MAPFRE USA reorganizes operations to add focus to core lines of business and states.
MAPFRE Reinforces Profitable Growth Strategy In The U.S.
Webster, MA – December 1, 2017 – MAPFRE USA today announced that it will realign its business to optimize its structure for profitable growth and will focus operations going forward on a reduced number of states.
MAPFRE has identified eleven core states in which it currently operates in the U.S. – Massachusetts, Connecticut, Rhode Island, New Hampshire, Maine, Vermont, Ohio, California, Oregon, Washington, and Idaho – where the company is positioned to leverage its existing scale, infrastructure, and independent agent network to pursue a profitable growth strategy.
MAPFRE has three additional states of operation – Florida, Pennsylvania, and Arizona – where the company will continue to operate but where it must first reinforce the company’s underwriting and distribution foundation prior to future expansion plans.
MAPFRE intends to cease operations in five states: New York, New Jersey, Kentucky, Tennessee and Indiana. In the case of New York, the company has engaged the services of an investment bank to pursue the sale of its New York subsidiary, MAPFRE Insurance Company of New York. The company is taking all necessary steps to produce an orderly withdrawal from the other four exit states, including the pursuit of replacement carrier transactions where viable. MAPFRE is committed to its customers and agents and will continue to operate in these states with the same high level of customer service until the process is completed.
ALIGNMENT OF REGIONAL STRUCTURE.
MAPFRE has aligned its operational structure with its new core state footprint, bringing closer to the states of operation the decision making process both from a technical and business development standpoint.
Effective January 1, 2018, the company will reorganize its regional structure to establish two primary areas of focus: (1) Massachusetts/Northeast Region and (2) States Outside of the Northeast Region, which will be managed through three Regional Centers.
The new regional structure is as follows:
1. Massachusetts/Northeast Region.
The Northeast Region accounts for 67% of MAPFRE’s business in the U.S. and includes Massachusetts – 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 the Region, which will remain headquartered in Webster, Massachusetts, are New Hampshire, Rhode
Island, Vermont and Maine.
The Northeast Region is MAPFRE’s largest and most profitable region in the United States. Reflecting the region’s strategic importance and to provide the necessary focus to ensure the continuation of MAPFREs leadership and profitability there, the Northeast Region will have its own management structure led by a regional Chief Executive Officer.
The company has announced the promotion of Patrick McDonald as the new Chief Executive Officer of the Northeast Region. Mr. McDonald has more than twenty five years of experience in the Massachusetts and Northeast market and is currently Executive Vice President for Business Development at MAPFRE USA. As Northeast
Regional CEO, Mr. McDonald will lead a team with extensive Northeast market experience, and will report to Alfredo Castelo, President and CEO of MAPFRE USA.
2. States Outside of the Northeast Region.
With the reduction in the number of states of operation, MAPFRE has streamlined its regional structure through the consolidation of its Regional Centers. The new structure 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.
The three Regional Centers outside of the Northeast 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.
MAPFRE USA has reinforced and strengthened the Technical Areas operating in each region. Under the structure announced today, the regional Technical Teams will have direct accountability for their respective territories working within a strong countrywide framework established by the national leadership team. The company recently hired a new Senior Vice President of National Underwriting, Dan Pickens, and a new Chief Actuarial Officer, Jean Louis Hernandez, to augment the leadership of the Technical Area going forward.
As part of the reorganization of its operations and businesses in the U.S., MAPFRE will divest from non-core business.
The company announced today that it will exit the life insurance line of business in the U.S. and that it is pursuing the sale of its Delaware based subsidiary, MAPFRE Life Insurance Company.
“With the changes announced today, we are positioning the company for success through a more focused business strategy,” said Alfredo Castelo, President and CEO of MAPFRE USA. “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.”
“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.”
ABOUT MAPFRE INSURANCE.
MAPFRE Insurance, rated “A” (Excellent) by A.M. Best Company, 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. www.mapfreinsurance.com
Assistant Vice President