Ely Kaplansky had an unconventional start. Born to parents who met in a concentration camp and moved to the United States for a better life, Kaplansky dropped out of high school before launching Kaplansky Insurance as a young man. Today, Kaplansky Insurance employs 85 employees in 15 offices across Massachusetts. Listen to learn how Kaplansky took advantage of all the freedom and opportunity he discovered in the United States.
Transcript
Denzil Mohammed: I’m Denzil Mohammed, and this is JobMakers. JobMakers is a weekly podcast produced by Pioneer Institute, a think tank in Boston, and The Immigrant Learning Center, a not-for-profit, giving immigrants a voice. Every Thursday at noon we explore the world of risk-taking immigrants who create new jobs, products and services in Massachusetts and across the United States. Immigrants are twice as likely to start a business, so an outsized share of immigrants give back to the country they now call home by creating jobs. The paths they take are usually unconventional, and oftentimes they fill gaps in the products and services being offered. For Ely Kaplansky, that unconventional path included dropping out of high school and essentially taking the place of the business that gave him a break, when it was found that they were committing unethical practices. Unconventionally, for an immigrant, his business was more conventional than most: insurance. But since 1974, Ely has created hundreds of jobs in Massachusetts and beyond, with 85 employees and 15 offices across the state today. And he’s grown his business, especially during the pandemic, with 37 acquisitions to date, such that Kaplansky Insurance was named to Inc.‘s “5,000 Fastest Growing Private Companies in America” list. Eli’s success is more than just the pride of having made it. It fulfilled the desires of his parents when they moved from Israel to America in 1955, with just the clothes on their backs and an aunt to take them in. Their journey began in the concentration camps of Germany. And Ely’s story is all about the freedom America offers as you’ll discover in this week’s JobMakers. Ely Kaplansky, thank you so much for joining us on JobMakers.
Ely Kaplansky: Hi, it’s a pleasure to be here. Thank you for having me join you today.
Denzil Mohammed: Tell us a little bit about your business and your vision for your company.
Ely Kaplansky: Well, Kaplansky Insurance, I founded it in 1974 at the ripe old age of 22 and started from scratch. Basically saved up a couple thousand dollars. Had my mother parents cosign for another $4,000. Rented a storefront. And I had no idea what I was doing, and we’ve been growing steadily since then. The first, I’d say first ten years, were difficult. But, we’re going on, I don’t know I’ve lost track, 46 years or something like that, right now, and we’ve been very active both in organic growth and in acquisition. So, and we’re continuing to do so.
Denzil Mohammed: You were named by Inc., Inc 5000, as one of the fastest growing private companies in America. What do you attribute to that growth?
Ely Kaplansky: Well, a lot of it really is due to acquisitions and really understanding our industry and timing is part of it. It’s an industry where the average owner of insurance agencies are getting older and they’re retiring, so there’s more and more opportunities. And I think too that you know, it’s not a very, in most people’s eyes, a very glamorous business to be in. But people who work in it, realize that that’s not the truth. It’s a great business to be in, and the people have the ability to make very nice incomes from it and be there for our clients when they need us the most. Insurance is something you have to have, you hope you never have to use, but when you do have to use it, that’s what we’re here. And, unfortunately, I found that out the hard way about four or five years ago, we had a major fire in our home. We were displaced for almost a year and a half of rebuilding it, and I’m evidence that insurance is important, trust me.
Denzil Mohammed: So you said you started in 1974. You actually moved to the US when you were just three years old, right?
Ely Kaplansky: I did, my parents.
Denzil Mohammed: Your parents moved here after relocating before that.
Ely Kaplansky: Yeah, they, my parents, met in a very unusual situation. They met in Hitler’s concentration camps. My father had been in for six years and my mother had been in for one year and they met very close to the end when they were liberated and they met. They were in Germany. I have an older sister who was born in Germany. Then they immigrated to Israel, and I was born in Tel Aviv. And when I was three, they came over here. My aunt had already immigrated. She had already also been in the camp. She had survived and immigrated to Worcester, Mass. And so my parents decided to come over and be with her and the other interesting part of that trip was in those days, what people seem to do is that my parents weren’t very wealthy at all, and, but whatever they had, they converted into a diamond. And that’s the way people brought their wealth from Europe or from Asia into the United States. And, she had put, my mother put the diamond in a wallet and my older sister was playing with the wallet and lost it. So, when they landed, they literally came here with nothing. Fortunately, we had some family. And my father, my father had a trade, and that’s probably what kept him alive in the camps was he’s an upholsterer. And he made a lot of furniture for the Germans and so, he was able to get work here pretty quickly because he was very good at what he did.
