Today’s announcement of Google Compare Auto Insurance for California will be valued by consumers. Hopefully, it will also spur the industry to action.
Celent research has identified that consumers, in general, highly value convenience in purchasing financial services products. In the report “Innovation in Insurance: A North American Consumer View,” we asked consumers why they chose their preferred service method when looking for help with financial services products. Nine percent said their choice was driven by a desire for “Better Results” while 26 percent chose both “Convenience” and “Ease.” In short, these consumers would rather have service fast and easy, even if it is not the best result!
We have also surveyed consumers about their preference to do business with companies which are viewed as innovative. In “Making Innovation Matter,” we found that the innovation reputation of a company means a great deal to those consumers who are most active in managing their finances and also to those who are “Highly Digital” (use more than seven digital services on a routine basis).
Google’s reputation for ease of use and also for innovation makes for an excellent fit with these declared consumer preferences. The fact that they have partnered with BOLT, an experienced insurance provider, will combine subject matter expertise with their world-class digital skills. (Read more about BOLT in this Celent report: “BOLT Insurance Agency: Changing the Small Commercial Insurance Service Paradigm”).
It will be good for the industry if this move motivates the bystanders to seriously pursue sustained, deliberate innovation as a response. As we documented in “Innovation in Financial Services Firms: The Leadership Gap,” there is a real mismatch between insurance customers’ expectations and insurers’ business strategies. In our surveys, insurance professionals repeatedly say that they believe that innovation will be critical to satisfying consumer expectations. However, they also say that it is only important (not critical) to fulfilling their strategy. Critical to the customer, but only important to strategy — not a good position for incumbent firms in a traditional industry.
From the industry veterans at Celent, here’s hoping Google’s entry shakes things up!
This blog entry has been reprinted with permission.
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