McKinsey Study on the Commoditization of Property & Casualty Insurance

McKinsey to Agents Adapt or Find Another Line of Work PropertyCasualty360


Interesting read for those of us who follow the Property & Casualty side of the insurance industry.  The article author states that the P & C side of the business is beginning to become commoditized.  Beginning?, I would ask.


Here’s my two cents worth (sp.RANT)  After 25 years in the business, I retired primarily because the business is no longer about providing the proper coverage, be it auto, homeowners, or any other coverage.  It’s become a game of marketing, primarily based on our price is lower than theirs.  The secret of the industry is that if the companies could eliminate their agency force immediately, they would.  Over the past 25 years, there has been a steady march toward doing just that.  The introduction of purchasing insurance over the internet, through call centers and through direct mail marketing has steadily increased, while the commission rates and support of the agents in the field has steadily decreased.  The insurance industry field sales has always been a merry-go-round thrill ride where only the strongest survived.  This is more so now than ever before.


My personal experience and observation during my career is the the entire field force in general tends to follow the 80/20 Pareto Principle.


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