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00:00This is my kitchen table hands. Also my filing system over much of the past three decades. I've been an investor. The highest quality of mankind. I've often thought is private equity. And then I started interviewing for my watch here. Those I know how to do. I've learned doing my interviews how leaders make it to the top. I asked him how much he wanted. He said 250. I said fine it doesn't negotiate with him. I did no due diligence. I have something I'd like to sell and how they stay there. You don't feel inadequate now because the only the second wealthiest man that was right in the United States today there are only 38 women who are serving as CEOs of Fortune 500 companies . One of those with the best track record is Tricia Griffith. She is the CEO of Progressive Insurance one of the largest automobile insurance companies in United States. She started out as a claim adjuster and worked her way up over many years to become in 2016 the CEO. Since that time the stock is up more than one hundred seventy five percent. My big mistake was I didn't know her then and I didn't buy stock in the company. If she ever leaves that company and goes anywhere else I'm going to buy that stock right away. So for those who aren't familiar with progressive and probably if you watch television you would be familiar because you have a lot of television ads. Right . And I'm just curious why is it that automobile insurance companies seem to advertise a lot. I see your competitors advertising. You advertise a lot. Is that because people really will be guided in their insurance decision by the advertisement. It's just a really competitive industry which is always odd because it's something you're required to have. So it's not like you know do you pick a different soft drink or a beverage. But it is required. But it is so competitive to be out there and being top of mind and be on the short list. You really have to be advertising . So you have a famous character in your insurance one of your some of your ads called Flo a woman that plays I guess an insurance person . Does she get a certain percentage of all the ad all the new business she brings in because she's so so good or she doesn't have that deal. No she does not have a deal. She she is paid per contract and she's doing fine . Let's talk about this year now. A lot of the auto insurers are up this this year in part because people aren't driving as much . And the theory is if you don't drive as much as hard to have an accident. So if I presume there are fewer people claiming that they've had an accident therefore you don't pay out as much as that. Why your stock is up you think. I think that might be one piece by I think we've also continued to grow not only market share I am based on units based on policies and force . And really if you think about it yes immediately in March vehicle miles traveled have been reduced in losses went for that . But at stake the reopened. It continues to go up. And right now we're still not pre cope with the level of driving for about 8 to 10 percent down. But the lost cost that gap is closing in because we're seeing more and more people driving more often . And so that that lasts for a couple of months. And then remember many companies gave back credits or have reduced rates . Now let me ask you about that. If you get a rebate that was because you voluntarily thought it was a good idea or the regulators said you have to give back money. Why did the automobile insurers started giving back money to their policyholders. We did it because it was the right thing to do . I mean we immediately saw a driving vehicle miles traveled go down 40 percent. It went back up pretty quickly to 20 etc. But we sat down and said OK we don't want margins that big. It's not the right thing to do. We want to be competitively priced . And so we gave 20 percent credits for on both April and May and then subsequently we're very analytically driven. So we went sort of state by state channel by channel product by product . And so far we've given we've had rate decreases in about 35 states and those bills are baked in permanently. So today when people have an accident today when we do have accidents the accidents are more expensive than they used to be. Is that because the cars are more complicated more expensive to repair . Yeah they absolutely are. A couple of reasons. One is the components to the car. So I started out as a plane drop and the cars in 1988 the bumper repair or replacement would be a couple of hundred dollars and now they could be upwards of a thousand two thousand dollars because of the components the safety components. In addition think of the inflation of medical costs . So if you're injured in an accident that's another component of the increased severity. So let's suppose I want to get some automobile insurance. I'm now 71 years old. Am I a good risk as a 71 year old or would you rather have somebody who's 25 and more alert you. That is one variable. So we look at hundreds of variables. It depends on where you live. Do you live in a congested area. Do you live in a rural area. What is your . Driving history do you have our usage based insurance that way we know what time of day you drive how many miles you drive . Have you had any violations. There's so many things that go into it. So age is only one component. When I was a teenager you know I was told that teenagers are not good drivers . Insurance is expensive. Is that true today. Insurance is more expensive for teenagers are not good drivers. I will say that having six people that drive in my family that we've added over the years we call youthful drivers. The issue is that many many are good but they just don't have that maturity. They haven't had the experience. And I remember saying because you need a lot of times you'll get rate increases if you add on a youthful driver. And I challenged that when I first got this job. And then I realized having six youthful drivers that there is a reason you pay a little bit more. You were in home insurance now and you bought a company that helps you get into that. Why do you want to be in the home insurance business. For us it was really access to more of the preferred customer especially on independent agent sides. We had a relationship with ASIO American