Google Inc may be trying to enter the US auto-insurance market as the internet giant prepares to launch its brand new website aimed at providing users with the ability to purchase and compare different policies.
According to Ellen Carney, an analyst at Forrester Research, the technology behemoth got approved to sell auto insurance in 26 states via its Google Compare Auto Insurance Services business.
Googles new website would allow users to compare and purchase auto policies underwritten by partners. Ms. Carney said that the company is licensed to make deals on behalf of six insurers, including MetLife, Permanent General Assurance and Workmen’s.
The move marks another push from to Google to get involved in different businesses, like the automotive industry, where the company is already the leader in self-driving vehicle technology.
In 2011 Google acquired the BeatThatQuote.com, a British website that allows its users to compare prices on different personal financial products. One year later the company launched it own auto-insurance comparison service operating in the UK.
Additionally Google has teamed-up with the UK auto insurer Admiral Group Plc, which also provides insurance policies in 48 US states including Washington, D.C.
The company has been trying to mirror its UK success and transition into the US for some time now as it has been licensed to sell insurance since August 2013 in some states, like Idaho.
Last month, Googles Regulator Operations Program Manager Meredith Stechbart got a permission from the auto-insurance comparison website CoverHound to sell insurance on its behalf. Ms. Carney also speculated that the Mountain View, California-based company would acquire CoverHound.
Google is trying to tap the lucrative market of online auto-insurance sales, which has grown rapidly in recent years. Geico, a unit of Berkshire Hathaway, has shifted its efforts to a more internet-oriented sales and thus became one of the biggest underwriters in the US.
Another follower of the fast developing trend is Allstate Insurance, which acquired Esurance Insurance Services in 2011 and launched direct online sales.
Additionally online insurers can significantly reduce costs and thus increase profit margins.
Ms. Carney estimated that Google Compare Auto Insurance Services will be launched in the first quarter of 2015.
“We can’t comment on speculation. Don’t fault us, though; we enjoy your coverage,” a Google spokeswoman said.
Google Inc. gained 0.32% on Thursday and closed at $502.68 on NASDAQ. On Friday the stock lost 1.17% to trade at $496.82 at 15:38 GMT, marking a one-year decrease of 11.53%. The company is valued at $342.43 billion.
According to CNN Money the 41 analysts offering 12-month price forecasts for Google have a median target of $640.00, with a high estimate of $750.00 and a low estimate of $530.00. The median estimate represents a 27.32% increase from the last close price.
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