5 Stories That Rocked The Insurance Technology Industry in 2012
3. Progressive's Social Disaster
In August, comic Matt Fisher posted on his Tumblr blog an entry titled: "My Sister Paid Progressive Insurance to Defend Her Killer in Court." At issue was whether or not Fisher's sister, who had died in a car accident, was entitled to "underinsured motorist" coverage that was part of her Progressive policy. The insurer felt that if she was at fault, they didn't have to pay out the full amount. The case went to court, and thanks to a peculiarity of Maryland law, Progressive was only able to state its case by serving as part of the "defense" of the driver who hit Fisher's sister. Things went from bad to worse when Fisher's post stirred the ire of the Internet, and Progressive began receiving tweets about the incident — which all received the same, milquetoast, robotic reply. This further enraged people, and the end result was a storm of anti-Progressive sentiment across social networks. Progressive lost the case and paid the policy, but that wasn't all it lost: its online and corporate reputation was sullied. Insurance companies learned that there's a right way and a wrong way to deal with the Internet's outrage — and Progressive's strategy was the wrong way.