The Google Threat to Insurers That Wasn’t—and the One that Could Still Be

Google Compare was never one-tenth of the threat to insurers and insurance agents that many in the industry thought it represented.

Google Compare was never one-tenth of the threat to insurers and insurance agents that many in the industry thought it represented.

A steady stream of punditry that began when Google Compare was first announced and never ceased until this week; ran along the lines of: “The almighty, all-seeing and all-knowing eye of Google is going to trample and transform all that is decent and good in the creation and sales of insurance products.”

The problem with this analysis was that Google was and remains fundamentally an extremely lucrative platform for advertisers piggy-backing on the transparency of Google users’ searches, emails, and use of Google Maps, etc. What makes the Google platform(s) so attractive to advertisers is Google’s analytic facility to parse huge amounts of data and use the resulting insights to make its search engine, Gmail, maps, etc. the bait to capture so many eyeballs—which in turn creates Google’s value proposition to advertisers. Plus Google also does a lot of really fun crazy Project X things like floating big balloons to provide internet access to isolated locations, driverless cars (which does have some insurance industry implications), etc.

Notice none of this has anything to do with harnessing Google’s inherent data acquisition and analytic capabilities to develop insurance products, to price and underwrite them, or to adjust the inevitable claims.

THAT is the real threat of Google—should it wish someday to modify some of its own DNA away from being the world’s greatest advertising platform to transforming the insurance industry.

 

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Donald Light // Donald Light is a Director in Celent’s North America Property/Casualty Insurance Practice. His coverage areas include: technology and business strategy; transformative technologies such as digital, the Internet of Things, and driverless cars; core systems; and insurance technology M&A due diligence. His recent consulting work includes: developing a strategic IT plan for a specialty insurer, core system vendor selection support; a build vs. buy analysis for core systems; and several due diligence assignments. Light is widely quoted in the press and media, including The Wall Street Journal, The Economist, NBC and CBS Evening News, CNBC, National Public Radio. He is a frequent presenter at industry conferences including those sponsored by ACORD, PCI, and IASA.

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