In this exclusive two-part interview, Nicolas Weng Kan, CEO of Google Compare, spoke with INN’s Chris McMahon about the forces changing insurance distribution, the partnerships behind the aggregation model, as well as the challenge of the technical integrations.
INN: What do you think are the most important factors that are shaping the insurance industry currently?
Nicolas Weng Kan: I think that it's the emergence of the direct distribution in America and the fact that you have some clear winners out there. At the same time, marketing seems to be more and more important and smaller brands are losing touch. I would say that part of what we're trying to do is keep a level playing field and allow brands to compete on their value and on their ability to price correctly.
INN: Do you think that the Google Compare platform appeals to smaller insurers by virtue of that?
NWK: I would say that it would certainly allow a small company to have a similar reach to a bigger one. It's just a tool that allows companies to choose their footprint, so they don't have the obligation to quote on everything. It's also a tool that allows them to test different propositions.
We've been based in the UK for some time now; It has been operating in this space for eight or nine years. What we've just done is translate some of the model, adapting it to the United States. There's a lot of learning and iteration by our partners on the model. What you see now is the start, and I'm pretty sure that where we'll end up in two or three years will be slightly different from where we're now. That's one of the key things: People realize there are options and decisions to be made, but I don't think there are a lot of tools available at the moment that allow them to compare, like for like.
INN: What were the technology challenges that Google confronted in creating this service in the United States?
NWK: We have a platform that is very easy to integrate with the partners, and we always need the partners to be available and open to this integration. Sometimes not every carrier is ready for this type of integration, so we have to do some custom work to adapt our model to the needs of our customers, which we'll gladly do. It's not the one-size-fits-all model.
INN: I was interested to see the partners that you have. Bolt is creating what they call an on-ramp to the Google Compare platform, and they also have their SaaS-based platforms for policy administration. Then there's Compare.com, which is the online agency that Google Compare partners with in the United States, and which is owned by Admiral Group. I'm curious about the Compare.com business relationship. Is it the same technology? I also understand that you used to work for Admiral Group.
NWK: Yes, I used to be the CEO of Confused.com [an auto insurance aggregator in the UK, which also is owned by Admiral Group]. As always, every engineer will tell you their technology is slightly different and theirs is better. The principle of it is working with an API and with the insurers; talking directly to the quoting engine, and getting prices directly from the source; displaying those prices, and allowing those customers to either buy online -- so, we go back to the policy administration or the web service of the partner -- or directing customers to an agency or call center where they can finish the purchase.
[Click here for: Aggregators Don't Want Big Insurers. Here's Why.]
INN: It's the insurer’s own pricing engines that are behind it?
NWK: Yes, each insurer would have their own pricing engine and we will plug into those engines. We've been working also with another platform: ITC [Insurance Technologies Corporation’s TurboRater]. They have a pricing engine working with multiple carriers; I think they have 140 carriers. In effect, we can have a very easy way of switching on carriers, as long as they exist already with ITC.
INN: How many of those rating engines are you partnered with and who are they?
NWK: At the moment we only one: ITC. We're talking to other ones.
INN: What are the technical challenges that the insurers face when they want to make this connection?
NWK: I think that some of it was the latency time that we will require from them. I won't divulge exact numbers, but we wanted a quick return on our queries to them. I think that that has proven to be a challenge to a lot of the quoting systems out there. When a customer comes, they want to see prices very quickly. They don't want to wait for a spinning wheel to display the price. I think that's one of the key challenges. When you're in an agency and you're talking to the consumer, 30 seconds is perfectly acceptable; when you're at home and waiting to see prices, 30 seconds can start to be a challenge.
INN: Do you hear insurers saying that they can't do this based on legacy systems, or the cost of updating those legacy systems?
NWK: Yeah. I think that there's an element of us also adapting to their needs and seeing how we can lighten the load on their side. We've been making a lot of progress there also. It boils down to: not only do we want prices, but we want accurate prices. Say I give you a $500 quote and you end up talking to the insurer and end up at $600. You won't be happy. So it has to be as accurate as possible, and that's why -- at the moment -- we do not do any estimation. We do not have any shortcut on our quoting process.
We have a heavy load of questions and that is a benefit for us and for the insurer, because we are asking more questions than most of the insurers would ask. The answers to those questions would be available for further analysis, if you wanted. You might use 40 of the answers out of 48 questions. But if you want to come back in six months or a year's time and say, "What did this customer answer on this particular question?" We'll have it available. You can have backward analysis for your purposes, if you wanted to.
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