The Estrella Insurance executive team (left to right) Felipe Martinez, Richard Estrella, Nicolas Estrella Jr. and Jose Merille.
When Nicolas Estrella Jr. took the reins of his father’s insurance company in 2006 and did an inventory of the business, he noticed that three of its 40 agency locations were performing exceptionally well. “Their financials were great. Their retention numbers were solid. The metrics were all there,” Estrella said.
The common denominator for Estrella Insurance’s top performing locations? All three made up the small franchise system the company’s founder, Nicolas Estrella Sr., had integrated into his Miami-based property and casualty insurance company starting in the 1990s.
“My father, who started our company in 1977, had dabbled with the franchising model, but he never really built it out. When I took over, I made the decision based on the success of our franchises that I wanted to change our corporate retail profile and pivot entirely to a franchise platform. It took us about two and half years to make that happen, and once we did it allowed us to grow much faster. Sales went up across the board almost immediately,” said Estrella Jr., the CEO of Estrella Insurance, which operates 200 franchise locations in 11 states.
The company was recently acquired by Confie Insurance, which is headquartered in Huntington Beach, California, to operate under its non-standard national brand Freeway Insurance.
Nicolas Estrella Jr., CEO of Estrella Insurance
Estrella said his decision to relinquish ownership control of the 40-year-old, family-owned company to a behemoth holding company was driven by the potential to grow faster by aligning with a nationally recognized insurance brand. With more than 750 retail locations in 23 states and over 3,750 employees, Confie claims to be the largest privately owned, personal lines insurance distribution company in the United States.
“Partnering with Confie enables us to expand our footprint and get into states we don’t have a presence in right now at a pace that’s much faster than what we would’ve been able to do on our own,” Estrella said. “We now have a lot more runway to work with.”
Estrella said the acquisition in May has not changed how his company operates. He said insurance business named for his father, a Cuban immigrant who began his career in the U.S. by selling life insurance door-to-door in Miami, continues to function under the Estrella name.
By adding Estrella, Confie now has three insurance companies under its umbrella that are utilizing the franchise model. Last year, Freeway Insurance, which Confie acquired in 2006 and now has over 530 retail stores, began offering franchise opportunities. In 2021, Confie acquired Velox Insurance, which primarily offers franchising to business owners in the Georgia market.
According to Alex Trachtman, senior vice president of business development and franchising at Confie, Freeway runs about 23 franchise locations and Velox has 16 franchise locations. The acquisition of Estrella and its 200 locations, that has sales projections of $550.9 million in 2023, is a clear indication how much the insurance giant is all in now on growing its footprint through the franchising model.
“Franchising allows us to broaden our customer reach and accelerate our growth into new markets,” said Cesar Soriano, Confie’s CEO.
Trachtman said the acquisition of Estrella benefits both companies. “Estrella gets a significantly larger carrier selection they can sell, along with marketing and advertising support and brand equity and more technology tools,” he said. “With Estrella, we not only expand our footprint greatly in Florida, but we also get a successful franchisor, someone who really knows the franchising system who can help us grow at a much faster pace in all 50 states.”
Alex Trachtman, senior vice president of business development and franchising at Confie
The company reports a customer retention rate of nearly 86 percent with total premium coverage sales of $550.9 million in 2022. Estrella is projecting sales of $639.5 million in 2023.
Estrella’s CEO said new franchise operators are put through a rigorous 4-8 week training period, depending on their level of insurance experience. He said his company helps new operators negotiate leases for their locations and provides them the online tools and franchising mechanisms needed to run their business.
Estrella offers franchising opportunities for individual commercial locations, with a total investment range of $49,950 to $84,000, and an individual home-based businesses investment opportunity with an investment range of $12,250 to $17,500.
“I believe strongly that the insurance industry is a perfect match for franchise because the most important thing in insurance is pairing a product with a customer and making that product stick,” Estrella said. “The success of the franchising model is largely engrained in having significant brand equity in a general area. It makes converting prospects much easier.”