Insurance agents risk facing additional marginalization if they do not evolve and get creative, according to a rather devastating report by McKinsey & Co. on the future of property and casualty insurance agents. The role of the agent in some lines, such as auto, is becoming obsolete, while other lines are similarly approaching commoditization, which means agents can be bypassed, according to the report by McKinsey & Co.’s Insurance Practice. “The hard truth is that most agents have neither the scale nor the operational efficiency to profitably sell a commodity (or even a near-commodity),” the report noted.
Auto insurance–which accounts for 70 percent of personal lines premiums–is fast becoming commoditized and with auto insurance accounting for 30 to 60 percent of a typical agent’s book, the numbers paint a difficult picture for future profitability, the report noted.
You can read the full article compliments of Property & casualty 360 here.