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Charging for Car Insurance by the Mile: Good Business and Good for Energy and the Environment?

Richard Hutchinson, General Manager for the "My Rate" program, Progressive Insurance.

Friday January 23, 2008
12:30-1:30 p.m.
Crawford Hall - Room 9
Inamori Center
Case Western Reserve University

Dear Colleagues,

For our discussion on this Friday we will look at a very creative idea from one of our major local corporations. It’s an idea that could help Progressive Insurance company do well by doing good. But how is it working?

Concerns about energy and the environment frequently involve issues of how to share collective goods that are in limited supply: such as clean water or fisheries or grazing land. A closely related idea involves imposing charges for contributing to collective evils, such as selling the rights to emit air pollution. The basic idea is that the market creates externalities – costs or benefits that are not part of the exchange between buyer and seller – and that the government must find a way to impose charges on behalf of society.

Driving automobiles creates all sorts of externalities that are not of interest to, say, the company that sells automobiles and the person who buys one. These externalities include pollution, congestion, and consumption of scarce energy resources. The more people drive, the more they contribute to these problems. In some cases, driving more aggressively or faster contributes to problems such as energy use and accidents.

We have various government programs to try to control those consequences. Yet in the case of driving, there is a private actor that has some interest in some of the externalities: namely, insurance companies. Less driving and less aggressive driving, for example, can lead to fewer accidents and lower claim payments.

Therefore, Progressive Insurance has created a new program to charge for car insurance by the mile. Like any government regulator, however, it needs some way to observe the behavior for which it wants to charge. And, working in a market, Progressive also has to satisfy customers.

So how is it working? Is it attracting customers, are they satisfied, and might it be affecting their behavior? To consider these questions, we will be very pleased to host Richard Hutchinson, general manager of the program.

As usual, we will gather in Room 9 of the Inamori International Center for Ethics and Excellence, on the lower level of Crawford Hall, for free cookies, beverages, and brown bag lunch.

Best regards,
Joe White

About Our Guest

Richard Hutchinson is currently the TripSense Business Leader for Progressive Insurance.  Richard has worked at Progressive since 1987 in numerous marketing and general management roles. He started as a Product Manager insuring commercial fleets. Subsequently, he has over 15 years of field management experience managing states and region profit centers; and 6 years of experience building next generation products and services. He has helped build Progressive's Agency, Direct and Internet distribution channels. His current role is managing the development and launch of Progressive's usage based insurance product. Usage based insurance is priced on when and how an insured drives their vehicle.

He has a BA from Yale University and an MBA from the University of Chicago.

Friday Lunch Upcoming Topics and Speakers:

January 30: "Election Recap: What Happened and Why?" With Karen Beckwith, Flora Stone Mather Professor of Political Science, Ph.D., Justin Buchler, Ph.D., Assistant Professor of Political Science, and Andrew Lucker, Ph.D., Associate Director of the Center for Policy Studies.

The Friday Lunch discussions are held on the lower (ground) level of Crawford Hall.  Visitors with mobility issues may find it easiest to take advantage of special arrangements we have made.  On most Fridays, a few parking spaces in the V.I.P. lot in between Crawford Hall and Amasa Stone Chapel are held for participants in the lunch discussion. 

Visitors then can avoid walking up the hill to the first floor of Crawford by entering the building on the ground level, through the garage area under the building.  The further door on the left in that garage will be left unlocked during the period before the Friday lunch.  On occasion, parking will be unavailable because of other university events.

For more information about these and other Center for Policy Studies programs, please see

January 20, 2009

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Upcoming Events

The View from the Mountaintop? President Obama and Racial Politics in America

Our panel of distinguished guests will include Peniel Joseph, Ph.D., Associate Professor of Africana Studies at Brandeis University and Martin Gilens, Ph.D., Associate Professor of Political Science at Princeton University.

Wednesday, January 21, 2009, 4:30 p.m. - 6:00 p.m., Ford Auditorium, Allen Medical Library, Corner of Adlebert Road and Euclid Avenue

Martin Gilens' current research projects examine (1) the responsiveness of federal government policy to the preferences of different segments of the American public; (2) historical changes in media coverage of presidential elections and the impact of those changes on the public's knowledge and interest in presidential candidates and campaigns; and (3) the role of (mis)information and heuristic shortcuts in the formation of the American public's policy preferences.

Professor Gilens is the author of Why Americans Hate Welfare: Race, Media and the Politics of Antipoverty Policy (University of Chicago Press), and has published on media, race, gender, and welfare politics in the American Political Science Review, the American Journal of Political Science, The Journal of Politics, the British Journal of Political Science, Public Opinion Quarterly, and the Berkeley Journal of Sociology. He holds a Ph.D. in sociology from the University of California Berkeley, and taught at Yale University and UCLA before joining the faculty at Princeton. His research has been supported by grants from the National Science Foundation and the Social Science Research Council.

Peniel E. Joseph, Ph.D. is quickly gaining a reputation as one of the leading young scholars of African American history. Although Joseph's formal expertise includes the Black Radical Tradition, Pan-Africanism, Black Social Movements, and African American feminism, he is currently embarking on a re-evaluation of the Black Power Movement. Professor Joseph teaches in the Dept. of African and Afro-American Studies at Brandeis University. Joseph is the founder of a growing subfield of historical and Africana Studies scholarship that he has named "Black Power Studies." This new scholarship, which connects grassroots activism to national struggles for black self-determination and international African independence movements, is actively rewriting postwar African American history. On this score, Joseph has published over a dozen articles and book chapters related to Black Power (and black radicalism in general) since earning his doctorate in American history at Temple University in 2000 and has been a very prolific book reviewer, essayist, and commentator on issues related to African American social, political, intellectual, and cultural history.

This program is sponsored by the Case Center for Policy Studies, the Inamori Center for Ethics, and the Excellence and the Share the Vision Committee

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