“Who’s afraid of the big bad wolf?” asks the popular nursery rhyme. While it's hardly surprising that Google is poised to pilot its auto insurance comparison shopping site in Q1, given the hints and speculation, it's still an ominous portent. Forrester analyst Ellen Carney describes this development as having “big implications for insurers.” However, the question this news asks insurers might be better framed as “Who’s afraid of the big bad wolf pack?” For as big as Google is, it is not a lone wolf.
The overarching threat for insurers is disruption of the prevailing distribution ecosystem by new entrants. Speculation about other entrants includes Amazon and Apple, but a host of interested companies—some already active, such as Overstock and Walmart—when considered together have the power to change insurance distribution. Distribution is currently a crowded space of agents, brokers, aggregators, banks, retailers, exchanges, and other parties. A recent Accenture Global Research study quantified the threat as two-thirds (67 percent) of insurance customers who 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.