Dear Agency Leader,

Employee benefits is an industry in crisis. Let me repeat that for emphasis:

Employee benefits is an industry in crisis.

And the future of the independent agency model is at grave risk.

The ACA and industry trends have rendered both the traditional agency business model and its transactional selling style obsolete.




no longer useful; out of date.

It used to be that an agency’s value was in managing – brokering – the group medical renewal and the agency’s worth was determined by how much commission the medical carriers were willing to pay for providing that transactional service. While the status-quo agency model worked beautifully for over half a century…it isn’t working now.

If “spreadsheeting” is one of the top 10 terms in your business vocabulary, you’re in serious trouble. Managing the renewal is now just table stakes and within five years commission on the medical will be a relic of the past. A foundational change is required if an agency is to remain relevant, profitable, independent, and growing.

Answering “What’s Next?”

But, as they struggle with a status quo system that’s broken, most independent benefit agency leaders – owners, principals & practice leaders – have no idea how to move beyond their obsolete business model. They have no answer to the all-important question, “What’s next?” for their practice and their agency.

This inability to answer “What’s next?” is driving much of the industry’s overheated M&A activity, as anxious agency owners must choose between remaining independent or watching their valuation steadily decline every year until they finally are ready to retire. With no idea how to maintain their valuation, they not surprisingly are choosing to sell to a national firm and take their chips off the table now, leaving it to someone else to answer the “What’s next?” question.

Structural problems

Additionally, medical inflation continues to drive up benefit costs for employers, which is driving down the quality of benefits for employees. For more than a decade, employee raises have gone to pay for higher medical premiums and now high deductibles and co-insurance are eating into employee pay and savings.


The answers to “What’s next?”

for an agency are easily found …

with the right leadership.


Compounding the problem, the employee benefits industry has an aging group of agency leaders and producers (management consulting firm McKinsey & Co. puts the average age at 59) and a significant challenge attracting Millennials and other younger generations.

An obsolete business model, declining compensation, commissions at risk, medical premiums trending toward unsustainable, declining benefits for employees, a looming labor shortage.

Bottom line, ours is an industry in crisis.

Great news for agency leaders…and the industry

While the industry faces severe challenges, the answers to “What’s next?” for an agency are easily found and solutions to the industry’s other pressing problems are readily at hand… with the right leadership.

The Association for Insurance Leadership, the industry’s newest organization, is committed to raising and equipping leaders to address the crisis threatening our great industry.

Dedicated to moving our industry onward and upward, the Association for Insurance Leadership is driven by a “Today & Tomorrow” agenda to elevate the employee benefits industry. The AIL NextGeneration Benefits Firm® business model offers agency leaders a successful alternative to their outdated status-quo business model. The Association’s NextGeneration Leadership® program will provide a template for recruiting and training the industry’s Emerging Leaders.

Elevating the industry begins with elevating independent benefits agencies.

Elevating the industry, one agency at a time

Elevating the industry today must begin with the individual agency. As an agency leader reinvents his own firm as a NextGeneration Benefits Firm®, as he…

•  transitions from transactional broker to consultative adviser

•  begins delivering strategy & resources that actually bend down healthcare costs

•  moves from the HR department up to the C-Suite, engaging the CFO or CEO

•  becomes able to deliver valuable business solutions to employers far beyond managing the renewal

•  moves away from a dependence on medical commissions to the freedom of a transparent fee-based model

•  begins with performance-based fees to put some of his fee at risk, further aligning his incentives with the client

•  elevates his own agency above the status-quo competition, and..

•  ensures his agency’s relevance, profitability, independence, and growth

…he helps raise the bar for the entire industry.

As one benefits agency becomes better and stronger, the other agencies in that market are forced to improve…or lose ground and lose business.  As agency reinvention & elevation occur across the nation, the entire industry increasingly is elevated.

As enough agency leaders are able to answer “What’s next?” and don’t need to sell out until they are fully ready, the future of the independent agency model is assured.

Elevating Emerging Leaders

If elevating individual firms elevates the industry today, elevating the industry tomorrow depends on our recruiting and training the next generation of industry leaders. It will be the talent, vision, and leadership skills of the industry’s Emerging Leaders that elevates the industry tomorrow.

While Emerging Leaders will be mentored by the current agency leadership, we believe it will be critical for them to also learn NextGeneration thinking and concepts, so that they can build on the knowledge and wisdom they will learn from their agency mentors.

As these younger men and women are recruited into our industry, it is critical for them to be equipped with a NextGeneration Mindset and NextGeneration strategies that will help them lead their firms boldly into the future.

If not us, who? If not now, when?

Elevating the industry will require strong and bold – and informed – leadership. In the midst of an acquisition frenzy, the time is short and the window of opportunity is closing. Already, too many fine benefits agencies no longer exist as independent firms because the owner(s) sold out simply due to not being able to answer “What’s next?”

The Association for Insurance Leadership has been created to support and equip agency leaders and industry thought leaders in our “Today & Tomorrow” mission of elevating individual agencies and elevating the industry’s Emerging Leaders.

Whether your passion is to elevate & grow your own benefits agency or to elevate & equip Emerging Leaders to prepare them for the mantle of leadership – or perhaps both – we invite you to join us in our mission to elevate the employee benefits industry.

Onward and upward,

Nelson L. Griswold III