Google Compare has debuted in the California auto insurance market. Google Compare is to auto insurance what Kayak.com is for flights, hotels, and rental cars. It’s a comparison shopping service that gathers driver, automobile, and coverage information and then displays up to 14 premium quotes for auto insurance. I suppose it was inevitable when everything else seems to be gravitating towards online commoditization in the 21st century.
To be sure, the California-only service is off to a humble beginning with only 14 insurers currently participating, and none that are household names. It is also true that Insurance comparison shopping is not a new idea, as evidenced by Quotesmith.org and Insure.com. Still, something feels different about the Google Compare service. For one thing, it’s Google – the renowned curator of all the world’s information, and the company who has professed to “not be evil” since its formative years.
I can’t help but wonder what Google’s entry into the personal lines insurance market means for the industry. Further disintermediation? Probably. Reportedly, Google plans to offer this service nationwide by next year and extend the site to include homeowners insurance. For the time being, the major brand-name insurers such as State Farm, Progressive, and Allstate have no stated plans to participate in Google Compare. I wonder if they’ll be able to resist the Google juggernaut if Google Compare becomes a hit. Southwest Airlines doesn’t permit its airfares to appear in Kayak.com comparisons, and they seem to be doing just fine. But all the other major air carriers are on Kayak.com.
And then there is this – price comparison sites reinforce the notion that service doesn’t matter, coverage differences don’t matter, and agents don’t matter. Could the entry of the 800-pound gorilla (i.e., Google) into the insurance market have the same effect on insurance agents that the online travel sites have had on travel agents? And Mr. Page, is that good, or is that evil?