Strategic Insurance for years. We had we had a small ownership in them and their values were very much aligned with us. And so we decided to go ahead and purchase them. And it's been a really nice transition a really great acquisition. And so now you're having sort of the whole picture for whatever you want auto home your boats motorcycle commercial. And that's where we're continuing to expand because I think it's really important to diversify. Their home insurance business are very profitable now. The home insurance business depends on what company you're talking about. We have struggled a little bit because of wind hail catastrophes and we also have been obviously growing our model across the country. We were in about five states for many years and so we're learning a lot about the product model. So I've looked at our results. We will be profitable but we're we're doing the same thing we did on the auto side. We're getting very surgical and our segmentation to understand the right rate for each home. Are you thinking of getting into the life insurance business . You're in the other insurance businesses. Why not get into life insurance. Well right now we have a great relationship with an unaffiliated partner that we get a commission when we send them to the company. And we've been working really well. And we actually are considering that we have a life insurance company filed in Ohio. More to come on that. People say that there is eventually going to be driverless or autonomous cars. And of course the theory is they will never have an accident because they're perfectly programmed. Is that something you worry about as cars that don't have accidents or you're not going to worry about that right now. I don't worry about it from a society perspective. You want to have less accidents. It's good for society. Everyone has been affected by someone who's been in an auto accident. What I think about I don't have my head in the sand but what I think about is timing realistic timing. That's also one of the reasons why I think about I'm not just executing on our current plan but expanding and exploring other other possibilities adjacencies to to grow our business. I will tell you that when you look back at some of the headlines in 2012 that say this type of cars can be fully autonomous by 2020 or 2015 it'll take longer. And I know that. That said again we're preparing for a possible smaller auto insurance industry. But again we have so many opportunities with other adjacent models including home. And in some of the other things we've talked about whether it's TNC or commercial or small business all the things that we've expanded to in the last couple of years. Now Elon Musk has said he's going to have an autonomous car out there at some point and not too distant future. And he's also said anybody that's an insurance agent why don't you call me up . Because we want to hire insurance agents. We're going to be in the automobile insurance business. Is that something you're worried about a lot. Not really because I think people love our culture. I think they love working here. And I think that we've got a huge future. I think that there that the technology is absolutely there. And I can see a car going from point A to B in a geo fenced area but there's a lot to be done. I think it'll be a little bit longer than most people had predicted even years ago when you were able to go into your office. You were well known for walking into the cafeteria and sitting down with the average person. Why did you do that. Why didn't you just eat in your office with other executives when you break bread with people. They open up to you not just about great things but about things you want to change . Let's talk about Progressive's background progressive. It's a great name progressive. That's a very positive word. Was that the original name of the company and when was the company started. Yes it was the original name. The company was founded in 1937 by Joe Lewis and Jack Green and they were two attorneys in Cleveland. And they didn't know they wanted to do what they wanted to be able to serve the nonstandard customers in Cleveland that needed insurance. And so they borrowed ten thousand from Joe Lewis his mother in law. And that's how progressive was born. And you might now Peter Lewis who ran the company for a long long time. He was the second CEO. And then Glenn Renwick and then myself. How did you get started at Progressive and at the bottom. Pretty much as I write. Yeah . I went to the State University and marketing degree. I wanted to go into something and marketing but all through high school and college I worked in retail. So and oddly where I went to school is the Home Office of State Farm. And everybody was doing internships there. And I'm like who wants to work in insurance. So I went to a retail company for about six months . It was called for a building materials. It was like a think of like a Lowe's or a Home Depot. I was like what am I doing. I'm mixing paint. I'm actually a forklift certified. And I was driving home one day with my hardhat and I said I got to go look for something different. And I what I wanted to do was work somewhere for a couple of years past my school loans and then go to get my MBA. So I went home and opened the classified ads . I'd never heard of a progressive at that time. We were less than a billion. And I thought Clem trainee it sounds interesting. Nineteen thousand. That'll help me pay off my debt and made the call. So the job is to be a claim adjuster . Correct. So what I would do if I've had your claim and you were injured I would go out and talk to you about your injury and and guide you through that. I would crawl under your car and let you know how much it took to get it repaired. I would kind of manage your whole file. I did. I also did special lines. So I was a motorcycle rep and basically handled the entire file. So I was in body shops crawling under cars and in your house talking to you about your injury. You've obviously risen up from the lowest position to the highest position and you had many different positions in between. One of them which is very unusual to have for a CEO maybe sadly is to be the head of human resources. So how did you go from being the head of human resources to being the CEO. Well that to me to actually take get