A YEAR ago, Ian Smith, chairman of Marsh & McLennan, the world's largest insurance broker, said that after a breathtaking spate of acquisitions his company was so big it didn't need any more deals. Right. For stockmarket punters it was just a matter of when he would swoop again. The most obvious prey were Britain's two big but underperforming brokers, Sedgwick and Willis Corroon. In July, the smaller of them, Willis, was bought by an American firm, Kohlberg Kravis Roberts. That left Sedgwick, which Mr Smith at last gobbled up on August 25th for £1.2 billion ($2 billion) in cash.

The deal could be the last in a three-year burst of consolidation that has folded a dozen or so big insurance brokers into three. Unless, that is, one more were to follow. Analysts reckon that the world's second-largest insurance broker, Aon, is in no mood to play second fiddle to its arch-rival, and may well enter the bidding for Willis Corroon. That would leave two companies to dominate much of the world market for large, brokered commercial risks—a prospect that frightens not only insurers but also companies that buy insurance.

Insurance brokers act as middlemen between firms that want to insure their property and casualty risks and the insurers that underwrite policies. Their main job is to find clients the cheapest cover, which is why it helps to be big. The more volume a broker has to parcel out among insurers, the more bargaining power it has to haggle down premiums. That explains why insurers hate the idea of mega-brokers. Premiums have been falling steeply as it is; more clout for brokers can only make things worse. It was in order to forestall further consolidation among the big brokers that five large insurers backed the buy-out of Willis Corroon last month.

Buyers of insurance, on the other hand, welcome the growing bargaining power of their brokers, since it gets them cheaper rates. Up to a point, that is: many are now growing sceptical about their dwindling range of choice and about the power that their brokers have over them. In particular, many take exception to the brokers' habit of charging customers a commission while simultaneously pocketing sweeteners from insurers. “As the power of brokers increases, their ability to demand more from insurers and deliver less to corporates goes up,” says David Gamble, head of AIRMIC, the British insurance-buyers' trade association. “One wonders why the regulators don't see the need to get involved.”

They still might. But trust-busters worry mostly about protecting individual consumers rather than large companies, which are the ones most threatened by broker consolidation. Giant firms, goes the reasoning, should be able to look after themselves. After all, ever more of them are choosing to cut out middlemen and buy cover direct from insurers, or even to leave some risks uninsured. So the brokers argue that even if the top four place as much as 80% (by some estimates) of total brokered business, that need not amount to an antitrust case—“80% of what?” asks Sax Riley, Sedgwick's chairman. “Brokers as a group only have a small share of the market.”

While “small” is unduly modest, it is certainly true that the position of brokers has in some respects been getting weaker. As big clients' interest in traditional broking services wanes and the cost of insurance plummets, the brokers are doing their best to collect advisory fees along with sales commissions. But even that has not boosted top-line growth by much. In theory, consolidation can ease this problem by cutting 8-10% off a broker's costs. Unless you believe, as Marsh's Mr Smith did until recently, that beyond a certain point size is no longer an advantage.