Toops Scoops: In the New Economy, Size Matters

Twitter and the blogosphere were ablaze this week with the buzz surrounding an Accenture study that found three-quarters of U.S. consumers prefer to buy insurance products through agents and other trusted sources rather than online.

The study of more than a thousand Americans at least 18 years old who own one or more insurance products showed that 73 percent preferred to buy auto and home insurance products from an agent, and 75 percent preferred to buy life products from an agent or trusted source, such as an employer or financial advisor. (The exception is “younger and more affluent” customers, who preferred to buy products over the Web: 39 percent of consumers aged 18 to 24 and 28 percent of buyers with incomes above $60,000 said they preferred online purchases, especially for auto and home products.)

This is a bit of welcome news for independent agents, especially the smaller Main Street guys who are struggling right along with their customers in this tough economy. Am I surprised? Not really, considering that some of the biggest players in the business world are the doing the worst right now.

For years, smaller agents have been bludgeoned with predictions that they're headed the way of the dinosaur. Ironically, these are the types of businesses that are poised to succeed in the worst economy in decades, probably because they've always practiced the ”doing more with less” philosophy that big corporations have just recently been forced to adopt.

The National Federation of Independent Business's index of small business optimism hit 86.6 last month, breaking a 4-month pattern of declines. And the American Express Open small business monitor of firms with fewer than 100 employees shows that 77 percent think that managing their firms over the last several hard months has made them better at managing their businesses in general.

NPR recently aired a segment on how half the current home foreclosures could be avoided through loan modification. Banks take a massive hit on foreclosed property, so it's in their best interest to work with troubled mortgage holders to keep them in their homes. Yet amazingly, megabanks like Wells Fargo and Citibank are literally ”not set up” to deal with the problem, even though they saw it coming ages ago–and the bigger the bank, the bigger the problem.

It got me to thinking that the bailout mantra of “too big to fail” could have just as well been applied to the dinosaurs.

Small is beautiful!