the feature job from having mostly claims experience during the first 15 years I had a little bit of sales and a little bit of claims. And Glenn Renwick at the time my predecessor interviewed me it was it was actually an odd circumstance. I went for it. I wasn't going to because I don't I don't have any major experience. I have some maternity leave but that's about it. And people kept calling me from around the companies. And you have to go for this. You love diversity you love metrics. We need this. So finally I had a pre interview launch with Glenn to see if I could even go for it. He put my name in the hat and gave me the opportunity . And I will always say it was a risk for him. He does not say that but that was really the turning point in my career. And then you know he was he watched me and I did that for six years and made a lot of big changes that we still have now. And the president of claims came up. And that's my dream job because I love claims. I love helping customers. I was able to do that . Seventy five cents of every dollar premium that comes in your pay on claims that the big business piece. And then he gave me all things customer facing. So I had our call centers and claims and then I was CFO before the CEO role. So I really credit Glenn for guiding me giving me opportunities coaching me and sponsoring me. So as kind of human resources you must have instituted some policies that changed the company's face because your company your been voted the number one most diverse company in the United States in some surveys. Is that something that you implemented and put it into practice. Yes we we started our diversity inclusion initiatives really in earnest when I was there. We started our first employee resource groups which was on progressive African-American network and our LGBT plus. Now we have nine. We really set forth a strategy of how we're going to make sure everyone can bring their whole self to work. It was a big piece of our culture and we started looking at the data. We continue to work on it though. It's not something that you can ever get a checkmark. And if you look at at senior leadership we have opportunities there. And in fact we are working on some really aggressive objectives for the next five years with my team to continue to change that. You're chairman of your board is a woman and obviously you're a woman. Is there any other Fortune 500 company where the chairman is a woman and the CEO is a woman. There must be none. I don't think so. And we actually have twelve twelve members of our board and six are women and one of the female as the person of color. So. You were the CEO and yes in line to be the CEO. Did you think that they were gonna give the job to a woman or you thought this will revert to the normal form and we'll find a nice white male that we can give it to. I was hoping they'd give it to the person they thought was the best fit for progressive at the best time . And I remember interviewing with the board for several years during the process. And one of the board members said to me So you want to be a CEO. And I said No I want to be the CEO progressive. And that was what really was meaningful to me. So had I not found the role I'd still be here. And and there were lots of other opportunities to have a great CEO other than myself. So when you were able to go into your office you were well-known for walking into the cafeteria and sitting down with the average person. Why did you do that. Why didn't she just eat in your office with other executives. Because that is my way of getting to know people and and really feeling what's going on at the company. And when you break bread with people they open up to you not just about great things but about things they want to change. And for me I think because of my roots as a claim director trainee I was wondered with the exact. And we don't have an executive cafeteria. Olivesi In the regular cafeteria it is a very different type of company from that perspective but literally it motivated me to be a better leader every time I walked up to a table of five people and said May I join you. And they gave that horrible look like Please no please no. And I sat down. I had five new friends. And I just I to me it's an important part to be approachable. Do you feel connected and you trust your leader you're going to run through the wall for them. So when you sit down with people at the employee cafeteria did they ever say by the way I'm underpaid . Is that never. They never say that. They'll sometimes talk about how they wish they could make more. What can they do . How can they get there. People are pretty pretty open and honest with you. What would you say are the leadership qualities that you brought to the table or that you most admire . I don't have to be the smartest person around. I know collectively what a team needs. And I love having really great debates . So as I talk to you you're not in your office I assume you're at your home. That's correct. I'm in my little library off of our bedroom. And have you been running progressive from your little office there for a couple of months now. Yes. Ever since mid-March I go in sometimes once a week just to get my mail and to check things out. But I don't see anyone. And in fact where I'm sitting here my son who's in film school film to me weekly for several months so I could send a video out to all of the progressive people. Has it been difficult to run the company remotely this way. It hasn't been difficult for me. It's been unusual. And I don't love it because I love the interaction . I think the biggest part is the claims organization because that is face to face especially when you're looking at vehicles. But we immediately were able to use videos and pictures jurors to do the best job we could to estimate vehicles . And we're doing pretty well. I'm I'm very proud of the organization . When the world comes back which hopefully we'll be in some point in time when we have a vaccine. Do you expect that all your employees will come back and work in the offices or now do you think you could have people working remotely and maybe save money by not having as much office space. How do you think about this in the future prior to Kovic. We already had about 25 percent of our call center people in some claims people that work from home just