Google’s foray into insurance officially has already begun, as Californians can now shop on Google Compare for auto insurance; is Canada next?
But Google’s move south of the border is definitely raising eyebrows here in Canada, and that interest is understandable, said Valen Analytics CEO Dax Craig.
“Carriers value the broker channel, but I think they’re very curious about these new players and what they’ll mean to them,” said Craig, who works with both carriers and brokers develop technology solutions for the industry. I think the distribution system is going to chance significantly, along with the rest of the industry.”
The Google feature, which is expected to expand to several more states in the coming months, allows shoppers to compare auto quotes from the 14 carriers that are participating in the site, including
MetLife, Mercury Insurance and Safeco. The policies can then be purchased online or through an agent.
“Whether you’re a national insurance provider or one local to California, people searching for car insurance on their phone or computer can find you along with an apples-to-apples comparison of other providers all in as little as five minutes,” Google said in a recent news release.
And what may be of greater concern to brokers here is the level of comfort and frequency Canadians have in using the internet.
“Canadians use the internet at a higher rate than any other country, yet quoting and buying insurance online is still in its infancy,” said Esurance President and CEO Gary Tolman. “We think there is a tremendous opportunity to introduce Canadian consumers to insurance for the modern world.”
The site has been trumpeted as yet another online channel poised to disrupt the independent agent sector: in an interview with the
New York Times, Forrester Research insurance analyst Ellen Carney suggested the 40,000 agencies in the U.S. could “absolutely… shrink by a quarter.”
Those in the industry say not so fast, however.
“What Google is really doing is adding another online channel,” said Sean Allen, vice president of North American sales for Xchanging Insurance Services. “The fact that they’re not underwriting today makes them really just another agency, and the biggest hit will be to companies like Esurance and Progressive.” (continued.)
#pb#
Comparison sites may even be a help to agents. Andrew Rose, CEO of Compare.com, which allows users to solicit quotes from more than 40 insurers, believes the real threat to agents is in the advertising dollars expended by what he deems the “big four:” GEICO, Allstate, State Farm and Progressive.
By allowing consumers to explore options from carriers that do not dominate the public consciousness, Rose says comparison sites give agents affiliated with those carriers a chance to earn commission through an online channel, provided the shopper chooses to purchase through an agent rather than online.
“If you’re the John Smith Agency on the corner of Somewhere, U.S.A., you’re in real trouble. The personal relationship structure of the past is changing,” said Rose. “Our model is something that gives agents consideration where they wouldn’t have it otherwise.
“We have a shot in competing against GEICO and other big advertisers. You may have to sacrifice a bit of commission up front to get your skin in the game, but it will allow you to take the personal relationships you offer and put it out on the multi-product market.”
Valen Analytics’ Craig agrees that the personal relationship mixed with the right technology is key to competing against giants like Google.
“If you’re an agent that’s small, I still think there’s a way for you to win. I really do,” said Craig. “Those who are adopting more technologically driven apparatuses to help them do business are going to be the ones most attractive to potential buyers.”
Google is so far licensed to sell insurance in 26 states.
