Don’t run and hide: A Q&A with Danny O'Connell
One of the keys to success in benefits for Danny O’Connell is understanding the importance of corporate culture.
Danny O’Connell is the CEO of Next Level Insurance Agency and works to educate employers on benefit and administration cost transparency while delivering and creating new solutions for their needs.
Paul Wilson: How did you get your start in the benefits industry?
I grew up in Oklahoma and graduated from the University of Oklahoma with degrees in Finance and History. I then moved down to Dallas and got started in the investment world. I got all my securities licenses and everything and then I met my wife, whose father was a former life insurance agent who had become a benefits agent many years ago.
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In 2006, I went back to grad school to get my MBA, and then moved back to Dallas and joined his benefits agency, where I worked for about 10 years. Then three and a half years ago, I started my own agency.
PW: What prompted you to start your own agency?
I saw that there was tremendous opportunity in the market and that things were changing rapidly. I knew that there were new opportunities and better ways of doing things out there and I wanted to explore them.
PW: How has your career path so far helped shape your mindset as a broker and business owner?
With my finance background and my MBA, I approach this very much as a business owner would and not as a sales consultant. I’m not out there just to sell a product; I can sit there as a business owner and say, “I deal with the same challenges you deal with every day. I’m not just a broker who is just interested in getting it sold, handing it off and making a commission. And as a business owner and consumer just like you, I’m going to share with you just what it is that I do.” I always try to find the best and most practical way.
PW: From a business owner’s perspective, what are the most common mistakes you see from clients and prospects?
I would say if you have a trusted relationship with an advisor and you think they’re very competent and do a good job for you, don’t be lured to fire that person just because somebody shows you some new bell or whistle. This has happened to me; I got fired because someone else was going to do something for them free and online. So the client moved everything and we came back in seven or eight years later and that other agent hasn’t changed a single thing. They hadn’t reviewed or done the due diligence; they were selling based on a technology bell or whistle that is just a commodity. So while the business owner may think they’re saving money by firing a good consultant, they often wind up spending exponentially more money in those hidden and lost opportunity costs because they’re overpaying and don’t have that expert on the back end.
If you’re an employer and have a valued relationship with a very competent insurance professional, instead of just firing that person, go to them and say, “Look, this what I’m interested in exploring or utilizing; is this something you can handle for us?”
PW: And what about mistakes by brokers as they run their businesses?
There are a ton of them. Number one is you have to realize you don’t know everything. We always need to learn new things, attend meetings and workshops, join associations and go to their conferences.
Secondly, what are you doing today to become a better business owner? What are you reading, who are you following? What study groups are you in? In most organizations, you take a good salesperson and you promote them to a manager; in our business, if you’re a good salesperson, you break off on your own and open an agency. But now, you need to understand that you’re a leader. You have to to decide what that looks like. To me, a leader is someone who is inspiring and can get people to do great things.
One of the most important things to realize as an agency owner is that you’re in charge and one of your top priorities is maintaining your corporate culture. In any organization, it doesn’t matter what size, you put certain things in place to create a culture. You need to protect that culture for the employees who are willing to embrace it and follow it and you get rid of the person who isn’t.
PW: Are you starting to see more employers and employees being open to new ideas and strategies?
Most of our clients have under 100 employees, and the good thing about that market is they’re often more willing to adopt newer solutions. They’re often looking at cost savings, and you’re not having to jump through hoops with some committee who has to deliberate for six months.
At the end of the day, I only represent insurance companies I would use for my own family. So we’ll talk about strategies like reference-based pricing, when it’s appropriate; there are certain groups where that is a good fit and some where it isn’t. If you come across the right way and do your job well, people will see that and trust that you won’t steer them wrong. When you’re initially meeting with a new prospect and showing them, “Here’s where you are today, here’s what we can do, here’s what needs to happen to get you there,” it’s about being willing to explain the deal honestly. You have to explain where it works, where it might have issues and how we can try to address those issues for you. It’s about aligning yourself with carriers and TPAs that you know will do a good job and educating the employer about the good, the bad and the ugly.
