Google Disrupts the Insurance Business


Google’s recent entry into the insurance industry (not as an insurer or agent, but rather as a discovery and price comparison tool holds some useful insights for data publishers.

In brief, Google is working with a number of auto insurance companies in California (it has national expansion plans of course) to help online shoppers easily find policies and compare rates. While exact specifics were not disclosed, it appears that this venture has a lead generation model, where Google will be paid for referring leads, although some published reports suggest Google will receive a percentage of the actual insurance premium from sales it generates.

Google is reportedly working with 14 auto insurers in California, but few of them appear to be the household name national auto insurers, at least for now.

This initiative is unquestionably disruptive to the insurance industry, which may explain why those insurers with the least to lose seem to be the majority of the early participants. After all, participating in this venture not only means giving up lots of valuable data to Google (who some predict has designs on becoming an insurer itself), but it’s a potentially large new marketing expense. Most significantly of all, it further commoditizes auto insurance, as Google makes it even easier for consumers to buy strictly on price.

What’s intriguing from a data perspective is that Google has partnered with insurance companies, in large part to get the data it needs. Certainly Google needed to get rate data directly, but it also needed comparable policy data to make meaningful side-by-side comparisons. In short, Google couldn’t find what it needed on the open web. I’m hearing from an increasing number of data publishers that Google is licensing their data primarily because it can’t adequately structure content to deliver the user experience it wants.

Secondly, we’re seeing the hidebound and opaque insurance industry showing willingness to cough up real time pricing, to be used in an environment where consumers are encouraged to buy on price. That’s no small decision, and I think this is a harbinger of things to come, as companies come under increasing pressure to do the unthinkable: provide pricing transparency online. And that means that we could shortly be seeing more price comparison sites in vertical markets, and these are true data-driven opportunities.

Looking at all these pieces, what I see is that Google is forcing change in the whole area of vendor/product feature and price comparison. But Google doesn’t have the finely structured data it needs to push into these markets. It seems to me, that with the essential data in hand, and a respected and neutral market position, data publishers can follow Google’s lead and cause a little disruption of their own.