The Google Property/Casualty Company

Joe McKendrick
Insurance Experts' Forum, July 1, 2014

Google, the disruptor of worlds, is setting its sights on the insurance industry.

That's the word from Christoffer Hernaes, partner at Core Group, who, in a recent post at TechCrunch, cites a recently released report from BCG India and Google, which “concludes that insurance is among the top five product categories in which the web is the dominant purchasing channel in addition to travel, digital media, ticket purchases and books and magazines.” Three out of four insurance purchases will be made online by 2020, the report states.

Thus, the potential to disrupt an information-intensive industry such as insurance does not seem to be lost on Google, Hernaes writes. He connects the dots between a string of Google acquisitions and initiatives — including those that give it an advantage in monitoring data from home properties, such as its recent acquisition of Nest, which provides smart home thermostats, or its catbird seat in terms of publishing and monetizing insurance quote searches. For sure, the Google driverless car that is now hitting the roads represents a major source of disruption — or at least rethinking — of the automobile insurance industry.

(For a perspective on the disruptive potential of Google Nest, see Chris McMahon's thoughtful perspectives here and here at INN.)

At the same time, current insurance industry players will not remain static in the face of potential disruption from large digital players such as Google or, for that matter, Amazon, Facebook or even Twitter. Insurers, too, will adapt and re-align the value of their services to remain competitive. If anything, the threat of disruption may make some insurers stronger, and even more digitally savvy. Hernaes points out, for example, that “the industry already has a high degree of technology adaptation and has systematically developed digital channels, with GEICO and Progressive as good examples.”

The banking industry faced a similar prognosis of being overwhelmed by software companies back in the late 1990s, but effectively fought back with online banking initiatives of its own. Plus, banks had a value proposition the software companies could not match — trust. Insurance companies also have huge reservoirs of trust that may provide a leg up from the big web companies.

Banks also had another huge asset that software companies could not overcome — physical branch locations. In fact, some banks even started building more branches, proving that people still needed access to individuals they could call or visit to help with their financial needs. For insurance companies, networks of agents provide a similar level of guidance, comfort and convenience.

Digital companies such as Google, Amazon or Facebook, with their never-ending big data, mobile, social and cloud-based innovations, are already becoming major forces within the insurance marketplace. And, as mentioned above, it already is a major force in many ways. But Google and Amazon are also huge, far-flung entities, with many broad-based business initiatives, from web services to online advertising to wearable computers to mobile devices to online publishing. Rather than become full-fledged insurance providers in their own rights, they may instead turn to partnerships, affiliations, administrative agreements or similar arrangements with existing insurers to provide service and support to customers.

My alma mater, Temple University, offers a great alumni life insurance plan, which is actually a product serviced and underwritten by New York Life. I don't expect Temple University itself to go into the life insurance business any time soon. Likewise, the digital giants may be reaching out to established industry partners to provide underwriting, risk management and policy administration roles as part of their advance into the digital insurance business. But it will a partnership like no other based on data analytics, mobile, social and cloud savvy. The industry needs to be ready.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

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Comments (3)

I agree google doesn't want to insure people, but the data gathering opportunity is too great to overcome. In fact I think the issue of Google selling insurance is mute, as there are already as an aggregator in the UK, see link below. They are not a carrier, but a new business only agency. I think their role in the US will be similar as more of a new business agent in the aggregator space. Carriers will have to integrate with the Google site, and Google will set the standards. No AL3 here folks. If you notice they start their quote process in the UK with the VIN, could be they already have all the other information from previous activity.

Google could as well be a threat to Lexus/Nexis and other data salesman in their ability to provide scoring for predictive modeling.

Another one to consider would be Intuit, i.e. quicken loans. A few natural new business tie-ins there.

Imagine you are a carrier and when they select your quote you also get google plus ratings or reviews from amazon. Fun times ahead!

Posted by: Scott M | July 3, 2014 12:07 PM

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Spwhat will they do? Offer data services for applicable line of business to existing insurance companies? Create an insurance marketplace, where companies can compete for visitors' business? How can they get a foot in the door without actually selling their own insurance?

Posted by: Wendy K | July 3, 2014 9:57 AM

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Scare tactic title... Google doesn't want to insure people, anymore than it wants own hotels, or create music.

Google DOES want to monopolize the travel, insurance, banking, consumer goods, music, entertainment, etc channels. The reason being is to sell ads and monetize the placement between consumer and business.

Honestly, does anyone really think your going to buy auto or home insurance from Google??? If Google wanted to do that, they would buy a company like GEICO and go for it.

Posted by: Roger S | July 1, 2014 3:12 PM

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