The Association of Medical Insurance Intermediaries (AMII) has voiced its "extreme disappointment" at the sale of Groupama's healthcare arm.
Its sentiments have been echoed by other brokers who are concerned at the reducing pool of providers now operating in the private medical insurance (PMI) market.
However the body believes a shrinking number of providers can provide opportunities for advisers and hoped that Simplyhealth would continue Groupama's good work.
Andrew Tripp, chairman of the Association of Medical Insurance Intermediaries is particularly worried about the impending sale of the group PMI specialist.
"Our initial reaction is extreme disappointment that a quality provider with a focus of claims transparency, and exceptional service may disappear with all its values and principles," he said.
"We can only hope that Simplyhealth incorporates what is good within their proposition."
Tripp also noted that although a smaller market might indicate there was less need for advice, the opposite was often true as insurers merge their products and need to offer more options.
"AMII's experience from previous acquisitions is that the bringing together of two insurer's product ranges often results in all customers experiencing changes to their contracts within a year or two, either in terms of benefits or policy conditions," he continued.
"Having access to independent advice from a specialist healthcare intermediary can help guide customers through these changes, ensuring they understand the implications for their cover resulting from minor amendments to benefits, policy wordings, claims processes or pricing decisions.
"More importantly, a specialist healthcare intermediary will help customers choose the right benefit options to ensure they continue to have the cover they require," he added.
While other intermediaries are anxious about another provider exiting the market, they are also positive about the potential synergy between Simplyhealth and Groupama's philosophies.
Debbie Kleiner-Gaines, managing director of Best Health UK and treasurer of AMII, described the trend as "very worrying" and admitted this was not what was hoping for in the PMI sector.
"My wish list in COVER included more choice and this kind of merger is a concern because it could indicate there is less choice," she said.
"One of criteria about being an AMII member is holding at least six agencies and we wouldn't be very impressed if there weren't six agencies to be held.
"On positive note, Simplyhealth taking over Groupama could mean there is more choice in terms of what they actually bring out because of that merger.
"We're sure that Simplyhealth will do a good job with the client base, but are also concerned with any news like this that could mean less choice for the consumer," she added.
Brian Walters, principal of Regency Health, echoed many of Kleiner-Gaines's feelings, particularly in the wake of recent market activity.
"Groupama Healthcare's portfolio will be a good fit for Simplyhealth as both insurers have a sensible attitude to pricing risk," he said.
"But this narrowing of the field will be a concern for brokers following the recent acquisitions of Standard Life Healthcare and PatientChoice, the planned acquisition of Health-on-line (by Axa PPP), National Friendly's withdrawal from the PMI market and CIGNA's withdrawal from the SME PMI sector.
"The PMI broking community will be anxious that there is no further provider consolidation," he concluded.
