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posted by LaminatorX on Wednesday January 21 2015, @05:58AM   Printer-friendly
from the google-risk dept.

The insurance industry is a fat target with $481 billion in premiums in 2013 and agents’ commissions of about $50 billion. Now Conor Dougherty writes in the New York Times that the boring but lucrative trade has been attracting big names, among them Google which has formed a partnership with Comparenow, an American auto insurance comparison site that will give Google access to insurers in Comparenow’s network. “A lot of people are waking up to the fact that it’s a massive industry, it’s old-fashioned, they still use human agents and the commissions are pretty big,” says Jennifer Fitzgerald. “It’s ripe for — I hate to use the word — disruption.” It may seem like an odd match for Google, whose projects include driverless cars, delivery drones and a pill to detect cancer, but the key to insurance is having lots of data about people’s backgrounds and habits, which is perhaps the company’s greatest strength. “They have a ton of data on where people drive, how people drive,” says Jon McNeill. “It’s the holy grail of being able to price auto insurance correctly.”

Robert P. Hartwig, president of the Insurance Information Institute, says rumors of the insurance agent’s death have been greatly exaggerated. “Even if they go through Google or another portal, they still end up at an insurance agency or company at some point,” says Hartwig. “I think the agency model has a lot more consistency than many people give it credit for.” But people in the industry and Silicon Valley say it is only a matter of time before online agencies attack the armies of intermediaries that are the backbone of the trade and Google could present formidable competition for other insurance sellers. As many as two-thirds of insurance customers say they would consider purchasing insurance products from organizations other than insurers, including 23 percent who would consider buying from online service providers such as Google and Amazon. Google Compare auto insurance site has already been operating in Britain for two years as a search engine for auto insurance prices. “There are 40,000 agencies in the US," says Ellen Carney, "and you could absolutely imagine them shrinking by a quarter."

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  • (Score: 2) by frojack on Wednesday January 21 2015, @06:16AM

    by frojack (1554) on Wednesday January 21 2015, @06:16AM (#136610) Journal

    “I think the agency model has a lot more consistency than many people give it credit for.”

    I tend to agree, I'm pretty sure shopping for insurance on line from a bunch of unknown companies found by google-brokered search is not going to have the same level of trust as shopping for toner for you laser printer.

    Since all the hits end up on at a licensed insurance agency anyway, google's cut has to come from somewhere. Pretty sure its not big insurance.

    If google wants to clean up some industry, let them clean up phone number reverse look up. The scam artists in that industry are running rampant.
       

    --
    No, you are mistaken. I've always had this sig.
    • (Score: 4, Interesting) by Whoever on Wednesday January 21 2015, @06:44AM

      by Whoever (4524) on Wednesday January 21 2015, @06:44AM (#136614) Journal

      Since all the hits end up on at a licensed insurance agency anyway, google's cut has to come from somewhere. Pretty sure its not big insurance.

      The insurance industry in the UK has long been different to that in the USA. In the UK, before the '90s, one always bought insurance through a broker. The broker worked for the buyer and was supposed to find the best deal for the buyer. Because the industry wasn't highly computerized, brokers effectively competed with each other, based on which broker was able to find the best deal for the buyer. The broker collected a fee from the insurance company for selling the insurance.

      Then, in the '90s, along came insurance companies selling directly to the company. A naive view would suggest that these direct sellers would have an immediate advantage over those that sell via brokers; however, the direct sellers, instead of paying commissions, had to pay advertising and selling costs that those that sold through brokers would not incur. It should be noted that many policies were written by relatively small syndicates at Lloyds, who would not have the resources to sell other than through brokers.

      In the USA, in contrast, selling through tied agents appears to have been the norm for a long time. As a buyer, it was your responsibility to go round various tied agents in order to get the best deal. In contrast to using a broker (as in the UK), who should be a single stop to get the best deal on your behalf from various insurance companies. However, in recent years, the direct sales model (not even a tied agent).

      IMHO, the insurance industry in the USA was less competitive than in the UK, because it was dominated by a small number of large players, instead of the more vibrant market that UK buyers could (and still can) access through brokers.

      In recent years, many "comparison" websites have sprung up in the UK, to help find the best deal from the direct sellers. Google is late to the party, and it's hard to see how Google will be a disruptor in the UK, but I suspect that the players in the USA insurance market are ripe for disruption. Tied agents cost money and provide little or no value today -- they only act as an (expensive) sales office.

