By Linda Koco
Insurance professionals looking for the next disruptor in the life, health and annuity business may have found a likely candidate in the form of Google Compare. That’s an online auto insurance website that Google debuted in California last week.
The site focuses only on auto insurance comparisons and operates only in California, so it may not seem like any kind of a life, health and annuity disruptor.
However, there are indications that a broader focus could be a future possibility. Consider:
Not just California: “More states will follow,” said Jerry Dischler, vice president-product management for AdWords, in a posting on the AdWords website. AdWords is Google’s pay-per-click advertising service. But trained insurance professionals know that it costs a lot of time, money and effort to set up in multiple states for only one product line. According to that reasoning, the expansion into other states may be followed by expansion into other product lines as well.
Ratings and reviews: As the rollout continues, “we’ll also be introducing ratings and reviews,” said Dischler in the same post. Might those “ratings and reviews” open the door to commentary on issues beyond auto insurance - such as life insurance or annuities?
A Google Compare suite: The California service “represents the newest addition to a suite of Google Compare products designed to help people make confident, more informed financial decisions,” Dischler said. The reference to “financial decisions” is enough to make insurance observers wonder: Might that suite reach into personal insurance products and shopping experiences beyond auto coverage?
Heft and entrepreneurial initiative: MetLife is one of nine auto insurers whose business logos are shown on the Google Compare site as participating carriers. In all, the site shows that the California service currently has 15 participating auto carriers (up from 14 carriers last week).
Due to MetLife’s massive size and scope across the nation and its multiline offerings, its presence in this new program surely will draw insurance industry attention.
This is especially so since MetLife has already established its willingness to pilot-test alternative distribution approaches, such as its much-publicized initiative to sell term life insurance at Wal-Mart stores in 2012.
A quote from MetLife executive Kishore Ponnavolu, which appears on the AdWords webpage announcing Google Compare, reinforces that entrepreneurial message. “We’re always looking for opportunities to use new technology to enhance the customer experience,” the executive vice president of MetLife Auto & Home said.
In view of all this, the Google Compare/MetLife relationship may bring Google Compare not only some valuable insurance heft during its start-up phase, but also a pathway for rolling out other product initiatives down the road, if the partners so choose.
Google seems to be positioning Google Compare as a connector between consumers, agents and carriers, not as a competitor to branded carriers.
For instance, in his post at AdWords, Dischler predicted that the new service will provide “a seamless, intuitive experience for connecting with your customers online.” He also said that the initiative will provide “local agent support for providers with agent networks.”
The Google Compare website reinforces that message when it nudges visitors to “talk with a real person” by speaking with “providers' licensed agents.”
This suggests that Google is not looking to put on the mantle of insurance disruptor.
But even if auto insurance comparison is only thing the service does, the venture still has disruptive potential. Assuming the service expands to other states as described, that a lot of consumers run auto insurance comparisons there “because it’s Google,” and that at least some of those people end up buying there, this activity could generate for Google volumes of data about insurance shopping behavior.
Any auto insurance shopping service can generate insurance shopping data. However, Google is entering this venture with a great deal of data it has amassed about consumers over many years. This is data it can draw upon to quicken and optimize the shopping experience. In addition, it will be able to collect even more data as it interacts with visitors to the shopping site.
Those factors, plus the expertise of Google’s data analytics experts, could make this insurance shopping service either a formidable competitor or a formidable ally in the sale of insurance. Competition is not always disruptive. But in this situation, the competitive tool of big data could be disruptive, given that many insurers have only begun tapping into data analytics expertise in the past few years.
Then again, established online marketers are not likely to sit idly by. Already accustomed to competing with each other as well as with on-ground agents and distributors, they probably will marshal the experience they have gained in the trenches to meet this new challenger.
Will Google later offer an online shopping “experience” for life insurance or annuities? Might it turn its hand to offering a private health insurance exchange? Might it decide to buy a shell insurance company and use it to start underwriting insurance in its own name?
It’s too soon to say. But the buzz is that Google will need to get its sea legs in insurance before making any type of deep plunge into the insurance business, most especially as a carrier.
It could work out that the auto shopping service is all there will ever be. However, it could also be that the Google Compare is the ship — and that the crew members are getting their sea legs right now.
InsuranceNewsNet Editor-at-Large Linda Koco, MBA, specializes in life insurance, annuities and income planning. Linda can be reached at firstname.lastname@example.org.
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