National Financial Partners Property & Casualty Insurance Services CEO Terrence Scali made waves with Insurance Business America readers this week when he suggested fewer independent agencies would better serve consumers—even as much as one-third fewer.
“A lot of very small agencies in this country are ‘lifestyle businesses’—businesses run by people who just work for a living and aren’t building anything, which leads to less than the most competent outcome for consumers,” said Scali. “I think fewer agencies would breed a stronger, smarter more capable industry. Maybe 10,000 would suffice.”
Readers, however, weren’t having it. Paul Roberts was quick to comment:
Competition is NEVER a bad thing. There are certainly some agents that the industry would be better off without. But to give consumers a third of the currently available choices is silly.
Meanwhile, wad drew a comparison with another financial services industry where consolidation didn’t necessarily serve consumers. He wrote:
I think the banks have taught us that "bigger is not always better'. Coming from the owner of one of those small lifestyle businesses, thats made a pretty good living for 30 years.
Reader Lou, however, could find an angle in Scali’s comments with which he identified. He told fellow readers:
I know Terry, I think I know where he is coming from. I own an independent agency and we have to battle agents who little integrity, talent or knowledge. I believe the problem lies with the carriers who will give someone an appointment with little regard for the tenure in the industry or knowledge of the field. The reason is they want more business. The carriers keep us very tight with not a lot of funds for marketing unlike other business's. So they appoint too many agents and keep bad ones too long. We should adopt the CPA model. All of us then would make more money, and serve the public better.
Thanks to all our readers who commented this week!
