Google Discovers Insurance Is Not a Commodity

Google to Shut Down Google Compare Products in March

by Precise Leads

March 1, 2016

Google announced it will discontinue Google Compare, its auto insurance, mortgage, and credit card comparison service, after just one year of operation. Why the sudden shuttering of this service, and what does it mean for consumers?

GoogleShutsDownCompare.jpg(Main image credit: Thom/Unsplash)

Google announced last Monday that it will begin to wind down Google Compare, the company’s auto insurance quote & lead-generation service. Company officials have scheduled the shutdown to be complete by March 23. Google will have run the American version of the site for just one year come March, although the service has operated since 2012 in the UK. Many industry outsiders have begun to wonder if the tech giant’s decision to shutter it wasn’t a bit premature.

But for Google, Compare turned out to be built on a failing model. Despite the fact that Google Search was receiving sufficient numbers of Compare-related queries, the service itself fell short of its revenue targets, according to Search Engine Land. In other words, while there is a strong consumer demand for online insurance quote comparisons, Compare turned out to be a poor tool for capitalizing on that interest.

There are many answers floating around the web as to why Google’s simplified insurance model, which commodified the insurance sales process, failed. But for industry veterans, the answer is simple: insurance isn’t a one-dimensional product — the process of selling and buying policies is necessarily complicated, which means overly simplified, one-size-fits-all solutions simply won’t work.

Right Package, Wrong Delivery

As observes, Compare sought to follow in the footsteps of Google’s highly-successful e-commerce and airline ticket comparison tools. They also hoped to solidify their move into online financial services, a direction that other large tech firms have have already begun to head in.

Yet, not all commodities translate well to the kind of ready-made interface that has otherwise shown Google tremendous success. Insurance is one of them, due to the fact that it isn’t a commodity at all — it’s a service.

“When it comes to insurance,” says Mike Becker, CEO of the National Association of Professional Insurance Agents (PIA), “customers appreciate that it is a complex transaction that requires professional advice.” Speaking with Property Casualty 360, he added that PIA research clearly demonstrates that both personal and commercial insurance customers strongly prefer local agents.

As insurance consultant Steve Anderson said of the Compare launch last March, “An independent agent can’t out-Google Google, but they can out-local Google.” That prediction was more fortuitous than he may have realized.

But Google had other problems, too. As notes, Google Compare struggled to roll out Google Compare on a national scale — auto insurance sales regulations require state-by-state approval. Moreover, many major carriers chose not to opt into the program. It’s speculated that Compare’s direct-selling service may have alienated and even upset insurance companies.

Online Comparisons Are Still Booming

However, selling “the old-fashioned way,” via licensed professionals, doesn’t mean overlooking digital tools and online sales channels entirely. Mike Becker also lectured that “Agents should not interpret this decision to wind down Google Compare as an indication that they need not compete in the digital arena.”

Adam Cherubini, Owner of Bottom Line Consulting LLC, corroborates Becker’s take on the news: “Google’s exit from comparative shopping within the insurance area should be recognized as an isolated incident within a rapidly evolving industry,” he says. “They chose to shut down operations given its relative contribution to their overall business.”

Cherubini continues, “Insurance salespeople need to evolve because their customer base is changing and seeking new methodologies to investigate and purchase insurance. In light of this fact, agents must accelerate their efforts to create a personal brand by utilizing every digital tool available. Investing in this area merely means keeping up with your industry peers.”

For example, in 2015, 71% of car insurance shoppers began their customer journey online, according to recent research from comScore. The reality is that, while people often start their customer journey online, they want to be personally guided through the process by an experienced agent before they make a purchasing decision. For this reason, strategies like paid search and social advertising, internet leads, pay per call programs, and content creation are still essential parts of an agent’s digital marketing tool belt.

The point is, Google Compare’s failure shouldn’t be viewed as a concern for insurance agents and carriers — rather, quite the opposite. Selling insurance is a fundamentally human endeavour. It requires quick thinking, a lot of personality, and the ability to read emotions and empathize with with people’s problems. In other words, Google didn’t really lose — it was just playing the wrong game.

Tagged with: , , , , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *