“It is a solution to a real problem,” says Renwick, adding that consumers may not understand that there is a solution to paying higher auto premiums. “They will have to understand it is a problem they want to solve.”

But Renwick put the burden squarely on the shoulders of his company's failure to communicate.

“We just need to fill the funnel at the top with a lot more consumer demand. It's going to be tricky. It is not like buying a coke; we're going to have to make it very compelling for people.”

Snapshot is an electronic transmitting device installed in a vehicle to record the customer's driving behavior. The telematics, or “Pay As You Drive” program, allows an underwriter to quote an auto-insurance rate based on actual driving habits.

Renwick said the program has proven successful with both direct- and independent-agent-channel customers. About 35 percent of its direct-business customers have opted into Snapshot and close to 10 percent of agent-channel customers have joined. About 8,000 independent agents offer Snapshot to their customers, said Renwick. In a Securities & Exchange Commission filing, Progressive said annual premium for customers choosing Snapshot exceeded $1 billion out of a total of more than $16 billion in net written premium for 2012. The carrier markets the program in 44 jurisdictions to its direct-auto customers and is available in 39 of the 44 jurisdictions for independent-agency customers.

Progressive is not alone in offering Pay As You Drive programs. State Farm, Allstate, The Hartford and Liberty Mutual are on the list of insurers making bets that the technology could open the door to a whole new underwriting strategy for the auto-insurance business.

However, Progressive has sued State Farm and The Hartford for patent infringement. At the same time, Progressive is licensing the intellectual property behind Snapshot.