Revised and updated January 8, 2020.
According to the National Association of Insurance Commissioners (NAIC), in 2018, the US insurance industry (the largest in the world) collected $2.47 trillion in premiums (up from $2.32 trillion in 2017). Savvy entrepreneurs who want to benefit from this growth with a proven business model have several companies worthy of closer examination on this list of the top insurance franchises of 2020.
As an industry, insurance is largely recession-proof and has barely stalled even during serious economic downturns. Car insurance is a primary focus of all the companies on this list, and as a segment within the insurance industry, collected $287 billion in premiums in 2018 (up from $267 billion in 2017). While many people dislike spending money on insurance, it’s considered by most to be a “necessary evil” in case of an accident. This is why 80% of adults in the US have car insurance.
Other types of insurance offered by the franchises listed here include homeowner’s and renter’s insurance, business insurance, and even health insurance is offered by two of the companies. Two of the four companies on this list specifically address insurance needs in underserved communities and for people who don’t fit the desired customer type among traditional agencies. And all four have shown strong growth in locations during the past year.
Here are the 4 best insurance franchises of 2020:
1. Pronto Insurance
Pronto Insurance was acquired by RPS/Arthur J. Gallagher & Co., a global insurance brokerage, a year ago but its core business model remains the same: auto, home, and business insurance with a special focus on serving the growing Hispanic market. It has expanded operations from its home state of Texas to both California and Florida, using location intelligence platform SiteZeus to help it identify the best new markets for its services.
Additional insurance policy types include motorcycle, renters, RVs, boats, roadside coverage, mobile home, condo, and watercraft. Business insurance types include general liability, artisan contractors, errors and omissions, commercial property, workers’ compensation, and builder’s risk.
Founded by the Varela family in Texas in 1997 but only franchising since 2009, the number of locations leaped from 172 in 2017 to the current total of 277, all of which are in the US and 217 of which are company-owned.
2. Fiesta Auto Insurance and Tax
Fiesta Auto Insurance and Tax is another insurance chain geared towards serving the growing Hispanic market with a focus on blue-collar workers and communities. By developing strong relationships with more than 40 different insurance carriers, Fiesta searches for the best possible pricing for each customer. Franchisees for this chain will do best if they speak some Spanish, or hire people that do. Its system is paperless and works through its web-based software.
Besides offering a wide range of insurance products (auto, home, business, rental property, boat, motorcycle, etc.), the chain also offers full personal and business tax services.
Founded by John Rost in 1998 and franchising since 2006, the number of locations has climbed steadily in recent years to the current total of 207 (up from 196 in the previous year), all of which are in the US and none of which are company-owned.
3. Brightway Insurance
Brightway Insurance was recently featured as one of the “Most Innovative Franchise Brands in 2019” by Franchise Business Review, based on feedback from franchisees. The company recently rolled out a recruiting and competency-testing tool that helps franchisees find and hire good agents using benchmarks formulated based on the chain’s best agents.
Brightway offers insurance for property, vehicle, life, business, and umbrella policies. Each location hires local insurance experts who have their own relationships with multiple insurance carriers. Each customer may have policies from multiple carriers, but all are handled centrally in the Brightway system, simplifying customer service.
Founded by David and Michael Miller in 2003 and franchising since 2007, the number of locations has risen steadily in recent years to the current total of 191 (up from 166 in the previous year), all of which are in the US and only one of which is company-owned.
4. Estrella Insurance
Estrella Insurance has received a lot of criticism lately for its blatantly sexist ads in Miami for its insurance services, but it doesn’t seem to be holding back the chain’s growth at all, even though its latest ads that were plastered all over Miami-Dade Transit buses have now been completely removed due to the backlash.
This company offers a variety of insurance policies to cover autos, motorcycles, boats, homes, rentals, health (indemnity plans, HMO, POS, PPO, and HAS), and businesses (commercial automobile, general/business liability, business owner policy, commercial/business property, professional liability, worker’s compensation). It works with more than 30 different carriers. Like Pronto and Fiesta, Estrella focuses especially on the Latino market.
Founded by Nicolas Estrella in Miami in 1980 but only franchising since 2008, the number of locations has grown steadily in recent years to the current total of 152 (up from 120 the previous year), all of which are in the US and only one of which is company-owned.
An Important Note About Our Methodology
The franchises on this list were ranked according to the number of units in the franchise system. If you are a prospective franchisee searching for franchise opportunities that meet or exceed certain performance benchmarks for sales, profits, and return on investment, please check out this list of America’s Most Lucrative Franchises.
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