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Is Google Buying CoverHound? The Curious Case Of The California Insurance License

Ellen Carney
Principal Analyst
January 8, 2015

It’s one of the worst-kept—and surely most disruptive—secrets in the US insurance market.  Soon, Google could be piloting its Google Compare auto insurance comparison shopping site in the US, following the lead of  its 2012 Google Compare UK site roll out. 

But the launch of Google Compare in the US apparently hasn’t been easy.  Even though insurers have been mentioning Google overtures to participate on the comparison site to me for more than two years now, the Google Compare US site launch keeps getting pushed back.  As late as last month the site was expected to launch in California, to be followed in Q1 2015 with likely launches in  Illinois, Pennsylvania, and Texas. Last I heard was that California pilot wouldn't begin until sometime in Q1.

And one thing’s for sure:  Google Compare is going to have big implications for US insurers.  While doing the research for a report on what Google Compare is going to mean for insurer strategies in 2015, I took a look at a bunch of state insurance commission filings to see just what was up with the entity now officially doing business as Google Compare Auto Insurance Services Inc.  What did I learn?

  • They’re licensed to business in more than half the states.  Along with California, the entity is licensed to do business in at least Alaska, Arkansas, Arizona, Delaware, Florida, Idaho, Illinois, Indiana, Louisiana, Massachusetts, Minnesota, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Texas, New Jersey, Washington, West Virginia, Wisconsin, and Wyoming. There may be more in process.
  • They’re working with a handful of identified insurers.  Among the insurers that Google is authorized to transact business on behalf of are Dairyland, MetLife, Mercury,  Permanent General Assurance, Viking Insurance of Wisconsin and Workmen’s, meaning that many others were likely taking a wait and see approach before jumping on. 
  • The corporate officers haven’t worked in insurance. Stephanie Cuthbertson, Kenneth Yi, and Meredith Stechbart are acting as the President, Secretary, and Treasurer, respectively.  Their jobs at Google, at least according to LinkedIn?  Roles like Project Manager, Securities and Corporate Governance, and Regulatory Operations Program Manager, respectively.  The lack of insurance chops means that they may think differently about insurance or at least are good at dotting the i's and crossing the t's that state insurance departments demand.
  • The  Corporate Treasurer added  CoverHound to her California producer license.  Most interestingly, on December 9, 2014,  Ms. Stechbart, the Corporate Treasurer for Google’s insurance entity and who has the job of Regulatory Operations Program Manager at big Google, added San Francisco-based CoverHound as one of the companies she’s authorized to transact on behalf of in addition to  Google Compare Auto Insurance Services  Inc. on her California individual producer license.

So, what could this last point mean?   

As much as I’d like to imagine someone could become so enthralled with the insurance industry that they’d leave a job at Google to become an insurance agent, there’s a more logical explanation for the addition of CoverHound on Ms. Stechbart’s license.  An acquisition of CoverHound gets the Google insurance entity to market faster in the US than they’ve been able to get  on their own; it gets them a national full service independent agency with more insurers that have already signed on; CoverHound’s San Francisco headquarters is conveniently close to Google’s Mountain View Campus; plus CoverHound gets Google the kind of insurance chops that the company will really need should they decide they really like the insurance business.  And an acquisition might explain this most recent delay. 

I did reach out to Ms. Stechbart through LinkedIn to see if she'd answer a couple of questions I had about her California producer license,  My request did prompt a look from her at my LinkedIn profile, but not a response back.

Time will tell. 

Questions or comments? Feel free to ask them here.

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