Exclusive: Google to Shut Down Online Insurance Site, Partners Say
It appears Google Compare’s grand experiment in online comparison shopping for auto insurance is dead – for now at least.
Insurance Journal has learned that two of Google Compare’s major partners were told today that the giant tech firm is shutting down its online shopping comparison undertaking.
One former partner, Compare.com, heard the news not from Google, but from several of its carriers that are partners in Google Compare. Another unnamed partner confirmed it had been told of the pending shutdown. A third major partner described the Google move as “going dark” and that the business is retooling.
A Google spokesman couldn’t be immediately reached for comment. An official announcement from Google is expected to be made on Tuesday.
“It was a bit shocking today to hear that they are exiting,” Compare.com CEO Andrew Rose told Insurance Journal.
Rose said he was told it was a global exit, and that Google Compare isn’t just exiting the insurance business but also credit cards, banking products, the mortgage products in the U.S. and the U.K.
Rose said the U.K. Compare operations were also informed of Google’s exit, which he said is perplexing because online comparison shopping is strong in the U.K.
“It’s just interesting to see them throwing in the towel,” he said.
Keith Moore, CEO and president of CoverHound.com – one of Google’s initial platform partners when it launched Google Compare – says Google’s plan is to “go dark” to retool all of its consumer product sites and improve the “customer experience.”
“We think it’s a smart move and something we have been pushing for all along,” Moore said. “We are still engaged with them and still have an active partnership and hope that partnership will continue down the road.”
Moore said there were a few carriers that Google was having challenges with outside of its relationship with CoverHound, and that the decision to pull the site was to address those issues.
“We gave [Google] a lot of guidance on what we thought was best for consumers and some of the carriers directly couldn’t deliver on that and we could,” he said. “The customer experience is everything.”
For now, CoverHound’s contract with Google is still in place.
When down the road CoverHound’s relationship with Google will resume Moore wouldn’t say, just that he considers the partnership to be “on pause.”
He also doesn’t expect Google’s hiatus from insurance will affect CoverHound’s business directly, as the search engine giant’s Google Compare platform only brought in about 10 percent of CoverHound’s business.
“We are in good shape and think that the decision will make us even better from a customer experience standpoint,” Moore said, adding the company has plans to announce other partnerships soon. “I am very optimistic. It’s a good time to be in insurance.”
This comes just over a year after Google made a big splash with news it was getting into the insurance business. It was made official in March 2015 when the deal between the Mountain View, Calif.-based tech giant and major partners Compare.com and CoverHound was made known to the public.
Google’s announcement included the unveiling of an online comparison tool that listed several major carriers as partners. Named as partners in the release were carriers Mercury Insurance and MetLife. Other large carriers subsequently signed on.
Participation in Google Compare was based on a flexible cost-per-acquisition model, but payment wasn’t a factor in ranking or eligibility, according to Google.
Google’s presence caused worry of a massive market disruption, particularly among independent agents. A month before the announcement amid rumors of Google’s entry into the insurance business W.R. Berkley Corp. CEO William R. Berkley said every agent who sells personal auto coverage should “be afraid, be very afraid.”
Another partner was Insurance Technologies Corp., a Carrollton, Texas-based software provider.
In its role with Google Compare, ITC provided auto insurance quotes to online consumersthrough its rating application program interface for its comparative rating system TurboRater, a system already in use by insurance agents.
“Ultimately I would not be surprised with Google exiting the market. It often seemed like a little bit of a distraction for them,” said Laird Rixford, president of ITC.
Rixford noted the model conflicted with Google’s main source of revenue, which is pay-per-click.
“They were almost cannibalizing that model,” he said.
Some have observed that Google Compare was moving much slower than anticipated.
Brian Sullivan, editor for Risk Information Inc., has been tracking the progress of Google Compare.
Sullivan said at an industry conference last month that Google Compare has only launched in four states in the nine months since they set out to tackle the U.S. market. They had expected to be in about two dozen states, Sullivan said.
“They were going to X amount of traffic and they had 10 percent of the traffic they thought,” he continued.
He reasoned they were going very slowly because they underestimated the complexity of personal auto.
Rixford said there’s a lesson in this apparent failure.
“Just being Google does not predicate success,” Rixford said. “They were not the first to try nor will they be the last.”
Rixford said the market for online comparison is fluid and changing, and that “the future market leader is probably not even around yet.”
He added that “U.S. consumers are still enamored with their agents.”
The news comes a week after Citigroup analyst Todd Bault’s bold suggestion that Google’s parent, Alphabet Inc., should buy American International Group Inc. to expand further into insurance.