His comments came as part of a daylong WFG seminar entitled, "Mergers & Acquisitions, And Other Strategic Alternatives To Maximize Shareholder Value" sponsored by the National Underwriter Company's Insurance Conference Division.

Mr. Lieblein said there are also a number other issues affecting the sale of agencies, both internal and external.

The impact of the softening market and questions surrounding the future of contingency fees is affecting agency value, he noted.

While an agency may have shown terrific growth during the hard-market, it must now demonstrate that its growth was not based solely upon rising premium rates in order to keep its value in the eyes of buyers, Mr. Lieblein advised.

He noted that agencies may show through the beginning of 2005 that their agency performed well only because their financials have yet to indicate the pricing from renewals.

"For 2005, things are not looking very pretty," he said. However, he added, that he did not believe this would turn out to be a prolonged soft-market. He said carriers are conscious of the need for underwriting profitability and are not inclined to pursue the patterns of the past.

He said he expects that 2005 "will be difficult, but I do not believe this [soft priced] market will extend out over 18 to 24 months."

The investigations into contingency fees begun by New York Attorney General Eliot Spitzer is affecting agency value by creating uncertainty over some aspects of earnings, he continued. There is fear, among some, that the contingents will be eliminated, making agencies less profitable.

"I don't think contingents will go away," said Mr. Lieblein. He felt that the eventual resolution of the issue will be greater transparency and disclosure by agents and brokers, adding, "If that's the worst that happens then we are in good shape."

However, he and others in the audience were critical of Joe Plumeri, chairman and chief executive officer of Willis Group Holdings, for his proclamation that he would pursue a policy of getting rid of contingency fees throughout the industry.

Mr. Lieblein called Mr. Plumeri's announcement "self-serving" designed to "their advantage."

The abandonment of contingent commissions by the major brokers, Mr. Lieblein said, would mean that they must pursue other avenues to increase shareholder value, and the avenue of growth these brokers are surely to look at is acquisitions.

But, he warned that few firms are able to successfully integrate the culture of acquired firms into their own.

Mr. Lieblein cited the insurance brokerage firm Brown & Brown, based in Daytona Beach, Fla., as a notable example of one of the firms that is able to make a considerable number of acquisitions and integrate them successfully.

Mr. Lieblein said the point of the day long seminar was to get clients to face issues confronting them concerning the value of their agencies, and to think about how they can go about enhancing them.