Palmer & Cay of Texas: Focused on Specialization

Georgia-based Palmer & Cay may have a lot of history behind it, but what’s driving the expansion of the independent insurance brokerage into Texas is a very modern sense of what it takes to succeed in the marketplace today, two key executives say.

The insurance business is very opportunistic and right now there’s “a huge amount of momentum in play,” said Howard H. McClure III, who has been appointed president of the newly re-opened Dallas office of Palmer & Cay of Texas.

He said the firm believes there’s space in the marketplace for large, high-end, privately owned brokerages such as Palmer & Cay built around talented people with expertise in key fields.

“We are focused on doing a few things exceptionally well,” said Jack E. Cay IV, the fifth generation leader of the firm that was originally established in Savannah, Ga., in 1868. “We’re trying not to be all things to all people. Where we can find strong talent, key industry expertise and hire those teams – we want to build a specialty around that. We’ve done that in areas like real estate, private equity, construction, healthcare, manufacturing and others.”

Both Palmer & Cay and McClure are familiar names in the Texas insurance industry. McClure served as president of the retail brokerage’s Texas operations from 2002 to 2005 before the firm was purchased by Wachovia Corp., which was eventually taken over by Wells Fargo.

At the time of the Wachovia purchase Palmer & Cay was one of the largest brokerages in the United States with nearly a thousand employees and offices in 34 states. Jack Cay, who was president at the time of the Wachovia acquisition, said as part of the purchase agreement he and his father, John Cay, who was chairman and CEO, committed to staying with the agency for five years.

“Of course we did that, and five years later I left and started Palmer & Cay. I was fortunate to get the name back and continue on our 147 year history. It’s been a lot of fun to rebuild the firm with a lot of the same people we had before and a lot of new people,” he said.

The new Palmer & Cay serves clients nationally and internationally from offices in Atlanta; Charleston, S.C; Dallas and Savannah. There are plans to expand strategically and slowly.

“Our business is all about attracting great people. Where we find people like Howard and his team, particularly in markets as strong as Dallas, we will be opportunistic in that way,” Cay said.

“As we attract more talent and write more business, we have the opportunity to get even more people interested and attracted to the firm,” McClure said. “That was the snowball effect we experienced in the first Palmer & Cay business that we built here. Dating back to 2002 first we were in Dallas, we then expanded down to Houston. We also opened an office in Denver.”

McClure, who was born and raised in Dallas, has a strong technical background in coverages for directors and officers, errors and omissions, and financial institutions.

“My background was in designing insurance products for private equity and financial institutions,” McClure said. And the firm has been able to build upon that and attract talent with expertise in the private equity business, which has been a great niche for the company, he added.

In addition to private equity, some of the specialty areas the Dallas office focuses on are real estate, construction, restaurants and hospitality. There are also plans to add new product lines, such as employee benefits and personal lines for high net worth individuals, McClure said.

“One of the reasons that we’re attracted to the employee benefit business is the great anxiety over the Affordable Care Act. If you go talk to a CEO or CFO and you ask them, ‘what are their plans to navigate the Affordable Care Act,’ you get these looks like, ‘I’m not really sure,'” McClure said.

Because many smaller agencies with limited resources don’t have a sophisticated strategy to help the client through the challenges of the ACA, “we feel there’s a void there, for employee benefits. And the people we’re talking to, to join us, have great expertise in that area. I think there’s a real need to solve that issue,” McClure said.

He said the surge in insurance agency merger and acquisition activity in recent years has also created openings for privately owned specialty firms like Palmer & Cay.

“A lot of old-line trusted insurance agencies have been purchased by other firms. The look and feel of the business has changed. So I think there’s a huge opportunity to provide a really high-end, consultative approach,” he said.

The fact that Palmer & Cay tends to retain clients for long periods of time, at least 10 years or more, is also a plus. “That’s a great business model, to build client relationships that last a long time,” McClure said.

In McClure’s view, great people want to be affiliated with a great firm with great leadership. “If you’re out there and you’re looking around, you want to be on a winning team. You want to be affiliated with a firm that’s got a track record of success.” he said.

And Jack Cay’s track record with the Palmer & Cay relaunch “has been incredible,” McClure added.