What We Can Learn from Google Compare’s Failure

“I’m here to tell you you’re screwed.”

These were the words of Bill Berkley, CEO of WR Berkeley, at a 2015 insurance conference on the subject of Google insurance and big data. Like many, he thought Google’s combination of unique data insight and a ubiquitous sales channel would massively disrupt the market.

But Google Compare’s operation ended on March 23—less than a year after the website’s launch.

What does this news mean for other insurance industry disruptors like Goji, Coverhound and Insureon? And what about the industry at large?

We can learn three fundamental lessons from Google Compare’s fall from grace:

Make it personal. The purchase of insurance is only a promise to pay in the event of a mishap. It is this fundamental difference which means the experience must be different from other consumer interactions. With insurance, trust builds over time, creating an element of a relationship—albeit a tenuous one.

In markets dominated by agents, this means bringing something other than a price differential to the party. Agents and brokers add value from personal insight and relationships. While markets like the U.K. provide empirical proof that brokers’ stranglehold can be weakened, it takes time to release the grip.

Google Compare’s user experience was very bland. It wasn’t much more than a search engine for insurance that failed to provide the consumer with substantial guidance or direction in their decision-making process. In order for a tool like this to gain traction, companies need to build a user experience that draws the customer in. While much of the world is looking for ways to eliminate human interaction in the shopping experience—like food or clothing delivery apps—the insurance industry is still one that values human interaction.

An online insurance service needs to show some semblance of trust and advice in order to flourish—perhaps similar to how TurboTax walks its users through every step of a tax return filing as if they were sitting with an accountant. An online insurance tool needs to offer that same hand-holding experience.

Know the industry. So many variables come into play with insurance, and it’s difficult to restructure the way it’s done overnight. Agents and insurers must address strict legal and regulatory issues and tailor products to each individual in order to provide the best coverage. It’s not surprising that Google Compare had only gained a license to trade in a handful of U.S. states. It takes time to get everyone on board.

To truly disrupt the market, new entrants must offer something dramatically different. When Google launched Google Maps for mobile in 2005, it radically changed the information available for people on the go, giving them instant access to directions. After that, other services jumped on the bandwagon with apps for driving, restaurants, travel guides and hotels that all enriched the experience.

There is no doubt that massive pain points exist in the insurance industry, like wasting premium on multiple stages of the supply chain. The need to adapt to the digitization of the market with more engaging content and services is hard to keep up with, along with the drive to use available data on the purchasing and fulfillment journey.

But Google Compare failed to harness the power of Google’s massive data lake in unique ways to drive differentiation. It’s not good enough to provide a comparison of rates because it’s not sufficiently innovative to disrupt a market. Usage-based insurance, gamification and data augmentation are all potential uses of data to enrich the experience.

Differentiate. When Google Compare entered the market, there was nothing special to discern it from already existing competitors. A long list of technology companies were already trying to disrupt the insurance market, and many comparison sites already provided enjoyable and intuitive user journeys. In the U.S. in particular, none of them have done much to threaten the already established insurance agents in the industry.

Consider how Netflix completely revolutionized the way people rent movies and watch TV. An online insurance service needs to change the way people think about insurance and how they go about buying it. Companies like Goji, Coverhound and Insureon need to be patient in order for a change in insurance buying to really catch on.

The insurance industry is known to be slow in adopting technology, and one can’t expect the entire population to start buying their insurance online overnight. The transition to an online insurance market will take time and commitment from providers in order to gain traction.

Phil Race is the Chief Sales and Marketing Officer at insurance software provider Xuber.