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<p align="justify">The Progressive Corporation is a vehicle insurance organization offering a broad range of insurances for cars, motorcycles, boats, commercial vehicles, and home insurances. The organization was formed in 1937 and having its Headquarters in Mayfield Village, Ohio. The firm offers its products through more than 30,000 independent insurance agencies across the United States. As of 2020, the business reflects an impressive figure of revenue which is 42.65 billion US dollars, and over 35000 individuals are attached with the firm (Progressive, 2020). From the viewpoint of the insurance industry, a study of the Porter Five Powers will help examine the company&#8217;s strategic role in the Insurance industry to overcome threats and utilize opportunities.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The competitive rivalry in the Insurance sector in the US market is high because thousands of insurance firms are operating in the industry, catering for the needs and demands of the people of the United States for a better future. Dealing with almost every aspect of life insurances to any product insurance across the country and its states. As a result of these variances, many insurance firms took initiatives and tried to capture the market&#8217;s considerable size in the industry, which shifts the competition among organizations very strong. According to Statista (2020), Progressive is trying to lead the market by showing progress in writing a premium of private passenger vehicle insurance of almost 31 billion Us Dollars in the US Marketplace. The corporation’s significant competitors are State Farm automobile insurance and Berkshire Hathaway inc. premium written amount of 40.9 and 34.9 billion US dollars, respectively. Therefore, leading to an atmosphere of tough competition.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The threat of substitutes in context to the insurance industry is considered low because of the uniformed products and services offered in the market. The central element in the threat of replacement goods or services is the buyer&#8217;s tendency to substitute a company to produce with others to meet the need. Insurers haven&#8217;t had to compete with any substitution goods or services in the case. However, the global insurance revolution has brought this even more a realization by allowing innovation in insurance products, such as on-demand and usage-based insurance services, which cater to potential users searching for a new approach to conventional insurance (Chang and Lee, 2020). As an end result, the threat of substitutes within the industry is low.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The threat of new entrants in the insurance industry is considered moderate because a higher level of competition faces a new entrant in the market, and this threat influences positioning, distribution, and approaches within the industry. Alliances and operational strategies are emerging as a result of the Global insurance revolution. From technology-driven underwriting to additional sources of market information, and usage-based insurance to artificial intelligence, there&#8217;s something for everyone. However, there are specific entry barriers like product differentiation, capital requirements, switching costs and financial securities associated with risk (Pietrasieński and Ślusarczyk, 2015). However, still, a new entrant can gain hundreds of consumers through broker agents in the industry. Therefore, the threat of possible entrants is in vehicle insurance is moderate.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The bargaining power of buyers is moderate in the insurance industry; if several options for procuring goods and services are open, the bargaining power of buyers can be a pain to deal with in the industry, While major corporate consumers who pay huge amounts of money in premiums have negotiating power, today&#8217;s policyholders are a factor due to digital technology advancement and the advent of social media. Modern consumers loyalty expect more personalized attention and treatment for the rates they pay, owing to enhanced knowledge of insurance policies and switching costs (Wong et al., 2014). In this practice, there is a possibility of the increased buying power of clients in the insurance industry.</p>
<h2 align="justify">Bargaining Power of Suppliers</h2>
<p align="justify">The power of suppliers in bargaining is considered moderate in the insurance sector because Suppliers can place pressure on businesses by raising costs, reducing quality, or restricting product/service accessibility. The funding source for the insurance industry is the premiums charged by its consumers, thereby tying the consumer and supplier together. Traditionally, cross-selling agents and brokers have used their power and skills to persuade policyholders to do business with particular insurers (Gasc, 2016). As a result, fund providers have the choice of selecting from a variety of insurance companies. Insurance companies, on the other hand, are unable to reduce premiums below a minimum price level. As a result, suppliers&#8217; bargaining power is moderate.</p>
<h2 align="justify">References</h2>
<p style="text-align: left;" align="justify">Chang, J.I. and Lee, C.Y., 2020. The effect of service innovation on customer behavioural intention in the Taiwanese insurance sector: the role of word of mouth and corporate social responsibility. Journal of Asia Business Studies.<br />
Gasc, J., 2016. Insurance agents will continue to have a valuable role in the new digital distribution era &#8211; Accenture Insurance Blog. [online] Accenture Insurance Blog. Available at: https://insuranceblog.accenture.com/insurance-agents-will-continue-to-have-a-valuable-role-in-the-new-digital-distribution-era.<br />
Pietrasieński, P. and Ślusarczyk, B., 2015. Internationalization of small and medium enterprises: empirical research review on barriers to entry into foreign markets. Polish Journal of Management Studies, 11(1), pp.113-123.<br />
Progressive, 2020. Progressive Corporation 2020 Shareholders’ Report. [online] S24.q4cdn.com. Available at: https://s24.q4cdn.com/447218525/files/doc_financials/2020/q3/interactive/index.html#letter.<br />
Statista, 2020. Leading US private passenger car insurers by premiums 2019 | Statista. [online] Statista. Available at: https://www.statista.com/statistics/186513/top-writers-of-us-private-passenger-auto-insurance-by-premiums-written/.<br />
Wong, R., Tong, C. and Wong, A., 2014. Examine the effects of customer satisfaction on customer loyalty: An empirical study in the healthcare insurance industry in Hong Kong. Journal of Economics, Management and Trade, pp.372-399.</p>
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