A new study suggests the blistering merger and acquisition pace in both the insurance underwriting and brokerage businesses shows little sign of slowing.

The activity has been driven by companies' desire to build economies of scale while increasing market share and using available technology effectively, said Nancy Carini, a consultant who wrote the Conning & Co. study.

Banks are in a strong position to capitalize from this trend, Ms. Carini said. Banks that want to become insurance marketers could bring the capital and technology to the table when talking with agencies. These same strengths might make banks attractive suitors of underwriters, should legal barriers fall by the wayside, she added.

"It's amazing to imagine how this thing is reshaping," she said. "There's just a huge blurring here."

Conning, based in Hartford, Conn., said insurance-related mergers and acquisitions have risen steadily in number and volume since 1993. It found that 432 deals worth $56.1 billion were announced in 1997, compared with 149 deals valued at $8.5 billion in 1993.

During that same period, insurance-related merger and acquisition activity grew from 3% of overall U.S. merger and acquisition activity to 7%, the study found.

Last year, some companies used initial or secondary public offerings to raise capital for acquisitions.

In a buy versus build mode, companies flush with cash are looking to buy those that have not grown organically and that lack cash, the study said.

Banks have the cash to buy, and they offer top-notch technological systems, Ms. Carini said.

"Banks and the financial services industry are ahead of the insurance industry in terms of technology," Ms. Carini said.

Insurance agencies, for instance, are hungry for the technology that a bank can offer in areas such as marketing, claims processing, and form filing, she said.

But some observers question whether banks have the ability to quickly adapt their technological systems and support to a new industry.

"I suspect they don't because they've never done it," said J. Edward Diamond, president and chief executive officer of Dime Securities, the brokerage arm of Dime Bancorp, New York. "I don't think it's a slam dunk."

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