Glenn Anderson explains how this non-standard insurance provider overcame several major obstacles to become a leader in the growing Hispanic market.

For Gainsco, Inc., a Dallas-based provider of nonstandard automobile insurance, the road in the late 1990s and a few years beyond was anything but smooth, characterized by a management shakeup, an attempted hostile takeover, plummeting stock, and a financial overhaul. But in the last several years, Gainsco has transformed itself from operating primarily as a holding company to a pioneer in the fastest-growing segment of the personal auto insurance industry: the Hispanic market.

“One of the key aspects to this repositioning strategy was the combination of capital and management,” said CEO and president Glenn Anderson, who came aboard in 1998. “We had an exciting vision and decided to build this company the right way. We’ve been focused on a singular and simple message: to become the very best provider of insurance in nonstandard personal auto in the Hispanic market.”

Gainsco’s footprint in that market is vast and growing. Currently, it has about 4,000 agencies in seven states with strong Latino populations, primarily across the southern tier of the country. Plans are to expand into several more states within the next 12 to 18 months.

Glenn Anderson

“We stand in sharp contrast to the larger companies that are focused on all elements of the business and don’t give any special attention to the Spanish-speaking segment,” he said.

Founded in Fort Worth, Texas in 1978, Gainsco cruised along for years selling general liability and property insurance to small trucking firms, taxi fleets, and auto garages. But the Internet boom, while it made millions for many, had dire consequences for insurance providers such as Gainsco. Demand for trucking services surged as e-commerce exploded, resulting in companies hiring inexperienced drivers, extending delivery routes, and neglecting vehicle maintenance. As a result, accidents skyrocketed, with the financial burden falling onto insurance providers.

Anderson, a seasoned insurance executive who formerly held senior executive positions with Baltimore-based insurer USF&G and Fireman’s Fund Insurance, was hired in 1998 to help steer Gainsco out of trouble. “The company was hemorrhaging pretty badly,” Anderson said. “After several years of attempted dramatic fixes, the capital losses were still so great that we couldn’t expose the remaining capital to further loss.”

In February 2002, Gainsco moved out of the commercial lines industry and spent the next two years re-evaluating strategies Nearly all of its workforce was released, with just a handful of members on the executive team and 50 other employees working in the company’s remaining franchise, which was based in Miami and specialized in non-standard auto insurance primarily for the region’s large Cuban population.

Analyzing vast amounts of research and data trends, the new ownership and executive team considered moving into several industries, including mutual funds, banking, and financial services. But its collective conclusion brought it back to a familiar place: its insurance subsidiary in Miami, which was performing well in a demographic segment poised for explosive growth.

“While we reviewed our strategic options, we were nurturing the Miami subsidiary as an operation with value,” Anderson said. “We ultimately came to realize that this business had a tremendous opportunity.”

Having decided its new direction, Gainsco’s leaders wasted no time in positioning the company for sustainability. The first step was a financial restructuring that added capital, most of which was provided by several key investors, for long-term growth. The company then moved its operations center from Miami to Dallas, ensuring it had direct control over its operations and decisionmaking.

Another key component was hiring a new management team that spent a tremendous amount of time developing and articulating a system of best practices on which to build the company.

“We try to make the entire insurance equation as simple and friendly as possible,” Anderson said. A significant part of the company’s revival was a multi-million investment in its technology infrastructure, which involved an overhaul of outdated equipment and implementation of a point-of-sale system that enables agents to provide an accurate quote on the spot to potential customers who enter the store.

“Gainsco is a vision-driven organization,” Anderson said. “We’re focused on the long term and on building a competitively successful business model. We plan to establish a significant presence in our targeted space, including the Hispanic community.”