    • (Score: 5, Informative) by edIII on Wednesday January 21 2015, @07:09AM

      by edIII (791) on Wednesday January 21 2015, @07:09AM (#136617)

      Speaking as a former CTO of a small agency, It's going to be insanely hard. While Google might pick up some business, these people writing the articles are completely clueless about daily operations. They must literally have never spent a day in the insurance industry, and just looked that agency/carrier model and assumed disruptive possibilities.

      Insurance is one of the most highly regulated industries. There's an awful lot of paperwork and signatures required. I'm sure Google might be able to automate some of it, but they STILL need a really sophisticated data collection portal. One of the things agents actually do to earn their commissions, is to check off the massive lists of what needs to be where. They'll actually go out to the vehicle, take pictures, confirm VIN numbers. Agents do work for their commissions.

      The most sophisticated consumers are flocking more and more to electronic interactions, but there are huge demographics in this country that lack that ability. I'm not convinced that Google can solve all the inbound documentation needs like scanning driver's licenses and things of that nature. Before you think you can just "integrate" with the DMV and State to pull it electronically, please let me take a moment to prepare to laugh my ass off. I'm happy to leave Google to that lofty goal. It's hard enough already to get data into and out of different state level departments as it is. I've seen agents spend 30 minutes on the phone with the DMV. It wasn't all that long ago that a rather popular state was still sending magnetic tapes back and forth between carriers to accomplish something done in less than 60 seconds with a secure XML/JSON API.

      What about underwriting? You know what you get with reckless cowboys selling hundreds of insurance policies each day? A lot of insurance policies that never make it past underwriting and are cancelled (meaning it could be a true lapse in coverage). It's also common that after an accident that carriers are rushing around to find the docs and underwriting again to avoid 10k+ fines from the state/court. In fact, it was such a common occurrence in Nevada, that needed to make it a law that even if the policy was invalid from underwriting, that the carriers still had to cough up minimum insurance coverage amounts period. Policies were being invalidated left and right over discrepancies in underwriting. In other words, an agent is required by law to review all policies and ensure that underwriting is correct . One of the easiest ways to detect insurance malfeasance is to look for an agent that for some reason is superhuman and can clear 200 policies in a day. There's no such thing as automated underwriting, and is one of the things agents are doing to earn that commission, and even that was going wrong.

      Google will have to suffer all the liability of the underwriting, as it has more than once resulted in effectively uninsured motorists once the carriers wash their hands after underwriting came back several months into the policy. As either an agency, or carrier, Google faces some serious challenges.

      Just because you can do something online and escape the brick and mortar costs, doesn't mean you can completely automate away the requirements. Google will need entire datacenters of staff and people to follow up on the legally mandated stuff they need to do. Is Google prepared to purchase a vendor that sends snail mail notices? They'll have to by law. I was tasked with managing the communication requirements of a policy in the State of Nevada. Google will be forced to deal with snail mail :)

      Let's not forget that it will be all but impossible to disrupt the actual insurance products themselves. It can take 9 months to get an insurance product approved in the State of Nevada. All Google can sell is approved products. They actually can't just adjust prices, or make something free, or pretty much anything. It's a registered product that literally takes about a year to make modifications to, AFAIK from being a CTO. Quomation also offers agencies the abilities to get realtime insurance quotes from multiple carriers. It's not unusual for an agent to check 20 or more insurance companies for the best products offered in that market, and the cheapest is not always best. So this isn't a new idea at all, and agencies are using sophisticated technologies to get quotes already. No agency can modify the product or make it cheaper. They game the system not by changing the terms of the product, but falsifying the underwriting so the customer *qualifies* for a cheaper registered product. You'd be surprised about how many Las Vegans live about hundred miles north of Las Vegas. At least their cars are garaged in these cheaper zip codes....

      Yes, there are a lot of upsells, but agencies can *only* make additional monies through upsells of other services. Google may well blow people away with the "upsells", but they are still just as hobbled as the agencies with flexibility of their product lines. As for the 40,000 agencies, I can see them shrinking by more than a quarter, but not because of Google. It's the economy that drives insurance, and this is especially true for some markets where bad economies simply result in uninsured drivers. We only *think* we've mandated insurance, but the truth is that the people who can't afford it just drive without it. Nevada has gotten better at finding these people, but it's not a trivial problem in most markets.

