Broker competition to intensify over coming decade

Competition for both brokers and underwriters will increase and grow more intense, keeping regulatory intervention at bay, Patrick Ryan, executive chairman, Aon Corp., told delegates at the National Insurance Conference of Canada in Montreal.
During the one-on-one session with George Cooke, president and CEO of the Dominion of Canada General Insurance Company, Cooke asked Ryan if he felt the market would remain competitive enough over the next ten years to stave off any regulator intervention.
Ryan remained confident that capital originating from alternative markets would prevent such a thing.
There is a lot of capital originating from investment firms and hedge funds that has discovered the insurance industry and likes what they see, Ryan said.
Hedge funds and investment firms will continue to play larger roles in the insurance marketplace, Ryan told Cooke.
These alternative sources of capital, Ryan continued, despite ensuring adequate capital capacity, also spur competition.
To illustrate his point, he pointed to a large infusion of capital into the industry that essentially resulted in the formation of Integro Insurance Brokers.
Basically, they said, well put up US$300 million in capital and you bring the people with you and well make you an entrepreneur, he told the crowd.
The capital is there and the competition will be created, so I dont think that the regulators will have something to object to, Ryan suggested.
I think competition will become more intense, and I think weve seen the high point of concentration, and since then weve seen a lot more fragmentation and I think youll see a lot more in the future.