Bret Brummitt, managing partner, A.G. Insurance

Bret Brummitt is a managing partner at A.G. Insurance, abenefits firm that strives to lead the industry as pioneers whocreate improvement that touches the lives of those they serve.

Paul Wilson: How did you get your start inthe benefits industry?

I started working at Mutual of Omaha right after college. Iwanted to be close to my fiancée at the time so I moved and gotthat job. We were married and had our first kid, so we moved backto Dallas/Fort Worth. We ended up divorcing and around that time, Iwent to A.G. It was a nice fit with good benefits and flexibilityfor a single dad.

After I transitioned into A.G., I met my wife, my kid startedschool and I really got my act together. That's when I put bothfeet in and started doing insurance wholeheartedly.

PW: Talk a little bit about A.G. and howthe brokerage environment may be shifting.

Historically, A.G. has been a smaller firm. It was more of ashared staffing model and has grown into a true agency over theyears. The ability to work autonomously to some degree wasattractive to me, although I've since learned the value of workingmore collaboratively. It's always been very progressive.

I think there's a way forward for smaller brokers and houses.There's a lot of mass buy-up happening now, but in the comingyears, we'll see more brokers wanting to go back the other way,toward a more boutique feel.

Right now, we have an aging broker population and there's a lotof attraction to an exit strategy, but I think a lot of the youngerfolks have had a taste of the smaller firm, of having a highertouch interaction with the client, and making nimble decisions thatare in the clients' interest. So I think you'll see more peoplebegin to move in that direction over the next three to fiveyears.

PW: What's the recipe for success forsomeone heading that way?

Many benefits brokers have developed a bad habit of giving awaythings for free or getting outside their lane. I think you'll seemore of us peeling back out to one or two key individuals who havea thirst for learning and can develop a very robust fee-for-servicestrategy, with non-insurance consulting alongside the benefitspiece.

I've been working on moving some of our revenue intofee-for-service consulting. To have transparency in the value ofwhat we do—there's been a lot of intention toward that in our firm,because we needed to future-proof ourselves. It comes with a hugelearning curve.

PW: I saw you described as “a calmingforce.” What does that mean?

Every client we meet is in some kind of chaotic, stressfulsituation, whether it be rate increases, backlash of carrierdeficiencies, or something else. Something's wrong when you'remeeting with a client, or you probably wouldn't be invited.

Most of us were not trained for higher economic and politicalpolicy impact. That's a game we get pushed into. So it's a finedance of staying up on it but not getting too bent out of shapeabout any one thing. When you look at the big picture, you realizethat when policy is passed, you're probably looking at five toseven years before something becomes viable in the marketplace andmaybe a couple more years before it flushes out. So keeping thatperspective becomes part of the calming force.

PW: You're big on insurance education. Whatare the major shortfalls?

I think one of the biggest problems is sending an employee intothe world without tools. We spend a lot of time and advocacyfocused on how to make an impact at the time of service, becauseenrollment meetings aren't sufficient for education. You have toexperience something to actually understand how it works. Maybeit's a cool tool that does geo-sensing, pings them on their phonewhen they walk into an emergency room and says, “Would you like totalk to a doctor right now on the phone?” Trying to get those toolsdeveloped and implemented, and to get people registered ahead oftime seems to be the challenge we haven't fully figured out yet,though we're getting a lot better.

PW: What other exciting strategies ortrends are you seeing right now to address costs?

I think of the saying, “Everything old is new again.” Directprimary care and surgical care contracts have started to emerge,where you end up with no-cost or low-cost first dollar health care,removing that barrier of care so you get a better engaged healthoutcome. I think we're going to see that trend, whether it'stechnology-driven or things like concierge care.

The self-funded plans, the reference-based plans are also veryexciting. But some of the new broker-driven captives scare me alittle bit, because I'm not sure whether it's all about thebrokers' best interest or the clients' best interest. I'm seeing somany brokers who don't have a background in risk management try todo risk management for thousands or tens of thousands of employeesat a time.

PW: I've heard others say that brokers whodon't fully understand self-funding might view it as a panacea andnot always consider whether it's a good fit.

I agree. I've taken clients in that direction, but getting thedata to move forward and understand those decisions is not alwayseasy. Trying to prescribe that without building a baseline of datais dangerous. Reference-based pricing will absolutely fend off bigdollar claims. Now, what's the effect on the employee? Does theemployer understand it and have a strong HR team behind them?That's part of the conversation, too. The nice part of it is thatyou're going to see a lot more accountability on fraud. I see apotential fraud situation happening several time a month on aclaims basis, whether it's overuse of imaging, or billing forservices that didn't occur.

PW: What do the terms “innovation” and“disruption” mean to you?

The word “innovation” excites me. It means people are looking tosolve a problem that exists or that they perceive exists. Someone'sactively putting brain power and finances behind finding somethingthat works better; tweaking or reinventing something to workbetter.

Anytime someone says they're a disruptor, my skepticism flaggoes up. “Disruption” is such a fancy term in the investment world.We had a few bright shining stars that made a big impact, but Ithink they often overinflate the product and the viability.

PW: Where do you see the role of the brokerheading in the next five to 10 years?

I think that Parker Conrad was right when he said, “We're goingto drink your milkshake.” The industry sometimes haddisproportionate revenue versus effort. Broker compensation hasoutpaced economic growth, which allowed for more staff, more firmsand bigger retail and leases. I think part of what's driving themergers is a market correction in broker revenue.

The broker today feels more overwhelmed and less in control thanthey ever have, which will push a lot of us to evaluate how manythey're trying to serve. And specialization is a trend that willcontinue to grow. The positive is you get better at doing thosethings; the bad part is, you lose perspective about what goes onthroughout the different stages of the consumer.

I also think you'll see brokers doing consulting fees outside ofcommissions. Firms that want to stay relevant must learn how youprice an equitable relationship. As a result, brokers will becomemore like professional services firms. Brokers aren't trained inbusiness operations, so not only are we learning the industry,we're also looking to grow our skill sets and operationalfunctions, which will ultimately better ourselves, but also ourclients.

PW: What are your sources of inspirationand innovation?

Public radio is actually one of the most refreshing,outside-the-box areas of inspiration, knowledge and perspective forme. There's such a variety out there, and it provides differentpoints of view.

Also, I was part of a theological group called Emergent. Beingpart of a conversation that was bigger than I can comprehend andactually seeing that cultural dynamic social shift was eye-openingfor me.

PW: Finish this sentence: The key tosuccess in this industry going forward is…

A hunger for learning.