Denzil Mohammed: Wow, as family reunification is the cornerstone of today’s immigration system. And, our partners at George Mason University, The Institute for Immigration Research, along with World Education Services, did a study a few years ago looking at what are the factors that enable high skilled immigrant professionals to succeed, and one of the biggest factors was family, having social support, a social network and it’s really crucial and it was to you because they were the ones who gave you the loan to start your business.
Ely Kaplansky: Well actually my mother ran the show in our family and, she was, based on what they went through, she was very, very careful about she didn’t like to take any risks at all. She wouldn’t let my dad start his own business. She wouldn’t, you know. She, he wanted, you know he wanted to be a bit of an entrepreneur and she wouldn’t really let him. So my parents, they banked at a small credit union, which at the time was in Mattapan, and then we moved to Brookline and I approached the president of the credit union for that $4000 loan. And he said, “I’d love to give it to you, but you have no credit.” And he says, “Well, why don’t you have your mother sign?” So your parents. So I contacted my parents and I asked him to sign and my mother said, “No, when I, we can’t risk that.” So I went back to him and he said, “Wait,” he says, “What’s your mother phone number?” And he knew her and he picked up the phone. And he said, “Sign the loan for this kid. Trust me, you’re doing the right thing.” And she did. And then, then there was that.
Denzil Mohammed: And you hadn’t even finished high school, but you had got into the business of insurance, right?
Ely Kaplansky: Yeah, I got into insurance. You know there’s this joke, nobody gets into insurance on purpose. It’s usually their family business, so they somehow fall into it. But I when I was, when I got my driver’s license at 16 and a half, I got a part-time job after school, delivering license plates and registrations as a runner to car dealerships and insurance agencies. And one of those agencies when I was about 17, offered me a part-time job in the evenings several nights a week, and I learned how to write, sell basically auto insurance at the time. And when I was in my senior year of high school, that agency offered me a full time job. I had worked for them for the previous summer, and they offered me a full time job and I had two months to graduate. And I said, well, this was a great opportunity. I wanted to take the job and I figured, well, I can always go back and finish those two months. I’m still thinking about doing that, but I haven’t done it yet. As it turned out, I found out that that agency was doing some things which were clearly unethical. I wasn’t aware of it, sort of going on in the back. And I said that I don’t want to be involved in that, and I said, I don’t think this agency is going to get themselves into trouble. And they’re going to be gone. They were one of the more prominent agencies in the Brookline area at the time. So this area is going to need another agency. So, again, I started from scratch and opened up and I was right. The one of the two owners end up going to prison. And I always worked from the age of 11 on. I always had a job. I never, never didn’t have a part-time job after school, from the age of 11 on. So, I was always active and enjoyed doing things that were exciting and interesting and challenging, and not easy. If it was easy, everybody would be doing it.
Denzil Mohammed: Speaking, of not easy, I was going to ask you about what the insurance world was like since March of last year.
Ely Kaplansky: Ooh, that’s an interesting question. I feel almost a little guilty answering it because we’ve done very well both as an agency ourselves and as an industry because of a number of reasons. One of the big reasons is claims have been very, very limited. People haven’t been driving, people have been home taking, less exposure to risks in their homes. From an experience and profitability standpoint, the industry has done very, very well. And agents have typically have profit sharing agreements with their insurance companies and we benefit from that. So, like I say, I almost feel bad about it, but we did very, very good in that arena and, at the same time, the amount of business that we did, our level of new business and new clients increased, which was actually our best year ever and I think a lot of people were just looking for ways to save money and improve things and they had a little more time because of their working remotely. So we really, as an agency, and we’ve already completed three acquisitions this year, we also benefited from the fact that we’ve been working the, although a lot of our staff has been back in our offices. Our offices have been closed to the public, and we’ve been doing most of our business remotely. And for us, it’s worked out nicely and I think for our clients, because we’ve sort of educated them that most everything could be done remotely, they don’t need to come into the office. I mean, they’re welcome to, so I think going forward it’s going to be a plus for our industry.
Denzil Mohammed: You know you see billboards everywhere for GEICO, and it’s all so gimmicky. You have the caveman, you have Flo, and they’re doing everything they possibly can to get clients. But what? How have you been able to be successful compared to all these big, big businesses?
