Credit Karma taps Progressive for auto insurance discount program

Consumer technology platform Credit Karma, widely known as a credit monitoring tool, is boosting its data-focused strategy through a behavior-based auto insurance discount program offered in partnership with Progressive.

Why should we care?
Credit Karma is moving into the growing field of telematics-based insurance, an increasingly competitive space bolstered by recent IPO plans of insurtechs Root and Metromile. Both of these firms use behavior-based auto insurance pricing. Credit Karma’s program, which is called Karma Drive, offers members usage-based auto insurance pricing. It works like this: Credit Karma members bring their mobile phone with them while driving for a 30-day trial period, with no app or additional device required. After receiving feedback on driving habits, members are alerted if they qualify for an auto insurance discount with Progressive. Credit Karma, which has 110 million members, generates revenue through referrals to financial providers. The Justice Department recently cleared Intuit’s planned $7.1B acquisition of the company, provided both companies divest Credit Karma’s tax preparation business, which Square agreed to buy for $50M.