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Oil and gas companies may soon come to realize that the promises of mega-brokers ring hollow, says an executive with one of the remaining independent brokers.

"The concept sounds great -- a single supplier to look after all the clients' needs," said Ian P. Curtin, executive director of the aviation, marine and energy division at broker C.E. Heath P.L.C. in London. "Uniformity of service approach, standards and paperwork. Experts in every class. Potentially a totally outsourced insurance and risk management function."

Along with a global reach that ensures "local service wherever the client may venture and a deep pocket to sue if somebody blunders," the few giant brokers at the top of the heap offer attractive enticements, said Mr. Curtin. "I admit, it really does sound great," he said.

But, Mr. Curtin asked, is that what the client really wants or needs? "In reality, most of the global major oil companies don't buy much insurance," he said. "Increasingly, where they do transfer risks, it is through mutuals or placed directly. They buy specialist lines, and they buy in particular territories; they buy where statutory or contractual compliance dictates."

In short, Mr. Curtin said, "our one-stop shopper has become a boutique shopper. They want the best broker in each of the individual lines or territories where they do purchase coverage."

Mr. Curtin made his case for independent brokers during last week's Houston Marine Insurance Seminar, held Sept. 20-22 at the Westin Galleria Hotel.

An independent broker, which Mr. Curtin defined as one other than Aon, J&H Marsh McLennan or Willis Corroon, "cannot, and usually does not, attempt to be all things to all men. The independent can and must concentrate on specific products, niches and territories where he can add value."

Heath's network, for example, isn't global and has a genuine expertise in oil and gas in only a few offices, according to Mr. Curtin. But the broker is able to choose its target clients carefully and with the confidence that it can provide service as good as or better than a megabroker, he said.

And, he pointed out, broker network arrangements help smaller brokers compete worldwide with the giants. For example, Globex International Inc. is an association of 55 independent brokers in the United States that holds reciprocal marketing and servicing arrangements with 229 agents and brokers in 92 countries. "It thus represents a network which can challenge the largest of the global brokers both in reach and expertise," Mr. Curtin said.

In the "duopoly that has emerged" among brokers, the largest brokers are realizing that cost-effectiveness must involve more than reducing head count and other kinds of trimming. It also will mean "the dumbing down of our business," according to Mr. Curtin.

"Clients will be offered not the best service that their broker is capable of providing but the minimum level of service the broker thinks the client will tolerate. The most experienced, and therefore the most expensive, professionals will become dispensable and let go wherever possible."

Off-the-shelf products and services rather than personalized ones will likely become standard issue for the giant brokers, Mr. Curtin suggested. "Don't get me wrong. In the real world, this is prudent business management and shrewd exploitation of the prevailing market forces. They will do this; they must do it -- if they can get away with it."

Smaller oil and gas companies have even more than their larger competitors to gain from dealing with independent brokers, Mr. Curtin noted. Smaller companies typically tend to be more dependent than larger buyers on conventional insurance, he said. "It is a real product to them, and their balance sheet is genuinely exposed to risk as protected by the conventional market. They genuinely need the broadest cover and aggressively seek the cheapest price."

Mr. Curtin said he has seen "from my own experience that very often such buyers are treated as second-class citizens by the megabrokers. Prestige and advancement for individuals in such cases are associated with servicing the major clients," he explained, leaving the smaller clients "as a training ground or steppingstone until the executive handling their business moves on to bigger and better things."

Such clients, Mr. Curtin emphasized, "are fertile ground for the independent broker."

Mr. Curtin acknowledged that independent brokers will continue to fall by the wayside "as the megabrokers seek to fill in gaps on the map. . . .Others among us will fall by the wayside simply because we aren't actually good enough at what we do to survive and take advantage of the opportunities that exist."

He emphasized that independent brokers have to be "cheaper, faster, more innovative and more dedicated than our larger competitors. We must add value or face extinction."