Progressive, Allstate Settle Lawsuit Over Patents For Usage-Based Insurance
<table cellspacing=0 cellpadding=0 border=0><tr><td align=right>Copyright: </td><td>(c) 2011 A.M. Best Company, Inc.</td></tr><tr><td align=right>Source: </td><td>A.M. Best Company, Inc.</td></tr><tr><td align=right>Wordcount: </td><td>438</td></tr></table><!-- start_body --><br><p><org value="ACORN:1208846978" idsrc="xmltag.org">Progressive Casualty Insurance Co.</org> and subsidiaries of <org value="NYSE:ALL" idsrc="xmltag.org">Allstate Corp.</org> have reached a settlement concerning litigation in which Progressive accused the <org value="NYSE:ALL" idsrc="xmltag.org">Allstate</org> units of infringing on its patents for usage-based insurance and online insurance policy-servicing technology, as well as trademark infringement.</p><p>Under the settlement, Progressive granted a license to <org value="NYSE:ALL" idsrc="xmltag.org">Allstate</org> under its usage-based insurance and policy-servicing patent portfolios, Progressive said. The companies also agreed to a coexistence agreement for Progressive's Drive trademark, and <org value="NYSE:ALL" idsrc="xmltag.org">Allstate's</org> DriveWise trademark.</p><p>Other details of the settlement between <org>Progressive Casualty</org> and <org value="NYSE:ALL" idsrc="xmltag.org">Allstate Insurance Co.</org> and <org>Allstate Fire & Casualty Insurance Co.</org> are confidential, the companies said in separate statements.</p><p>"This was about protecting and leveraging Progressive's investment of more than 15 years in usage-based insurance research, development, testing and piloting," <person>Chuck Jarrett</person>, Progressive's chief legal officer, said in a statement "We have always said we are willing to license our intellectual-property rights to others and that we will enforce those rights when necessary."</p><p><org value="NYSE:ALL" idsrc="xmltag.org">Allstate</org> said it is "pleased to be able to leverage its patent portfolio in this settlement by providing a license to Progressive and to eliminate the distraction from this litigation."</p><p>Spokespersons for both companies declined comment beyond what was contained in the statement.</p><p>As part of their usage-based insurance programs, both Progressive and <org value="NYSE:ALL" idsrc="xmltag.org">Allstate</org> offer monitoring devices that plug into a port in a vehicle that record a driver's behavior. For instance, Progressive's Snapshot pay-as-you-drive device monitors mileage, braking, acceleration and time of day the car is being driven and sends the data back to the company. After 30 days, customers find out if they are eligible for a discount, based on their driving habits. Progressive's Snapshot program, now available in 40 states, has the larger geographical presence. <org value="NYSE:ALL" idsrc="xmltag.org">Allstate's</org> DriveWise device is available only in <location value="LS/us.il" idsrc="xmltag.org">Illinois</location>, <location value="LS/us.oh" idsrc="xmltag.org">Ohio</location> and <location value="LS/us.az" idsrc="xmltag.org">Arizona</location>. Both companies say good drivers can save up to 30% on their insurance with the devices.</p><p>Insurers increasingly are turning to usage-based programs. Last last year, <org value="NYSE:ALL" idsrc="xmltag.org">Allstate Corp.</org> launched its telematics-based, low-mileage program, DriveWise (Best's News Service, <chron>March 14, 2011</chron>). A 2008 <org value="ACORN:1177922890" idsrc="xmltag.org">Brookings Institution</org> study concluded if all drivers paid per mile, driving would decline by 8% nationwide, saving <money>$50 billion to $60 billion</money> each year (Best's News Service, <chron>Nov. 17, 2008</chron>).</p><p>In midday trading on <chron>Oct. 4</chron>, shares of <org value="NYSE:ALL" idsrc="xmltag.org">Allstate</org> (NYSE: ALL) were trading at <money>$22.70</money>, down 0.04% from the previous close, while shares of <org value="NYSE:PGR" idsrc="xmltag.org">Progressive</org> (NYSE: PGR) were down 0.81% at <money>$17.14</money>.</p><p><org>The Allstate Insurance Group</org> has a current Best's Financial Strength Rating of A+ (Superior). Rated members of the <org>Progressive Insurance Group</org> also have a current Best's Financial Strength Rating of A+ (Superior).</p><p>(By <person>Diana Rosenberg</person>, senior associate editor, BestWeek)</p>
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