It was with a sense of disbelief that I read the guest column inthe October issue of American Agent & Broker, “Get on Board orGet out of the Way” by CIAB president Ken Crerar, in which hesuggests that small and midsize insurance agencies consider goingout of business.

Such a suggestion, aside from being insulting, is built uponquestionable assumptions, specifically MarshBerry predictions thatin 7 years there will be only 3,500 agencies in the country withpremium volumes of $500,000 or less and an explosion in the numberof very large firms.

For such prognostications to have credibility, they would needto come from a more objective source than a firm specializing inadvising, brokering and executing agency mergers and acquisitions.Fostering an impression that the only hope of success for owners ofsmall or midsize agencies is to grow larger through acquiring ismisleading because it ignores what independent agents have done fordecades and continue to do: compete and win.
The central premise is that bigger is better. I don't buy it. Everyday, individuals and small business owners increasingly arefrustrated by the lack of service and cookie-cutter advice fromlarge companies and financial institutions. Large multinationalentities in banking and securities hardly have cornered themarketplace on competence, innovation or integrity. Simply beinglarge is not the competitive advantage that it once was touted tobe. If you don't believe that, you could ask the investmentbanks–those still in business.
Crerar's guest column also suggests that opposition to optionalfederal charters or to a wider role for the federal government inthe business of insurance is either resistance to positive changeor protectionism. It is neither.
Main Street insurance agents believe in a robust, competitiveinsurance marketplace that is free and open, with many insurers andproducers of all sizes–not a market artificially constricted byfederal intervention that provides fewer choices and higher costsfor consumers. We do not believe there are too many insurancecompanies or too many insurance producers. To the contrary, webelieve the more competition there is, the better it is forcarriers, producers and consumers.
The kind of federal interference in insurance that Crerarrecommends and the sort of market constriction he applaudsrepresent protectionism for mega-firms. We believe the only“protectionism” that should be at issue is consumerprotection.
Placing regulatory oversight in the hands of an inexperiencedfederal bureaucracy struggling to come to grips with its oversightfailures regarding so many other financial industry segments isn'tgoing to enhance fair competition. It just tilts the field towardbig brokers and away from the 99 percent of agents that actuallyserve Main Street America.
Crerar says, “If you can't get on board, get out of the way …because one way or the other, voluntarily or involuntarily, I'mbetting you won't be around much longer.” I will be happy to takethat bet because betting against Main Street independent insuranceagents is, and has always been, a losing proposition.
Despite the wishful thinking of our direct writer and captive agentcompetitors, Main Street agents will not go away. We believefervently in the American free enterprise system. Providingconsumers with more choices is the key to winning for our entireindustry. Those who ignore this basic free market principle will bethe ones who won't be around much longer.
Our resilience must be frustrating to our competitors who, havingfailed to beat us in the marketplace, now attempt to get us tosupport legislation that would disadvantage us, or convince us thatour future is so bleak that we should simply give up and throw inthe towel.
Nice try. But forgive us if we continue to decline such magnanimousoffers.