Percent of business in Illinois by line:
Commercial: 15% Personal: 85%

Are you currently appointing new agents? Yes, pending a company review.

What type of agency is your company looking for? Progressive is looking for agents with proven technological skills, proven sales skills, a commitment to quote us on all auto risks, and a solid business plan on how they are going to grow their agency. We are happy to discuss qualifications on an individual basis.

What are your premium volume requirements? We have modest premium requirements compared to most national companies. Our personal auto profit sharing minimum is $150,000 with additional levels as your agency grows.

Are you currently doing any niche-marketing program? We offer several options for agents to leverage our nationally recognized brand. Research indicates that most consumers want to buy from brand recognized companies. Please contact your local Territory Sales Manager for details.

What is your company's most aggressive line of business? Private passenger automobile is our largest product line. However, we are aggressively seeking business in all product lines we write (motorcycles, motorhomes, boats, personal watercraft, mobile homes, snowmobiles and commercial vehicle).

Do you use credit scoring? Yes. However, we never use credit to deny or reject a risk. We use credit in combination with other variables to determine the most accurate rate for the risk.

Do you currently download/upload with your agencies? All agencies representing Progressive are required to upload new business applications and download customer data using either their own agency management system or our proprietary system called Client Profile.

What methods do you use to distribute your insurance products? We offer consumers the choice of purchasing our products through independent agents, over the phone or online at progressive.com. The majority of consumers prefer to buy locally, from a brand-recognized company, and most of our business is sold through independent agents.

What do you think makes your company different, or stand out from all the rest in Illinois? Why would an agent want to contract with your company? We are a very aggressive, "progressive" company. We have consistently delivered superior profit and growth results, both in Illinois and nationally. We continue to remain a very stable market with no restrictions on our products during difficult market conditions. Please find out for yourself what Progressive can do for your agency.

If we had agents agree to sell homeowners policies with actual cash value endorsements, would you write more business in southern Illinois? We do not write homeowners policies.

What are the major ways in which you are interfacing electronically with your agents today? Are you pleased with the results? At Progressive we take great pride in being agents' technology leader. We provide unparalleled upload/download capabilities. Our quoting software, Prorater is considered the best in the industry. Foragentsonly.com gives our agents access to virtually all data they need to manage their Progressive clients. In the future we will continue to migrate most, if not all, technical applications to the Internet.

Thoughts on the Agents Council for Technology (ACT)
Our agent technology leader, Chris Garson, has been active with Acord via Augie and IIABA via ACT. Some important messages have emerged over the last year. Our ACT statement on agency interface cites 4 steps:

1. Participate in standards that allow for real-time transactions between carriers and agency partners
2. Implement Acord XML standards
3. Streamline the efficiency between agency offices and web sites
4. Improve the quality of download

Further, as regards to carrier web sites, ACT recommends

5. Minimize rekeying through bridging of data
6. Automatically handle logon
7. Improve web site navigation
8. Intuitive web sites from start to finish

We believe that Progressive is taking these messages seriously and acting on them in demonstrable ways that meet many of our agents' needs while also meeting our own internal objectives.

Some of the actions we are taking on these points include

1. We upgraded to a full member of Acord. Participate in AUGIE, ACT and Acord standards. We helped draft the initial XML specs. We are sponsoring a work group proposal to automate carrier web site logon. We are adopting the Acord specifications for billing inquiry and became the first carrier in the country to make this available to agents in November of 2003. Applied is our pilot management system for this effort.

2. We have rebuilt our back end rating engine to completely support Acord XML. It became available in Ohio in 2002, with a half a dozen additional states to be added by year-end 2002. We expect to be countrywide by summer of 2003. This effort affects quoting and new business submission. We are engaged in 2 pilots with vendors/agents to bring the same capability to the policy change transaction.

3. We have a link available with AMS that brings you from their system to Foragentsonly.com without rekeying the policy number. We are quite willing and eager to make this available to other management system vendors.

4. We provide more data than most, if not all carriers, with our download. Our paperfree strategy makes this a necessity. We will soon be announcing commission download for Applied and AMS.

5. We have the ability to move data from your management system to our web based quoting with a single click, piloting this with AMS in Ohio, fall of 2002. We expect this will be widely available as we rollout our XML rating engine (see #2). We can pass policy numbers already, as mentioned in #3.

6. We chaired the ACT security committee and recommended automating ID/password synchronization between carriers and vendors. Only Progressive is willing to do this, nonetheless we are presenting our findings to Acord and asking for a working group to be formed to build standards for this transaction.

7. We invest heavily in the usability of our software - the screens, the navigation, the amount of keying and the workflow in the office. We have a commitment and dedication to delivering software that is highly usable and intuitive. Our stated goal is to make our software so easy to use your CSRs don't need training.

Transformation Station is a great fit for some companies, particularly those that are farther behind in jettisoning legacy systems and building XML based replacements. The primary value TS provides, in our opinion, is translation facilities between the vendor and carrier. There are also some workflow benefits from an agency standpoint. They key issues facing agents in using company web sites according to ACT are:

1. Separate data entry. Our answer is vendor partnerships with bridging capabilities to eliminate rekeying. We are an advocate of a hybrid interface - the agent starts in vendor systems, transfers data to the carrier on the backend and then finishes the transaction there.

2. Separate logons. We are advocating an industry answer for this problem. So far few carriers are willing to do so due to perceived security risks.

3. Separate workflow. This is one where we disagree with the SEMCI vision, we believe one workflow is a myth we've been chasing for years that will never be attained.

4. Training agency staffs. Our usability efforts are designed around making training time minimal in the agency - prefill of screens, automated logon, easy navigation, English screen labels, popups with words not codes, automated point of sale and reconciliation, automated underwriting, integrated credit ordering and easy to use screens. Our belief is these efforts are paying. Evidence is Progressive's growth, rapid agent adoption of our new technology and the many kudos we receive for our technology leadership.

Given this background, we are not pursuing a path of using TS for real time quoting, new business submission or policy changes. We are, however, using it for inquiry transactions. We strongly believe that the steps we are taking, as outlined above, will address many of the concerns agents have voiced concerning efficiency. Our primary reasons for not using TS for the update of transactions are not cost, as you may have thought. Rather, they are based on loss of control of the quoting experience. Progressive would lose capability by moving in this direction, capability that would negatively impact the accuracy of your quotes and the cost of providing those quotes.