'It's good to think big, but at what cost?'

Does quantity have to come at the expense of quality? Two distinct answers are emerging in the market.

On the one hand, some major insurers – such as RSA this week – as well as national and international brokers are slashing their agencies by number to focus instead on the depth and quality of the remaining relationships. They argue that this puts their expertise to better use, and it undoubtedly means that both broker and insurer can expect more from each other, in terms of volume, value and service.

But there’s another school of thought. Big-ticket insurers, such as ACE, argue that one size does not fit all, and brokers should have the widest possible range of insurers on their books so when that one special programme that needs a bespoke solution crops up, they are properly positioned to place it.

Sure, there’s nothing wrong with focusing on those partners that deliver more value, but at what point does broking stop being broking? With schemes, exclusive partnerships, bespoke products and special deals dominating the industry, what tiny percentage of risks is now put out to a broad range of markets?

Perhaps that doesn’t matter, as long as the client’s interests remain at the heart of the transaction. But is that always - or even often - the case?

♦ It looks as though the message over the Financial Services Compensation Scheme is finally hitting home, with this week’s welcome news that the levy for brokers is dropping by 18% – although insurers are feeling the pain with a 26% rise. The madness of the compensation scheme has been well documented. With the FSA in its dying days and the FSCS under review, there’s finally a chance to get some sense into the system. Insurance Times will be leading the charge for change.