Passing the Torch
John Ritenour’s life reads like a 19th century Horatio Alger story. It’s a remarkable journey from government housing in Pittsburgh, to founding one of the nation’s most innovative insurance agencies, with over 900 employees, covering a pantheon of businesses including sports franchises like the Orlando Magic, the Tampa Bay Lightning, the Oakland Raiders and the Jacksonville Jaguars.
But it is not only a story of determination and vision, it is also one of deeply held values that caused John and his wife Valli, whom he met in the ninth grade, to reinvent how insurance brokers could be compensated and build their own businesses. Their idea was to create a place that clients and employees would never want to leave. It was a move that has produced growth beyond his wildest dreams and a trajectory his son, Heath, is now continuing to accelerate.
Growing up in the 1950s and 1960s in the projects that gave the city a reputation as a gritty steel town, like most who were able, John went to work in a mill after high school. He didn’t mind the work, nor did he mind working hard. But when the union rep pulled him aside and told him to slow it down, as he was making the other workers look lazy, he knew it wasn’t where he wanted to be.
“I was lucky, because the money was hard to leave, but then the union went on strike and I decided when I left I would never go back,” John recalled. His first venture into entrepreneurialism was working in his brother’s bakery, which together they soon expanded around the city. “We were the first to open up in supermarkets. I enjoyed being my own boss, but the gas shortage of the 1970s, which drove up sugar and flour prices, really hurt our business,” he said. John then moved to selling life insurance during the day and working the bakery business at night.
An Expanding Horizon
It was an unforeseen consequence; he needed a job and soon found insurance sales fit him so well, he told his brother the bakery could support one person comfortably, but not two. “I was selling weekly premium life insurance, which meant I sold insurance and collected premiums weekly. It was a great learning experience, as it taught me to relate to the full gamut of people,” he explained.
He noticed however, as his experience grew, that the agent who handled the insurance for his brother’s bakery was “driving a Mercedes, while I was driving an Oldsmobile.” So John called him and over lunch discovered this type of insurance paid a commission on new business and on renewals; it was a smaller percentage, but it was consistent. For most life policies, the agent gets a commission the first year, then it trails off significantly. It was a lucrative difference and
one that would later shape IOA. John and his wife soon opened their own agency, focusing more on property and casualty insurance.
He branched into a number of ventures: a deli, a travel agency, apartments and commercial real estate, but the foundation was his insurance business. His son Heath was growing older and they began considering moving away from Pittsburgh. A friend encouraged him to consider Longwood and on his first visit there, he purchased a home, sold his businesses in Pennsylvania and moved south.
He bought an agency in Apopka, then sold it and worked for that agency for a while. “But when after nine months, the new owner changed my commission structure three times, I decided I wasn’t a very good employee,” John said smiling. He went back to his Apopka location, called it Insurance Office of Florida and began designing an entirely new commission structure for the agents who worked for him.
“We wanted to build an agency where commissions wouldn’t change every two years,” he said. “That decision was key to our original mission. We wanted a system that took care of producers. So what we did immediately was design our commissions so the individual sales executive would receive the same commission, both the first year and with renewal business, and that hasn’t changed. I don’t know of anyone else who’s doing what we’re doing. We developed a better mousetrap. I wanted to design what I had looked for as a sales representative.”
The concept flourished locally and soon a friend, who was working in New Jersey but was disappointed with his options, approached him about opening an office in his state. “He was a good salesman and still is today. Though I was reluctant, he talked us into opening Insurance Office of America,” John said. “We’re very attractive to anyone who is entrepreneurial and wants to be a part of a large organization where you have many products to choose from, but where you are treated like an owner.”
Growth and Succession
Scaling a business is always challenging and when the magnitude of growth is somewhat unforeseen, it can be daunting. “Honestly, when we began to grow, I didn’t feel I had the brains to run a $5 million agency, much less one with $30, $40, $50 and now nearly $130 million in revenue. Yet God seemed to send me people at exactly the right time, when I began to run beyond my skill set. I hired a financial consultant, Wes Scovanner, and after a year I talked him into coming on board as CFO. It was the best decision I ever made. He turned the company around, along with our COO. I was then able to focus on the sales staff, which is what I do best.”
Valli has also been a crucial part of the business from the start. “She sets the work example for all the staff, plus she is the customer service tone setter for the whole company. Frankly, it is customer service that makes us different,” John said beaming.
Heath, after a few years at college on a football scholarship, said he wanted to explore what the family business was like. John allowed him to intern, sharing his office, hearing calls and observing negotiations and client interaction for the summer.
“I was really hoping to meet some of my dad’s friends and clients and explore other businesses to find out what I really wanted to do with my life,” Heath recalled. “At first, he just observed and listened,” John said, “then he started critiquing me, and I thought, gosh I have to pick my game up! Heath was always an overachiever – the hardest worker on his athletic teams growing up. He wasn’t that big, but he ran for 1,600 yards at Lake Brantley his senior year. So I knew he had it in him.
“Growing up I got to coach Heath in football, basketball and baseball, but none of that compared to coaching him in business. That was awesome,” John exclaimed. “He soon became one of our best sales agents and I eventually went to him about the CEO position, because I knew he wouldn’t change the culture or commissions, but he wasn’t interested.”
“When I was working with my dad I realized how much value we add to our clients,” Heath said. “We are a necessity business; regardless of the economy, you have to have insurance. By the end of that first summer, I wanted to go to work at IOA. Insurance itself isn’t what lit my fire; it was consulting and learning about each business – from roofing companies to high tech manufacturers, we’re advocates for businesses. We are a part of the company’s strategic team, just like their accountants or attorneys, to grow their business and mitigate risk. When I started, I was agent No. 10, and now we have over 300. I learned to love it and never looked back.”
John went back to Heath about the CEO role in 2008, but again he refused, but this time he said he would consider it and “pray about it.” When he agreed, he said he wouldn’t do it for the position, but for the culture. “For a long time, the only title Heath would accept was ‘Keeper of the Culture.’ That connected with our people,” John said. “At first people saw it as ‘okay he’s the son,’ but now he’s the people’s choice.”
“One thing that makes IOA unique is that my dad as chairman, our president Jeff Lagos and myself as CEO all still have clients and we all retain our own book of business. It helps us to keep rowing the boat in the same direction as our agents. I don’t ever want to forget what it is like to live and die by commissions,” Heath conceded. “Most companies like ours are run by people who never were agents. That is what makes this organization so dynamic and growing: we are focused on making our agents’ businesses thrive and in turn, we share in their success.”