Oscar DiVeroli: I’d like to welcome to the studio today Jerry Katz, CEO of Premier Protection. Jerry, welcome.
Jerry Katz: Thank you, thank you Oscar. It’s a pleasure to be here.
Oscar DiVeroli: Thank you. Tell me a little bit about Premier Protection. What do you do?
Jerry Katz: We are an insurance agency that really caters to what I call high net worth entrepreneurs.
Oscar DiVeroli: And, what does that mean. I’m a high net worth entrepreneur. What’s going to be special to me?
Jerry Katz: Really one to 10 million dollars in net worth is our niche with the client, the entrepreneur, because what we’ve realized is once you’ve passed 10 million dollars in revenue, a board usually comes in to run the company, and the relationship between our agency and that entrepreneur starts to fall apart. The CFOs, the COs become more loyal to their people and loyal to things other than a relationship. But in the beginning, we become that expert. We allow the entrepreneur to go and focus in his business and be good at what he is, knowing that they have a professional watching their back with the insurance and the risk and all the [natures 00:01:17]. And always we try to do it, we understand by being entrepreneurs, the entrepreneur needs coverage, he needs protection for everything that he’s built his whole life, but at the same time they want to do it at the most profitable way. So we try to trim the expense as much as we can and go the distance, you know? And deliver the service, deliver the price, deliver the quality, and deliver the security.
Oscar DiVeroli: So, Jerry, just to clarify, are you providing a holistic approach to insurance, meaning you’re not only providing guidance, recommendations and ultimately coverage on the business side, but you’re doing at the same time on the personal side as well?
Jerry Katz: Exactly, because most entrepreneurs, they have multiple exposures and their business can eventually end up in their personal world. So a typical client will come in through one of our joint ventures that we’ve established, whether it’s local banks or commercial realtors or another person who shares that same ideal client as us but a different service, but again as an A player. For instance, a bank that recommends the client to us. They bring them in, they’re buying a 40,000 square foot warehouse to house their manufacturing facility. We get called in usually by the bank as a referral source. We do the insurance on that property, and we do it all, we meet the bank requirements, we get the best prices, we get the best rates, the best coverages.
At that point, we engage the client, and we do a profile. We say, “Okay, what’s your approximate net worth? How many employees do you have? How many homes do you own? Do you have children? Do you have boats? Do you have cars? Do you have toys?” All of that, because we believe if we can’t get that full vision and approach, we really can’t protect you. It starts with the business, and then we cover the employees, the insurances, the benefits, you name it, the auto and everything in the business. Then it streamlines back into their personal world. Umbrella policies are big, you know? Making sure we cover those assets, up to 10 million dollars. The people that work with us and the people that work in my staff, we have a purpose, and the purpose is we understand as an entrepreneur you’ve worked your whole life to build what you have. For you, your family, and also your employees. And if something happens, and you have that exposure out there, whether you have a fire and now you have 40 employees that don’t have a job to go to for a month. It affects everything.
So we have products in place for that, like a business income, or what happens if there’s a fire. Who’s going to pay the salaries of your key employees when they’re gone? Or if you have a liability issue at your manufacturing company, if your umbrellas aren’t large enough, what if that goes into your personal thresholds? We take that encompassing thing, but the key for us is that we know that you’re good at what you do in your business, and you’re not in insurance, but we bring our A game because you’re an A player. So it works. There’s a good synergy, and it’s a relationship.
Oscar DiVeroli: Fantastic. What motivated you to get into the insurance industry?
Jerry Katz: What motivated was really my primary business years ago was commercial multi-family real estate, and a couple other different businesses, and I saw on my balance sheet this huge expense every year that really said insurance, insurance, insurance, insurance. At one point, I didn’t like the expense, and number two I was dealing with multiple insurance agencies who really never understood what I needed, couldn’t deliver the service, I wasn’t sure if I was protected 100 percent. Somebody, “Oh, you have a business that’s worth two, three million dollars. Oh you have a boat as well? Do you have an umbrella?” I go, “What’s an umbrella?” So I never felt I got the service and advice that gave me real value and really protected me. So at one time I did find one good agent and I approached him and I said, “Hey, let’s open the shop. I’ll do this, you do this, you do that,” and I brought him in under an umbrella of companies and boom, Premier was born. Then, I really saw the need, me being an entrepreneur, I saw the need for the ideal clients to some degree being me, the lack in the marketplace of that.
