August 16, 2020 6:50 AM EDT

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One of the best indicators of economic activity is how many miles Americans drive, and as CEO of Progressive Corp., one of the largest U.S. auto insurers, Tricia Griffith keeps a careful eye on the nation’s coming and goings. Since the pandemic began, people are both driving less—miles driven plummeted by 40% in April—and getting into fewer accidents.

Griffith has spent her career at Progressive, starting as a claims rep, and is a rare CEO who previously served as her company’s head of HR, a background that she credits with helping make Progressive the top-rated corporation for diversity and inclusion, according to a ranking by the Wall Street Journal.

Griffith, 55, joined TIME for a video conversation from her home outside of Cleveland. Griffith shared her views on humor in insurance advertising (comedian Stephanie Courtney has been appearing in Progressive ads as Flo since 2008), the “sophomoric” state of the nation’s leadership, and how to build a diverse and inclusive corporate culture.

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This interview has been edited and condensed for clarity.

You’re in the risk business. How good a job are we as Americans doing at judging risks right now? How would you grade our decision making process?

F, F, F. I can’t believe people aren’t wearing masks. It’s ridiculous. And it’s selfish. Because you wear the mask for me, I’ll wear it for you. I’m looking at these beaches, and I am so disturbed. I just don’t understand why people don’t wear masks. My daughter’s wedding was 400 people and now it’s 12. And we’re all wearing masks.

And what grade would you give the nation’s leadership?

I think the sophomoric ways that both sides of the aisle are acting, it’s just like—I said to my team the other day, it was right around the time Democrats were saying $600 for unemployment. The Republicans were saying $200. And they couldn’t come to a compromise. I said, “If we worked this way as a team, all of us should be fired.” I would not allow that. And my board wouldn’t allow me to work like that. I’ve been disgusted at people not being able to compromise.

Shouldn’t the business community be speaking up with a louder voice? You have a lot of clout.

We actually have. As a member of the Business Roundtable, we have sent letters to Congress asking them to do specific things for small businesses, etc. I can forward you a note that we sent.

Yes, but there are degrees. I mean a polite letter from the Business Roundtable is nice, but a pointed comment from an individual CEO brings another level of pressure. Should more people be speaking up?

Right. I haven’t personally, but many members of the Business Roundtable have been on the different various talk shows and been more aggressive about it.

And another thing—the stock market is acting so irrationally.

I agree.

Why is the market continuing to hit these frothy levels?

It’s hard for me to say. I really try not to guess on the market. Very little of our investment portfolio is in equities, like 11%. We’re very conservative from that perspective. We are invested across the board in fixed income. We do commercial mortgage-backed securities. We do investment in corporate bonds. Municipal bonds.

So you’re not watching Squawk Box and calling your investment division and saying, “Sell! Move it all to cash!”

No, no, no.

You spend more than a $1 billion a year on advertising. Why is the consumer insurance industry such a heavy advertiser?

It’s funny you ask that because when you really think about it, everyone is required to have insurance yet we advertise it. But it works. We measure it and it works. We know customers react to it. It makes the proverbial phone ring.

You’re out there fighting every day for customers?

Absolutely. Geico and Progressive, we’re sort of Coke and Pepsi. It’s very competitive.

It’s funny, I’m an older consumer and what insurance company I use is a decision I want to make once. I’m surprised that people are constantly re-evaluating it.

Years ago, we put together personas. We have Sams, Dianes, Wrights and the Robinsons. You’re a Robinson. I’m a Robinson. I got my phone. I’ve got my cars. The ones that move a lot are Sams. They are what we would call inconsistently insured. And they do it solely for price. And so they’ll move for $50 or $100. Then Dianes are a little bit more stable, where they have a car, and maybe they have a rental policy. We want to get those Dianes so that they grow into Robinsons, which are auto/home bundles.

Insurance is a serious matter. But the prevailing tone of the ads is so comical. Why has the industry taken this approach?

There’s so much noise out there with so many different insurance companies advertising, you have to have something memorable. It is a serious category. When you’re calling in, we’re not going to be lighthearted about it. But we have to get your attention to be on the short list.

How important has Flo been to the growth of Progressive?

She’s been extremely important.

But at the same time, as early as 2015, there was a Reddit subthread advocating “Flo Must Go.” How do you balance her continuing popularity with the anti-Flo faction?

We look at the data. And so we sent out a survey that says literally, “Are you tired of Flo?” And we have not seen that change.

Are any of your new characters taking off? As a dad myself, I have to love the series on parent-like behaviors.

We call it parent-a-morphosis. You morph into your parents. We designed that in my office when I was chief operating officer about four and a half years ago. It’s funny because it’s true. Those lines are literally from all our dads: “Defense wins championships.” That was my dad.

