Risk & Business Magazine California Risk & Business Magazine Summer 2017 | Page 26

RUDY GARCIA: MAN ON A MISSION
his own firm, Qandun Insurance Agency.
Qandun was originally formed as a
traditional agency, yet Garcia became
increasingly disillusioned when he saw
firsthand the frustration experienced
by business owners as their employee
health insurance premiums continued
to rise every year: 8 percent, 15 percent,
sometimes 25 percent or more.
Faced with these annual rate increases,
many companies have simply thrown
up their hands, according to Garcia,
concluding there is nothing they can do to
combat these persistent price hikes. “For
too many employers,” Garcia notes, “it
feels like they have no control. Employers
keep paying the increases . . . until the
day comes when they just can’t afford
to anymore.” Garcia sees a point in time
when many companies will be forced to
cancel coverage or severely reduce benefits
to the point where employees no longer
value their company’s benefits package.
CRISIS OF CONSCIENCE
Even more troubling to Garcia was
the broker’s compensation. “Broker
commissions are built into the insurance
premiums that companies pay,” Garcia
explained. “Because of the annual
premium increases, brokers are getting
raises of 10, 15, 20 or even 25 percent per
year purely from the growth in health care
costs, not from any improvement in the
broker’s performance.” Garcia just wasn’t
comfortable with the broker’s automatic
pay increase even when the broker did a
poor job for his client.
CREATING A BETTER MODEL
When Garcia began looking for a
way to make his business practices
and compensation structure more
transparent and client-focused, he found
no existing model to follow. However,
after conducting some due diligence, he
managed to get some targeted training,
partnered with other agencies that were
also taking a new approach to the market,
and began developing a transparency
model.
The new model would transform the
agency from a traditional agency to what
he terms an “ABC,” or “agent-broker-
consultant,” that reflects the heavy client
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focus of his reimagined firm. In fact, as he
began to reinvent his agency, Garcia took
the part of the client in a transformative
game of ‘Imagine’ to help reimagine his
firm.
Now Garcia asks companies to imagine
that their ABC agency, their benefits
advisor, is a true…
…Client Representative, whose
relationships with insurers and vendors
take a backseat and hold less influence
than its relationship with you;
…Collaborator, that looks at your overall
business to uncover areas of vulnerability
and develop solutions to make your
company more secure and less prone to
costly liabilities;
...Advocate, working on your behalf with
insurance companies to find your firm
the best-in-class product and service
solutions available and to negotiate the
best deals;
…Analyst, that uses metrics and analytics
to evaluate performance statistics
against stated goals to ensure that your
company’s health and benefits needs are
being met;
…Business partner, that fully discloses its
costs and revenues so that you clearly
understand what you are paying for your
benefits and what Qandun is receiving in
fees and other compensation; and
…Trusted Advisor, working with you to
evaluate problems and opportunities
and implement solutions to make your
business more effective, more efficient,
and more profitable.
Garcia and Qandun’s new model for
an employee benefits firm looks like
nothing companies have seen before.
The transparency of both cost and
compensation in this new agency model
is difficult for some company decision
makers to grasp at first. According
to Garcia, a big portion of the initial
consulting process is often purely
education. “Many of our clients are so
used to the traditional brokerage system
that it requires some education to get
them fully onboard with our program,”
says Garcia.
When and where allowed by law,
the transparency method allows the
ABC agency to carve out traditional
commissions from the premium and then
negotiate an annual consulting fee, many
times with multi-year guarantees for both
fee and pe