B2B Payments

With Google’s Entry, Competition Within Comparative Insurance Sites Spikes

The introduction of online comparative sites for insurance policy purchases is already disrupting the insurance market. The launch of CompareNow.com and, last year, Overstock.com’s insurance e-commerce operations revealed the potential for an industry in the U.S. that has already taken off in the U.K.

But becoming a host for an insurance comparison platform online not only requires business relationships with the insurance providers, but in the U.S. it also means the host must become a licensed insurance seller in whichever state they are operating, or to partner with companies that are already licensed.

It’s a tricky industry to navigate, but it seems online platforms are willing to take on the burden. And with Google’s new entry into the space, the digital insurance comparison market is bound to gain traction among insurance buyers.

Overstock Breaks Into the Market

Online B2B and consumer retailer Overstock.com first launched its insurance comparative site last April for business and consumers. At the time, Overstock CEO Patrick Byrne said that businesses could save 25 to 30 percent on their insurance policies when using Overstock’s comparison service.

In accepting various methods of payment – credit card, check and even Bitcoin – for insurance policies, Overstock’s insurance services aim to challenge traditional insurance sales agents, the company said, and to work with 20 insurance providers (Overstock launched the service with 12 insurance partnerships already locked down).

Google Makes Its Entrance

For years, the insurance industry had anticipated Google’s entry into the insurance e-commerce market. The conglomerate launched an online insurance comparison site in the U.K. in 2012, and it was only a matter of time for those services to travel across the Atlantic.

Market experts kept a close eye on Google’s actions in the space, and chatter erupted in January with the expectation that the company would launch its online auto insurance comparison service in California.

While reports say the project had been pushed back several times, experts highlighted Google’s strategic moves to become licensed insurance sellers in dozens of states already, as well as business partnerships with several insurance agencies including MetLife and Mercury.

Perhaps the biggest tip-off to Google’s new insurance plans was the revelation that Meredith Stechbart, Google’s Corporate Treasurer for its insurance arm, became authorized to transact on behalf of California-based auto insurance company CoverHound, in addition to already being licensed to transact on behalf of Google Compare Auto Insurance Services.

Less than two months later, Google announced the rollout of this long-awaited online insurance comparison site. Last Thursday (March 5) the firm revealed the U.S. version of its existing UK Google Compare service. At present the site only services California customers seeking auto insurance, and only has two official partnerships with insurance providers: MetLife and Mercury Insurance.

But Google also struck a strategic partnership with CompareNow to gain access to more insurance providers, reports said.

“Google Compare for car insurance provides a seamless, intuitive experience for connecting with your customers online,” Google AdWords Vice President of Product Management Jerry Dischler said in a blog post on Thursday. “Whether you’re a national insurance provider or one local to California, people searching for car insurance on their phone or computer can find you along with an apples-to-apples comparison of other providers – all in as little as 5 minutes.”

A Disruptive Business Model

In acting as a portal for insurance companies to sell their products directly to businesses and consumers, these online comparison sites have the potential to overhaul the existing business model of insurance procurement.

Instead of the tens of thousands of insurance brokers that currently accelerate insurance sales, these sites nix the fees associated with brokers’ sales commission. The platforms offer discounts to buyers, and collect a referral fee from the insurance company. According to reports from The New York Times, the potential gains from the market are massive. In 2013, insurers recorded $481 billion worth of premiums for various insurance products, a figure reports say landed insurance brokers about $50 billion in commission.

While experts say some insurance providers are unsure about signing on to comparison sites like Google’s, reports suggest that the services will eventually win them over as the insurance companies seek new ways to gain customers and offer technologically flexible ways for consumers and businesses to purchase a policy.

“We’re always looking for opportunities to use new technology to enhance the customer experience,” MetLife Auto & Home Executive Vice President Kishore Ponnavolu said in a statement about its new Google partnership.

The entrance of Google and Overstock into the insurance supply sector is certainly a significant innovation in the insurance sales space. But there are other aspects of the insurance industry that are ready for disruption, too. One of these is payments reconciliation, still largely done through a slow and tedious process with a bank. With Overstock’s progressive payments outlook – including its support of Bitcoin – and with Google’s expanding e-payments products and services, the penetration of these corporations into the insurance industry has the potential to overhaul much more than the way insurance companies sell their products.



The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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