Three questions

J. Kipp Wall: Vice president and sales manager, Iler Wall & Shonter insurance agency

Q. Your firm recently agreed to be acquired by BB&T. Wachovia bought DavisBaldwin Insurance. Brown & Brown has been on a tear buying small agencies. Why are so many of the smaller insurance agencies selling?

The number one reason is because of the (need) to satisfy their market. There are insurance companies (which provide insurance products to agencies) that demand really high volumes. It's hard to do it even as a medium-to-large agency. You almost need some clout behind you.

Number two, if you're selling to a bank, there's a natural synergy there with referrals of their customers to you and your customers to them.

Q. Do you see the days of the small private insurance agency as limited, or is this just part of the cycle?

That's a hard one to answer. When I started in 1975, people said we couldn't do it and we obviously did do it. So now I'm the old establishment guy who wants to say you couldn't do it. I think you could if you niched out . . . or bought a small insurance agency with a good insurance company that would back you up as a small guy. . . .

It's just satisfying the volume commitments that's almost impossible. Typically, most companies don't want to do business with you unless you do $1-million in premiums. But to get the better contracts, you're talking $2.5-million to $5-million.

Q. How will your business model change under BB&T?

I think the main change will be that we will be doing a lot of business back and forth with Republic Bank (which also is being acquired by BB&T). Their bankers introduce their insurance agents to their commercial clients, and they want us to introduce them to our commercial clients.

The model has proved effective in all the other states they've been in. Over half of their business was through referral in other states last year, which was astounding.

We do a lot of business without having that source. If it was anywhere near that, that would be phenomenal.