♪ [Phonograph record crackling] ♪ Rubenstein: This is my kitchen table and also my filing system.
♪ Over much of the past 3 decades, I've been an investor...
The highest calling of mankind, I've often thought, is private equity.
and then I started interviewing.
I watch your interviews because I know how to do some interviewing.
I've learned from doing my interviews how leaders make it to the top... Bezos: I asked him how much he wanted.
He said, "250."
I said, "Fine."
I didn't negotiate with him, and I did no due diligence.
Rubenstein: I have something I'd like to sell.
and how they stay there.
You don't feel inadequate now because being only the second wealthiest man in the world, is that right?
[Laughter] Very few CEOs have worked their way up from the lowest position in a company to the highest position at a company.
♪ One of those who's done so is Tricia Griffith.
She worked her way up from being a claim representative to the CEO of Progressive, one of the largest automobile insurance companies in the United States.
In her tenure at CEO, she's made diversity, equity, and inclusion a hallmark of her performance.
♪ 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?
Griffith: 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 that to be out there and be top of mind and be on the short list, you really have to be advertising.
Rubenstein: Do people change their automobile insurer every year or every couple of years, or they stay for 5 or 10 years or something before they change?
Griffith: It really depends on the customer, so we have these personas that we put with our customers, and there are a certain set of people-- we call them Sams-- that just shop a lot and leave a lot, and they come and go.
They usually come and go because of price.
Other customers stay because of loyalty, so we have a group that we've called the Robinsons.
Those are auto/home bundles, and once you have more and more products with a company, normally, you're stickier, and you stay longer.
Rubenstein: So you have a famous character in your insurance, some of your ads, called Flo, a woman that plays, I guess, an insurance person.
Does she get a certain percentage of all the new business she brings in because she's so good, or she doesn't have that deal?
Griffith: No.
She does not have that deal.
She is paid per contract, and she's doing fine.
Rubenstein: So today, when people have an accident today, when they 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?
Griffith: Yeah.
They absolutely are, a couple of reasons.
One is the components of the car, so I started as a claims rep, and the cars in 1988, the bumper repair or replacement would be a couple hundred dollars, and now they could be upwards of $1,000, $2,000 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.
Rubenstein: So today, do people drive under the influence of alcohol more than they used to or less than they used to based on your statistics?
Griffith: We would say because of the DUI laws and safer vehicles, frequency of accidents have gone down, so it's not just one component.
It's also the safety of vehicles, but we believe that stricter laws have helped with that.
Rubenstein: What about people who are texting while they're driving?
Is that a big problem?
Griffith: You know, it is, and we for years, obviously, thought of that, and as you're driving down the road sometimes there'll be somebody in the left lane, and you'll be like, "What are they doing?"
and then you see that they're texting.
We are driven by data, and so, you know, we have usage-based insurance, but we also-- so we had that in a dongle, but we also have it on a mobile phone, and so we've started to measure for several years now distracted driving, and it absolutely makes a difference if you have handheld, hand-free, and we can tell the difference, and you're much more distracted, obviously, if you are looking at Facebook or talking on the phone with a handheld.
Rubenstein: So you have a mechanism, as I understand it, where you can kind of monitor how I'm driving.
Am I driving under alcohol influence?
Am I texting?
Am I driving too fast?
Is that what you do-- you put some kind of monitor in a car, and you can make insurance go up or down depending on how they perform?
Griffith: Well, there's two different ones.
There's a Snapshot device we've had for many, many years, and that's a dongle that's actually in the OBD port, and with that, we look at hard braking, miles driven, time of day, and we look at it based on that plus other variables, and you get a discount to try it, and then at the end of a certain period of time, we will either give you a deeper discount or a surcharge.
On the mobile device that's embedded in your iPhone or your Android, we actually also measure distracted driving.
Rubenstein: Let's suppose I am somebody-- I just bought a new car, and I want some insurance.
I want it from Progressive.
I like your ads.
