Adapting the General Agent Model

The employee benefits market has changed significantly over the past decade.

“Brokerage consolidation, new carrier entrants, point solutions, rising costs, and legislative complexity” have all contributed to transforming the market since 2016, says Lauren Roth, president of employee benefits general agent Avant Specialty Benefits.

This new employee benefits market presents challenges, but it also represents an opportunity for general agents, Roth says. However, this requires adaptation of the traditional general agent model.

The Traditional Model

The typical employee benefits general agent focuses on transacting large volumes of small business insurance on behalf of the carriers, according to Roth. This is a symptom of the general state of the employee benefits market when general agents emerged, she says: small-business insurance has low margins compared to insurance business for larger companies, and due to benefits renewal timelines, it requires carriers to quote and place insurance in a limited schedule every year. Those factors compound to make small business employee benefits insurance a struggle for carriers—then and now.

As such, explains Roth, “When the [general agent] concept was introduced to the market, it provided an opportunity to share administrative burdens, avoid increasing permanent headcount-related costs, and continue growing by writing new business. The market broadly accommodated this healthy disruption.”

But with the changes in the employee benefits market, Roth believes there is an opening for another “healthy disruption,” though the traditional general agent model will still play an important role. As the life and disability carrier market expands with new entrants, and absence and leave management grows more difficult to navigate, Roth sees an opportunity for general agents to take another form, one that complements the more traditional “broker’s broker.”

The Consultative Model

Avant’s version of this transformation is based on adapting the core value proposition of the general agent model—driving carrier efficiency in exchange for compensation—into one better suited for serving large national employers, according to Roth. Rather than helping carriers sell and administer small business employee benefits, Avant would focus on efficiency through specialized consultation with carriers.

Ted Holt, Avant’s director of stop loss services, lays out what this means. Avant now “assists carriers in developing and delivering the highly customized and embedded services—centralized leave support, new hire onboarding and enrollment, [human resource information system] troubleshooting, RFP marketing events, etc.—needed to acquire and retain their largest and most highly valued employer customers,” Holt says.

Avant has also adapted the general agent’s relationship with the broker to focus on consultation and collaboration. As part of that, Avant helps develop RFPs for small, medium, and large group ancillary and supplemental benefits, for leave administration and absence management, and for medical and pharmacy stop-loss; provides employee engagement services, including onboarding and enrollment support; and offers claims management and advocacy services, among others, Holt explains.

Recently, as a result of this success in consultation and collaboration, Avant has also been able to expand into stop loss services, Holt says. “In partnership with our parent company, Holmes Murphy, we were able to organically build a stop-loss services practice to support our broker partners with medical and pharmacy stop-loss marketing, claims management, clinical expertise, and data analytics services.”

The adaptation of the general agent, according to Roth, “has been game-changing.” The emphasis on consulting and value-add services allows Avant to act as a resource for and benefit from every part of the insurance value chain: “a center of excellence for our broker partners, a general agent, and a resource for individual employees and their family members,” says Roth.

The Avant Approach

Technology plays a key part in delivering and maintaining the quality of the services Avant offers. “We are constantly evaluating internal opportunities to introduce thoughtful automations [and] appropriate applications of AI,” Roth says.

For example, Avant’s primary goal with AI is to streamline tactical, black-and-white manual processes, Roth explains. “While the use of market-leading technology has been a part of Avant’s foundation, the additive applications that AI offers Avant to continue to create efficiency for our clients and freedom for our experts to apply their creativity and to spend collaborative time with our buyers is where we will continue to invest.”

How Avant uses generative AI is an example that encapsulates Avant’s overall approach, which Roth sums up as “expertise-led, tech-enabled, and people-focused.” Technology is not the be-all and end-all for Avant, but a way for Avant to empower their employees—and their clients—to be industry experts, Roth says. “We want to understand each client’s current state, where they would like to be, and how we can serve as a catalyst to support them.