When I had my insurance agent, when I finally got this one person and I asked to go into business with, I impeccably trusted them. I knew they had my back, I knew they had my back, I knew they were great at what they did, I knew they were watching my bottom line, too, the expenses, and I felt secure. Eventually I could just stop worrying about those things and watch my expenses go down and know that my risks are secure. I saw that as wow, what a benefit to an entrepreneur that understands that to have a pro like that on their team. It’s like every good one has a good doctor, a good lawyer, a good CPA. Ask how many entrepreneurs have a good insurance agency they work with. A lot of them, they don’t, or they’ll say, “I hate insurance,” or “My insurance carrier doesn’t pay me,” or they always have a complaint about insurance, or it costs too much and so on. So I saw that need, and I really jumped on it, and I love the recurring revenue stream that it brings, which is another bonus.
Oscar DiVeroli: Some of the most successful businesses are those that solve problems, and apparently you solved a real problem and a need in your particular niche, and congratulations on that.
Jerry Katz: Thank you, thank you, I appreciate it.
Oscar DiVeroli: What is the toughest decision you’ve had to make since you’ve launched your business?
Jerry Katz: The toughest decision I had to make, when I launched my business, which was a recent decision, as I mentioned earlier I basically took my old agent and offered him an opportunity to start the insurance agency and feed off the other businesses that I had at the time, and I was really the rainmaker, bringing in the clients, understanding the big picture, and he was more the technician, understanding the … And he was very, very good, technicians. So, we reached a threshold of revenues and employees and policies, and I was kind of absent for the last few years, running my other businesses and things like that. I came back in when I saw the revenues had flattened out, and then I started to see dips. I managed from a dashboard perspective, metrics and things like that.
I came back in about three years ago and tried to implement a lot of things that I’ve learned from EO. I just couldn’t get the execution inside the office because the person that was really running the company at that point was an operational type of person and a technician. He didn’t understand people. He was afraid to delegate. He had something in his head saying, “No one could do it as good as I can.” And you can’t scale a company with that. Every time I implemented structures and systems and processes, new employees, new staff, everything, it would just collapse 90 days later, and collapse again, and the employee turnover and the customer service. And my previous partner was working 70, 80 hours a week, and he would never stop, to a point where I literally had to say, “Go away for a month, I’m going to answer all your emails” and those things.
So recently, back in May, I approached him many times and I kept saying, “Listen, I feel like I’m dragging a horse to water, and when we get there I’m taking your head and putting it in the water and you’re either going to drown or you’re going to do it. We’ve been doing this for three years and I love you like a brother, but what do you want? Here is my vision for this company. I’m exiting all my other companies, more or less, and going into this one because I see a huge opportunity here.” And he said, “I don’t know.” I can’t work with “I don’t know,” but I respect him and he’s a great guy, so he finally took a vacation. He went away to Asia for about six, seven weeks, extended that trip another week. He came back and he said, “Jerry, so what,” he goes, “I’m going to take a break. Buy me out.” So I said, “Really?” I said, “You don’t even want to do business? You don’t want to do anything?” He goes, “No, I’ve been working 11 years, 70, 80 hours, we’ve got a great company, it’s time for me to have my payday and figure out what I want to do next.” He’s only 34.
This happened in May. We executed the agreement 60 days later. Nice and easy, no problems. Now I’m in there full time. I’ve completely restructured it, put all my systems in place. I had 11 employees, only two are the same, because the old team was just, they couldn’t make those changes in executions. I’ve completely systemized metrics, dashboards, everything that I’ve learned about EO, being a learning chair, going to events, every system, everything that I always just wanted to execute better than I ever could in my life, I’m finally there and doing it in that business. Because my other businesses weren’t such large infrastructures, like multi-family property, you have a property manager. It was a little different, you know? This one, it’s full spectrum, from the back office to the front office, so marketing, the CFOs to the whole thing.
So it feels good. Today is October. We’ve been growing for two months in a row, and I did everything. I recruited great employees. We’re getting better clients. Service is coming back around, and I really held the place together and the clients together during that period and now we’re getting feedback. They’re like, “Wow, what’s happened. It’s really changed.” Re-marketed, re-branded, everything, and so now I’ve got this three to five year vision that my goal is, if you read the South Florida Business Journal, you see the top 10 insurance agencies in the state of Florida. My goal is to make that list, or at least, yeah, the top 10. Top five are very large companies, very large companies. But that’s my [b hag 00:11:18], let’s call it, and I think we can make it happen, and now I’ve got other plans and executing. I’m working harder than I have in five years. But I’m enjoying it.
