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Marketing Agency of the Month Coming of age York International continues to evolve By Dennis H. Pillsbury
Slow but steady might very well have been the watchword for Paul Krantz & Co., Inc., Yonkers, New York, from its founding in 1946 until 1997 when “things changed dramatically,” Jim Krantz, CEO, remembers. That was the year when Robert Kestenbaum joined the agency as president—it had been renamed York International Agency, Inc. Robert came to the agency from Alexander & Alexander after it was acquired by Aon. “What I had determined was that I wanted to control my destiny, but I was not willing to set up my own shop,” Robert says. The chance to join York, where he now is an equal partner with Jim, was the perfect solution. Paul Krantz & Co. merged with George Friedberg’s company, Great Bay Brokerage in 1985 to become York International Agency, with combined revenue of about $1.2 million. Before 1985, “our agency consisted of my dad, myself, and one other person,” Jim says. “The merger added George as partner, and his staff. I became a partner when my dad passed away in 1987. Because our family also was involved in real estate investing/managing, that became a natural specialty for the agency.” Jim has been a leading producer with a specialty in real estate accounts since 1980. When Robert joined the agency in 1997, revenues had reached $3 million and growth became the watchword. York began adding people to the agency who would accelerate its growth and bring an entrepreneurial spirit to the enterprise. New people/new attitude “We made a decision to invest in the people,” Jim says. “We decided to recruit a higher level of employee with the expectation that it would pay off. And that’s happened.” Robert continues: “The people we have are so talented and are constantly striving to perform in an exemplary way. They are all focused on providing the highest level of service possible to our clients and, in the process, our growth has been great.” The agency now boasts revenue of more than $8 million with 32 people. “The emphasis on truly great service has led to sales—truly great sales,” he adds.
One of the first steps was to bring life and health sales in house. York International Benefits was formed in 1998 and David Kane was brought in to head up the new organization “so we could sell life and health to our existing clients and future prospects,” Jim says. “We have done extremely well cross-selling and with new sales, but our greatest opportunities are ahead of us.” Over the years, we continued our growth strategy of hiring the best people available, many of whom came from large national firms. In fact, Robert points out, “10 of our 32 employees came from Marsh, Willis or Aon, including a number of national account level people. That really has been a key factor in our evolution to a multi-faceted agency serving clients headquartered in the Tri-State New York Region. We are very proud that our growth has been almost entirely organic” Barbara Strauss joined in 2000 after 35 years with The Owens Group, along with a colleague Angie Castella. Their area of specialty is coop-condo real estate. “She came here with an entrepreneurial spirit,” Robert says of Barbara, “and was able to expand our habitational and commercial real estate book substantially. Very simply, Barbara and Angie are superstars in every way. We are lucky to have them.” Carey O’Connor joined in 2001 after 20 years with Frank B. Hall and with Willis Group where he specialized in the placement of large accounts, with an emphasis on real estate. “We brought Carey in to handle the placements for our biggest clients and our most difficult property risks,” Jim says. “We never anticipated that he would also become a major producer, but he produces because of his expertise.” Gil Fishman, who enjoyed success in a number of industries, joined the agency in 2002 as a producer. “In 2003, we became a user of a proprietary data and marketing system that includes a risk management audit process with a specialization in human resource management,” Robert notes. “Gil immediately adopted this system as his marketing approach and his production took off. This approach has not only been an excellent door-opener for new accounts, but also has helped our retention.” Also in 2003, the agency opened a professional liability department under Alex Lopukhin. “Alex came to us from Travelers,” Jim says, “and has been able to use her expertise to bring in an unbelievable amount of sales. We had a very small amount of business in that area before she came on board. Now, we write a lot of D&O through broker-dealer securities relationships and also do lawyers E&O and other miscellaneous E&O lines. Thanks to her knowledge of the business, we’ve been able to work with our insurance companies to tweak certain forms to give us a competitive edge.” Help from new friends
At a planning session in 2004, York management had a lot to consider. George Friedberg, the last remaining shareholder from the merger in 1985, had decided to sell his shares in preparation for eventual retirement and that brought up the entire issue of perpetuation. At the same time, the agency was reaching a size and level of expertise that made it apparent that it would soon be competing for major accounts normally written by the large brokers. It was clear that getting better known would help with the latter concern, while increasing sales certainly would help with the former. York was able to put together a plan with George in a “very friendly atmosphere,” Jim says. “He continues to serve the agency as our chairman emeritus and is still producing accounts. It’s gone over very well. George is still working and providing counsel on a daily basis. We feel very proud that we have successfully perpetuated the agency from the original partners.” Last year (2005), “we were able to hire Steve DeMatteo, who had spent more than a decade at Marsh working with large, complex, multinational clients,” Jim notes. “Steve’s broad capabilities have created meaningful opportunities to interact with clients with whom we never would have been able to talk to. One company that has $5 billion in sales and international exposures is talking to us because its management perceives that we have something to offer. That’s a quantum leap for us.” He continues, “The middle market remains our bread and butter. Very few of our accounts have risk managers. We now have the ability to handle large accounts in addition to continuing with our expertise in real estate.”
