A Day of Reckoning Approaches for Insurers
Robert Regis Hyle | January 13, 2015
The day many insurers were looking to with trepidation while consumers were waiting for with some measure of glee appears to be drawing nigh. Google seems poised to enter the North American insurance market and it could happen quite soon.
All the signs are there. A new company has been established, Google Compare Auto Insurance Services Inc., and it is licensed in 27 states, including New York, California, and Florida. According to Forrester’s Ellen Carney, who posted a blog on the developments last week, Google Compare is authorized to transact business for several insurers, including Dairyland, MetLife, Mercury, Permanent General Assurance, Viking Insurance of Wisconsin, and Workmen’s.
In her blog, Carney writes: “. . . the launch of Google Compare in the U.S. 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 U.S. site launch keeps getting pushed back. As late as last month the site was expected to launch in California, to be followed in Q1 2015 with likely launches in Illinois, Pennsylvania, and Texas. Last I heard was that California pilot wouldn't begin until sometime in Q1.”
Carney does make one more point that is impossible to dispute: “Google Compare is going to have big implications for U.S. insurers.”
Truer words have never been spoken. It’s not as if insurers are afraid of competition. The big worry. As always, is the unknown. It took a while for insurers to get around to selling policies online, which is likely the only way Google will sell its products. They have huge resources and name recognition that dwarfs nearly all the big-name insurers in this country, no matter how much those traditional insurers spend on advertising.
This also is no surprise for anyone. Google has been running a comparative rater service in Europe for a couple of years now and giant American companies don’t do that without eventual plans to do the same thing—if not more—on their home turf.
Google is the first of the giant tech companies to jump into the insurance fray. That advantage may serve them well. It also may spur others, such as Amazon or Apple, to join the fray. There is a lot of low-hanging fruit in the personal auto market for these companies to pluck off the vine. The big question will be what is left for the traditional insurers to harvest.
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