One of the most encouraging things for many considering the insurance sector as a way to transfer their risk has historically been an abundance of choice. However this has been consistently eroded over the last 30+ years through consolidation, merger, and acquisition. Although the recent spate of notable mergers (Chubb/Ace, Fairfax/AWAC, Axa/XL, Apollo/Aspen, and now Marsh/JLT) are all huge transactions, the reality is that there are few smaller purchase options available. 

I can recall my father moving from Clarkson Puckle, to Bain Clarkson, to Bain Hogg, and then ultimately to Aon, but being consistently employed by the same company through that time. The levels of stress and pressure lumped on to middle management through those mergers cannot be understated, and any such activities lead to huge amounts of uncertainty and concern for many in both companies. 

So where are the benefits? The combined entities obviously benefit from increased economies of scale, and reduced competition within the market, as well as often a diversification of the proposition and broadening of their distribution network. But does the customer gain any additional benefit? 

The majority of those mergers that have obtained major press coverage have been in the Insurer space, but most industry professionals can point to any number of smaller acquisitions by consolidators in the broking space (many of whom have now become part of still larger groups: Oval, Jelf, Heath Lambert... all were gobbling up small local outfits at an alarming rate before being acquired themselves).

I appreciate that there are solid arguments for reduced cost burdens as a result of being part of a larger entity, but it takes some time for those to get back to the customer due to the costs of integration.

Hopefully this does not come across as a naive analysis, but I think the customer can often suffer as a result of marketplaces becoming less varied. Would welcome any arguments for the creation of mega-globals...