When we first heard the news that Google had entered the automobile insurance comparative quoting business in the UK, our first reaction was that this would be a pure price play. However, a little more reading suggests that the approach is more sophisticated than that. So who should be worried (Hint: brokers might want to read all the way through)?
In 2011, Google purchased a comparison quoting service, BeatThatQuote, and began offering comparison services for bank accounts and credit cards earlier this year. On that basis, auto insurance is a natural extension and fits Google’s business model of deriving revenue from clicks.
The model seems to be working. ITProPortal cites reserach from Greenlight, a direct marketing agency, which “found out that Google had the second highest share of voice in the market for Car Insurance Advertisers in Paid Media on the day the service launched, surpassing established competitors including Churchill and Directline.”
ITProPortal concludes: “Google’s disruptive apparition in the car insurance comparison market could mean very bad news for these companies’ shareholders. Especially as this may well prove to be one of the first few steps before a full blown attempt by the search engine to corner and eliminate the affiliate market.”
However, the Google approach is more quality- than price-focused. According to Richard Evans, writing in The Telegraph:
Specifically, it reckons that price comparison websites use a variety of questionable tactics to artificially lower prices, which may mean some customers end up with inappropriate cover. It also accused some of these sites of selling customers’ phone numbers to third parties such as “ambulance chasing” lawyers.
Moreover, Evans notes, Google plans to differentiate its offering from other services which are owned by insurers and brokers and give preferred status to quotes from their own affiliates.
To ensure accuracy and completeness, the form that Google requires customers to actively respond to prompts about additional coverage and does not default to the lowest cost alternatives. Which.co.uk, a UK consumer advocate site, notes in its review of the Google Site that this completeness does not cost the consumer additional time: “when one of our researchers tested it out using a number of different scenarios he found it generally took the same amount of time as it does when using other price comparison sites.”
Google goes to great lengths to ensure that the consumer is protected from unwanted solicitation. Which.co.uk notes:
Google has produced its own code of conduct, though, which asks insurance providers to:
- Not make contact with you if you have not agreed to it
- Not pass on your information to any other party
- Ensure the price shown on the provider’s site is exactly the same as the price shown on Google’s, subject to minor rounding.
While it’s true that the Google move is clearly targeted at the price competitors, its approach seems to have a cast a wider net.
Let’s see, promising best coverage as well as a competitive price, offering to control the market search to protect the consumer, providing a code of conduct for participating insurers … what does that sound like?
Who do you think needs to worry? Don’t fret, you can leave a comment below.