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Michael Ezzat, Ethan Le, Ye Na Lee, Ahraniya Ragavan
Introducing: Snapshot Plus
Industry Trends
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet
Progressive Position
Industry Overview Snapshot PlusInvestment
ThesisValuation Risks & Catalysts Recommendation
The Current Model: Snapshot
Usage-based telematics device using GPS
Collects information about driving habits
PROS: Reward good driver up to 30% discount, competitive pricing model and accurate information
CONS: Privacy concerns and Reservation to change
Snapshot Plus
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet
Accelerometer
• Speeding
• Breaking Pattern
Motion Sensor
• Hard Turn
• DUI
Light Sensor
• Night Driving
Environmental Sensors
• Weather Condition
• Distracted Driver through Music
Position Sensor
• Distracted Driver through Phone Usage
Snapshot Plus
Rethink Insurance
Policy
Holders
Insurance
Company
Risk
Premium/
Restrictions
Reducing
Risk
Reducing Claim
Snapshot Plus
Watch your speed! Speed
Limit: 80kmSnapShot+
Driving Your Saving
Level of Assisstance
Off
Minimal
Moderate
Recommended
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet
BenefitsWecome to SnapShot+
Driving Your Saving
Ready to Save?
GO!
Reducing manufacturing costs
Utilizing build-in sensors of mobile phones
Monitoring the safety of your vehicle, home and more
Reducing privacy concern
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet
Implementation
Industry Overview Snapshot Plus Implementation Forecast Risk Managmenet
Beta launch to Snapshot user
Open to public
Covering more
products line
Developing
App
3-6 months 6 months -
1 year
1st year 2nd year
Industry Overview Snapshot Plus Implementation Forecast Risk Management
115,580,040$Sales Growth
800,000$Cost
42,576,929$Saving on Claim from 9,160 cases
Risk Management
Industry Overview Snapshot Plus Implementation Forecast Risk Management
Apps Hacking
• Audit
• Contract
• Incentives
• Patents
• Regulations
• Copy
Future Risks
Assumptions
Snapshot will be implemented on all products lines
In 2013, 11% people who shop Progressive, opt for Snapshot
We plan to increase number by 5-15% after Snapshot+
In 2013, 15% policies are closed by Progressive with the aid of Snapshot
We plan to increase this number by 2-10% after Snapshot+
We assume that Snapshot+ will reduce 1-5% number of claim due to safer driving behaviors
cost of changing the apps is insignificant, less than 1 million
Appendix
https://www.jdpower.com/sites/default/files/InfluenceofTelematics%20JDPower%20Insights.pdf
Assumption Rationale
Cost of Making An Apps
http://www.formotus.com/14018/b
log-mobility/figuring-the-costs-of-
custom-mobile-business-app-
development
Appendix
Sensitivity Analysis
28.8951 10% 8% 6% 4% 2%
15% 289.0$ 231.2$ 173.4$ 115.6$ 57.8$
12% 231.2$ 184.9$ 138.7$ 92.5$ 46.2$
10% 192.6$ 154.1$ 115.6$ 77.1$ 38.5$
8% 154.1$ 123.3$ 92.5$ 61.6$ 30.8$
5% 96.3$ 77.1$ 57.8$ 38.5$ 19.3$
21.288465 5% 4% 3% 2% 1%
15% 106.4$ 85.2$ 63.9$ 42.6$ 21.3$
12% 85.2$ 68.1$ 51.1$ 34.1$ 17.0$
10% 71.0$ 56.8$ 42.6$ 28.4$ 14.2$
8% 56.8$ 45.4$ 34.1$ 22.7$ 11.4$
5% 35.5$ 28.4$ 21.3$ 14.2$ 7.1$
5% 4% 3% 2% 1%
15% 395.4$ 316.3$ 237.2$ 158.2$ 79.1$
12% 316.3$ 253.1$ 189.8$ 126.5$ 63.3$
10% 263.6$ 210.9$ 158.2$ 105.4$ 52.7$
8% 210.9$ 168.7$ 126.5$ 84.4$ 42.2$
5% 131.8$ 105.4$ 79.1$ 52.7$ 26.4$
Sales 19,263.4
Opt in Snapshot 5%
Policy Closed 3%
Claim 14,192.31
Opt in Snapshot 5%
Accident Reduction 3%
Revenue Forecast bases on historical performance(In Millions) 2011A 2012 A 2013 A 2014 A 2015 A 2016 E 2017 E 2018 E 2019 E 2020 E
Agency 7,627$ 8,104$ 8,602$ 9,087$ 9,109$ 9,473$ 9,852$ 10,246$ 10,656$ 11,082$
Growth 6.2% 6.1% 5.6% 0.2% 4.0% 4.0% 4.0% 4.0% 4.0% 4.0%
Direct 5,804$ 6,264$ 6,740$ 7,474$ 8,159$ 8,812$ 9,517$ 10,278$ 11,100$ 11,988$
Growth 7.9% 7.6% 10.9% 9.2% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
Commercial Line 1,467$ 1,649$ 1,762$ 1,838$ 1,996$ 2,108$ 2,226$ 2,350$ 2,482$ 2,621$
Growth 12.4% 6.8% 4.3% 8.6% 5.6% 5.6% 5.6% 5.6% 5.6% 5.6%
Loss Ratio 71.2 74.6 73.0 72.8 73.7 73.0 72.3 71.6 71.0 70.3
Growth 4.9% -2.2% -0.3% 1.2% -0.9% -0.9% -0.9% -0.9% -0.9% -0.9%
Expense Ratio 21.6 21.3 20.4 19.8 19.8 20.0 20.2 20.3 20.5 20.7
Growth -1.5% -4.3% -2.9% 0.3% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8%
Combine Ratio 92.8 95.9 93.4 92.6 93.5 93.0 92.5 92.0 91.5 91.0
Growth 3.4% -2.6% -0.9% 1.0% -0.5% -0.5% -0.5% -0.5% -0.5% -0.5%
Appendix: Company Financial Forecast
Earning Analysis and Forecast
Industry Comparison