Confie Seguros CEO: Acquisition of Cost-U-Less Expands Reach Into Northern California

The head of Confie Seguros, an automobile insurance brokerage serving Hispanic customers, said the company's acquisition of Cost-U-Less Insurance of California, will bring the number of retail centers for the company to more than 150 in the state.

Confie Seguros Chief Executive Officer John Addeo said the acquisition will expand his company's geographical reach in northern California. It also plans to open new retail locations in Phoenix, Houston and San Antonio, he said. Terms were not disclosed.

About 95% of Confie Seguros' sales are generated from nonstandard auto insurance. The market consists of people with little or no credit history, people with little or no driving record, and people with poor driving records. The majority of Confie Seguros' customers fall into the first two categories, Addeo said.

Sacramento-based Cost-U-Less, founded in 1989, writes more than $125 million in auto-insurance premiums annually and has more than 80 offices. Norm Hudson will continue to serve as president of Cost-U-Less.

Addeo said the growing Hispanic population is an under-served market.

"One third of the Hispanics in this country are under the age of 18," Addeo said. "There's going to be a growing need to provide auto insurance, homeowners insurance, and life insurance to this community as it continues to mature."

Confie Seguros, which has a goal of $250 million in annual revenue in three years, plans further acquisitions. The company has signed letters of intent with two companies in the Seattle area, Addeo said.

Confie Seguros means "trusted adviser" and is rooted in the research that led the company's management team to develop a business plan based on storefront operations in Hispanic neighborhoods (BestWire, Jan. 28, 2008).

To hear the full interview with John Addeo, visit http://www.ambest.com/media/media.asp?RC=178656.

(By Diana Rosenberg, senior associate editor, BestWeek)