The Nomura analysis also says that as insurers' underwriting-model sophistication grows, “the value of 'frontline underwriting'—the strategy of paying talented agents to differentiate good vs. bad risks on behalf of the insurer—has declined. Even the ability to provide price comparison has been diminished because the consumer has been made aware of a cheaper alternative to the independent agent's best deal.”

The McKinsey report likewise pointed to obstacles faced by independent agents, arguing that they are in danger of becoming obsolete in lines like auto insurance.

In its analysis, Nomura focused mainly on two insurers to illustrate its point: Geico, which uses a purely direct model, and Progressive, which uses both an agency model and a direct model. Regarding the strategy of charging less and advertising more, the analysis says, “Geico offers the consumer value and makes sure they are aware of the offer.”

For Progressive, meanwhile, the analysis says the company is “saddled with a legacy agency business that absorbs dollars that could produce greater return in ad spend and lower prices.”

Essentially, according to a subhead within the analysis, “Geico spends on ads that appear to deliver whereas Progressive pays agents that don't.”

The analysis cites figures from SNL Financial as well as its own research showing that Geico spent about $1.1 billion in advertising in FY 2012 and just $76.3 million in direct commissions. Progressive, meanwhile, spent $526 million in advertising and over $1 billion in direct commissions. “The amount Progressive spends on agents is taken away from the ad budget,” the analysis contends.

The analysis further states that Progressive's initiatives such as customer-retention efforts and its Snapshot user-based insurance product are “either missing the problem or worse—investing into an agency business that is incapable of growth.”

Regarding customer-retention efforts, Gallant and Rohrmann say, “The challenge is that the independent agent appears to be either poorly incentivized or structurally unable to partner in meeting this challenge.”

On Progressive's UBI initiative, Gallant and Rohrmann say it appears to further commoditize the auto-insurance product, emphasizing price and reducing the profits made from the best drivers in the pool. It also does not solve the basic problem, according to the analysis: “Geico charges less and advertises more.”

The news in the Nomura analysis is brighter for captive agents. Gallant and Rohrmann state that the “long-term advantage of the captive agent/insurer—i.e., the ability to lower cost by bundling multiple products under a single brand—appears to be solid.”

Additionally, while the Nomura analysis mentions Geico's rise in the auto-insurance market share—now second highest with 9.9 percent of the market—the company still trails leader State Farm, which uses a captive-agency model, by a significant margin (State Farm has 18 percent of the market).

In an email, Gallant says, “I think that the captive agency model is much better positioned than the independent agent.” He says the ability to offer value through bundling “remains powerful,” and adds that, despite Geico's rise, “I can see State Farm holding market share for a long time to come still.” Geico may eventually take over the number-one spot, he says, but if it happens at all, it could still take another decade.

A Progressive representative did not respond to a request for comment.