Kinecta Federal Credit Union recently acquired Apollo Agencies Inc., a multi-lines insurance agency headquartered in Tustin, Calif.
The credit union did not disclose the terms of the deal, which was effective June 1. Kinecta FCU made the purchase through one of its CUSOs, Kinecta Management Co., LLC.
Nader Moghaddam, president of Kinecta Financial & Insurance Services, the CU's insurance sales and service CUSO, said Kinecta's board decided two years ago to expand alternative revenue sources- specifically insurance companies. Kinecta solicited 150 independent insurance agencies, he said.
"It took quite a while to narrow it down to the winning candidate. It was a deliberate process," said Moghaddam. "We chose Apollo because the company is very focused on service. About 85% of Apollo's business is personal lines. Because it does commercial lines, also, that gives us the ability down the road to expand our business insurance offerings."
Kinecta's insurance CUSO had relationships with three major carriers: Mercury, CNA and Safeco. Moghaddam said Apollo brings with it other carriers. Another factor that drew Kinecta to Apollo was its pre-existing relationship with a number of credit unions in Southern California, including Orange County's CU, Long Beach Schools CU, Lockheed FCU and First Entertainment CU. Two-thirds of Apollo's business is non-CU based, and that also will continue.
"We have experience in insurance services through our CUSO, but our previous book of business was one-sixth of Apollo's business," he explained. "With 190,000 members, we had too much business for our insurance agency. Apollo will improve our capacity. And in terms of scale, this deal will make us one of the largest property and casualty carriers in CUSO circles."
