“My Sister Paid
@Progressive Insurance to
Defend Her Killer in Court”
Overview
O The Accident
O Automobile Insurance
O Underinsured Motorist Coverage
O The Lawsuit
O Matt Fisher’s Tumblr Blog
O Progressive Response
O Business Problem and Repercussions
O Key Stakeholders
O Arthur W. Page Principles
O Discussion Questions
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The Accident
O Kaitlynn Fisher (“Katie”) was killed, on June 19
2010, by Ronald Hope when his car collided with
hers while driving through an intersection.
O Evidence of Fault?
O Baltimore Police crash reconstruction expert
O Katie’s Passenger
O One written, independent eyewitness account
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Automobile Insurance
O
Why settle?
O Nationwide, Hope’s insurance company, paid the full
liability insurance limits ($25,000).
O Progressive, Katie’s insurance company, paid
$100,000 in liability claims under Katie’s main
insurance policy.
O Katie Fisher’s policy
O Fault
O No fault
O Under-insured
5
Underinsured Motorist
Coverage
O The Fishers sought additional relief from Progressive
under Katie’s underinsured motorist coverage
O Underinsured motorist coverage provides
compensation to the injured party of a car accident
when the “at-fault” party lacks sufficient insurance
coverage to compensate the injured party in full for
his or her injuries.
O Hope was considered an underinsured motorist
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Underinsured Motorist
Coverage
O Under Maryland law, in order to receive the benefits
of an underinsured motorist claim, it must be
determined that the other motorist be “at-fault.”
O Maryland state law also uses contributory-
negligence, meaning Katie is barred from any
recovery if she is found even 1% at-fault for the
accident.
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Underinsured Motorist
Coverage
O Progressive refused to pay the Fisher family the
underinsured motorist claim, citing that the 100%
liability requirement was not proven.
O Progressive did attempt to settle the case with the
Fisher family numerous times, but according to Matt
Fisher, never offered more than 1/3 of the full
$75,000.
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The Lawsuit
O The Fisher family ultimately rejected Progressive’s
settlement offers in favor of proving that Ronald
Hope III was 100% at fault
O The Fisher family hoped that if a court ruled in favor
of Katie, they could use that ruling as leverage to
force Progressive to pay the full-underinsured
motorist coverage.
O Progressive Insurance intervened as an “Interested
Party” and was granted an allowance “to intervene
as a party Defendant.”
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The Lawsuit
O Progressive’s Insurance attorney, Jeffrey Moffat, sat
with the Nationwide Insurance attorney at the
Defendant’s table throughout the duration of the
trial.
O On August 9, 2012, the jury ruled in Katie’s favor
and awarded the Fisher family $760,000 in
damages, $100,000 of which to be paid by
Progressive
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Matt Fisher’s Tumblr Blog
(Monday August 13, 2012 10:00am EST)
O “At the trial, the guy who killed my sister was
defended by Progressive’s legal team.”
O “If you are insured by Progressive, and they owe you
money, they will defend your killer in court in order to
not pay you your policy.”
O Fallout:
O Post goes “viral” overnight
O Public turns to twitter to express outrage
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Progressive Response
(Tuesday August 14, 2012 2:00pm EST)
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Progressive Twitter Response
Team
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Social Media: Round 2
(Tuesday August 14, 2012 ???)
O @ Progressive Blog response to outrage.
O “To be very clear, Progressive did not serve as the
attorney for the defendant in this case. He was
defended by his insurance company, Nationwide.” Claims General Manager
O Matt Fisher’s second Tumblr post:
O “I am comfortable characterizing this as a legal
defense.”
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http://www.youtube.com/watch?v=hESOXSTwQI0
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Business Problem and
Repercussions
O Progressive’s decision-making process and
communication strategy which caused the public’s
loss of trust and goodwill.
O More than 1,000 customers claimed to have dropped
Progressive as their insurer.
O Decrease in revenue and sharp decline of stock price.
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Source: http://investors.progressive.com/phoenix.zhtml?c=81824&p=irol-stockQuote
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Business Problem and
Repercussions
O Social media changes the way Progressive must
approach its legal, economical, and ethical
decision-making process.
O Progressive legally not at fault, but social media
allowed customers to interact with one another,
sharing opinions and harming the company’s
reputation.
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Key Stakeholders
Direct
Indirect
O Matt Fisher
O Maryland
O Fisher Family
Jurisdiction
O Customers (Current
and Future)
O Media
O Competitors
O Ronald Hope III
O Progressive
O Shareholders
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Arthur W. Page Principles
O Tell the Truth: Progressive’s delay in its response and
aggressive response when they finally did makes one
question how truthful and transparent they are.
O Prove it with Action: Progressive’s actions proved that it
cares most about following policies while disregarding
the better ethical decision.
O Listen to the Customer: Progressive did not act quickly
or adequately when customers started questioning its
actions.
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Arthur W. Page Principles
O Manage for Tomorrow: Progressive did not consider that their
behavior will lead to reputational damage and potentially
constrain future growth and revenue potential.
O Conduct Public Relations as if the Entire Company Depends on it:
Progressive’s robotic response and the blog post stating they did
their “contractual obligations” creates significant questions of
the company’s corporate values and commitment to brand
image.
O Realize a Company’s True Character is Expressed by its People:
The actions of Progressive’s employees confirmed a company
that cares more about policies than its customers.
O Remain Calm, Patient and Good-Humored: Given the emotional
taxing story, Progressive alienated customers by seeming hostile
and unemotional.
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Discussion Questions
O What do you think Progressive can do to regain trust
with the consumer?
O What do you think are the long-term effects of Social
Media on Progressive’s legal, moral, and economic
decision-making process? What role does
communication play into that strategy?
O Do you think that Progressive could have responded to
the Social media outrage in a better way?
O Do you think that Progressive could have handled its
interest in the lawsuit in a better way?
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Class Room Activity
The do’s and don’ts of social media communication
O Imagine you are a communications adviser to Progressive
(or one of the other insurance companies) and your boss
asks you to create a social media policy handbook. Create
a list of at least ten do’s and don’ts as they relate to
communicating online through social media.
O Think about the take-away lessons “The Future of Digital
Media” lecture has provided to those communication
officers working through social media channels?
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