Oscar DiVeroli: This next question is an opportune time. Let’s say for argument’s sake, that I would like to make a one million dollar investment into your company. How would you deploy those funds?
Jerry Katz: How would I deploy those funds? I would do two things. I think now that’s my infrastructure and systems are more or less in place, and more or less proven, and I’ve built a scalable model. That was the big thing. Before, we didn’t have a true scalable model. Everyone knew one or two people’s names in my office. You can’t scale in that model. Today I’ve broken it down. I’ve split all the clients equally amongst highly sophisticated account managers, which I recruited, overpaid, but I’ve learned that that’s okay. So, I would probably take the million dollars and I would build a little more infrastructure, get a little more of these sophisticated account managers, because right now our bandwidth is approaching full again, so I’ll need to add one or two. They’re not the cheapest people in town, let’s put it that way. So we need to do that.
I would probably implement, spend a little bit of money on technology at this point, because sooner or later … Right now, we have relationships with entrepreneurs. They’re customized insurance programs. But I can see the way the industry is going, that technology will change that and streamline that. It’s not there yet. It’s there with personal auto insurance, and personal home quotes, but not on sophisticated commercial insurance. But it’s there, and there’s a couple platforms that can probably streamline things, but they cost money at this point, they’re still too expensive. That would be a good investment. The other thing, which I’m already currently doing, is starting acquisitions. I’m trying to pick off smaller agencies like mine that I can basically take over, buy their book and bring that person on as an employee. I can actually pay them a higher pay that their margin is today. So it would be nice to have a nice little war chest to do that with. B
ut I think in the insurance industry it’s so difficult to do acquisitions through a mailer, 25 hundred to all these, there’s literally 5,000 agencies just in the state of Florida, and we do business in Texas and Georgia as well. I would probably spend that money on a full-time acquisition sales-type person. Someone who’s a door-knocker strictly for that role of going out, maybe even one or two, put them on salary and just start doing that, and bring that in and then use that money for acquisitions, talent acquisitions, revenue acquisitions with an insurance policy, but it’s got to meet our criteria to some degree. And just grow, grow, grow. I think that would extremely … I can grow organically at this point, but with that strategy, I think the growth can be exponential. And yes, the million dollars would help to do it.
Oscar DiVeroli: Well, today’s your lucky day, Jerry, because you not only have the opportunity of being the recipient of a million-dollar investment, but I’m also for just a couple of minutes, I’m going to give you some magical powers. Briefly, if you had the ability rolling back the clock to the first day of your insurance company, up through current, and you could reverse any decision that you made, what would you change?
Jerry Katz: What I would have changed, what would I change? What would I change? I think it’s pretty simple. Number one, one of the reasons I’m an entrepreneur, I would say I don’t want to be the richest guy in the graveyard. I like to give back to the community. I like to have employees feel like they’re owners, maybe give percentages and have structures for that, and things of that nature. And I really like to build a place that’s really fun to work at, where people just really care about each other. They’re open, they’re honest, they share great core values, and things like that. So in the beginning of the company, when I offered my partner, who was really an agent at the time of mine, I had no idea what this insurance company would become. I was more to the multi-family real estate, and this was just a little side piece to service my infrastructure. I offered my agent a guaranteed salary for two years and 49 percent of my company.
Well, what I realized is as I evolved as an entrepreneur, you’re either wired as an entrepreneur or you’re not. That was a big learning curve. This was nine years ago, when I started this company. What I found is technicians and things of that nature and certain personality traits, I guess, they’re not wired to run companies. There was really no need for me to give up 49 percent of that company. I did it out of care for the guy and like, “Hey, this guy, we’re going to do well. He’s 26 years old, he’s going to own half the company, I’m going to give him a salary.” You know, “why not, let’s see what happens.” And I thought to myself, that’s a great and fair deal, and it was in the beginning. But in the end it wasn’t fair for me anymore, because I wanted to take the company from here to there, and the person that I’d put this whole thing around didn’t have the same vision as me at all.
