Google is expanding its insurance distribution capabilities
Following some excellent primary research by Forrester analyst Ellen Carney it is becoming clearer that Google is close to piloting the launch of motor insurance in the United States.
Her research indicates that Google has agencies established in more than half the states including California, Florida , New York & Texas. A launch in the first quarter of this year is indicated with California as the pilot state – although Carney noted that a delay will not be surprising. As Carney says in her post:
“… the launch of Google Compare in the US apparently hasn’t been easy. Even though insurers have been mentioning Google overtures to participate on the comparison site to me for more than two years now, the Google Compare US site launch keeps getting pushed back.”
Google will be entering as an aggregator in car insurance and Carney reports agencies have been signed with a number of insurers including MetLife, Dairyland & Viking.
Denise Garth, reporting in Insurance Networking News, has also concluded that Google is on the verge of entering the insurance sector.
So the immediate question now seems to be to anticipate and predict how Google will enter the space.
Google entered insurance in the UK in 2011
Google purchased Beat That Quote in the UK in 2011 for more than US$50 million and continues to run the site. When you look at the commentary around that acquisition it is not clear whether the purchase was an opportunity for Google to learn about the price comparison market or a blocking move to eliminate an emerging business model that was rewarding customers who share their data with cashback offers.
As Kelly Dolan from EntrepreneurshipCountry Global said in her analysis of the Google acquisition of Beath That Quote:
“What John and his team (at Beat That quote) were doing was actually very simple, if stunningly effective: they were incentivising users through cash backs to give them more data.”
Google has already partnered with CompareNow.com in the US
The New York Times reported in January 2015 that Google has partnered with CompareNow.com.
Google appears to be aggressively building its access to insurers both directly and via partnership. The Economic Times of India reports:
“The deal with CompareNow, which was signed late last year, gives Google access to roughly 30 insurers in CompareNow’s network, including many of the biggest insurers in California and Texas – the nation’s largest auto insurance markets. When Google Compare is up and running in the United States, it will send that traffic to CompareNow, and the two will share the royalty, the person with knowledge of the situation said.”
Is CoverHound on Google’s acquisition list?
In her blog Carney mentioned she had discovered that a Google employee, had signed up as a CoverHound agent. She speculates that Google could be running the slide rule over CoverHound. But could it simply be a mystery shopping exercise? Or just an employee looking for some extra income?
Google Compare vs CoverHound – We compare the experience
At The Digital Insurer we thought it would be useful, and maybe insightful, to compare the user experience of Google Compare in the UK and CoverHound in the US.
The Slideshare below gives the visuals and detailed analysis of this comparison.
Our conclusion, in a nutshell, is that CoverHound offers by far a superior customer experience and Google would do well to at least study the approach they have taken. In a future post we may also take a look at Compare Now vs CoverHound.
How far will Google go into the insurance sector – and how will it manage the conflicts?
What seems to be clear is that Google want to take a bigger share of the distribution margin in insurance but is stopping short of acquiring manufacturing capability by taking over an insurer.
This strategy makes sense as Google’s direct entry into the insurance sector would put at risk a valuable source of search advertising revenue.
However, even this relatively small step highlights the conflicts in the Google model. How can we be sure that Google will not use its privileged access to customer and client data (including search data from insurers and competing aggregators paid searches) to get an unfair advantage over the competition? I am not an expert on US regulations – and it would be interesting to hear from those that are how this conflict is dealt with by existing regulations or how it might lead to future regulatory lobbying for change.
Google Compare in the UK is interesting as the low key site seems to imply that Google are taking a very cautious approach and have been using the site for internal learning as opposed to market disruption. Will the US launch be so timid?
However, even in the UK we have seen Google use its search assets to give it a preferential position compared to other comparison site – see the image below, where a quote can be initiated from a google ad, and also this blog.
Looking ahead, is this part of a plan from Google to aggregate car owner data in order to promote the Google car in a few years’ time as well as to be superbly positioned to offer insurance solutions to the new risks that will need to be insured for driverless cars?
Keep an eye out
As a minimum I think we can see that Google is already disrupting the aggregators who themselves are disrupting the insurers.
Interesting times ahead for sure. It looks like we will know more very soon and next move is with Google. What’s your view?
Web references for this post
- Ellen Carney’s excellent blog: http://blogs.forrester.com/ellen_carney
- Google comparison ads in the UK: http://www.stateofdigital.com/uk-insurance-comparison-ads/
- Google Compare in the UK: https://www.google.co.uk/compare/
- Forbes on Google insurance: http://www.forbes.com/sites/juliemeyer/2014/11/29/the-judo-move-how-to-out-google-google/
- New York Times on Google partnership with CompareNow: http://bits.blogs.nytimes.com/2015/01/08/new-clues-on-googles-plans-for-insurance/?_r=2
- entrepreneurship Global analaysis of Beat That Quote: http://www.entrepreneurcountryglobal.com/ecosystem-economics/item/case-study-beat-that-quote
- Economic Times of India on Google partnership with CompareNow: http://articles.economictimes.indiatimes.com/2015-01-09/news/57884069_1_insurance-industry-insurance-company-agency
- Interesting video from the founder of Beat that Quote on being an entrepreneur:
https://www.youtube.com/watch?v=k_7gw9x076Y