State’s top auto insurer to sell life insurance
The state’s dominant auto insurer is branching into life insurance this week as it faces greater competition from large national companies such as Geico and Progressive Insurance in its traditional business.
Mapfre USA, the parent company of Commerce Insurance, said this week that many of its agents in Massachusetts will begin selling life insurance policies. The company will begin offering life insurance in other states later this year.
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Mapfre USA is the US subsidiary of the Spanish company Mapfre SA, which is making its first venture into life insurance in the United States. The international insurance giant plans to use its large network of independent agents who sell Commerce home and auto policies to pitch consumers on life insurance, said Jaime Tamayo, president of Mapfre USA.
Commerce, based in Webster, has long been the state’s largest writer of automobile insurance, but its share of the market has eroded since regulators loosened their tight management of the auto insurance in 2008, encouraging many national companies to start selling car policies in Massachusetts. Before deregulation, Commerce held 31.5 percent of the market share of personal automobile insurance. It now holds about 27 percent, Tamayo said.
“Certainly, we’ve lost some market share since 2008,” Tamayo said. “They made a dent. These companies are formidable competitors.”
The erosion of Commerce’s market share has stopped, he said. Now the company is seeking to grow by offering other insurance products. Mapfre sells life insurance policies in other countries.
Tom Skelly, an insurance agent with Wellesley-based Deland, Gibson Insurance Associates, Inc., said he expects other insurers will watch how Commerce does with its life policies.
Skelly said his firm plans to market Commerce life insurance to younger customers.
It is also a product that could appeal to customers who are looking to supplement insurance they already have from their employers, he said.
“We’ll find out if there’s a need,” Skelly said.
Mapfre declined to comment on how much its hopes to earn by selling life insurance.
The life insurance market is already dominated by its own giants, including Massachusetts Mutual Life Insurance Co., of Springfield, John Hancock Financial Services in Boston, and Prudential Financial, headquartered in New Jersey.
“We believe we can be a competitor,” Tamayo said. “We’re going to start modestly.”