Last year was also a banner year in terms of increasing York’s exposure. “We joined the Council of Insurance Agents and Brokers so we could expand our horizons on a national level. We also hired Marsh, Berry & Company as our business consultant and joined their APPEX group in order to find out just where we stood relative to other agencies and also to get advice from other agencies,” Robert says. “One fortuitous meeting that occurred early on was our running into Scott Addis of The Addis Group, who has become a friend. [The Addis Group was the Rough Notes cover agency in August 1999.] We have a tremendous amount of respect for Scott. “York now has the capabilities that reach beyond simply the transaction and have developed a unique risk management process called RADAR (Risk Assessment and Data Analysis Report). Our process goes beyond standard P&C brokering by being consultative. We meet with clients, prospects, and centers of influence to explain this approach.” Jim adds, “We also see personal lines as an important area where we can grow. In 2005, we hired Justin Moundas to augment our strong Personal Lines department to help us develop a stronger presence in the high-value personal lines client arena. Justin comes to us from Marsh, where he headed up their personal lines department on Long Island.” Another important event was “our decision to make Carey and Steve equity partners in the firm,” Robert says. “We are willing to share with some of our key people and want to make it clear that this is the way we intend to perpetuate the agency.”
Technology also is a key component of York’s success. “We brought in a former Applied Systems trainer to be our IT and marketing person,” Robert adds. “Thanks to his efforts, we’ve gotten much better in technology. We continue to invest heavily and have the latest version of Applied Systems’ agency management system. We use scanning and are basically paperless. But, most important, the technology is being used to help our account executives be more productive and efficient. That’s really what having our own IT person has brought to the table.” Of course, the agency would be unable to provide coverage and service to its clients without the support of its insurance company and wholesale broker partners. “Over the years, we have had an appreciation dinner for company underwriters and wholesalers in January. We do it after the holiday parties are over so it will be more memorable,” Jim notes. “We bring 40+ underwriters and wholesalers to a very fine restaurant in the area and thank them for their support throughout the year.” Passion Robert sums up the York driving force in one word: passion. “Our employees, from the administration person to the president have a passion for the business. The amount of teamwork that is required for our type of collaborative selling makes it essential that we are all passionately involved. And that starts out when we hire. We always conduct a personality interview rather than a technical interview. We want to determine if the person is good in the dugout. We tell them about the agency and let them decide if it’s right for them.”
“We have an incredibly high-level staff where teamwork is stressed and egos are left at the front door. We’re a very flat organization where there are no silos. Everybody simply rolls up his or her sleeves and does the job that’s required. It’s really a pleasure to work here and we get compliments about our personnel from our mortgage holders, national banks, underwriters, wholesalers and everyone who comes in contact with anyone from our agency—especially our clients.” Future “While we are very pleased with our results and know we can now compete with anyone, it is not time to sit back and relax,” says Jim. “We also know our future is very bright. We expect benefits and personal lines to be major contributors in the future. Of course, Commercial lines will always be our driving force. In fact, we are working harder than ever but enjoying ourselves so much more. Our formula for the future will stay the same as we will continue to add the right kind of employee/partners that share our vision.” * |
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