Google recently announced the launch of “Google Compare for Auto Insurance” – a feature that allows consumers to comparison-shop insurance carrier rates. Currently, the tool is only available in California, but Google has filed for insurance in 26 states with plans for expansion across the entire US. The price comparison market is inherently designed to find customers the cheapest price, something that goes against the ethos of loyalty.

Once on the website the process is simple. Here’s how it works:
o Enter zip code
o Fill out a short form
o Google then compares auto premiums across carriers
o Consumers review carrier quotes, and have the option to buy online or by phone

Research shows just how well perceived the Google brand is by US consumers, indicating there’s huge potential for Google’s comparison service to shake up the industry. Here are the greatest opportunities for disruption in the auto insurance industry:

1. Quote Comparison Market
In 2012, Google purchased Beat That Quote in the UK, creating Google Compare, which operates across a number of financial products, including car insurance. Most consumers use online sites when shopping for car insurance and the highest proportion of this group do so through price comparison sites. However, Google still has a way to go before it’s working on the same level as more established and well-known UK comparison services such as and, both of whom run high profile advertising campaigns in order to remain top of mind for consumers. In the US, the comparison market is less known, but increased consumer demand for a seamless shopping experience will drive awareness and usage.

2. Shopping Behavior
Mintel’s research shows that price is the most influential in US consumer auto insurance switching behavior:

• 34% indicate switching because another company was less expensive
• 24% indicate switching because their insurer increased price at the time of renewal
• 14% indicate switching because another company offered a discount for bundling products

Purchasing from an agent is becoming a less popular way to purchase property and casualty policies. In fact, independent agents are least likely to be used the next time consumers purchase a policy (21% exclusive agent vs. 16% independent agent). More people plan to buy their policies online (26%), particularly young customers who are planning to purchase future policies electronically.

3. Search Optimization
Google receives their user base straight from the 33% of people that look for insurance on a search engine and choose the top one. The link to the service appears when someone searches for terms related to that product, for example “auto insurance”.

Google profits from its search engine business, as shoppers who just pick a website after searching online are more likely to use Google’s comparison service than the overall average. Cross-analysis shows that Google benefits from this tie-in, as adults who search online and then pick a website at the top of the list are more likely to have used Google’s comparison service at some point than the average. This dominance can certainly be leveraged to provide comparison services to consumers, and using this connection in the future will be an important strategy.

4. Market-Share
Major US insurance carriers are reluctant to partner with Google, as the top 4 auto insurers (State Farm, GEICO, Allstate, and Progressive) are not listed as providers. Currently, US consumers can compare quotes from 13 carriers, including MetLife, Mercury, Foremost, and The General. This is a far cry from the 120+ car insurance companies available for comparison on the UK website. In an attempt to add additional providers, Google has partnered with in California. Google Compare users now have access to some of’s 41 carrier partners through the Google Compare site.

The ability to get instant quotes and to sign a policy will shift the landscape in the auto insurance market. Smaller carriers will now be in the mix as consumers will gravitate towards price, but may have trouble closing sales due to low brand awareness. Conversely, major carriers hope to build off their reputation of being stable and reliable.

5. Loyalty
One of the longer-term challenges to price comparison websites is the fact that insurance companies firms are starting to change their approach to customer acquisition and retention. Insurance carriers have been looking at how to reward loyal customers in order to prevent switching. This change has been varied and consists of carriers either offering discounts when clients purchase multiple products or rewarding clients with better rates if they have been a customer for a number of years. Such initiatives are obviously detrimental to the aggregator market because price comparisons websites thrive when consumers are dissatisfied with the deal they are getting and are looking for a better offer. Indeed, one of the reasons why aggregators have become so popular in the car and home insurance markets is because of customer dissatisfaction with rising premiums.

Looking Ahead

Currently in the UK, more than two-thirds of consumers arranged their last policy online, with 43% using a price comparison site. This shows the influence that the price comparison websites play in allowing consumers to find competitive deals and save money. In the US, Mintel data shows that more consumers than ever are using online sources to research and review insurance products. Price comparison websites will play an increasingly important role in consumers’ selection of insurance coverage. The key to success is responsive media strategies, combined with the word of mouth effect. Consumers are increasingly savvy and word-of-mouth promotion provides the information and third party credibility consumer look for.

For more information on the US insurance industry, check out US innovations in the Insurance market report on our store.