      I'm more than a little dubious that they can do anything disruptive. Selling insurance is not something you can easily do over the phone, or in a kiosk. I know. I was paid to try to do just that for years. It's not something so trivial Google can just make us look like idiots.

      • (Score: 2) by Phoenix666 on Wednesday January 21 2015, @10:37AM

        by Phoenix666 (552) on Wednesday January 21 2015, @10:37AM (#136652) Journal

        Yes, government regulation is often the rub in disrupting entrenched industries. Decades of revolving doors between the companies and politicians and the byzantine ways of self-dealing aren't undone overnight (short of a Revolution).

        Personally I'd prefer Google first finish disrupting an entrenched industry they've only sort of started disrupting: broadband. NYC, despite being the financial capital of the world, still has 3rd world broadband. All of us entrepreneurs and techs would love to have Google fiber, but TWC and the rest have colluded to keep it out. It's supremely frustrating.

        Of course if they wanted to disrupt investment banking by, say, providing those services as a non-profit that assiduously does not commit crimes on a daily basis, I could be persuaded to wait for Google fiber until they're done putting Wall Street out of business. That, even more than the insurance industry, is a giant that dearly needs slaying.

        --
        Washington DC delenda est.
        • (Score: 0) by Anonymous Coward on Wednesday January 21 2015, @02:48PM

          by Anonymous Coward on Wednesday January 21 2015, @02:48PM (#136708)

          government regulation is often the rub in disrupting entrenched industries. Decades of revolving doors between the companies and politicians and the byzantine ways of self-dealing aren't undone overnight

          If at all. Insurance companies are massive money machines. The second highest person by wealth in the united states is an insurance underwriter. He manages billions of dollars for Berkshire (you know them better as geiko).

          Every state has its own set of rules. Then on top of that are the federal rules. Even county to county can have different rules.

          These guys have *billions* of dollars they are playing with. They want something done they call up their buddy who gets them dinner with the Governor/senator/congressman/whatever. They wisk over in their private jet. They mull it over dinner and a nice aged brie and some 150 year old wine and several campaign contributions for their re-election because they are such good friends.

          Take obamacare. It is basically a large lovenote to the insurance industry.

          If you think google is going to be the uber of the insurance industry think again. Those guys are just now starting to get organized. They will head it off eventually at the state level in every state and make it even harder to get in. They are not going to go down without a fight.

          When my father first became an insurance agent. He would get 20-30% per year kicked back to him on commission. The current rates are somewhere between 2-5% however the rates when up for the clients. More and more is going to fewer and fewer. Few people understand the scope of it. It is not hard. There are ~300 million insured people in the US. At even a simple number of say 100 a month you can do the math and see what is at stake. They are not going to let themselves be disrupted. It is why they headed off nationalized healthcare with an insurance scheme. It would have cratered the money machine of Hillarycare.

        • (Score: 3, Informative) by edIII on Wednesday January 21 2015, @10:03PM

          by edIII (791) on Wednesday January 21 2015, @10:03PM (#136811)

          Hey, I'd prefer complete disruption everywhere. I'm just pointing out that you are *NOT* going to get disruption in that industry by attempting to make them look stupid and efficient through their processes when those are very well engineered by regulators and state level departments like the DMV and DOI.

          The true disruption to the insurance industry really needs to start at the carrier level. This article is about the agency level. There is literally nothing that can be disrupted or changed at the agency level in the light of carrier requirements and dealing with the state. I'm sincerely trying and the only thing I can do is improve some of the processes and add automated BI everywhere. Otherwise, my hands are tied by state regulations and processes.

          I was serious that quite a bit of the time you find agencies competing by agents knowingly falsifying information for underwriting. I'm not saying it's widespread and endemic (at all), but that it's very difficult to compete with just the products alone. It isn't like the insurance carriers can evaluate you and give you a fully customized and dynamic policy on the spot. That would really lower the prices, but my gut tells me that will never happen when the state wants you to rigidly define an insurance product and you can only receive and verify information so fast. The carriers don't really get to place you anywhere with anything they want, but find a registered product that they sell and are willing to accept the risk of selling to *you*.

