Google Compare announced in an e-mail to its partners that it would be shutting down its insurance and financial products comparison service tools in the United State and the United Kingdom, as of March 23. The lack of traction in both usage and revenue generation were named as two key reasons. Those were the headlines across the industry this week. So Google Compare is done — for now.
This is big news for the insurance industry that has spent the past year figuring out how to shield itself from the potential impact that the tech giant would make. It turns out it didn’t make much of a splash after all. In addition to insurance, Google is backing out of credit cards, banking and mortgage products. In its issued statement, Google is shutting down for now and focusing on “improving the customer experience.”
Maybe they will be back in a year, maybe five years, but what can we learn from it now?
When Google Compare was launched in the U.S. last year, it took the industry by storm. The agent/broker ecosystem was skeptical of any success, but they were also fearful — given Google’s size, wealth and talent — could Google become a disruptor in personal auto quoting?
But what the agent/broker ecosystems did was to keep their (potential) enemy close by understanding what they were doing. They watched, and hoped for failure. Meanwhile, a handful of insurers signed up to be part of the California launch: those insurers who could easily connect to the Google platform and wanted to be part of a potential success. And these companies had to explain their actions to their agents — who were in the wings watching and waiting to see what would happen.
I have my own thoughts on why Google Compare failed this first go-around.
First, consumers can get these quote comparisons elsewhere — insurers already do this. Next, maybe customers just aren’t quite ready for self-service compare engines — but by all accounts, they soon will be. I don’t think Google underestimated the complexity of insurance, nor do I think they underestimated the consumer. I think, probably, that the timing was off, and they didn’t differentiate themselves from existing solutions with comparative raters. They probably lacked some of the innovation that would have been needed to differentiate them from others in the market.
Google Compare, like many start-ups, at least for now, has failed. At Strategy Meets Action, we talk all the time about how there is an innovation journey and how even the best laid plans will sometimes fail. Part of the journey is learning through failure and then coming back better than ever. This is especially true in insurance. The industry is complicated. It’s complex and heavily regulated. It experiences slow growth, a slow pace of change, and relatively small profits. And it requires lots of resources, cash, and expertise commitments over a long period of time before it pays off. SMA research shows 88% of insurers understand that innovation projects may fail. Part of that acceptance indicates a growing ability to learn from failure.
So where do you place your bets moving forward? Will Google Compare opting out of insurance cause new disruption? Will new solutions move in to fill the void?
Many will place their bets on strong incumbents and today’s ecosystem. Insiders believe that with Google Compare moving out, it will become unappealing for outsiders to move in and try to understand it, citing that the barriers to success are too high. Others will say that something will come to disrupt and challenge the traditional ways of the comparative raters, and that outsiders, with their naivety and innovative thinking, will find a pin hole in the ecosystems and exploit the market.
Either way, the wonderful thing about innovation is that it is essence of change. The only constant is change. Things happen so quickly. Innovation can flip an industry on its side overnight. Google Compare isn’t going away forever; it is just shutting the blinds. While this may be a small win for the establishment insurers who viewed Google’s entry as a threat, it doesn’t mean these organizations should rest on their laurels. The time is now to innovate, fill a void and improve overall services.
Finally, failures and what we learn from them serve to set the ground work for change and innovation. It is part of the innovation journey to improve and adapt. As we continue this year, I am confident there will be more changes to the industry … so stay tuned.
Editor's note: This article first appeared on StrategyMeetsAction.com and is reprinted here with their permission. Click here for the original post.
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