Google positioning to enter auto insurance market?
Published: October 20, 2015
Updated: July 24, 2018
Author: Luke Jones
CATEGORY: Industry News
According to one analyst, internet giant Google is slowly positioning itself to become a major player in the auto insurance industry. The company recently announced that it would accept liability for accidents involving its autonomous vehicles, which are expected to be available to consumers in the next five to 10 years.
Most outsiders and experts have scoffed at these announcements (similar proclamations have been made by automotive heavyweights such as Volva and Mercedes) saying that at this stage in development Google is merely buttering up consumers and regulatory bodies. However, Blake Corbet, a managing director at PI Financial Corp. in Vancouver, B.C. says that Google is actually aligning itself to become involved in the auto insurance industry.
Writing for the online publication Cantech Letter, he reasons, “Google’s willingness to accept full liability for accidents involving its driverless cars is, in fact, a Trojan Horse into the multi-trillion dollar insurance industry. And once we are getting our AV car insurance from Google, how long will it be before we are getting house, health, disability and life insurance from the same source?”
It is expected that autonomous vehicles will usher in a seismic shift in the way the insurance industry works, especially as these types of vehicles become more common and more self-reliant. It is expected that the industry will have to adapt to lower accident rates (possibly leading to lower premiums), and more important insurance companies will be forced to seek liability from manufacturers and not consumers.
Google involving itself in the automotive industry seemed novel, but the company is now a major force in the self-driving technological development area. Could a similar scenario play out in the auto insurance sector? There are several indications in Google’s past and indeed present that the company is not entirely happy just being known as a tech giant and is happy to branch out into areas beyond the internet sector from which it grew to enormous proportions.
The company has increasingly placed its money and resources into high science projects and sees itself as a futurist company that is expanding technology. Its decision to enter the autonomous vehicle race is the clearest evidence of this, while recently Google created a parent company called Alphabet that will be branching out into other areas.
Alphabet will allow Google to perhaps become an auto insurance provider, even if that is only for its own autonomous vehicles. Aside from that, Google already has its hands in the auto insurance market with its Google Compare service.