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Google Spells Disruption for the Insurance Industry

Posted on February 09, 2016 by Guy Weismantel

 Digital Insurer Blog

Online comparative raters have taken off in a big way. 

Big marketing spends by industry giants (we’re looking at you, Progressive) have raised awareness of comparative raters among consumers. Today, price-conscious US customers widely use both price comparison websites and the rating tools built into the websites of their insurance companies. As a result, real-time comparative rating has become a core function for many insurers, and 60 percent of them use some sort of comparative rater to provide prospective customers with a range of near-instant coverage quotes.

Now Google has entered the fray with a price comparison tool that may further change the way customers think about purchasing insurance.

With Google Compare, anyone with an Internet connection can comparison shop for auto insurance online. The tool’s widespread adoption in the months ahead, particularly among millennials, has the potential to alter the current insurance landscape. 

The 800-pound gorilla 

Let’s face it, Google is a more popular brand than any of the giant direct insurers which currently offer price comparison functionality. The name itself has become synonymous with Internet search—we “Google” everything from weather reports to sports scores to driving directions. Millions upon millions of consumers interface with Google on a daily basis, and those users will find Google Compare familiar and convenient to use. Just two months after the launch of the tool, 39 percent of survey respondents said they planned to use Google Compare.

Google Spells Disruption for the Insurance Industry

Does Google want your clients?

Among millennials, loyalty to the traditional insurance industry is tenuous. The Googles and Amazons of the world haven’t begun directly offering insurance to their massive, loyal customer bases … yet.

Currently Google Compare provides its parent company with modest revenue generated through commissions, but the more consumers use the tool, the more data it collects about how different insurers price the same risk. 

“Google has the potential to be a major disruptor,” says Tom Minkler, president of the Clark-Mortenson Agency. “They have what a lot of major disrupters don’t have: they have access to the information, they have plenty of money to make it happen, and they have a brand that transcends other brands ... They have the ability to collect information—data mine—from places that no insurance company can.”

In the future, Google could leverage the data it’s currently mining to actually underwrite auto insurance. 

But would customers buy insurance directly from Google? You bet. Thirty-five percent of customers ages 18–34 would consider purchasing insurance directly from an online retailer like Google or Amazon.

David v. Goliath

So how can you compete with a giant like Google? Take advantage of new technology that will help you focus on your customer experience.

• Use data analytics to make smart, strategic decisions that improve pricing and efficiency
• Use the right tools to make your workforce more efficient and customer focused
• Use digital technology to give your customers the services and products they expect

“I would estimate that agencies have about six months to act before disruption from Google Compare and other outside pressures start to have a direct impact on the bottom line,” says Ellen Carney from Forrester Research.

The Googles of the world may have acres of server farms and thousands of miles of fiber-optic cables, but they can’t deliver the personalized customer service and industry expertise that you bring to each client interaction. 

Are you sure your customers wouldn't leave you for a better experience? If you can't afford lost profits, fewer renewals, and less revenue, it's time to get customer focused. Learn how in our new free ebook:

Download the eBook

Mr. Weismantel is the Vice President of Marketing at Vertafore. With 20 years of marketing and financial leadership in companies such as Microsoft, Business Objects, Baxter HealthCare, Caremark International, and Expedia, Guy’s career has focused on bringing differentiated products to market and providing the “compelling reason to purchase” for customers and prospects alike.

Guy has a Bachelors Degree in Accounting from the University of Notre Dame, and a Masters Degree in Business Administration from the Kellogg School of Management at Northwestern University.




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