When a fight breaks out, both parties don’t necessarily have to be to blame—but when you find yourself in one, there are only two options: Win, or go home. And if you think Google’s move into the business of selling insurance doesn’t constitute a fight, you’re wrong.
Last month, the Internet search giant finally launched its Google Compare portal in the U.S., offering auto coverage in California. It is likewise licensed to sell insurance in nearly additional 30 states thus far. Visitors to the portal can shop for auto coverage by comparing the prices of several participating P&C insurers, and select a price that suits their need. Google takes a percentage of the final sale.
Its debut has been stealthy, and its strategy is smart: Start with a well-populated state for the rollout, not a national launch. Learn some lessons along the way, and expand further if the effort bears fruit.
The very first step to losing any contest is to underestimate your opponent, and independent agents cannot afford to do so against a behemoth like Google. If you’re not taking this contest seriously, you’re one step closer to coming out on the losing end.
Google is a lot of things, but let me tell you what it is not. It is not some fellow P&C agent, perhaps a friend of a friend or someone your cousin knows, who’s set up shop in a neighboring county and actually respects boundaries—or some benevolent competitor who may not try to infringe on your territory.
The moment it threw its hat in the ring and entered the business of selling P&C insurance, Google established itself as a direct competitor to independent agents. It is a threat to your business, and that threat is real. The question is, will you allow it to take business from you, or are you prepared to assert your own hard-earned value proposition?
When considering the list of P&C insurers that have opted to align with Google in this venture, it’s tempting to dismiss it as not being a real contender. Its bullpen doesn’t exactly read like a who’s-who list of top P&C carriers. There’s no Travelers here, no Hartford, no Progressive.
Here’s the thing, though: It doesn’t have to.
Do you honestly think most consumers know the difference between coverage sold by a third-tier insurance carrier and one that ranks in the top five list in net premiums—or, for that matter, an insurer that ranks highly in agent satisfaction?
If you do, odds are you’re giving them more credit than is appropriate.
Independent agents have long sold on two things: personal relationships, and the personalized service they provide their customers. The common word there: personal. As the fragmentation of news, media and even consumer products continues to shift to a micro level, selling the end user a product more tailored specifically to that person’s desires (did you ever think you’d see the day when you could purchase a tin of Crayola crayons containing only the colors you select?), independent agents would do well to craft a single, unified message for Main Street America that communicates one thing: We know insurance, not Google. We do this expertly, and we can craft personalized coverage for you at a good price.
The slogan for this effort? "Let Us Show You."
Consider this: What do you think the result will be, should Google’s strategy work and those smaller carriers start seeing a great deal of revenue? Do you think the A-list insurers will graciously concede that business, and deign not to partner with Google out of some noble sense of responsibility to direct agents?
I’ve got news for you: If the numbers make sense, several major carriers will likely partner with Google, simply because too much money would be left on the table if they didn’t. Those types of decisions are made by corporate boards, not agent liaisons. Other carriers would then follow.
Independent agents continue to be able to carve out successful niches of business in the U.S. because it is profitable for major carriers to use them in extending their reach; it’s in their best interest. There’s a symbiotic relationship that exists there, which to date has remained in place mostly because the numbers have proven it to be effective.
However, if an alternative, cheaper method of reaching consumers should prove successful, you can bet your last dollar that the bean counters will lead the charge to focus more carrier energies where it’s cheapest. It would only make good business sense.
So to the thousands of independent agents in this country who are the backbone of the insurance business and whom I deeply respect, I say this: Take this fight seriously, because a fight it is—and start giving some real thought to how you’re going to aggressively market the skills you possess.
If you do otherwise, your retirement will likely start much earlier than you’d planned.