Mapfre is an Insurance company. Due to its history it has a complex structure, which is changing over time and will change more in the (near) future.
The main characteristic of the structure is that it has been a mutual and the holding company still is. In 2006 MAPFRE began a process to break the mutual nature of the company’s structure and in which it became a public limited company. (Wiki about Mapfre) This continues to be the current structure in which the corporation (holding) acts as the main shareholder (57%) and serves as a financial vehicle to support the business units.
About the business:
In 2003 the return on equity increased to 13%, in previous years the ROE went from 7.9% (in 1999) to 10.1 in 2002. The funds managed were: 19.8 million euros and premiums insurance and reinsurance totaled some 5.3 million euros. The distribution of employees in that year was between Spain 40% and (South) America 56%. In total there were 13,868 employees. It acquired the Road America Motor Club and Mapfre-life was delisted from the Stock Exchange. The president at that time was: Carlos Alvarez Jiménez.
In 2007 the company had changed a bit more. Mr. Domingo Sugrnyes Bickel retired as Executive Chairman of the Executive Committee. Mr. José Manuel Martínez Martínez was chosen to be the new president. Growth has been achieved through acquisitions: Mutual Valanciana was acquired in 2007 and also the Commerce group (USA). The strategic alliance with Caja Madrid was restructured. The distribution of Human Resources: Managers 12%, Administrative 29%, Sales 13% and Technicians/others 44%.
One of the main problems remains the structure of this difficult-to-understand organization. The long-term strategic alliance with Caja Madrid is one of the main factors in the complexity of the overall structure. Recently this structure has been redesigned. In the previous situation before (May) 2008 there was a separate holding company Mapfre-Caja Madrid (of which Caja Madrid owned 49%) which dealt with the life insurance and national insurance part of the corporation. Also the investment branch and the stockbroker branch were separate entities.
In the new situation, these have been integrated and reside below the global holding company of Mapfre (of which Caja Madrid now owns 15%). Now all the autonomous units (automotive, life, real estate, Americas and international and reinsurance are autonomous business units.
Ignacio Hernando de Larramendi was the first president of an insurance company to be inducted into the Insurance Hall of Fame (1)… he was a pioneer in the development of the current MAPFRE Corporation… which he created in the 1970s , an early model of a global insurer with a business philosophy he called “specialized diversification.” His successful model of “one-stop financial shopping” would later be emulated by many other companies around the world… utter dedication to developing customer services. He pioneered many creative and user-friendly services for customers that were later replicated by others, including a travel assistance plan for motorists, in-home assistance programs linked to multi-risk homeowners insurance. (1)
But there is something more special in this Spanish miracle. This will become clear when comparing MAPFRE with two other companies: ING and AEGON, who are also inducted into the Hall of Fame: “… Mr. Jacobs (ING) has always been a supporter of taking prudent measures to protect policyholders He emphasized the need for adequate provisions to cover longevity risk.”(1)
“Under his aspiring and creative leadership, AEGON achieved strong growth around the world, becoming an international company through autonomous growth but also through acquisitions, such as with Providian Corporation, Transamerica Corporation, JC Direct Marketing Services Penney in the US and Guardian Royal Exchange in the UK Thanks to Kees Storm’s personal efforts, AEGON received a license from the Chinese government to start life insurance activities in China Mr. Storm is noted for his charismatic leadership and management skills. He wrote a small volume called “Management with a Smile. And he has said that he is convinced that pleasure and participation in work can go hand in hand. Other attributes of Storm’s leadership approach included traveling to all offices, reach out and meet people and always respect individuality.His motto, which helped create the success of AEGON was: “Respect people, make money, have fun.” (1)
The normal thing for either of the two companies is that ING has combined insurance with banking; Aegon, on the other hand, has never developed a banking business to support its insurance business.
Mapfre is a company that chose a strategic point right in the middle: it had developed a banking business in the eighties but it was not successful. Instead, it decided to establish a strategic alliance with Caja Madrid. This was the (main) responsibility of José Manuel Martínez: “… until the year 2000, the new distribution channels were increasingly relevant in Spain and in other European countries… MAPFRE was quick to seize the opportunity when CAJA MADRID, the second largest savings bank and fourth largest financial group, declared its willingness to discuss an alliance in the year 2000.”(1)
HJB
(1) – http://www.insurancehalloffame.org/laureates.php
