The Googlization of Insurance

“The only constant is change and the pace of change is increasing.” Peter Diamandis (founder of the X-Prize)

Google’s entry into the insurance industry in the US has been well documented. They released a few months ago “Google Compare for Auto Insurance” currently available in California.

Providing comparative insurance pricing for insurance is not new for Google.

They have provided Google Compare for auto and travel insurance quotes, as well as mortgage quotes in the U.K. Google also operates a credit card comparison site in the U.S., all of which fall under the “Google Compare” branding.

The auto insurance comparison U.K. site has been live since 2012, but the U.S. launch has been rumored for quite a while. Google Compare Auto Insurance Services, Inc. is now licensed to sell insurance in all 50 U.S. states.

Google Compare

The current site is located at https://www.google.com/compare. I urge you to take a look at this site.

The site offers a simple and easy to use layout. The first step is to enter a zip code. The compare tool asks for the usual underwriting information. When completing the initial name and address information the user can elect to “speed things up.”

The site provides an option to have Google look up their information and enter it automatically. The option will “share your name, address, and date of birth with third party data providers to prefill the answers in our questionnaire about you, your car and any additional registered drivers. You can review and edit this information before you submit it.”

After selecting the desired coverage, the site displays quotes from 17 insurance companies including USAA and MetLife Auto & Home.

The fine print at the bottom of the site states:

“Our service is free to you but to operate this service, we are compensated by the insurance providers on our panel. We always welcome new members. If you are a US insurance provider, please contact us if you would like to join. This service for comparing insurance quotes is provided by Google Compare Auto Insurance Services Inc., which is a licensed producer acting as an independent agent of the insurance providers on our panel. Each insurance provider is solely responsible for its own products (including the ads for those products)."

This is similar working to what is on the U.K. Google compare site. 

I am not sure Google is using the term “independent agent” in the same way you do.

While the Compare site is yet another revenue stream for Google, it might also be a way to gain a deeper understanding of the US insurance marketplace. While they do have five years of experience in the U.K., the insurance environment there is very different than in the US.

That knowledge could be very valuable down the road when it comes time to put the company's autonomous vehicle into customer's garages. The expertise could come in handy if the rumored Uber competitor happens, as well.

Google's Intentions

The question looms – what are Google’s intentions for entering the US insurance marketplace? Moreover, how concerned should insurance agents be about this new entrant to an already crowded space?

Google is not sharing much information about its intentions. Let’s look at some of the possible implications for the insurance industry and ultimately US insurance agencies.

Google currently makes a lot of money from the insurance sector through their Google Ads platform.

According to Google’s 2014 10-K filing with the Security and Exchange Commission, their total revenue was $66 billion. $28.1 billion of that came directly from US operations.

89% of that revenue comes from the Google Ad Words advertising platform – $25 billion dollars.

For at least the last five years, insurance search terms were the most expensive paid terms on that advertising platform. Thanks to GEICO, Progressive, Esurance and the many other advertisers looking for a lead from Internet searches the top PPC (pay per click) fee is $54.91 (for one click).

While Google does not publish how much revenue is generated by particular keywords, it is estimated that revenue from insurance search terms represents 24% of total revenue.

This means that Google is making about $6 Billion in advertising revenue directly from the insurance industry in the US.

Why would they jeopardize making their top revenue-producing clients mad by competing directly against them?

Will the Google Compare service just become another way for them to generate additional revenue from the industry by selling the leads captured through their site?

The lead aggregators like NetQuote and InsureMe might have more to worry about – at least in the short term.

While I do not see Google seeking to jeopardize its advertising revenue, there are some other factors that can be considered. Google spends a lot of money on far out ideas, experimentation, testing, and research and development. Some of these projects will have implications for the insurance industry.

Here are two examples that I am following.

The Waze App

The Waze App is my GPS of choice. Like a standard GPS, it provides turn-by-turn direction information. What makes Waze unique is that it is community driven. Individual users submit real-time updates about road conditions, travel times, police locations, and route details that become immediately available to all other users. As a mobile application, it also gathers anonymous data about driving conditions and habits.

Waze was founded in Israel in 2008 and acquired by Google in 2013 for $1.1 billion. Google is currently merging their existing Google Maps with the Waze app to provide users with an overall better driving experience.

With Google’s deeper move into the insurance industry could Waze be a hidden asset for Google and a threat to the industry?

Progressive is the pioneer in using real-time driving information as a factor in setting automobile insurance premium. Their SnapShot product allows many drivers to lower their auto insurance premium by allowing Progressive to track their driving habits.

However, the Progressive program is expensive. They have to physically mail out a device you plug into your car data port.

Waze has millions of drivers using their app every day – at no cost to Google. The same driving data could be tracked – number of miles driven, how fast, where you drive, when you drive, and how fast you brake.

If there is one thing that Google is excellent at it is analyzing massive amounts of data and making intelligent and informed decisions. What can Google do with this driving information from millions of app users?

Google Cars

You have heard a lot about autonomous cars – also known as driverless cars. Google has been on the leading edge of this technology advancement. The technology is progressing faster than most anyone anticipated.

However, from an insurance standpoint if the car is driving itself who is liable if something goes wrong?

The car owner? The manufacturer? The software developer?

Could Google’s move deeper into the insurance industry be the beginning of their education on how to provide coverage for a Google car? Would Google provide the car insurance as part of the lease program?

Insurance agents cannot out Google Google, but they can out local Google.

What’s an insurance agent to do?

There is no need to panic, but you had better not be complacent either.

Learn to Master your Internet Presence - You cannot out Google Google, but you can out local Google. Concentrate on mastering your Internet presence in your local area. Continue to be involved in local community activities. Facebook and LinkedIn are great tools to be more visible to the on-line consumer.

Don’t be lazy. Do your existing clients and prospects understand what you do offer? I see too many agents that take their customers for granted. Do an annual account review on every account – personal and commercial. If you are not providing proactive service why would they stay with you?

Fix your follow-up failure –What are you doing to communicate regularly with prospects and clients? A discussion on a vendor user group forum highlighted this issue. The question? What do other agents do with the information for people who request a quote but did not purchase? Most people responded that they did not do anything with that information. The prospect reached out to you. You spend the time and effort to put information together. And you are not going to follow-up with that person?

The insurance industry is changing – faster than it ever has. Consumers will find the information they need to make informed decisions. Will they find that information and advice on Google or in a conversation with you and your staff? That is your challenge – to be visible to the on-line consumer.

Should you be afraid of Google?

Maybe not yet, but you better respect what they do and pay attention to how you need to adapt.