Massachusetts-based MAPFRE Insurance has announced an ambitious reorganization and realignment of its organizational structure for 2018. Effective January 1st, the company will essentially bifurcate its operations into the following areas of focus: Massachusetts/Northeast Region and the rest of the United States and Puerto Rico.
In a December 1st letter explaining the company’s plans to its independent agent partners, President and CEO of MAPFRE USA, Alfredo Castelo, noted the insurer’ decision to divide the company essentially reflects the critical importance of Massachusetts and the Northeast Region.
“With the changes announced today, we are positioning the company for success through a more focused business strategy,” said Mr. Castelo. “The strategic realignment focusing on MAPFRE’s core markets and lines of business will reinforce our market leadership position in our home state of Massachusetts and drive our profitable growth strategy in our remaining states of operation going forward.”
According to the company, Massachusetts and the Northeast Region accounts for 67% of MAPFRE’s business in the U.S.
The new Massachusetts/Northeast Region has 67% of MAPFRE’s U.S. premium
In its announcement, MAPFRE noted the new Northeast Region accounts for 67% of MAPFRE’s business in the U.S. In the new Northeast Region, Massachusetts is MAPFRE‘s home state where the company maintains a strong market leadership position in private passenger auto, homeowners, and commercial auto lines of business. The remaining states in this Region: New Hampshire, Rhode Island, Vermont and Maine will report Webster, Massachusetts, are.
The Northeast Region will also have its own CEO, Patrick McDonald
As part of the reorganization plan, the Commonwealth’s largest writer of auto insurance has announced the promotion of Patrick McDonald to Chief Executive Officer of the Northeast Region. Mr. McDonald has than 25 years of experience in the Massachusetts insurance industry and has worked at Commerce since 1990, serving most recently as Executive Vice President Business Development.
In this newly created position, Mr. McDonald will focus his efforts on growing the company’s business in Massachusetts and the Northeast and will report to Alfredo Castelo, President and CEO of MAPFRE USA.
In addition to Mr. McDonald’s appointment, the insurer also announced that John Kelly has been promoted to Executive Vice President, and will be in charge of leading the Northeast Technical Team which includes the company’s Claim, Product, Underwriting, and Operation areas.
Andrew Drayer, who is an Assistant Vice President of Business Development, Northeast Region, will continue to lead this area. The Company also announced that Sarah Clemens, also an Assistant Vice President, will lead the company’s Product, Pricing, And Underwriting areas.
The insurer will withdraw from five states and add three regional centers
As for MAPFRE’s presence outside of the Northeast Region, the company’s realignment plans include focusing its operations on a reduced number of states. The company will cease operations in New York, New Jersey, Kentucky, Tennessee and Indiana.
In the case of New York, the company advised, it had engaged an investment bank to pursue the sale of its New York subsidiary, MAPFRE Insurance Company of New York. In the other states, it is pursuing replacement carrier transactions if possible to ensure orderly withdrawals.
In addition to pulling out of five states, the company has streamlined its regional structures to create three regional centers along with regional directors who will report to Mr. Castelo.
The company says the restructuring of its business outside the Northeast is designed “… to provide additional empowerment and accountability to regional leadership to meet the profitability strains the company has faced outside of Massachusetts in connection with its substantial growth since MAPFRE’s acquisition of The Commerce Group, Inc. in 2008.”
As for the three new regional centers outside of the Northeast, they are as follows:
- East Central Region.This region will be composed of Ohio, Pennsylvania, Connecticut, and Florida, and accounts for 9% of MAPFRE’s business in the U.S. It will be led by Greg Clark as Regional Director and headquartered in Columbus, Ohio.
- Western Region.This region will be composed of California, Arizona, Washington, Oregon and Idaho and accounts for 9% of MAPFRE’s business in the U.S. It will be led by Miguel Coello as Regional Director and headquartered in San Ramon, California.
- Puerto Rico– MAPFRE’s operations in Puerto Rico are included within the North American region and accounts for 15% of MAPFRE’s business in the U.S. MAPFRE Puerto Rico will maintain its own management structure under the leadership of Alexis Sanchez who, effective January 1, 2018, will become the CEO of the MAPFRE Puerto Rico group of companies.
The Regional Directors and Mr. Sanchez will report directly to Mr. Castelo.
The company will also cease its life insurance operations
The final part of MAPFRE USA’s 2018 restructuring plan includes its exit from what it calls its “non-core” business, which mainly concerns the company’s efforts within the life insurance sphere. MAPFRE says that it will formally exit the life insurance line of business in the U.S. as well as pursue the sale of its MAPFRE Life Insurance Company.
“The strategic plan announced today fully aligns with the changes announced earlier this year at the Annual Shareholders meeting,” said Antonio Huertas, Chairman and CEO of MAPFRE Group. “MAPFRE is committed to achieving the necessary scale and profitability in its operations outside of Massachusetts and strongly believes that the above outlined reorganization will accelerate the achievement of our strategic goals in the U.S. market.”
MAPFRE Insurance, rated “A” (Excellent) by A.M. Best Company, presently writes property and casualty insurance in 19 states across the United States through a network of more than 5,000 independent agents and brokers. MAPFRE Insurance is the 19th largest provider of personal automobile insurance and the 20th largest personal lines insurer in the United States. MAPFRE Insurance is also the largest private passenger automobile insurer, homeowners’ insurer and commercial automobile insurer in Massachusetts. MAPFRE Insurance provides a full range of insurance products, including coverage for automobiles, homes, motorcycles, watercraft and businesses, as well as term life insurance. MAPFRE Insurance is part of the MAPFRE Group.
MAPFRE North America accounts for 11% of MAPFRE Group’s overall premiums. MAPFRE is a global insurance company present on five continents. It is the benchmark insurer in the Spanish market, the leading multinational insurance group in Latin America and one of the top 10 insurance companies in Europe in terms of premium volume. MAPFRE employs more than 37,000 professionals and services 37 million clients. In 2016 MAPFRE’s revenue amounted to $30 billion, with net earnings of $861 million.