Robert Rusbuldt, president and CEO of the IndependentInsurance Agents & Brokers of America says hefinds serious flaws in a recently-released study byMcKinsey & Co. on the future of agents.

“McKinsey's proclamation that it is 'The End of an Era for theLocal Insurance Agent' is dead wrong,” says Rusbuldt, in astatement. “A number of studies over the last several decades havedecreed the demise of the independent agency system, and they haveall been wrong. Independent agents are resilient entrepreneurs whoknow how to adapt to marketplace changes.”

READ: McKinseyto Agents: Adapt or Find Another Line of Work

At the Big “I” boad of directors meeting in San Antonio,Rusbuldt outlined a series of deficiencies in McKinsey's report,“Agents of the Future: the Evolution of Property and CasualtyInsurance Distribution.”

Rusbudlt says:

• The report ignores the growing trend to “buying local” and theindependent agents' use of social media to magnify their localpresence and involvement in the community to drive more traffic totheir agency.
• McKinsey uses an oversimplified comparison to travel agents anddis-intermediation. Despite rhetoric to the contrary by the directcarriers, personal lines is more complex than basic travelreservations.
• McKinsey doesn't adequately take into account the IA channelmarket segmentation towards affluent customers who preferrelationships for personal lines.
• McKinsey assumes that the investment in digital capabilitiesmarginalizes the agent rather than aids the agent-customerrelationship to add value.
• Agents have the opportunity to organically leverage SEO so thatthey are well positioned for digital consumer searches. McKinsey'sconclusions encompass all agents, exclusive and independent, andthere are fundamental differences between them: independent agencycarriers compete for the business of their agents, causing them totake different considerations into account in managing their agencyforce vs. exclusive carrier relationships with theiragencies.

”The Consumer Agent Portal, LLC is providing consumers anelectronic pathway to finding and doing business with independentagents, and they are working with agencies on digital marketing,social media, local optimization, and much more, enabling agenciesto do business the way consumers want to do business, while addingthe value that independent agencies provide,” continued Rusbuldt.“TrustedChoice.com is quickly becoming the way more consumerssearch for an agent, and everything points to the fact thatconsumers still want to do business with a local agent if at allpossible.”

Rusbuldt did credit the McKensey report for providing agentswith some recommendations to position themselves for success,such as on communication with clients, defining markets, usingtechnology and increasing scale.

“While independent agency market share in personal lines hasbeen relatively static in recent years, many things are convergingfor the IA system to increase its personal lines marketshare,”continues Rusbuldt. “While McKinsey says 'Auto insurance – whichaccounts for 70 percent of personal lines premiums – is fastbecoming commoditized,' agents can successfully counter theemerging perception of auto insurance as a commodity by 'goingopposite' with their marketing strategy and fully embracing alocal, relationship based strategy leveraging technology and fullyembracing the Consumer Agent Portal (CAP).”

Rusbuldt also noted the independent agency system is growing.The 2012 Future One Agency Universe Study showed that between 2010and 2012 more than 1,000 new independent agencies were formed.