Big ‘I’s’ Rusbuldt Says McKinsey Conclusions Off Base on Independent Agency System
Targeted News Service |
* McKinsey uses an oversimplified comparison to travel agents and dis-intermediation. Despite rhetoric to the contrary by the direct carriers, personal lines is more complex than basic travel reservations.
* McKinsey doesn't adequately take into account the IA channel market segmentation towards affluent customers who prefer relationships for personal lines.
* McKinsey assumes that the investment in digital capabilities marginalizes the agent rather than aids the agent-customer relationship to add value.
* Agents have the opportunity to organically leverage SEO so that they are well positioned for digital consumer searches. McKinsey's conclusions encompass all agents, exclusive and independent, and there are fundamental differences between them: independent agency carriers compete for the business of their agents, causing them to take different considerations into account in managing their agency force vs. exclusive carrier relationships with their agencies. "
* Develop a value proposition that is compelling for both carriers and consumers.
* Define and reach target markets, rather than just being a generalist in your local market.
* Increase your digital presence.
* Be more flexible in how you communicate with your clients.
* Develop new ways to get in front of your audience, both to develop new prospects and to reach out to your existing clients.
* Deliver more tailored and deeper expertise, such as bundled insurance packages for personal lines & industry-tailored advice for small commercial risks.
* Use technology to be positioned to do more with less.
* Increase scale, whether through organic growth, mergers, banding together, outsourcing certain functions. Rusbuldt noted the Trusted Choice(TM) co-brand for independent agencies dovetails with TrustedChoice.com, the way consumers are looking for local agencies now. The Trusted Choice(TM) co-brand, the consumer agent portal, Best Practices, and much more are preparing independent agencies to effectively compete both now and in the future. "While independent agency market share in personal lines has been relatively static in recent years, many things are converging for the IA system to increase its personal lines marketshare," continued Rusbuldt. "While McKinsey says 'Auto insurance - which accounts for 70 percent of personal lines premiums - is fast becoming commoditized,' agents can successfully counter the emerging perception of auto insurance as a commodity by 'going opposite' with their marketing strategy and fully embracing a local, relationship based strategy leveraging technology and fully embracing the Consumer Agent Portal (CAP)." Rusbuldt also noted the independent agency system is growing. The 2012 Future One Agency Universe Study showed that between 2010 and 2012 more than 1,000 new independent agencies were formed.
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