Google’s Entry to the Insurance Market
The body shop that offers the most complete service to Scottsdale’s collision-repair needs a vision bigger than our community’s singular marketplace. Oftentimes, being the best means seeing the ripples that surround you and preparing to adapt to the impact.
In our line of work, that includes remaining constantly abreast of shifts in the auto insurance market, and understanding how those changes might impact our customers.
To be fair, Google dipping a toe into the insurance field isn’t so much a “ripple” as a “wave” – one on the rise, we might add.
GOOGLE & ONLINE INSURANCE: A MARRIAGE MEANT TO BE?
The online-media giant steps into auto insurance arena on ideal terms: by purchasing insurance comparison website BeatThatQuote.com for $61.5 million less than two years ago, then bringing similar services to France and the United Kingdom’s respective markets. Six partnering French insurance companies in just six months have aligned themselves with Google’s still-in-beta site, but the U.K. brand has accumulated over 125 partner insurance providers since beginning operation in 2012.
Google has spent years absorbing web tools seen as offering massively lucrative long-term upsides. In this instance, the tech Goliath interestingly steps into a specific product competition with comparatively little stateside relevance. Granted, online car insurance comparison tools generate a competition worth billions of dollars, with the U.K.’s Coverhound.com in particular estimating that online purchases represent 80 percent of their current policyholders. By comparison, fewer than 70 percent of American consumers that pursue quotes online go on to purchase policies.
Point in fact, online policy purchases account for only about 5 percent of American auto insurance sales. More often than not, American consumers are still just fine with buying auto insurance through a broker or agent. The thing is, Google has the resources, reputation and overall data-management capacity to be the trend-setters that expand American enthusiasm for purchasing auto insurance online. First, Google would have some caveats to take into consideration…
1. A U.S. model similar to Google’s EU approach would classify Google as an insurance broker or
agent under many U.S. states’ guidelines, requiring the company to go through the effort of
registering as such and keep in compliance with laws that vary from one state to the next
2. Good news: Google’s online car-insurance ads earn them upwards of $45 per click…but…
3. Bad news: Yahoo and Bing have both gotten wise to this, and both are now rumored to be
developing their own rate-comparison brands for several different insurance products
Still, the venture could be good for everyone.
For Google alone, there’s the revenue opportunity of selling online-search data leads to various insurance providers who would surely value the insights. Meanwhile, the sites themselves that are presently displaying growth potential among the EU marketplace are a boon to consumers because they stoke competition among more than 100 insurance providers and drive policy prices down.
Now, take that demonstrated potential and attach an equally proven catalyst: the trust and reputation of Google’s own brand.
Hold on tight. If this tide starts rising with Google’s force beneath it, every boat on the sea is coming with it.