The ideal person for you is somebody who is what age, what gender, what kind of job, what kind of city?
What would you say is the ideal person that you would like to insure?
Griffith: The ideal person is anyone where we believe that we can service them and that we can make at least 4 cents of underwriting profit on them.
That's why when I talked about those personas, we grew up in non-standard, so we covered all the people that were higher risk, and we were able to make that business model move work, and now we continue, and now we have from non-standard to preferred.
We like everyone, so it's, come to us, and if we have the right price and it works for you, we want you to be a Progressive-insured.
Rubenstein: 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?
Griffith: That is one variable, so we look at hundreds of variables, so it depends on where you live.
Do you live in a congested area?
Do you live in the 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.
Rubenstein: When I was a teenager, you know, I was told that teenagers are not good drivers and insurance is expensive.
Is that true today-- insurance is more expensive for teenagers?
They're not good drivers?
Griffith: I will say that having 6 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 know, 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 6 youthful drivers, that there is a reason you pay a little bit more.
Rubenstein: You're 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?
Griffith: Yeah.
For us, it was really access to more of the preferred customer, especially on the independent agent sides.
We had a relationship with ASI, American Strategic Insurance, for years.
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.
It's been a really nice transition, a really great acquisition, and so now, you know, having sort of the whole picture for whatever you want-- auto, home, your boats, motorcycle, commercial-- and that's why we're continuing to expand, because I think it's really important to diversify.
Rubenstein: Now, you also have something called pet insurance, so, for those who are not that familiar with pet insurance, what is pet insurance?
Griffith: Well, there's two types of things, so one, we were the first to say, "If your pet is in your car, that's a free insurance," and he or she gets injured or killed, we would pay an amount, and that kind of was covered a long time ago.
Then there's pet insurance if your pet gets sick, and so people have that coverage, and that's one of many coverages that we have in our-- We call it our Progressive Advantage product, and what we want to be able to do-- it's program, really-- we want to be able to deal with all those little things, like wedding insurance and pet insurance.
Those go along with all the big things, like life and umbrella and home, and so we kind of just want to be able to provide anything that anyone wants.
If they call in, we want to be able to say, "Yes.
We have that."
Rubenstein: But you provide pet life insurance, in effect, or not?
You don't do life insurance for pets.
Griffith: No.
It's for if they... Rubenstein: Injuries?
Griffith: get sick, yeah.
Rubenstein: OK. Are you thinking of getting into the life insurance business?
I mean, you're in the other insurance businesses.
Why not get into life insurance?
Griffith: 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 that's been working really well, and we actually are considering that.
We have a life insurance company filed in Ohio, more to come on that.
Rubenstein: People say that there's 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, is cars that don't have accidents, or you're not going to worry about that right now?
Griffith: I don't worry about it.
I mean, 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 put 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 possibilities, adjacencies to grow our business.
I will tell you, though, when you look back at some of the headlines in 2012 that say, "This type of car is going to 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 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.
Rubenstein: Now, Elon Musk has said he's going to have an autonomous car out there at some point in the 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?
Griffith: Not really.
Rubenstein: Because...?
Griffith: I think people love our culture.
I think they love working here, and I think that we have a huge future.
I think that the technology's absolutely there, and I can see a car going from point A to B in a geofenced 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.
Rubenstein: So in the insurance business, one of your competitors is Geico, which is famously owned by Berkshire Hathaway, and Warren Buffett has famously written about how it was one of his best investments ever and so forth and so on, but the reason that Geico, I think, he likes it is, among other things, there's two businesses in the insurance world that you're kind of operating, and one is, you're making assessments of whether people are going to have claims or not, and then you have the premiums that you're investing, so in the first part of the business, can you explain, in the business of just paying off claims or not paying them off and getting the premiums in, you try to make a profit on that of what percent, generally, in the automobile insurance business?