What’s up with all the hip new insurance companies like Hippo and Lemonade, Root and Young Alfred? What’s driving that dynamic?

There’s been a lot of money to be able to fund startups. And I actually think many of those companies are answering unmet needs for people. Making it easy. You can get a really quick quote with Lemonade. Root is all usage-based insurance. Those companies are pushing us to not be complacent. I love competition. I just think it makes you better.

Let’s turn to your core business: car insurance. With the pandemic, are people driving less?

It went down 40% [in April] and then immediately upon the states’ opening, it’s crept back. So it’s not to normal levels, but it’s getting closer.

As a proxy for how the economy is doing, with reopening and then reclosing, are we down from a peak? Did it go up in June, and now it’s falling again?

No, it’s been relatively stable since things started to open because different states are going to open and close. So when we reclosed some of the states, other states picked up.

So the overall trend line continues to be up, is that correct?


But miles driven is still down year-over-year?

It’s probably still down like 10%.

And what’s happening on the accident front?

We’re seeing fewer accidents. We believe because there’s less congestion that people are getting in less accidents.

Even before the pandemic, the frequency of accidents has been declining, right?

Frequency [of accidents] in the industry has been going down for the last 60 years. The offset of that has been severity. Our components are much more complex because of the technology. When I was in claims, the bumper might be $300. But now it would be $2,000 if it’s got cameras in it, etc. And medical costs.

People are getting injured more severely?

No, when you get injured, medical costs have gone up. So your visit to the chiropractor yesterday is a lot more than it was 10 years ago.

Regarding accidents, historically, are there certain times you want to avoid being on the road, the Fourth of July?

I think the highest rate of DUIs is the Wednesday before Thanksgiving. Everybody gets home. You’ve gone out with your college friends or your high school friends.

How existential a threat to the auto insurance business is full development of autonomous vehicles? Say that it was fully here tomorrow.

It’s a threat to the industry. If it was here tomorrow, it would be huge for our auto business because there would be a lot less accidents. And so premiums would go down. That’s one of the reasons why we’ve diversified and we bought a homeowners’ company, and we have commercial lines, and we have relationships with Lyft and Uber. But I think everyone’s rooting for safer vehicles because it’s good for society. I’m not putting my head in the sand. Cars will get safer and that will be great for society. But I think it’s going to be a little while.

The Wall Street Journal last year ranked Progressive the No. 1 company for diversity and inclusion. What advice would you give to a company that’s now starting to take this more seriously, going beyond making supportive statements and donations?

You have to be really intentional. You have to realize it takes a long time. And you have to really have programs in place that you can monitor. We started employee resource groups back when I ran HR in 2007. Now we have nine that are really embedded in our culture. We started a program three or four years ago called our Multicultural Leadership Development Program. We have a cohort of people that go through an 18-month program. Most of them are people of color. And their rate of promotion having gone through this 18-month program is about 60% higher than your standard peer. We’re going to supercharge that program to close that gap in the middle so that when I leave, my team is more diverse.

That same study found that companies that are more diverse performed better financially. What are your thoughts on why that’s so?

Because you get an opinion from a variety of people. If you have the same people that grew up the same way as you, that look the same as you, that love the same as you, you are going to come to probably the same conclusions. Diversity allows for debate and action. And it’s more fun. I don’t want to be around a bunch of 55-year-old white women all the time.

What else has been successful in building a diverse culture?

I’ve had the opportunity to hire several members from my board of directors in the last several years. And I think having a board that is diverse is as important because they’re guiding me. And I think we’re the only Fortune 500 company that has a female CEO and a female chairwoman. And I have 12 board members: half men, half women—and one of the women is a person of color.

Where are you from? What was your childhood like?

I was born in Decatur, Ill., which is a blue collar place. I’m the youngest of six kids. My mom stayed home until I was in grade school. She was a waitress, and then she worked as a mom. My dad sold life insurance door to door so we were really broke. I had a very small house with a lot of people.

What type of behavior will you not tolerate on your management team?

Disrespect. Be respectful to everyone.

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BUSINESS BOOK: Principles, Ray Dalio

AUTHOR: David Halberstam mostly because—I’ll tell you a quick story. So my sister bought me a book years ago, October 1964. And that was actually the month and year I was born, and it’s about the Cardinals and the Yankees going to the World Series. My dad played Triple-A farm ball for the Cardinals. He’s a Cardinal fan, so that was really big. And I was born on the day the Cardinals won the pennant, Oct. 4, 1964. My grandma called and said, “Congratulations!” And my dad said, “Yeah, can you believe the Cardinals won?”

APP: Instagram

EXERCISE/STRESS RELIEVER: My husband and I get up every day at 5 to work out. I love to go for long walks.

ALTERNATE FANTASY CAREER: I’d like to be a talk-show host.

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