When I asked my office, I said, “If you picture this agency as a make and model of a car,” people came back and said a Cadillac Escalade, a Mercedes, all of these things. He came back and he said Chrysler Minivan. I knew at that point he was creating a place for security for himself and he never had the same vision. If I could go back, I would have changed that. He would have been a great salaried employee type of situation, a great producer or a great technician in my office, and I think to some degree yes, he did very well and he got a nice check. But to some degree what I think I did with him has almost hurt him to some degree, because he wasn’t a leader, and he was always under pressure to do it. And he did it, but I don’t think he ever wanted to, and part of that was because of me. So I look, and today we’re still great friends. So I think that’s my biggest thing I would have changed.
Oscar DiVeroli: Very interesting. What one word describes Jerry Katz as an entrepreneur?
Jerry Katz: I never give up. Failure is not an option. One word is difficult. I would say, oh that’s easy, I’m sorry. Passionate.
Oscar DiVeroli: That’s been the most common word to that question.
Jerry Katz: Okay.
Oscar DiVeroli: Where do you go if you’re looking to brainstorm an idea, you’re looking to problem-solve, you’re looking for some kind of guidance or mentoring? Who’s your go-to guy or your go-to group for that?
Jerry Katz: That’s pretty easy. If it’s any major decision or really even some small decisions, it’s my network of EO friends. It really is. I have a forum that I’ve been in for seven years together. We’ve seen it all together. I’ve seen the highs, the lows of life, the highs, the lows of businesses and entrepreneurship, and we’re still together, and really it’s helped me to make tremendous decisions. But that’s my group. Even on a larger scale, on a global scale, like I did some business in Costa Rica and Colombia, and before I learned my lesson, by not going through my EO brothers and sisters. I lost money. I was stolen from. Now, if I … Any venture, whether I’m changing my marketing strategy, whether I’m hiring a new vendor, whether I’m dealing with a new software CRM system, we have a network that I can bounce that off people who are a lot smarter than me, who have done it before and they’ll pick up the phone or send me an email and tell me everything that they experienced. So for me, I mean, what an advantage that we have right off the bat. Opposed to me making all those mistakes in the beginning, on my own, doing this, they could have told me, “Nope, don’t do that.” They don’t tell me, first of all, they tell me what happened to them, and the mistakes they make, and I learn from that.
To me it’s an edge. It’s a unique place, it’s a unique situation, and the best thing about it is we all share the same core values. I know when I’m talking to an EO brother or sister, I can trust them. They care about me, and they’re sincere, and I’m dealing with what I say a real person, an honest person, an ethical person, and a passionate person.
Oscar DiVeroli: Sure. Final question. Let’s pretend for a moment that when you wake up tomorrow morning, Premier Protection is no longer. What will be the next venture that you would want to launch?
Jerry Katz: That’s a tough question. But I would definitely … It would point into the ways of something to do with motivational speaking. Some kind of … You know what I’ve learned about myself through EO, some of what makes Jerry tick? You know, what’s my core values inside? Do I love insurance? Is that my favorite thing in the world? No, I like fishing, I like traveling, all that good stuff. But what I’ve learned is I love to lead. I love to inspire others. And I love to change the lives of the people around me. Whether it’s my peers, whether it’s my employees, I like to see people better themselves. So I like to teach. I like to lead the way through example, and really if you come to my office the environment is, yes we’re there to make the business run. We’re there to deliver service. But we’re really there to learn and grow as people, either how we interact with each other, how we interact with the community. To keep a level of sustainable happiness, really, for everybody around us, including our clients, including our community, and including the people that we see every single day.
I’m the learning chair at our South Florida chapter, and it was a challenge to me, because I have to bring inspirational things to a group of entrepreneurs, my peers. No longer am I doing this just for my employees or my staff or things of that nature. Now I’m bringing it to peers that are at my level or much greater. That’s why I took on that challenge, because I see somewhere down the road … I love speaking. I feel like a rock star when I’m up there, and it’s just a great feeling. So, someday I think those core values of mine will lead me somewhere in that world, just not sure yet. I still want to make my mark in this insurance world, and see, and then … Or maybe do both. But I think that’s where I’m heading.
Oscar DiVeroli: Well, when you get there, I promise I’m going to be in the center front row. You absolutely inspire me. It’s a tremendous asset to our organization that you’ve been a member for seven years, that you are a very hard-working board member, and you continue to fuel the entrepreneurial spirit in South Florida. Thank you so much for joining us today.
Jerry Katz: Thank you Oscar, it was a pleasure. It was an honor.
Oscar DiVeroli: Thank you.