Google’s Distribution Disruption: Insurers Must Be Where the Customers Are

Google supplies something that was lacking from insurance companies’ interaction with consumers, but it introduces disruption into the industry’s distribution paradigm and levels the playing field between carriers.

(Image credit: Dollar Photo Club)

Nicolas Weng Kan, CEO of Google Compare—the online service provider’s new U.S.-based insurance venture—shared many interesting observations about the company’s plans and the market factors that are driving them during his keynote presentation at Bolt’s recent Executive Summit in Palm Beach, Fla. However, perhaps the most interesting remark he made was during a subsequent panel discussion: “Distribution will have to go where the customers are.”

Weng Kan continued his remarks, saying, “You have to be on the media customer are looking at; you have to be very accurate at guessing what the customer wants.” This is precisely what Google is good at, and what insurers badly need.

(Related: What will the Launch of Google Compare for U.S. Auto Mean for Insurers?)

Like Willie Sutton ’s supposed explanation of why he robbed banks, Weng Kan’s observation is obvious, almost tautological. And yet insurers have struggled to shift their orientation from the contract to the customer, for cultural reasons and because of systems limitations, Google is essentially offering to serve as a partner to insurers to supply that customer orientation in the realm of direct distribution. Google Compare launched in March 2015 for auto insurance, so far in California only.

Weng Kan reiterated assurances he’s already made publicly that Google has no intention of becoming an insurance carrier. Google’s involvement in the insurance market was based, he said, on the company’s mission to “organize the world’s information and make it universally accessible.” He added that, “Our ultimate goal is to put as many choices in front of the customer as possible.”

During his presentation, Weng Kan related that nearly half of consumers use the Internet as a direct channel for gathering insurance options, and yet shopping for auto insurance has been inconvenient and unpleasant. “Something between root canal and watching a TV channel I won’t name,” as he put it.

“Sixty-eight percent of consumers want to save money, but they don’t know where to find a tool to help them do that,” Weng Kan explained. “People asked why there wasn’t a website to compare auto insurance—like for hotels or flights.”

(Related: Google Compare – Friend or Foe?)

In delimiting the company’s mission, Weng Kan noted that online and phone fulfilment will be available through Google, but not by Google. “We are not interested in fulfillment—that’s not our purpose,” he said. “We expose the different search results, and someone else has to do the fulfillment—but we’re tracking the fulfillment to see whether the customer has a good outcome.”

Within the Google shopping paradigm, the customer is in charge of communication with providers and they receive no unwanted phone calls or emails, Weng Kan noted.

Kimberly Harris-Ferrante, VP and Distinguished Analyst, Gartner.

Kimberly Harris-Ferrante,
VP and Distinguished Analyst, Gartner.

The downside for insurers may be that Google Compare competes with existing distribution channels, and that it will tend to level the playing field between large and small carriers competing for consumers’ favor. As Gartner analyst Kimberly Harris-Ferrante told Insurance Innovation Reporter earlier this year, “Companies who haven’t been able to compete in the digital space are now empowered to do so.”

Harris-Ferrante noted that Google Compare adds two elements beyond traditional insurance aggregation: whereas aggregators already provide price comparison, Google Compare adds a suitability measure to match customer to insurer, as well as a customer approval score, analogous to Net Promoter Score. “We don’t have a digital platform today that does these two things today,” she said. “I think that’s the really cool thing.”

Weng Kan, when reviewing the benefits of Google Compare to insurers noted that Google charges nothing for its highly qualified lead and brand exposure. “Carriers only pay when a consumer binds a policy,” he remarked.

Breaking with Conventional Wisdom

Google Compare serves as a conduit for highly qualified, “deep-funnel” customers, Weng Kan elaborated, which in the company’s U.K. experience has translated into a high conversion rate. Google also breaks with conventional insurance distribution wisdom in asking more rather than fewer questions during the rating process.

“We’re aggregating questions from our different partners and making that available,” Weng Kan says. “One of the big benefits we’ve seen in the U.K. is that customer know they’re going to have a better experience with the comparison, so they’re willing to answer more questions.”

Weng Kan advised insurers to take a proactive approach to how Google’s services could fit in with carriers’ distribution strategy. “Design the aggregation that works for your brand; mix online origination with offline completions,” he suggested. “I think this is a wonderful opportunity for you to shape this product.”

Mike Fitzgerald, Senior Analyst, Celent.

Mike Fitzgerald, Senior Analyst, Celent.

Michael Fitzgerald, a Celent analyst who made an introductory presentation at the event, also characterized Google’s entry as representing an opportunity for insurer. “I’m really looking forward to partners like Google entering our ecosystem, because what they do better is to figure out what a customer needs and desires,” he said.

When a recent survey asked consumers to name an innovative financial services company, the most popular response was “none,” Fitzgerald noted. In a rapidly changing world, insurers willing to experiment had an opportunity to differentiate themselves. “They want to do business with innovative financial services companies—but they don’t know any,” he said. “For companies willing to do something different, the bar is really low for consumers—in the land of the blind, the one-eyed man is king. We do a little, and we can see a big payoff.”

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at or (503) 936-2803.

Comments (2)

  1. Basically Google knows everything about the customer and that is a serious advantage. The internet browsing trends patterns etc etc etc.

  2. As I’ve said before here on and elsewhere, I have strong doubts that Google Compare will actually “level the playing field between large and small carriers.” I expect that the large carriers will eventually, and sooner rather than later if in fact Google Compare shows any real momentum, join up and begin to dominate. After all, the model here is identical to what they’re already used to — “Carriers only pay when a consumer binds a policy” — when they use Google PPC — and that, of course, is to the tune of tens, perhaps millions of year a year. Small carriers cannot possibly compete w/ the large carriers on Google Search & I have little doubt that they will able to so on Compare once the big guys join the party. Oh, and let us not forget the billions of dollars for brand building, lead generation, etc. the big carriers spend annually on every other kind of advertising besides mere Google Search. In a nutshell, once the big carriers join the game, it’s game over.

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