Wescom Insurance Services Strategic Moves Pave Way for Success
PASADENA, Calif. -- What started in 2004 as a way to deepen the Wescom Credit Union member relationship has turned into Wescom Insurance Services--an insurance CUSO that just keeps growing.
"Wescom was looking for a value added service for the membership--something they would provide at a low cost that would be a true benefit to members," said WIS President Lyle Sandlin. "They decided on an insurance agency." Sandlin says after some two years of research and talking to agencies Wescom retained the services of Marsh, Berry and Associates for the actual acquisition of Hallmark Associates Insurance Services.
"Not every insurance agency represents all insurance companies so when looking for an agency to acquire you want to find one that contracts with a mix of insurance carriers that write insurance on a very competitive basis," said Sandlin. "Starting an agency from scratch would be an excellent idea if you could arrange to get all your contracts from day one but that is not how the insurance business works. It is one of the biggest hurdles to starting an insurance agency from scratch--carriers are hesitant about the risks with a new agency."
According to Sandlin, Hallmark proved a perfect match--not only was it an established agency with appointments with top-name insurance carriers, but the commitment to providing high quality member service was equal to Wescom's and its location was ideal. In addition, the agency's product line offerings including auto, homeowners, life and health insurance would add a great mix of insurance services for members. "Finding the right agency is key and it takes time and due diligence, which is why we tapped the expert services of Marsh Berry. It's a case where the person you want most to work for you isn't necessarily looking for a job," said Sandlin. Looking to further expand its insurance services, in December 2005, WIS acquired the Downey, California-based Lopez Insurance Agency, Inc. and most recently acquired its third agency--the Grentner & Litzinger Insurance Agency, a La Palma, California-based property and casualty insurance agency.
"The first agency set the benchmark and scope of business we intend to follow in the foreseeable future," said Sandlin. "It is critical to get an agency with a long history of prudent management and contracts with insurance carriers that are low cost providers in the area they operate in--without that it is difficult to achieve a decent rate of return."
Retaining that key agency talent is also a priority that Sandlin says with Wescom's reputation, pay levels and benefits fortunately hasn't been an issue.
"Employees have been quite pleased to make the transition since generally the benefit levels are greater than the insurance agency," said Sandlin.
WIS' strategic moves have paid off in revenue and employee growth. In 2006, WIS had income of $5.8 million and an employee count of 60 compared to its 2004 income of $3.5 million and 29 staffers. --email@example.com