NU Online News Service, June 30, 2:19 p.m.EDT

Chief executives from seven of the most active insurancebrokerage acquisition firms say they see a bright future ahead forthe insurance industry, as clients rely more and more on theirexpertise in risk transfer and employee benefits in an increasinglycomplex environment.

The seven sat for a panel discussion during the Reagan Consultingbi-annual Mergers and Acquisition Conference attended by more than130 insurance executives.

Participating in this conference discussion was:

• David Eslick, chairman, Marsh & McLennan Agency.

• Marty Hughes, chairman and chief executive officer of HubInternational.

• Wade Reece, chairman and CEO of BB&T InsuranceServices.

• Dave Zuercher, executive vice president and group head ofinsurance services for Wells Fargo.

• Pat Gallagher, chairman and CEO of Arthur J. Gallagher.

• Mike Sicard, chairman, president and CEO of USI

• Powell Brown, CEO of Brown & Brown.

“The world is getting riskier,” says Gallagher. “The need forrisk consultancy and risk mitigation will only continue togrow.”

“The outlook for the future of our industry is very bright,”adds Eslick. “The combination of growing complexity of risk andregulatory involvement makes the need for resource-rich advisorseven more critical for businesses of all sizes.”

“The future continues to look promising for those who remainentrepreneurial and nimble,” says Hughes.

“Clients are looking for ways to reduce their cost structure andneed our expertise,” notes Reece.

“The core fundamentals of the industry remain strong: It’s a‘required’ spend by clients,” says Sicard.

“Given the state of litigation and the nature of risk insurance,risk management and transfer of risk will continue to be importantelements in any successful business,” Zuercher says.

Brown says the future holds “great changes in its landscape.” Headds that, “There will be continued consolidation in the agencycommunity and to a lesser degree in the carrier community.”

The brokers say they see no reason for let-up in their strategyto acquire other agencies based on their appetite and strategicfit.

Eslick says his firm, a subsidiary of Marsh & McLennanCompanies which began operation a few years ago, will seek toestablish itself in “a number of geographic regions” as platformsfor additional growth.

Touching on employee benefits, all the brokers see changes aheadand the need for their expertise with the onset of changes in thehealthcare law.

“The employee benefits practice five years from now will lookvery different from today,” says Reece. “It will be morevalue-added, consultative services than we do today.”

However, it also means smaller firms in this area will notsurvive.

“I believe that all small employee benefits practices are athing of the past,” Gallagher says. “This law is too complicatedfor the small employee benefits person to be able to deal with onany group of any size over 100 lives. We believe that under 100lives, these groups will move to the exchanges.”

All said they remained interested in acquisitions of employeebenefits operations.

“We are not shying away from employee benefit practices, but weare being very careful about what we value,” Reece says.

“We will look at employee benefits operations, but we willdiscount small group business,” says Hughes.