Google is preparing to make a splash into the auto insurance market by selling insurance policies and creating a website that compares other policies based on insurance needs. Forrester Research, Ellen Carney, broke the news in a blog post that told readers that Google already has authorization to sell auto insurance in 26 states through a company entity known as Google Compare Auto. It is also noted that Google has the green light to sell insurance for other insurance companies in one state. It is widely believed that if Google’s new auto insurance arm gains steam, it could reshape the industry hierarchy. While Carney expects the website to launch some time the first quarter this year, she is concerned that no management experience in auto insurance sales could be one risk factor for the company.
Google pushing to acquire an insurance license
While Google has not yet commented on the “speculation”, as the spokesman for Google put it, but CoverHound Insurance Solutions President, Greg Isaacs has said that Meredith Stechbart is the treasurer of Google Compare Auto Insurance and has pushed for CoverHound to acquire an insurance license. However, CoverHound has denied the request saying that Google does not own the company, but rather a partnership. That being said, there is speculation that Google is looking at a possible CoverHound acquisition to help bolster presence and get a better leg up in the auto insurance industry. However, Google Compare Auto segment could be another source of revenue, as the company would get percentage for selling other insurance company’s products, not to mention sales from its own products and advertising sales on the website. It could take some time to get off the ground and really make a statement in the industry, but Google is known for infiltrating markets and turning the tides in its favor.
This certainly seems like an interesting move on the part of Google, when you consider some of the other projects the company is working on, such as Google Fiber and driverless cars. Analysts already agree that Google Fiber could be a huge opportunity to enter the “cable” industry and help create more competition and better prices, options for consumers. However, these products are still in development, but are seen as long term revenue sources.
Google diversifying its business
Ultimately, Google continues to diversify its business and rely on other income sources, despite its dominance in search engine. The future in Google lies in growth and the company is working on numerous projects, such as the couple listed above, that could help continue to propel Google’s growth. While there are risks with the Google Compare Auto segment, such as no management experience selling auto insurance, this could easily be fixed by bringing the CoverHound team onboard when and if an acquisition is made on the company. It will certainly be interesting to see when the website launches and the early response it will have from consumers.