Google Compare is now live in California.
If you run through their site, you will see that it is very well-designed, and straight-forward to use. They are quoting 14 different carriers.
Google offers the shopper the option of either filling the data in, or having Google retrieve the data for them. Although I didn’t take this option, Google will pull data from public information sources such as LexisNexis, or perhaps resources they’ve been building in the background.
In my test, I received seven quotes, and seven carriers chose not to provide a quote. I don’t blame those who didn’t return quotes. I wouldn’t quote me either.
Google Compare: Hire Me for Your Insurance Strategy!
Got you to look, didn’t I?
Let’s get this out of the way up front. Google isn’t going to hire this ex-insurance agent to design their insurance strategy.
Heck, they probably have interns in their insurance division with PhD’s and patents. In every other thing they do, they hire the best and the brightest. Why would this opportunity be any different?
But if Google made me head of strategy for their insurance initiative, today’s launch would be the first of many steps that would ultimately rewrite the way insurance is sold, underwritten and priced in the U.S.
What Is Google Up To?
The steps taken today are Google’s lowest cost method of entry into the market. As described in this earlier post, they are providing a comparative rating tool, and then allowing the carriers either to bind online, or to direct the consumer to one of their agents for binding and policy issuance.
An intermediate step would be to own and staff an agency. In this way, they would control the process more fully, and they’d get better business intelligence as well. They would know what business closed and what didn’t.
However, their ultimate goal is probably much bigger.
Could Google’s End Game Be Walmart?
Google’s research finds that consumers want quotes from two or more insurers.
Very quickly, Google will have enough traffic and brand awareness from insurance shoppers that they can start to require players on their platform to participate in specific ways. Walmart did the same thing back in 2003.
In 2003, Walmart announced new requirements to vendors who wanted to sell product in their stores. The most forward thinking of those was to require RFID tracking tags in each item. The tag tells electronic readers the product SKU, description and the name of each specific item.
RFID tracking tags allow Walmart unprecedented inventory control and data.They know when product arrives, where it is stored, and when it is sold.
Twelve years later, all large retailers are using RFID for inventory control. Walmart played the long game, and revolutionized the retail industry.
How might Google implement a similar approach?
How about if they said to any insurance company that wanted to quote on their platform: “You can’t ask any of your carrier unique questions. And you can only use the Google agency to bind and service the accounts.”
Sure, insurance companies could refuse to participate using the new rules. Let’s talk turkey: Too many insurance companies are too competitive. Somebody will be first, and then the rush to play will be on.
The End Game
Although I took this quote from the Google website a couple of weeks ago, I am re-purposing their text. THIS IS NOT A DIRECT QUOTE!
The underlined words below are mine, but the rest come from another (different) Google initiative. The intent as presented in that statement, if extended to insurance, may provide some clarity as to their ultimate intent.
Our goal in launching Google Compare Insurance is to create a service that will give people access to their personal risk and insurance information. We want to translate our successful consumer-centered approach from other domains to insurance and have a real impact on the day-to-day insurance experiences of millions of our users.
Kinda scary when you fill in the topic of insurance, huh?
They aren’t doing this to earn commissions. They want to have real impact on the experiences of their users. Because if they can, the BIG money will follow.
And big money means carrier money.
Could Google Become an Insurance Carrier?
The revolutionary approach is to completely rewrite the way insurance is transacted.
Google has access to so much data that they can effectively underwrite almost every individual according to their individual risk profile.
That amazing computer you carry around with you in your hip pocket or purse. Your cell phone. GPS and Google maps, put together, make for a very insightful look at your behavior.
- Google knows when you are on the road, how fast you are going, and what the speed limit is on the road upon which you are driving.
- Google knows when you are in the bar or restaurant, when you are at the mall shopping.
- Google knows when you are at home.
And isn’t insight into behavior what underwriting is all about?
How about pricing? No need for telematic devices when you’ve got ‘The Google’ in your pocket. They could price by when and where you drive. How frequently your car is in a different territory overnight. By miles driven.
So let’s say that Google decided that it wanted to start an insurance company. You think that they couldn’t find the cash to fulfill surplus requirements?
How about senior executives that have carrier experience? Cash and staffing aren’t going to be a problem for Google. When they started their assault on search, they hired the best minds in computer science and half a dozen other disciplines.
The truth is, the barriers to starting an insurance company are pretty low, particularly to an organization with Google’s scale and appetite.
They recently announced that they partnered with Fidelity in a BILLION dollar investment in Elon Musk’s Space X. I’m not smart enough to know what they are thinking there, but anybody who is playing in the space game is definitely thinking big.
Long Story Short
Today’s announcement is the first step in Google’s insurance foray. The next step will be expanding to additional states.
Of course, there are no guarantees that they will be successful, but the opportunity to capture a significant portion of the auto insurance market is attractive. If they can generate cash by facilitating the placement of insurance by others, isn’t getting a bigger slice of control and the revenue something they would be interested in?
Who is most at risk right now?
TrustedChoice.com’s job just got harder, and conceivably more expensive. Google can attract lots of eyeballs, and they are directly competing with anyone who is in the internet insurance shopping business. Other lead aggregators are probably in a more difficult position.
Good customer-focused independent agencies should be impacted the least in the short run.
Captive agents don’t have an option, and if one or more captive agency companies decide that selling direct via Google is the right direction, some of that business will come at the expense of their agency forces.
Thirty years ago, Progressive turned the market upside down by taking business nobody wanted, and using better information to underwrite it profitably. If I was running Google Compare, I’d work very hard to replicate their success. There is quite a bit of money waiting for the company or companies that can do it again.
TrustedChoice.com Can Help
For independent insurance agents, there is a way to combat Google Compare (and other digital competitors): TrustedChoice.com.
Bob Rusbuldt, CEO of Independent Insurance Agents and Brokers of America, had this to say about TrustedChoice.com after yesterday’s announcement:
Google has landed in our backyard, and now independent agents have a real choice to make – the status quo, OR embrace consumer change and leverage TrustedChoice.com for both personal and commercial lines to create leads for their agencies.
Independent Agents do not, and should not, sit on the side lines as Google and the competition attempt to take our market share.
There is an aggressive way to combat the competition, not just to protect our market share, but to increase our market share by becoming an Advantage agency on TrustedChoice.com.
The platform is up and running and proven, generating great referrals for agencies that embrace TC.com. Now is the time to combat Google, the directs, the market disrupters, and the captives! And it’s relatively easy to do!
In just the first four days of March, TrustedChoice.com has delivered over 650 unique online referrals to independent insurance agents across the US. To claim your advantage profile and begin receiving new inbound leads from TrustedChoice.com click the banner below:
It’s time for the independent channel to respond as one.
Whether you’re an agency or carrier, the easiest and most cost effective way to do this is to join TrustedChoice.com today.
The next 36 months are going to be very interesting.