The PROGRESSIVE CORP., a Cleveland-based insurance holding company specializing in non-standard, high-risk automobile insurance, began in 1937 when attorneys Joseph M. Lewis and J. H. Green formed the Progressive Mutual Insurance Co. with $10,000 in capital.
The Progressive insurance organization was created in 1937 when Peter and Daniel’s father, Joe, joined fellow Cleveland attorney Jack Green for a state-sponsored investigation of a group of door-to-door insurance salesmen.
Progressive was founded in 1937 by Joseph Lewis and Jack Green as Progressive Insurance Company.
Lewis and Green wrote less than $10,000 in premiums that first year, and by 1939, Progressive’s original capital had dwindled to less than $1,500.
Although licensed to write all types of automobile and casualty insurance, they limited themselves to auto insurance, and by 1940 were writing about $100,000 worth of insurance annually.
People finally had jobs and money, so they could afford cars and insurance, but gas was rationed so they couldn’t drive and didn’t have many accidents.” The booming, car-crazy, postwar economy further accelerated Progressive’s business: premium revenues reached $480,000 by 1946.
Progressive grew in the postwar period, acquiring assets of $2 million and more than 25,000 policyholders in 1951, and establishing offices at 3600 EUCLID AVE. and branches in Akron and Youngstown.
In 1956 the company organized Progressive Casualty Insurance, which, along with 3 other related insurance companies, became part of the Progressive Corp. incorporated on 8 Feb.
Public CompanyIncorporated: 1956 as Progressive Casualty InsuranceCompanyEmployees: 7,300Revenues: $2.3 billionStock Exchanges: New YorkSICs: 6331 Fire, Marine, and Casualty Insurance; 6399Insurance Carriers, Nec; 6719 Holding Companies, Nec
They then insured only the statistically best candidates, known in the industry as “standard risks.” Progressive Casualty Insurance Company was created in 1956 to capture the growing “nonstandard” pool of drivers that didn’t make it into the preferred category.
The younger Lewis helped lead Progressive’s expansion outside Ohio’s boundaries after 1960.
The Progressive Corporation, an insurance holding company, was formed in 1965 upon Jack Green’s retirement.
In 1965, Peter B. Lewis, son of Joseph Lewis, and his mother borrowed $2.5 million, pledging their majority stake as collateral, and completed a leveraged buyout of Progressive.
By 1970 Progressive Casualty, which accounted for 75% of the corporation's business, was writing its non-standard, high-risk auto insurance in Ohio and 8 other states.
Progressive became a publicly held company in 1971 and constructed a new corporate headquarters at 6300 Wilson Mills Rd. in MAYFIELD VILLAGE the following year.
Lewis took Progressive public in 1971 with the sale of 110,000 shares.
Lewis, a long-time collector of art, first began the Progressive Corp.'s art collection in 1974, when he purchased Andy Warhol's Mao Tse Tung Series.
These pricing policies helped the company’s premium volume increase to $157.3 million by 1980.
In 1986, the company wrote over $830 million in premiums, over five times as much as it had at the beginning of the decade.
In 1986, the company began insuring long-haul truck and bus fleets.
That year it suffered a decline in income due to overstaffing and losses from its trucking insurance business, begun in 1987.
By 1987, the corporate collection constituted over 1,000 pieces of award-winning contemporary art.
After the 1987 stock market crash, Lewis ousted his investment team and brought Alfred Lerner, chairman of Equitable Bancorp, MNC Financial Inc., and MBNA Corp., on as chairman and director of investments.
The insurer celebrated its 50th anniversary in 1987 with its first $1 billion year and a listing on the New York Stock Exchange.
The most notorious law, California’s Proposition 103, mandated 20 percent cuts in auto insurance premiums and refunds to many customers after its 1988 adoption.
A computer system known as Pacman (for Progressive’s Automated Claim Management), was implemented in July 1989.
Lewis was characterized as “a brilliant and unusual man” in a 1990 Financial World treatment, and has been credited with the managerial savvy that kept Progressive in the vanguard of auto insurance.
In 1992, Progressive became the nation’s largest provider of automobile insurance through independent agents.
Then, late in 1992, the investor converted his $75 million bond into $244.5 million in Progressive stock and sold half of his holdings.
By 1992, the experiment had lost $84 million—an amount unheard of and unacceptable at Progressive—and was eliminated.
By reducing the number of employees and eliminating most of its trucking insurance, Progressive returned to profitability in 1993.
In 1993, Progressive became the largest automotive insurer in its home state, Ohio.
By 1993, Progressive had reduced its revenues from the state to $50 million and created a $150 million reserve to pay for rate rollbacks to 260,000 current and former policyholders.
Lewis softened the blow for the remaining 5,600 employees by instituting a profit-sharing program, but admitted to Fortune magazine that the money-saving decision “destroyed morale.” However, Progressive was able to cut costs enough to actually reduce premium rates in 18 states during 1993.
In 1994, Progressive reported net written premiums of $2.4 billion, helping the company to grow 37.7% that year.
By 1994, the company operated a fleet of 2,600 vehicles, complete with laptop computers and internet access, as part of its Immediate Response service.
In addition, after being led by Peter Lewis for nearly four decades, one writer noted that “Progressive’s biggest risk is losing Lewis.” Brother Daniel, 13 years Peter’s junior, stood in the wings, but as of 1994 the elder Lewis, at 60, still occupied the company’s top three positions.
In 1995, Progressive served its policyholders in the United States & Canada through more than 30,000 independent agents, 200 claims offices, and 7,500 employees nationwide and in Canada.
In 2000, Lewis, then 66 years old, stepped down as CEO of the company, but remained chairman of the board.
By 2003, the Progressive Corp. was the third largest insurance company in the United States, with more $11.9 billion in written premiums, underwriting 12 million people.
In 2016, that number crossed the $20 billion mark.
"Progressive Corporation ." International Directory of Company Histories. . Retrieved April 16, 2021 from Encyclopedia.com: https://www.encyclopedia.com/books/politics-and-business-magazines/progressive-corporation-0
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