Progressive Insurance and United Services Automobile Association (USAA) Signs License Agreement for Usage-Based Insurance [Professional Services Close – Up]

Progressive Insurance is entering into a licensing agreement with United Services Automobile Association (USAA) for intellectual property related to usage-based car insurance programs.

According to a release, Progressive has current implementation of UBI, Snapshot, accounts for more than $1 billion in premiums and is currently available in 44 states and the District of Columbia.

"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 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 announced its licensing program in December 2012, making its intellectual property available to companies interested in implementing UBI programs, subject to the following terms:

-Term of Agreement: Commences the date license is executed through April 2022

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

-Licensing Fee: 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

Application for Licensing under these terms is open through June 2013, with payments commencing with usage on or after April 2015.

More information:

www.progressiveonline.com.au

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