Disappointed with the public's initial response to an offer totest drive its telematics program, Snapshot, for free, ProgressiveCorp.'s CEO says the insurer will launch an aggressive advertisingcampaign in an effort to catch consumers' attention.

During a recent conference call with financial analysts, CEOGlenn M. Renwick said the Mayfield Village, Ohio-based insurer'sprojections for the number of new customers expected to participatein the free Snapshot program, Test Drive, “did not meetexpectations,” adding that the company may have set the bar toohigh. However, he is convinced that once customers try it they willenthusiastically embrace it.

“Some drivers do get a significant benefit from it,” Renwicksaid.

To break through, Renwick said the company will “do asignificantly better job with advertising in the early Apriltimeframe” and make the benefits clear to consumers.

“It is a solution to a real problem,” says Renwick, adding thatconsumers may not understand that there is a solution to payinghigher auto premiums. “They will have to understand it is a problemthey want to solve.”

But Renwick put the burden squarely on the shoulders of hiscompany's failure to communicate.

“We just need to fill the funnel at the top with a lot moreconsumer demand. It's going to be tricky. It is not like buying acoke; we're going to have to make it very compelling forpeople.”

Snapshot is an electronic transmitting device installed in avehicle to record the customer's driving behavior. The telematics,or “Pay As You Drive” program, allows an underwriter to quote anauto-insurance rate based on actual driving habits.

Renwick said the program has proven successful with both direct-and independent-agent-channel customers. About 35 percent of itsdirect-business customers have opted into Snapshot and close to 10percent of agent-channel customers have joined. About 8,000independent agents offer Snapshot to their customers, said Renwick.In a Securities & Exchange Commission filing, Progressive saidannual premium for customers choosing Snapshot exceeded $1 billionout of a total of more than $16 billion in net written premium for2012. The carrier markets the program in 44 jurisdictions to itsdirect-auto customers and is available in 39 of the 44jurisdictions for independent-agency customers.

Progressive is not alone in offering Pay As You Drive programs. State Farm,Allstate, The Hartford and Liberty Mutual are on the list ofinsurers making bets that the technology could open the door to awhole new underwriting strategy for the auto-insurancebusiness.

However, Progressive has sued State Farm and The Hartford for patent infringement.At the same time, Progressive is licensing the intellectualproperty behind Snapshot.