          As a person who was in the industry and still around it, I share your sentiments. The glacial pace that technology is moving in the industry is astounding. Only thing getting a renovation are the user interfaces and maybe some document management/collaboration. You can make a $25k per month SaaS payment for carrier platforms being sold, but they didn't do anything disruptive to the actual service itself. Just an upgrade of the daily operations and increased efficiencies. Otherwise, they still need to support the old processes and methods including binary transfers of data files and unbelievably clumsy and error prone information exchange systems. What I'm saying is that Google will only become just like an insurance carrier, and not disrupt anything. They can't, until you change the regulators, and they literally take over the platforms themselves the agencies are running on and upgrade them. Then they can ditch the old carrier platforms by telling the other carriers where they can go about legacy compatibility.

          Just up to a few years ago, State Farm was using AS/400 machines and expensive platforms to allow Windows boxes to emulate the terminal machines. By few, I mean it was past 2010. To the point, I'm not sure the hardware itself in the branch offices wasn't disintegrating into the carpet. Even with the technical nightmares, the real revolution has to happen at the state and regulation levels if you want things to get really better for the consumer. Unless it's just about the insurance carriers and Google pocketing the savings as newly found profits.

          --
          Technically, lunchtime is at any moment. It's just a wave function.
      • (Score: 2) by VLM on Wednesday January 21 2015, @12:16PM

        by VLM (445) Subscriber Badge on Wednesday January 21 2015, @12:16PM (#136676)

        Interesting post. To me it sounds like a building trade general contractor job. Well, google should be able to automate that because 50000 nationwide building codes are just like software code and rather than being onsite a bot could just SMS the plumber and HVAC guy to keep them on track, I mean what could possibly go wrong, its not like GCs on big jobs personally swing hammers... Yeah good luck with that "disruption" LOL.

        I think the big business model confusion is in American English we call them all agents, but some agents run industry operations while also talking to customers, and other agents are just salespeople, so some can be replaced with a website and a extremely small shell script, but others are more or less impossible to replace under the current system of regulation.

        Of course the system of regulation could change, and if a multibillion dollar company tells .gov to jump, .gov asks "how high?" so the days of state regulated insurance are not necessarily eternal. IF, (big if) there were one unified and sensible nationwide set of insurance regulations, then ... Of course that creates other disasters like to big to fail insurance companies and confuseopolies and stuff like that.

      • (Score: 2) by iamjacksusername on Wednesday January 21 2015, @02:44PM

        by iamjacksusername (1479) on Wednesday January 21 2015, @02:44PM (#136706)

        Parent is spot on right!

        I am more familiar with the facultative market than auto but many of the issues parent raises are true. Insurance seems ripe for disruption only because most people do not want to understand how the industry works. This happens every decade or so - a bunch of new players show up in the market with all sorts of "new" ideas about how everybody else is doing it wrong. They try to build a book by vacuuming up business with cheap premiums so then every major carrier loses a boatload of money as they have to lower their own premiums to keep their book. Then, after two years or so the "new" players lose tons of money and exit the market leaving behind a trail of bankrupt Bahamanian shell companies; then premiums start to rise again and everybody's sanity returns.

        Insurance is the way it is for a reason. Don't mess with it.

      • (Score: 2) by urza9814 on Thursday January 22 2015, @04:41PM

        by urza9814 (3954) on Thursday January 22 2015, @04:41PM (#136983) Journal

        They'll actually go out to the vehicle, take pictures, confirm VIN numbers. Agents do work for their commissions.

        They do? What agents are those? MetLife sure as shit doesn't, I've never even met anyone from the company. One phone call, that's the only interaction I've ever had with them over the three years I've had my policy.

        The most sophisticated consumers are flocking more and more to electronic interactions, but there are huge demographics in this country that lack that ability. I'm not convinced that Google can solve all the inbound documentation needs like scanning driver's licenses and things of that nature.

        a) Again, I don't recall ever sending these when I got my policy. I know I verbally gave them my license number, but I don't recall scanning or photocopying the thing. Could be wrong there though, it was a while ago.

        b) Scanning is a solved problem. Clearly this solution won't be for everybody, but the people like myself who prefer electronic interactions will have no problem with such requirements. Hell, here's an easy solution: make it a mobile phone app. I already deposit checks to my bank account by taking photos of them in my bank's app, why not send my license info by taking a photo of the license right in the insurance search app?

        c) There are lots of online insurance companies already, I see commercials all the time. Esurance or The General for example. How do they manage if it's so impossible?

