high levels but at all levels of the company. We talk about what we’re thinking, what we do. We also talk about what isn’t working.
We’re very open as a culture. We try things, measure, talk about what’s working, what needs to get done and, in some cases, why we’re not going to do them anymore.
How do you communicate your vision?
Formal communication is pretty regular. I have a lot of interaction with the staff, so I probably talk to 10,000 people a year. I write to all staff at least four times a year, and I write in a way that is substantive yet readable and explains what we’re trying to do.
In addition, our annual report is a very important document. I take time to write that. We don’t have committees writing that. It’s an expression of what we are, what we feel good about and what we can do better. I’m not reluctant to put things in the annual report. I also update the annual report letter every quarter, so it’s in continuous update.
Do you find that level of transparency creates loyalty?
I certainly hope it creates a level of loyalty, but it’s also very practical. Twenty-seven thousand people have to implement the strategy, so it’s important to communicate it to them. And, as you communicate it, you also refine the message.
How do you measure results?
We’re very metric-driven. I have a very large book of measures at every level, including business reviews of every area. They cascade down, so every month there are key business reviews and key business reports. We are the only public company to publish our highest level managers’ results on a monthly basis. We feel very good about that.
To achieve the kind of things we do on a monthly basis, you would have to reasonably believe that we could answer a lot of questions. I could tell you, off the top of my head, what the acquisition rate is in all of the centers for the last week. And it’s not just acquisition rate. What is the offset on productivity? What is the number of labor hours per shop day?
What drives your expansion philosophy?
You’re doing things that feel good. ‘Feel good’ sometimes gets you into a terrible business situation, and sometimes there are a lot of emotional ideas. This [the new service center template] was prototyped for five years. In fact, we even slowed down, not because we didn’t like the idea but because there were some places that weren’t meeting the specifications we put in place.
That’s awkward, when you put specifications in place and they never get done. But I knew that if we could achieve those specifications, it would be a success. And rather than modify and soften, we held to it, and said ‘No, I think we can achieve those specifications.’ And we did, and now we’ve announced significant expansion.
How do you approach the tough decisions?
Progressive’s everything to me; I live it, and so tough decisions are with you all the time. And frankly, if they weren’t tough decisions, they wouldn’t be getting to me. So I balance them out.
I can think of certain decisions that have actually taken multiple years before we’ve been comfortable that that’s the right strategy. Other decisions are made quickly. And, we know that we can, if needed to, reverse those decisions.
What’s the most important business lesson you’ve learned?
The value of a culture and how to continue to create a culture where people want to do the right thing — both ethically and from a business perspective. That’s no easy thing. It doesn’t happen overnight. Everyone has objectives. We take one person’s objectives and say, ‘How does that relate to the big picture?’ My job is to make sure that people can relate their objectives to the big picture. Maybe they’re doing a back-up job in IT. How does that relate to how we’re trying to win the marketplace? I try very hard to bring those things together. So the single biggest thing would be, over and above strategy, over and above finances, is making sure the culture hangs together in a way that is capable of producing extraordinary results. You’ve got to have an extraordinary culture.
HOW TO REACH: The Progressive Group of Insurance Companies, (440) 461-5000 or www.progressive.com