Griffith: So ours is at least 4 cents, so we've had the same business objective since we went public in 1971, so you'll hear Progressive, and everyone knows-- it's in all of our objectives-- 96, grow as fast as you can, so 96 means out of a dollar premium, we want to make at least 4 cents of underwriting profit, grow as fast as we can, and the only caveat to that is, we won't grow if we don't think we can serve our insureds, so if there's a ton of high growth and we can't hire, we'll kind of slow down.
Rubenstein: 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?
Griffith: 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 what they wanted to do, but they wanted to be able to serve the non-standard customers in Cleveland that needed insurance, and so they borrowed 10,000 from Joe Lewis' mother-in-law, and that's how Progressive was born, and you might know Peter Lewis, who ran the company for a long, long time.
He was the second CEO and then Glenn Renwick and then myself.
Rubenstein: How did you get started at Progressive and at the bottom, pretty much?
Is that right?
Griffith: Yeah.
I went to Illinois State University, a marketing degree.
I wanted to go into something in 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 6 months.
It was a called Furrow Building Materials.
It was like a--think of, like, a Lowes or a Home Depot.
I was like, "What am I doing?
I'm mixing paint.
I'm actually forklift-certified," and I was driving home ne day with my hard hat, and I said, "I got to look for something different," and what I wanted to do was work somewhere for a couple of years, pay off my school loans, and then go to get my MBA, so I went home and opened the classified ads.
I'd never heard of Progressive.
At that time, we were less than a billion, and I thought, "Claims rep trainee?
"This sounds interesting.
19,000?
That'll help me pay off my debt," and made the call, Rubenstein: So the job is to be a claim adjuster... Griffith: Correct.
Rubenstein: and so what does a claim adjuster actually do?
They go out and look at my car and say, "The damage isn't that great, and you don't need that much money to repair it," or what does a claim adjuster do?
Griffith: So what I would do is, if I've had your claim and you were injured, I would go out and talk to you about your injury 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 also did special lines, so I was a motorcycle rep, and I basically handled the entire file, so I was in body shops, crawling under cars, and in your house talking to you about your injury.
Rubenstein: 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.
How did you go from being the head of Human Resources to being the CEO?
Griffith: Well, that, you know, to me, to actually take-- get the CHRO 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 actually an odd circumstance.
I went for it.
I wasn't going to because I don't have any HR experience-- I have some maternity leaves, but that's about it-- and people kept calling me from around the company saying, "You have to go for this.
You love diversity, You love metrics.
We need this," so finally I had a pre-interview lunch 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 watched me, and I did that for 6 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.
That's 75 cents of every dollar of premium that comes in, you're paying out in claims, so it's a big business piece, and then he gave me all things customer-facing, so I had our call centers and claims and then I was COO before the CEO role, so I really credit Glenn for guiding me, giving me opportunities, coaching me, and sponsoring me.
Rubenstein: So as head of Human Resources, you must have instituted some policies that changed the company's face because your company's been voted the number-one, most diverse company in the United States in some surveys.
Is that something that you implemented and put into practice?
Griffith: Yes.
We started our diversity inclusion initiatives really in earnest when I was there.
We started our first employee resource groups, which was Progressive African American Network and our LGBT+.
Now we have 9.
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 senior leadership, we have opportunities there, and, in fact, we are working on some really aggressive objectives for the next 5 years with my team to continue to change that.
Rubenstein: Your 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's a woman?
There must be none.
Griffith: I don't think so, and we actually have 12 members of our board, and 6 are women and one of the female is a person of color.
Rubenstein: So when you were the COO and, I guess, in line to be the CEO, did you think that they were going to 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."
Griffith: 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 of Progressive," and that was what really was meaningful to me, so had I not gotten the role, I'd still be here, and there were lots of other opportunities to have a great CEO other than myself.
Rubenstein: 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 you just eat in your office with other executives?
Griffith: Because that is my way of getting to know people and really feeling what's going on with 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 claims rep trainee, I always wondered what the execs did, and we don't have an executive cafeteria.
