Google Poised to Enter U.S. Auto Insurance Market: Report
Giant search engine Google, which already offers auto insurance online in the United Kingdom, could soon be selling auto insurance online in the U.S.
Google Compare Auto Insurance Services Inc., its online auto insurance shopper, has been licensed to sell insurance in at least 26 states and is working with several insurers including Dairyland, MetLife and Mercury Insurance, Forester Research’s Ellen Carney reported in her blog this week.
Carney reports that Goggle has been working on the project for more than two years and could finally launch later this quarter in California, followed by Illinois, Pennsylvania and Texas. According to the Forester Research technology expert, Google could be working with CoverHound, which currently offers online quotes for multiple insurers including Hartford, esurance, 2st Century, Travelers, Safeco, National General, Progressive, Foremost, Plymouth Rock and others.
Also, Conor Dougherty of the New York Times technology blog Bits reported that Google recently formed a partnership with the Virginia-based insurance comparison shopping site CompareNow.com. Comparenow, which was launched in 2013, allows users who complete a single, simplified form to obtain comparison quotes from multiple carriers, and buy a policy online, by phone or through a local agent.
Google could present formidable competition for other insurance sellers. As many as two-thirds (67 percent) of insurance customers said they would consider purchasing insurance products from organizations other than insurers, including 23 percent who would consider buying from online service providers such as Google and Amazon, according to research by Accenture.
“Competition in the insurance industry could quickly intensify as consumers become open to buying insurance not only from traditional competitors such as banks but also from Internet giants,” Michael Lyman, managing director for management consulting within Accenture’s Insurance industry practice, said in February upon release of his study.
However, another report, this one by TransUnion, indicated that shopping for auto insurance online may have peaked already. It found that shopping rates for auto insurance were down about 3 percent in the 12 months ending Feb 2014 relative to a year earlier.
“We are finding that despite billions of dollars being spent on advertising each year, the percentage of consumers shopping for auto insurance has been dropping for approximately the last two years,” said Mark McElroy, executive vice president of TransUnion’s insurance business uni,, at the release of the study. “This places additional pressure on insurance carriers as their pool of potential customers declines.”
Google Compare (google.co.uk) launched in the UK in 2012. In addition to insurance, the service allows consumers to comparison shop for credit card offers, travel insurance and mortgages.
Google has also been in the forefront of the development of driverless vehicles.
Google Inc. does own the site, GoogleCompare.com, however the site is not operational.
Google has not responded to Insurance Journal requests for more information. The tech giant told Reuters and the Wall Street Journal it does not comment on speculation.
By Andrew G. Simpson | January 9, 2015