        Just because you can do something online and escape the brick and mortar costs, doesn't mean you can completely automate away the requirements. Google will need entire datacenters of staff and people to follow up on the legally mandated stuff they need to do. Is Google prepared to purchase a vendor that sends snail mail notices? They'll have to by law. I was tasked with managing the communication requirements of a policy in the State of Nevada. Google will be forced to deal with snail mail :)

        Yeah, the manpower and snail-mail will probably be an issue for Google. My guess is they create, buy, or bribe another company to do that instead. I work for a retail pharmacy, we sell lots of prescriptions but we aren't the ones making sure your doctors license is still valid or that there's no possible drug interactions or anything like that -- we just pass that information along from a third-party system. I'd bet Google would do something similar. They provide the interface, but not necessarily the information. The interface is all they need in order to scrape your information for advertising anyway...

    • (Score: 1, Interesting) by Anonymous Coward on Wednesday January 21 2015, @08:38AM

      by Anonymous Coward on Wednesday January 21 2015, @08:38AM (#136635)

      The best way Google can disrupt the auto insurance industry is to keep pushing the driverless cars. The faster they come off the production the line, the sooner premiums will plummet.

  • (Score: 3, Interesting) by bradley13 on Wednesday January 21 2015, @07:46AM

    by bradley13 (3053) on Wednesday January 21 2015, @07:46AM (#136623) Homepage Journal

    The thing is: this (and similar) industries have been ripe for "disruption" for a long time. The incentives are just all wrong. You, the supposed customer, walk into an insurance agency to get advice - but you aren't paying them anything. They are paid by the insurance company for selling. So you want to save money, but their goal is to sell you stuff you don't need.

    The same is true for essentially any field where you have sales people working on commission. Car sales, to name an obvious example, are currently being disrupted, at least a little bit, by Tesla's direct sales.

    Investment banking is a less obvious, but hugely bigger example. When was the last time a bank or investment advisor offered to deposit all commissions for selling funds into your account, and instead be paid based on the performance of your portfolio? This is how it ought to work, if the incentives were aligned correctly (and if the investment experts actually believe in their own expertise).

    --
    Everyone is somebody else's weirdo.
  • (Score: 1, Interesting) by Anonymous Coward on Wednesday January 21 2015, @07:50AM

    by Anonymous Coward on Wednesday January 21 2015, @07:50AM (#136624)

    More to the point is they have a ton of data what drives people! That makes google so very dangerous.

    • (Score: 2) by mrchew1982 on Thursday January 22 2015, @03:58AM

      by mrchew1982 (3565) on Thursday January 22 2015, @03:58AM (#136870)

      THIS!!!

      Google has enormous amounts of information on people, including their driving habits if they use a mobile phone with *any* of their services because they collect geolocation data all the time! They don't need a buggy OBD2 data logger to collect info, they can just use an app on your phone!

      This gives them the ability to customize a policy to your actual risk in a way that the insurance companies are all salivating over. and It also gives them an "in" for insuring their driverless cars when they come to market. Whoever is writing google's 5-10 year plan is a freaking genius.

  • (Score: 1, Offtopic) by aristarchus on Wednesday January 21 2015, @07:56AM

    by aristarchus (2645) on Wednesday January 21 2015, @07:56AM (#136625) Journal

    The insurance industry in the UK has long been different to that in the USA.

    Things are different _from_, not different "to": that makes no sense! It's your bloody language, and you can't get it straight? Take this example: "A is similar _to_ B". All good. Now if we reverse: "A is different _to_ B"? NO! A is different, divergent, away, from B! There are cases in inflected languages for such things, you know, like comparative genitives and distinguishing accusatives. But English is a language that has self-destructed by achieving global dominance. or from achieving global dominance, or to achieving global dominance. I give up.

    • (Score: 2) by wonkey_monkey on Wednesday January 21 2015, @09:12AM

      by wonkey_monkey (279) on Wednesday January 21 2015, @09:12AM (#136638) Homepage

      Where did you get that quote from? I couldn't find it in any of the linked articles.

      Things are different _from_, not different "to": that makes no sense!

      Oh, come on. Unlike, for example, the modern mangling of "literally," you can easily tell exactly what was meant.

      A is different, divergent, away, from B!

      Then why do we usually say "opposite to" or "opposite of" instead of "opposite from"?

      It's your bloody language, and you can't get it straight?

      Yes, it is our bloody language, and we say "different to" often enough that it's a perfectly cromulent alternative to "different from." I can't help it if your variant is different to mine in this regard.