All of us eat in the regular cafeteria.
It just 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, you know, 5 people and said, "May I join you?"
and they gave that horrible look like, "Please, no.
Please, no," and I sat down, I had 5 new friends, and just, to me, it's an important part to be approachable.
You feel connected and you trust your leader, you're going to run through the wall for them.
Rubenstein: So when you sit down with people at the employee cafeteria, do they ever say, "By the way, I'm underpaid," or they never say that?
Griffith: 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 me.
Rubenstein: You and your husband have 6 children, right?
Is that right, 6 children?
Griffith: Yes-- his, hers, and ours.
Rubenstein: All right, so when you have 6 children and you're running a company, isn't that kind of complicated?
I mean, how do you have time in the day to do anything else?
Griffith: 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 HR for a couple of years, he also-- We met at 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-- assume 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 somebody's room, and someone would have an ear infection, and so I created a network of friends that stayed home, and I did an old-fashioned bartering system, so if you could take, you know, Emma for a couple of hours while I do this presentation, I will babysit your kids, and you and your husband can go out on the weekend.
I treated it-- I always had plan B, C, and D just like you do in business.
Rubenstein: So as a leader, what would you say are the most important qualities?
Obviously, to rise up at a relatively young age to be the CEO of a major company, it's not easy, and you got the job at a very young age for a CEO, so what would you say are the leadership qualities that you brought to the table or that you most admire?
Griffith: I mean, 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're only a leader if people want to follow you, so do people want to follow you?
Do you have, you know, 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 HR 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 the only thing better than those debates are the unity, the power in the unity when you come in, you come out, and you're your solidified as a management team, as a leadership team.
Rubenstein: So sometimes, people say, it's very difficult for women to have it all, to have a family and also have a great professional career.
It's obviously possible.
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?
Griffith: I think you have to have your priorities, and you have to talk to your children all the time.
I always knew what my children needed, and they knew that I couldn't come to everything, and so I would say, "Oh, oh, there's a dance "coming up on Friday night.
Do you want me to be the chaperone?"
"No, Mom.
No.
Please don't come to the dance."
"Do you want me to be lunch mom?"
"No," so I would create well in advance a calendar of going to Matt's field day, Eric's Valentine's party, and I really was very planful about it, and, like I told you, I also had plan B and C. 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 of his, and I worked my way around that so I could do that, and sometimes that meant working, you know, 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 went to more things than most stay-at-home moms," because I was so obsessed with making sure I got to almost everything.
Rubenstein: So if you would go to a football game or something like that with your kids, do people come up to you and say, "You're the CEO of Progressive," or you try to avoid telling people you're the CEO of Progressive when you go to those kind of family events?
Griffith: It's funny because my husband says all the time, "Why do you play 20 games with everyone?"
because people say, "Where do you work?"
and I'll say, "For an insurance company."
"Oh, where?"
"In Cleveland."
"What do you do?"
"I'm corporate," and so I'll do all these things till finally, I'm like, "OK.
I'm the CEO."
What I have found, if you're on a plane when you used to be on planes or you're somewhere, a good way to not get 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 I found the right thing.
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 work day to go to his lacrosse game, and 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 a 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 5 other children, and Jack was on the field, and during halftime, I went up, and I said, "Hi," and I went to tell him, and I said, "Hey, I need to tell you some news."
He goes, "I know, Mrs.
CEO."
"You're trending on Twitter," so, yeah, I try to be really present in the moment, which I don't always do well, but I try really hard.
Rubenstein: Now suppose somebody came to you from Ohio and said, "You run one of the best companies in Ohio.
You should be Governor of Ohio."
Would you have any interest in running for office?
Griffith: 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'd love to do some philanthropy, maybe a board or two-- I'm on a public board now-- and do some things with my husband to help the country.
Rubenstein: And the higher calling of private equity, that doesn't appeal to you.
Griffith: Ha ha ha!
I'll let you do that.
♪ ♪