As with many industries, it feels like ours as independent insurance agents is constantly under attack, especially by new technology. It feels like no matter what you’re listening to or watching, you are going to be faced with many commercials about insurance, many of which are companies that tell you to do it yourself. Basically, eliminate the agent and come to us.
Recently, one very high profile company decided to get into the insurance business, Google, with a service called Google Compare. You may not have heard about it, because it didn’t last very long. But their quick departure from the business, especially for a company as large as they are with the data they have, really highlights just how tough this business is, and why it’s so important to have an independent insurance agent, like us, on your side.
1. What Was Google Compare?
Simply put, Google Compare was a comparison shopping site for personal auto insurance. You could go to the site, enter your information, and get rate comparisons from multiple companies. They were also trying to do this with credit cards and mortgages as well. Their plan was to use their enormous reach in the marketplace as a way to provide consumers with niche shopping services and financial-services tools.
2. Why Did It Fail?
Google doesn’t fail at much, but in this case, they basically bit off more than they could chew. Google had expected to be in 24 states by now, but after a year they’ve only managed to be in four. According to most publications and sources, the complexity of auto insurance, the fact that auto insurance requires state-by-state approval, and the fact that they couldn’t convince many big insurers to be part of Google Compare, led to limited choices for consumers and very little traffic to their site. So after roughly a year, they decided to pull the plug.
3. What Does It Mean For Agents?
As an independent agent that represents multiple companies, we can already give you what they were trying to provide, a comparison of rate and coverage from multiple highly rated companies. But what we also give that they didn’t is advice and guidance, and a person to talk to.
What you’re getting with us is a trusted advisor. And in fact, despite all the money that companies like Progressive and GEICO spend on telling you to go to their site to get quotes, Progressive still invests heavily in independent insurance agencies (we represent them) with the agent distribution channel representing half of the company’s production and revenue. And GEICO has begun to open up agencies where you can go in and talk to people for guidance. This, in part, is being driven by the fact that millennials, defined as a person reaching adulthood around the year 2000, are the least likely segment of U.S. adults to buy insurance without an agent.
4. What Does It Mean For You?
Lucky for you, you’re already working with the best way to get your insurance! As agents, we strive to create relationships with our clients that breed trust on both sides. Of course we will have to adapt, just like any other industry. Ultimately, we’ve already been around for 136 years, and we plan to be around for 136 more. And we will do this by continuing to invest in one of our most important assets, you, our customers.