Wescom Credit Union has bought its first insurance agency in a bid to beef up its insurance operation, and it said it may look to additional acquisitions down the road.
Darren Williams, the president and chief executive officer of $2.9 billion-asset Wescom, said, "For the last six or seven years we have been offering automobile and homeowners insurance, and that has always been through a third party, and we were never completely satisfied."
"We have been exploring the possible acquisition of an existing agency or forming our own agency," he said. Hallmark Associates Insurance Services' size was appealing to Wescom, a Pasadena credit union that is Los Angeles County's largest, with 237,000 members. The agency brings in about $3 million of annual revenue. Mr. Williams declined to say what the company's sales goals are for the agency.
Wescom announced Wednesday that it had bought Hallmark Associates in Pico Rivera, Calif. The deal's terms were not disclosed. Hallmark sells property and casualty insurance to individuals and businesses.
"The acquisition allows us to acquire expertise, systems, and appointments with over 90 insurance companies," including Safeco and Travelers, Mr. Williams said.
"The acquisition also allows Wescom to enhance its product offerings to Wescom members to include automobile, homeowners, life, and health insurance," said Mr. Williams. "This is a natural fit for a credit union like Wescom."
Hallmark is Wescom's first acquisition in the insurance sector, but the credit union may eventually consider further agency-deal opportunities. "We certainly could grow the agency through additional acquisitions," said Mr. Williams, and Wescom will consider all opportunities.
When considering potential acquisitions, Mr. Williams said, he seeks candidates with complementary products and services, multiple insurance company appointments, and a geographic presence in Wescom's Southern California territory.
Insurance is an attractive business for Wescom, he said, because it lets the credit union "deepen relationships with our members and help them save and meet their insurance needs. It's not just merely another revenue opportunity."
Mr. Williams said insurance is a "minuscule" part of Wescom's business. "But we see that changing," he added. He declined to discuss long-term sales goals or how much he would like the insurance business to grow.
"Eventually, Wescom will have representatives in many of our branches assisting our members with their insurance needs," he said.
Hallmark will continue operating from its existing offices. Its founder, Lyle Sandlin, is to join Wescom as president of the credit union's insurance agency.
Hallmark has four offices from which it offers both insurance and employee benefit and retirement plan services.
Wescom has 33 branches throughout Southern California and one in Sugar Land, Tex. Membership is open to people living and working in Los Angeles, Orange, San Bernardino, Riverside, and Ventura counties in California. Despite the Texas branch office, Mr. Williams said he does not plan aggressive expansion outside the home state.
