How can an Independent Insurance Agency Compete with Google?

In January of 2015, the Insurance Journal announced Google's intent to launch an online insurance agency sometime the first quarter of 2015. Well, they did. No delays on this one. Why on earth would a sophisticated tech company jump into a staid enterprise like an insurance agency? Surely, they have other, far more cool ways, to invest their piles of cash. Like developing a Google watch or a robot car washer to go with their robot cars.

Google has a lot of money and a lot of smart people, they aren't entering this business just because - there's something more behind it. To be sure, Google has logged numerous forays into new ventures, only to pull the plug later. A good example is Google Video; Google simply never was able to get any traction, so they just bought You Tube instead (Google Buzz and Google Wave are a couple of well known casualties).

Google doesn't just try to predict the future, they make substantial investments to get out in front of it. Prognostication is a tricky business, sometimes you get it wrong. But when you get it right, the payoff can mean total market domination, as in search, pay-per-click, or online video. It's Google's culture to take big risks, accept big losses...and cash in on even bigger successes.

So again, why an insurance agency? It's interesting that Google launched the insurance agency initiative following online airfare and hotel rate search comparison ventures. Google will display airfares and room rates inline with other search results for searches. Before they started doing this, search results showed a boring list of blue links back to sites like Priceline and Hotels.com and it took another click and a little typing before any actual price comparisons displayed.

The more seasoned persons among us will remember the good old days, when actual travel agencies, many of which were local businesses, made flight and hotel arrangements for us. Almost overnight, their number shrank to the vanishing point, as 'virtual' travel agencies began popping up. And then the search giants got into the game. That hasn't made Priceline or Hotels.com irrlevant, but it must be making them sweat again.

To be sure, the insurance business, with state regulations to navigate, complicated policy forms and rating, not to mention that underwriting thing, makes simple premium analysis much more difficult than room rate or flight fare comparisons. And so in the insurance agency business, there is far more opportunity to add value to purchase and service transactions. But are we really adding value? And what is it our clients actually value?

Clearly, Google thinks that being able to have a choice is one thing insurance shoppers value.* For those among us that think having a number of companies to choose from differentiates our insurance agencies from other options, perhaps this is finally the wake up call.

Is Google smart enough to display meaningful rate comparisons based on what a random searchers preferences and needs might be? Probably. The data is out there, all it takes is money to acquire it and put it to work, and Google has plenty of that. Whether Google will attempt to crack the code or not and whether or not this initiative remains to be seen. But it really isn't worth the risk of waiting around to see. The time is now to question the value we add to insurance agency client relationships and make sure that we raise the competitive bar for online players by adding consultative services that will be hard for the robots to duplicate...at least in the near term.

*And Google would be right about that, at least according to a 2012 PIA survey.