Is Google Entering the Auto Insurance Market?

The answer to that question appears to be yes. Google already offers auto insurance online in the United Kingdom and is licensed to sell auto insurance online in 26 states. They are also working with several insurers.

It’s a move that should have auto insurance companies worried, according to some industry observers.

Google has been working on its entry into the auto insurance market for the past two years, and could soon begin offering service in California, followed by Illinois, Pennsylvania and Texas.

The reason Google could be a formidable competitor in the insurance market is because it has information, and lots of it, enabling the company to more accurately assess risk. Because Google manufactures cars that drive themselves, it has amassed information for rules of the road across the country. Google knows, for example, where drivers can motor along at 45 mph and where they can go 55. They know where drivers can turn on a red and where they cannot.

They can give drivers a plug-in device which rates their driving all of the time. This means that Google will be able to tailor their rates not for each car, but for each driver. Moreover, it is a self-correcting system – people with better driving habits will pay less, so those who see their rates go up, will correct their bad driving habits to bring their rates down. It is a system that appeals to regulators.

Through Gmail, it can sell its product directly to the consumer, as well as charge directly.

However, industry experts still see a role for insurance agents because of the services they offer. To stay relevant, agents need to be responsive to consumer needs, know what consumers want and how agents can best provide it.

Challenges from companies such as Google present a wake-up call for the auto insurance industry. According to industry experts, instead of playing catch up, responding to what is happening around them, auto insurers need to be more proactive in spotting trends and meeting the challenges they pose.

If you’re the owner of an insurance company, or manager of a department and need knowledgeable insurance professionals, look to the insurance recruiters at Insurance Relief™. Give us a call today.