Catherine Smola, President & CEO | Canadian Underwriter insBlogs
In early March, months of speculation regarding Google and its intentions for the North American insurance market came to an end – or at least changed into a lower gear, as the industry finally had concrete information to work with. Among the rumours: Had Google purchased CoverHound, a successful insurance aggregator and online insurance comparing service? Was Google poised tobecome a full-fledged insurance company? Was the industry about to encounter a complete upheaval of the competitive landscape?
The answers are almost underwhelming. Google’s official stance is that it wants to remain exactly what it is: a technology company. Fears that the industry was about to be rocked by a new insurer or aggregator with deep pockets and a wealth of consumer data can be safely laid to rest for now. The Silicon Valley giant has simply partnered with CoverHound and Compare.com, another aggregator, to offer a centralized and broad search for insurance quotes with apples-to-apples comparisons. In fact, after receiving a quote, customers are directed to purchase their policy through the insurer or its agents.
For the time being, Google Compare’s expansion is limited to California. Brokers and insurers in Canada have the luxury of learning from the experience of their American counterparts. In the meantime, of course, there is already a great deal of speculation on what that experience will be.
One of the more encouraging aspects of Google’s entry into insurance shopping is that it could level the playing field for small- to mid-size carriers whose advertising budget is easily dwarfed by that of a larger carrier. Google could place its Compare service at the top of insurance-related searches, supplanting companies who pay top dollar for their search engine optimization (SEO) efforts. The results generated by Google Compare itself are organized by price, not advertising.
The reduced power of advertising could be a competitive edge for smaller players. The insurance industry already commands among the highest prices for online pay-per-click AdWords campaigns – up to $54 USD per click, much of which is snapped up by a few big players. Google Compare can provide companies that compete on price, not advertising, with a louder voice and improved visibility. As well, Google Compare could serve to drive awareness of online rate comparison in general, leading to increased opportunity for insurers and brokers across the industry.
The long view
As with any disruptor, the future is uncertain. According to one view, Google Compare’s leveling of the playing field may be temporary at best. Once the largest companies begin to lose market share, all they have to do is join Google Compare as well to compete for the same opportunities as everyone else.
One key point of this story that needs to be told is that oftentimes, customers need more service than a price on a screen can provide. There are significant differences between a policy from an independent broker and one from Google, as brokers can offer more customization to individual customers. Brokers, not Google, build a trusted relationship, take the time to explain a policy in detail, and provide assistance when needed. With clear communication of these benefits to insurance customers, brokers can effectively compete – whether their trading partners sign with Google Compare or not.
In addition to positioning themselves as trusted advisors, brokers can strengthen their value proposition with leading-edge technology that provides an exceptional customer experience from start to finish. Already, brokers have benefited from the streamlined workflow of eDocs and the convenience of eSignatures, to say nothing of the value generated by a mobile website, robust SEO or even building a mobile app.