It's long been suspected that web giant Google has designs on many other industries far removed from internet searching, and this year's creation of umbrella company Alphabet, of which Google is now a subsidiary, has only reinforced those suspicions.
Driverless cars are getting all the headlines right now, but how high on the agenda is insurance and how are the two linked?
Blake Corbet, managing director and head of the technology & diversified industries investment banking group at PI Financial, is offering a warning that Google has its sights set on car insurance; any move there could well indicate where the tech giant intends to start diversifying its revenue streams.
Writing for the CanTechLetter, Corbet suggests that Google's recent announcement of its intention to accept the liability for any accident that is the result of a flaw in the design of its self-driving cars, or one of its components, is likely something much bigger than a marketing ploy to instil confidence in the autonomous vehicles (AV).
There is much debate over who is liable for incidents involving AVs as the vehicle's owner has limited influence on the car's behaviour. So it seems natural that liability should rest with the designer and could lead to a situation where every AV has to be insured by the manufacturer.
This is not necessarily a burden for the makers, as Google has already shown that insurance for AVs is a no brainer. Out of the 11 accidents Google's driverless cars have been involved in, human error on behalf of the other driver, was found to be the cause. Couple this with a completely auditable log of every event, timeline and sensor on the car and indeed the AV insurance sector seems attractive.
In fact, Google has already made a play in auto insurance with the 2012 acquisition of price comparison website BeatThatQuote, which it then spun into the Google-branded
Compare Auto Insurance.
Google Compare Auto Insurance Services launched early this year with licenses to sell insurance in 26 US states on behalf of a handful of companies including Dairyland,
MetLife, Mercury, Permanent General Assurance, Viking Insurance of Wisconsin and Workmen’s, but it's thought the company could be developing its own auto insurance products.
It's no secret that Google sits on a veritable gold mine of user data, from the billions of unique web pages indexed and search queries carried out, to the hundreds of millions of emails and social media accounts it can contextualise, albeit anonymously.
Couple this with the real time traffic data fed in from the millions of Android devices travelling through the road network (which it accurately maps) and a solid Internet of Things (IoT) management play through the acquisition of smart thermostat maker Nest Labs and the formation of the Open Automotive Alliance, and it's clear the behemoth is exploring channels that could go very deep into sectors beyond auto insurance.
Health insurance became another likely candidate last month, when Google Capital invested US$32.5m in startup Oscar, a health insurance startup pioneering the use of fitness trackers among its customers.
Then with the connected home becoming a near reality, giving Google access to data such as power and appliance usage, smoke and fire detectors and perhaps even security cameras and devices, through applications like Nest, home insurance could well be another target.
The figures seem to reinforce these suspicions.
In 2014, finance and insurance accounted for the lion's share of Google's advertising revenue, with US$4bn of the US$56.4bn total. Commonly used keywords are “cheap car insurance,” which Google sells at up to US$33.97 per click and “self employed health insurance,” which it sells at up to US$43.39 per click.
Unsurprisingly, the top three spenders are State Farm, Progressive and Geico, which between them account for US$114m in
ad spend.
With technology and the internet disrupting so many industries and Google in a position to play multiple angles, the web giant will remain closely watched by the insurance sector.