PW: The COVID-19 situation is changing health care and employee benefits right before our eyes. What will be some of the lasting impacts in the months/years ahead?
I think everyone needs to understand that business will not be the same as it was after this. If I’m Olive Garden right now, where I’m not exactly crushing it like I used to, I’m probably not going to open up 100 percent of my stores when all this is over. I may only open up 40 percent or 60 percent. So bigger companies are going to take a hard look at what they can shed or divest. Other companies are going to decide, “Hey, we don’t need all this retail space.”
We’re going to need to work together with carriers and other partners coming out of this. As a consultant, I’m looking to stay in front of my clients, pass along updates, provide reliable resources about COVID and also specific info about their health plans. When times are tough, leaders step up, they’re visible and they tackle the hard things. Brokers need to be a resource; don’t run and hide. I’m chomping at the bit to come into work and say, “we’re open for business and we’re a resource for you.”
PW: How do you stay motivated while working within a broken system?
When I broke off three years ago, I knew there were resources available to me, I just didn’t know how to access them or exactly how they worked. In reality, many agencies out there have a tendency to move slowly when it comes to change and innovation. Often, it only happens when a competitor moves the needle, which pressures them to keep up. So by joining associations and attending study groups, I now have access to many ideas and strategies. And while they’re not all mainstream yet, we have tools we can use to address quality of care, cost matrix, the spend, transparency about the quality of the providers, including readmission and reinfection rates and how doctors and hospitals are ranked based on quality of care.
It’s really easy to continue doing things the old way, but you have to challenge yourself to continue to push those boundaries and to look at new things so you’re continuously evolving and remaining fresh and at the forefront.
PW: Are you optimistic that things can be fixed?
Things are going to change, without a doubt. You have to be willing to understand and accept that and you have to be willing to change, too. If someone like Bernie Sanders ends up getting elected, or we somehow end up with a more socialized medicine environment in the U.S., there will still be some kind of privatized insurance, so you have to be willing to accommodate that. We have clients who are spending $30,000 a year for a relationship with a direct primary care doctor, which may seem mind-blowing to some. But it goes back to the fact that people are going to want what they want.
Things are going to change, regardless of who’s in charge. We’ve had a very tight market for a while now, where companies have been trying to find the best benefits to attract people. We see companies going after the best LTD contract they can get, or life insurance playing a bigger role than ever, or other fringe benefits that can be added. Now if the economy is down for an extended period of time, those things will get stripped away. But when it inevitably rebounds, there will always be something that employers need or want to offer to separate themselves from other employers, outside of compensation. So you always have to be willing to look at other opportunities.
PW: What are your favorite things about your job?
I love the fact that I get to be creative in what I do. I love the fact that when I meet with someone, I get to find a better way to do things. Every group, every client, every prospect is a challenge, a puzzle that I have to solve. And I have to constantly find new ways to do it. I love the fact that what we do serves people. I tell my staff, “when someone calls us, they may be angry or scared, but you have to understand that we’ve probably caught them on one of their worst days.” They’re having an issue, trying to figure out how to get through it and they’re dealing with insurance, which is very frustrating. So we get to help someone on one of the most important days of their lives.
PW: What are the hardest/most rewarding parts of being an innovator?
One of the most rewarding things is when you meet someone and you can see them start to buy into what you’re saying and watch their trust in you begin to grow. Taking someone from a complete and total skeptic to someone who trusts you and relies on you as a resource and a go-to person.
A frustrating thing is when they don’t view you as a partner and they’re always second-guessing you and questioning your every decision. When you come into those types of situations, it’s all about providing education and not being combative or defensive, but instead understanding that this is an opportunity to provide value. When you sense walls are being built up, don’t run from it. Address it. “Here’s what we’ve done before, this is our vision.” Ask about their vision and where they want to go. Be willing to engage that person on a meaningful level.
PW: Finish this sentence: The key to success in this industry going forward is…
Passion and drive.
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