      --
      systemd is Roko's Basilisk
      • (Score: 2) by bradley13 on Wednesday January 21 2015, @09:43AM

        by bradley13 (3053) on Wednesday January 21 2015, @09:43AM (#136644) Homepage Journal

        If lots of people say "different to", it's still not correct. The verb is "to differ" [oxforddictionaries.com], and one thing differs from another.

        Where some of my family live, people might say "the boy brang the ball, then he et his dinner, ain't that great". It's dialect, not proper English.

        --
        Everyone is somebody else's weirdo.
        • (Score: 0) by Anonymous Coward on Wednesday January 21 2015, @10:39AM

          by Anonymous Coward on Wednesday January 21 2015, @10:39AM (#136654)

          If enough people say "different to", it's correct, exactly because enough people say it. The English language is not defined by a standards document or similar, it is defined as the language English-speaking people use. If enough people started to use "moron" in the meaning of "exceptionally bright guy" then due to that the word "moron" would acquire the meaning "exceptionally bright guy". That's how "computer" changed its meaning from "a person whose job is to compute" to "a machine that is able to compute". It's how "fantastic" acquired the meaning of "wonderful".

          Another nice example is that "nice" originally meant "silly". So if you ever travel back in time, better be careful with calling someone a nice person. ☺

          • (Score: 2) by aristarchus on Wednesday January 21 2015, @06:48PM

            by aristarchus (2645) on Wednesday January 21 2015, @06:48PM (#136777) Journal

            That's all very nice, but we are not talking about semantic shifts here, we are talking about the logic of grammar, and Google taking over the insurance industry. Languages are not democracies, and while languages do evolve, certain root structures are necessary for any language. (See Chompsky on this.) "Putting food on your family" just makes no sense, just like a "damp squid", and "begs the question . . ", no matter how many people use them. I think the "different to" error began with a correct form, "different compared to", and people dropped the comparison.

            Sorry for being off-topically pendantical.

        • (Score: 0) by Anonymous Coward on Thursday January 22 2015, @10:21AM

          by Anonymous Coward on Thursday January 22 2015, @10:21AM (#136912)

          If English followed logic (like other languages at least attempt to do), you'd say things were "similar than" or "different than" other things. Unfortunately it doesn't, so everyone trying to learn English will have to memorise massive amounts of more or less randomly assigned conventions.

          Using "proper English" in the context of that particular language is borderline ironic considering that there are two massively popular official dialects whose users cannot agree which one of them is the one true way and regularly enter fights about how to spell colo(u)r as if the other way didn't exist at all.

  • (Score: 2) by Geezer on Wednesday January 21 2015, @10:31AM

    by Geezer (511) on Wednesday January 21 2015, @10:31AM (#136650)

    Google is certainly going to put a dent in the online-quick-and-easy market for cookie-cutter insurance plans. No doubt about that. Lotsa bucks in that.

    However, reports of the death of the insurance agent may be greatly exaggerated, to paraphrase Mark Twain. There will no doubt be a continuing need, perhaps reduced but still present, for consultation with an expert by folks in circumstances that don't quite fit the gekko ad mold.

    Most insurance agents I've worked with are also investment planners and tax consultants. It's quite nice to go over one's whole financial picture with a human who can be judged for honesty and competence first-hand. Like all salesmen, insurance agents depend on good will and repeat business to succeed. Their incentive to give good service relating to complex issues on a personal basis will not be replaced easily by a flashing, twirling gif advert.

  • (Score: 2) by PizzaRollPlinkett on Wednesday January 21 2015, @12:12PM

    by PizzaRollPlinkett (4512) on Wednesday January 21 2015, @12:12PM (#136675)

    The trend I see is that any employee which manages a workflow process that takes inputs, moves them through a process, and creates an output is going to be eliminated and the workflow automated. These are the jobs that are disappearing. So the question is whether these insurance agents are just workflow managers, or if they add some sort of value that would be lost by automating the process. I don't know the industry well enough to say. There's also value added versus cost of employee. Even if an employee adds value, it has to be several times what the employee costs, or the job gets eliminated.

    If I had to guess, I would think there would be tiers. Most workflows will be automated, so you can buy insurance products with a few taps on your mobile phone. There will be a few experts around to handle cases that the workflow automation can't handle. If Google or someone gets into this market, then the old-line insurance companies will start getting leaner to compete.

