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Chicago-based Aon Corp.'s announcement that it will acquire Alexander & Alexander Services Inc. and thus create the largest retail brokerage in the world is drawing mixed reviews from underwriters with which it will do business.

While underwriters agree the merger makes economic sense, they say customers will pass the ultimate judgment on the merger's value.

"It's inevitable in their business, just like it is among the insurers," said Mark Owens, executive vp in the marketing division of Reliance National Insurance Co. in New York.

"We're not crazy about that kind of consolidation. We'd like to see the broadest lines of distribution," he said.

"It just makes bigger gorillas," Mr. Owens said of broker mergers. "Any time you tighten your distribution system, it puts pressure on the carriers."

Mr. Owens' assessment was not universally shared.

"I think it's going to have a very positive impact for several of the carriers out there, like Chubb," said Paul J. Krump, senior vp and managing director at Chubb & Son Inc. in Warren, N.J. Mr. Krump added that determining which insurers will benefit from the deal will be in large part a matter of "who is willing to partner with Aon and cut some creative compensation deals."

"Because they are larger now, they certainly don't need all the carriers in the stable that they had before and they certainly are able to pick that handful of winners into the next millennium," he said.

Brian Duperreault, chairman and chief executive officer of ACE Ltd. in Hamilton, Bermuda, said for insurers that depend on brokers, anything that creates a more viable broker community is a good thing.

"We rely heavily on the brokers, obviously, so what we need is a viable broker infrastructure in the insurance world," Mr. Duperreault said. "To the extent that this consolidation makes the brokers more viable, financially sound, then I think that's good for us at the end of the day."

Another insurance company executive said he expects the deal to have little direct impact on his company's business.

"From the underwriter's perspective-at least from CIGNA's perspective-we have done business for a long, long time with both Aon and A&A, and the combination of the two simply means we have one source to deal with instead of two," said Dennis Kane, president of CIGNA Property & Casualty's Special Risk Facilities in Philadelphia.

"The real issue is how do the customers respond?" Mr. Kane asked.