It was interesting to read Tony Cornell's piece (20 February, Insurance Times) outlining his predictions for the independent broking sector.
As a "barbarian" mentioned in dispatches, I write to argue the case for Smart and Cook as a value creator rather than a destroyer.
Cornell's proposition that the consolidators will use their muscle as leverage to destroy the profitability for carriers is ill-founded. Most of the independent brokers, consolidators or otherwise, do work in a partnership environment with their insurers. Their growth and strength has been founded on mutual dependency.
Cornell's description of the profit drivers - that is, partnerships with insurers, owner-managed, privately owned, owner financed, strong local franchise, independent strategy towards insurers, etc - describes the Smart and Cook philosophy from top to bottom.
He is correct when he says the independent intermediary has been a saviour for the commercial insurance sector over the years, but there is nothing that will change that, as the independent brokers consolidate.
We, as a business, are able to produce risks to our partner insurers that have a better risk management strategy and clearer risk identification, creating a profile of facts that enables our partner insurers to rate more efficiently, effectively and therefore profitably.
In addition, it has to benefit our insurers that we are large enough to embrace technology.
At the same time, we manage highly visible businesses operating in a thoroughly regulated and compliant environment. In this environment, size does matter. It enhances both broker profits and insurer returns.
Paul Meehan
Group managing director
Smart and Cook
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