    Another thing Google needs to remember is people get discounts if they get all their insurance through one company, so if Google offers only car insurance, they're going to have to make it cheap enough that people save more than it costs them to "unbundle" their car, home, etc insurance from their current company.

    --
    (E-mail me if you want a pizza roll!)
    • (Score: 2) by edIII on Wednesday January 21 2015, @10:34PM

      by edIII (791) on Wednesday January 21 2015, @10:34PM (#136824)

      The trend I see is that any employee which manages a workflow process that takes inputs, moves them through a process, and creates an output is going to be eliminated and the workflow automated. These are the jobs that are disappearing. So the question is whether these insurance agents are just workflow managers, or if they add some sort of value that would be lost by automating the process. I don't know the industry well enough to say.

      I was in the thick of it as a CTO. Insurance agents are workflow managers primarily, but what is often lost is their expertise in understanding the products. An agent can explain the policy and is much better able to evaluate the products than you are. Contrary to my own cynicism, I witnessed firsthand for years agents working for customers instead of the carriers. It's a cut throat business, and there is no real loyalty to carriers beyond their products selling.

      Google *could* completely automate the workflow for the *inputs*. No problem with that at all. Here's what they are missing, and why you are dead wrong about the "few taps on a mobile phone": (That last part is a marketing bit that never turns out to be true in real life)

        - Assuming all inputs are gathered, Google could construct *possibly* valid policies from rate sheets (basically calculate it all out according to published tables), as well as forms of direct quoting by integrating with the carriers to just ask them directly. Google can put up on the screen (in a beautiful UI of course) all the selections for the customer. What then? Google isn't a travel agent, and is just a dumb search engine. Who is explaining the products to the customer? Nobody. You're real issue is just beginning....

      - Assuming the customer clicks on a possible policy (it's associated costs are the lowest, or it was sorted by ranking), it still needs to go through the full process of underwriting verification with the insurance carrier. If this fails, the insurance carrier WILL NOT UPDATE THE DMV AS TO THE STATE OF INSURANCE. Google didn't actually sell a policy. What it did was proceed to a next step where the workflow requirements just exploded......

      - Now that a policy has been elected it can't be simply "added to cart" and sold. An insurance policy is contractual and I'm damn sure that a EULA will not cover this. It requires services as solid as online notaries (not completely legal yet anyways). So it's not an item added to a cart, but a product that needs to be fully provisioned before sold. Congratulations! You just sold a cablemodem over the Internet. Now provision the bastard...

      - Assuming the customer is a young techno wiz destined for the Singularity, you might get really good pics of the VIN number plate, license plate, and general car photos from a cell phone. You still need to fully verify DL info, and all kinds of info about the car itself (registration, etc.). Forget about integrating with the DMV online, we're about 2 or 3 decades away from that. You only get access to private services for background checks, etc. to verify a person's identity over the Internet.

      - Assuming everything went just swimmingly, and all the docs get scanned in and posted from a *mobile phone*, Google must provision the policy correctly and then push it to the DMV.... and this is where everything breaks down. Automated Workflow just fails.

      The reason you need the agents, is that you need time . Quite often a policy can be "sold" but the customer needs to be henpecked to follow up and deliver the documents they promised. This is why it's not possible to completely automate. All you end up with is cancelled policies that failed provisioning after about 30-45 days.

      If you actually pushed all the workflow from the agent to the customer... what you get is somebody that has no idea what products they *really* qualify for, which products are really what they are looking for, and quite a few documentation and underwriting requirements that they need to follow up on and make sure gets done correctly.

      I think that's asking too much once you see just how many inputs are really required for a correct quote, and how many attachments need to uploaded and verified.

  • (Score: 3, Interesting) by WillR on Wednesday January 21 2015, @04:45PM

    by WillR (2012) on Wednesday January 21 2015, @04:45PM (#136743)

    It may seem like an odd match for Google, whose projects include driverless cars, delivery drones and a pill to detect cancer

    It really doesn't, traditional insurance companies are always nervous about their ability to measure the risks involved in new technologues, and likely to decline coverage (or just price it at $fuck.you per annum) for things like delivery drones or self-driving cars.

  • (Score: 1) by gnuman on Thursday January 22 2015, @01:23AM

    by gnuman (5013) on Thursday January 22 2015, @01:23AM (#136855)

    If Google thinks that commissions are too large, why don't they just become an insurer? Put your money where your mouth is.