With the news of Google Compare shutting down in the next month, you might think the shuttering of Google's auto insurance comparison website means you can breathe a sigh of relief. But, doing so would be a huge mistake.
Why the exit?
Google's entry in auto insurance leads was an extension of its core business... online ads. Auto insurance is consistently the most often searched and expensive keywords. Google had an opportunity to further monetize that traffic. It seems that it did not work as expected.
We may never know the true reason for Google's exit from our industry. But, there are a lot of possibilities as to why they decided to shut down.
1. It is not easy.
While building an online quoting portal is not complicated, you need carriers to fill out your pricing. A carrier's already tight resource constraints complicates the problem. Unless using a third-party API to get access to carriers, aggregators will have a hard time.
A successful auto insurance lead website needs traffic. In this case, Google had the traffic. They're Google!
However, due to Google's size they couldn't provide favoritism towards their own properties. Doing so would draw the ire of anti-trust and other regulatory groups. Therefore, they never pushed Google Compare within search results to the critical level.
3. Cannibalizing pay per click revenue.
Auto insurance keywords reach more than $300 and average $54 per click. So, Google makes a significant amount of money off the insurance industry already.
Google Compare has been cannibalizing that to provide consumers a choice without leaving a Google property. As I mentioned above, doing insurance online is not easy. Why do all the hard work when you can just allow people to pay you instead.
4. U.S. consumers are still enamored with their agent.
Unlike the UK market, Americans still rely heavily on their insurance agent. While they were included, the local aspect of agents was downplayed inside Google Compare.
5. A distraction for Alphabet.
Google has always been a company to experiment with new ideas. If an idea does not work, they are not afraid to pull the plug (aka spring cleaning). As an innovator of technology myself, I applaud them. Experimentation and change is good.
Last year Google reorganized into Alphabet Inc., a conglomerate and parent company to Google. This reorganization was a sign they are focusing on what works. With Alphabet and its renewed focus, coupled with the items above, my opinion on the entry and longevity of Google Compare has always been one of skepticism.
Google's entry into auto insurance was not a testament to the viability of searching for and buying auto insurance online. It's evidence of consumers' changed expectations.
Consumers now expect a higher level of service. They demand instant access to quotes from multiple carriers. The ability to purchase those policies online or directly from an agent. They want someone local. They want choice.
Today's independent insurance agents can provide that choice. Right now, with the right technology, you can provide online comparative quotes. You can sell those quotes online, on the phone, or in your local office.
There is now one less player in the market. Consumers options for buying insurance has decreased, for now.
Now is the time for you to embrace technology.
Don't get comfortable.
Over the past year, I have said multiple times that just being Google does not predicate success. They were not the first to try, nor will they be the last. The future market leader is probably not even around yet.
Google was not the bad guy disruptor everyone made them out to be. They were chasing opportunity.
This is the same opportunity that awaits you. As long as you are willing to embrace technology to meet the needs of today's modern insurance buyer.
Want to learn how the exit of Google Compare from online auto insurance will impact you and your clients? Join us at ITC Agent Conference 2016. We will be addressing the changing industry. Especially our keynote panel of guests - including Compare.com, Coverhound.com, Insurify.com, and TheZebra.com. - which will discuss the changing needs of today's consumers.
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