Google closes Google Compare insurance price comparison site

Google follows a Silicon Valley ethos that does not shy away from closing down products that are not meeting market expectations. Google Glass and Google Wave are two products that launched with high expectations, but underperformed and Google unceremoniously shut both down. Google Compare is the latest platform to meet this fate. Google Compare was an insurance price comparison tool. Customers entered driver and vehicle data once, and were then able to view and accept offers from multiple insurance companies. Google cited low traffic and slow sales as the reason for the shutdown. Industry observers also cite low participation from large insurers and complex state-by-state regulations as a contributing factors.

Google’s entry into the insurance business last year caused an uproar in a normally quiet industry. Industry analysts and participants openly worried that this new comparison site would kill the existing agency model for personal lines insurance. While those fears now seem overblown, the Google site was an impressive piece of technology and design, especially compared to the efforts from many insurers to provide effective and efficient online quotes. Google Compare also met with significant success in the UK insurance market, although this international site was included in the shutdown.

Where Google goes from here in an open question. Google clearly saw value in disrupting the staid insurance industry, an industry which still relies heavily on intermediaries and offline sales processes. The Google model of entering data once and viewing many offers is a compelling one. I suspect that Google will take the learnings from this failed attempt and reenter the market again at a later time. In what form is unknown, but with almost 1.2 trillion USD in insurance premiums in the United States alone, this market may be too large for Google to ignore.