Ely Kaplansky: Well, quite frankly, you know the guy goes and the Progressives of the world. They have a certain market and they a lot of their clientele. So tend to be people who don’t that just where we’re protecting their assets is not that important. Somebody buys a car, they just want to get the set of plates on the car and drive it. So GEICO will sell them the minimum coverage. We won’t do that. Some agents will, but most agents try to make the buyer understand that they need certain amount of liability. They need rental reimbursement. So if you’re buying just on price, you get what you pay for, and if something happens, you then you can have a problem. In addition, again, if you’re dealing with these direct writers, you’re dealing with somebody who’s either in South Dakota or maybe in some foreign country. And if you have a problem, you really you have nowhere to turn. We’re there for the clients you know, you know. Fortunately, in our industry, it’s another positive thing about our industry is 80 percent of our clients, pay their bills. They don’t have accidents. But it’s the 20 percent, that where there’s problems, it’s financial or claims. And we spent 80 percent of our time with those 20 percent, but that’s what we’re here for, to help them. But we want to make sure that we’re selling them the right coverage. And like I say that, interestingly enough, to, you know, you mentioned Flo, that’s Progressive, and those are the two of the biggest direct writers in the country. But what most people don’t realize is Progressive is the largest independent agent company in the country. So we represent Progressive as well. They don’t really advertise that a whole lot, but even if somebody for some reason they want to be with Progressive, they can come to us as well.
Denzil Mohammed: So you said that your dad wanted to be an entrepreneur as well. It’s sort of strange that your mom took this stance of not taking risks, because I mean they took a risk to migrate. They took more risk to migrate twice into a new place. What do you think it takes to be an entrepreneur?
Ely Kaplansky: Well, I will say I was an entrepreneur before I got married, so I didn’t have that issue that my dad had. And again, like I say he, both my parents came here, not speaking any English and my dad went to night school and eventually they both got their citizenship and I tagged along with that. My mother just learned to speak English on her own, but she was much more social and she learned the language much, much better and quicker than my dad. As an upholsterer, when you’re working, you’re really not doing a lot of talking. His English was a lot more broken though, I mean, he did ok. I spoke I grew up in in my house speaking Yiddish to my dad until I moved out until I was 17. After a while, he wanted to open up his own shop, and again, she was just so, I mean I guess from what they went through, she just didn’t want to take the chance. I’ve had a number of other businesses along the way. I started this business at age 22. And this has been successful. The others, not so much. So I’ve failed a number of times. I’ve probably had five, six, seven other businesses, and, as I said earlier, I have absolutely learned more from those failures than I have from this one success. But I’ve been in the rental car business, car rental leasing. I got into the travel business a year or two before the Gulf War. So I bought an agency, and it was doing ok. And then the Gulf War happened and the world stopped traveling. And that was it. We basically lost 75 percent of our business overnight. I think back, it’s like one of the biggest lessons that I’ve learned. I somehow ran across a book when I was in my early to mid-20s after I had started my business and the name of the book was called OPM. And I never heard those initials before, but it meant Other People’s Money. And I didn’t realize it, but I had already done that. I borrowed some money to start my business, but after I read that book, it made me, you know. And so I grew up in a no risk type of environment. But I realized that that’s what it takes. So I’ve learned that borrowing is not a bad thing and extending yourself a little bit more than you think is reasonable. Taking a little bit more, not too much, but if you feel you can take X amount of risk, multiply that by 1.1 or 1.2 and take that, because if it doesn’t work, you’re not going to end up in too bad of a situation.
Denzil Mohammed: And how do you personally feel about America as this place as full of immigrants and has always depended on immigrants, opened its arms to immigrants?
Ely Kaplansky: I think being one and my family being one, I think it’s the most amazing country in the world. As to how it’s always had its arms open to immigrants. I have mixed emotions about illegal immigrants because I saw how hard my parents worked to become citizens, how difficult it was for them to learn the language and go to night school and do everything that they had to do. And they were proud to become citizens and again as a child I automatically became one. I didn’t have to go through the process, but because of what I remember them having to go through and how much they appreciated what this country offers. We have landscapers. My landscaper is American, but he has illegal immigrants working for him. Now, these are nicest people in the world. I love them, but I just I wish there was a better way for them to become legal, maybe not as difficult as it might be now. But I just feel that immigrants will feel like they’re part of something, that they’re not outsiders if they are citizens of the United States, and if they can legally vote and legally drive and do things of that nature.
Denzil Mohammed: Ely Kaplansky thank you so much for joining us on JobMakers. This was a fascinating interview. So happy that you join us for today’s an inspiring story of another immigrant entrepreneur. If you know someone who should talk to, email Denzil, that’s D-E-N-Z-I-L at jobmakerspodcast.org, and please, leave us a review. I’m Denzil Mohammed. Join us next Thursday at noon for another JobMakers podcast.