because it worked better for them. I imagine we're doing some surveying as we think about returning . What percentage will that still work for. I think in person in the office hallway conversations are so important. So although I think it might increase from that 25 percent if you fast forward and there's a vaccine and people feel comfortable. I think a lot of people will come into the office. I think that that is something that we work through. We've done a really great job especially with technology. But I know many people really miss it. You and your husband have six children right . Is that right. Alix Steel. Yes kids hers and ours. All right . So when you have six children and you're running a company it's not kind of complicated. I mean how do you have time in the day to do anything else. It was very complicated as I was as I was growing and going up through the ranks. And my husband worked as well when I was in H.R. for a couple of years. He also we met a progressive. So he worked there. We both had travel jobs. And at one point he said when our oldest was going into high school he said you know one of us probably needs to stay home. I think you have a longer runway . And so he decided to stay home. But I think I treat it like everything else assumed something might go wrong . And so when we were both traveling and I knew I had a big presentation I knew that morning I would go into somebodies room and somebody would have an ear infection. And so I created a network of friends that stayed home and I did it old fashioned bartering system. So if you could take you know Emma for a couple of hours I did this presentation. I will babysit your kids and you and your husband throughout the weekend. I treated it. I always had plan B C and D just like you do in business . What would you say are the leadership qualities that you brought to the table or that you most admire. I think the ones I brought to the table were being genuine being authentic communicating. You know just all the time painting the picture of where I want the company to go. And I think that's really important. I think people you know you only you're only a leader if people want to follow you. So do people want to follow you. Do do you. Do you have a great attitude but also a certain paranoia to make sure that we're always doing well. And for me I think that what I'm most proud of. And I think why I continue to get jobs after that age our job was I form really great teams. I don't always have to be the smartest person in the room. I know collectively what a team needs. And I love having really great debates and looking better than those debates are the unity the power and the unity. When you come you come out and you're you're solidified as a management team as a leadership team. So sometimes people say it's very difficult for women to have at all to have a family and also have a great professional career. It's obviously possible. You would you've obviously done it. So what would you say is the trick to having it all and getting it all done if you were to give advice to some younger woman. I think there's sometimes there's things you don't give up. So Jack played high school and college football. It was important for me to go to as many games as I could have hit. And I worked my way around that so I could do that. And sometimes that meant working at 10:00 at night to catch up on things. But it was worth it because my kids tell me even now they're like you women to more things than most stay at home moms because I was so obsessed with making sure I got to almost everything. So if you go to a football game or something like that with your kids do people come up to you and say you're the CEO progressive or you try to avoid telling people you're the CEO. Progressive when you go to those kind of family events. It's funny because. My husband says all the time. Why do you say 20 games with everyone. Because people say where do you work. I'll say for insurance company aware in Cleveland. What do you do. I'm corporate. Yes I'll do all these things. So fine. I'm like okay MCO what I have found. If you're on a plane when there used to be on planes or you're somewhere a good way to knock in a conversation is they'll say what do you do. And I say I sell insurance and then no one talks to you. So that's I found it right there I think. I've no people. I live in a smaller town and my kids went to a small Catholic school. So everybody knows me. When I got the job the day that it was announced I was headed to our son's school after the workday to go to his lacrosse game at our PR department kept saying you know The Wall Street Journal wants to talk to you. This place wants to talk to you. And I said I'm headed to lacrosse game. Let me call my mom. Let me call my sister. Let me enjoy this. And I finally said stop calling me because I wanted to be present in the moment. And actually I talked to my five other children. And Jack was on the field. And during halftime I went up and I said hi. And I went to Talon and I said hey I need to tell you some news guys. I know Mrs. CEO it's it's it's you're trending on Twitter. Suppose somebody came to you from Ohio and said you've run one of the best companies in Ohio. You should be governor of Ohio. Would you have any interest in running for office. I think government would frustrate me. I like to get things done . I like to move forward. And I'm a big believer in compromise . So for me I don't think government is in the future. For me I think I loved. I'd love to do some philanthropy maybe a board or two. I'm on a public board now and and do some things with my husband to help the country. And the higher calling a private equity. That doesn't appeal to you . I'll let you do that .

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The David Rubenstein Show: Progressive CEO Tricia Griffith

Tricia Griffith started as a claims rep and rose through the ranks to become CEO of Progressive, one of America's largest auto insurers. Under her leadership, Progressive shares have soared and the company has successfully maneuvered challenges during the global pandemic. She tells her story in the latest episode of "The David Rubenstein Show: Peer-to-Peer Conversations." The interview was recorded Aug. 26. (Source: Bloomberg)

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