Editor,

RE: "The new headache for local insurance players” (The New Times, March 18).

The smaller players will not necessarily go out of business. Even more developed markets where bancassurance developed through the merger or acquisition (or organic strategic business unit development) by a bank of an insurance company or vice versa on the basis of cross-selling of products between merged enterprises of entities from the two branches of financial services, smaller pure play firms have not been out-competed out of the market.

First, large firms tend to be heavy while smaller competitors remain nimble and able to be more competitively efficient in niche markets. Second, the ethos of insurance and banking differ and melding their disparate cultures into a single firm operating effectively under the same senior management has not achieved all or even many of the benefits claimed by proponents of bancassurance.

I wouldn’t therefore bury the existing—much smaller insurers just yet. I simply look forward to the customer benefits of increased competition in this market.

Mwene Kalinda