American Family Mutual Insurance Company
This is a biography of a man that dedicated his life to one company: Mapfre
Ignacio Hernando de Larramendi,
... got listed in the civil war in 1936 to fight in the north of Spain. He was only fifteen by that time. After the war he concluded his studies and received a bachelor's degree in Law in 1941.
He said himself that he "accidentally entered the insurance business. First in the state Security Institute, than at the British Royal Insurance Company where he could agree with the strategy and had to leave. He entered Mapfre in 1955, which was at a crisis at that time.
Mapfre was originally an acronym: Insurance Mutual for the landowners cooperation in Spain (Mutualidad de Seguros de la Agrupación de Propietarios de Fincas Rústicas de España). This benefit society was founded in 1933 to insure to agricultural labor accidents.
Since than, MAPFRE started a diversification process with other mutuals (robbery, fire, individual accidents, etc). In 1944 the mutual agreed to offer health (illness) insurance for a contract period of ten years.
The contract was not beneficial and in 1954 the company had accumulated large debts, due to pharmaceutical costs and lack of sufficient resources.
In these circumstances, Ignacio Hernando de Larramendi took over the control of the management of the Mutual.
He managed to re-contract the pharmaceutical obligations and postponed the debt payments of these.
Solidarity has been as seen as the main forces of the mutual. Yet the life and work of Larramendi added certain mechanisms to achieve the required efficiency for the Mutual to survive as a company.
He refortified the national network of the company by substituting the delegates that were working on a commission basis to an office-network of local managers and employees on the payroll. He also hired university graduates and trained them abroad.
IN 1966 the company was restructured again because of a new law to serve work accidents. This FREMAP organization was brought into life to serve this insurance area and got independent soon. Mapfre concentrate in the private insurance business.
In 1985 the Mutual was restructured into three autonomous units (automotive, other risks and life and reassurance). The mutual still is the largest shareholders owning more than 50% of the capital outstanding.
The new structure made it possible to finance the international growth.
One of the issues Larramendi was struggling with since the seventies was a banking entity that was missing. Only in 1990 a bank with three offices was created. Currently this bank figures as the head of the credit operating system of the company.
From 1955 to 1990 Ignacio Hernando de Larramendi has occupied the maximum executive responsibility of MAPFRE: until 75 as managing director and between 85 and 90 as president of the board of supervisors
For the international expansion the company added an editorial office which publicized about insurance and business in South America.
In his writings, Ignacio Hernando de Larramendi has been stressing the importance of social responsibility; "the company is not obliged to offer an efficient service, but it is also subject to social obligations" Many foundations (On Medicine, Culture, studies, etc) have been established during his mandate.
The effect of social responsibility was also felt in the organization: he didn't allow family of employees to work for the company.
(Source: The Ignacio Larramendi Foundation)
The newspaper El Mundo dedicated a obituary to Ignacio Hernando de Larramendi, titled: the captain of the Mapfre miracle (written by Eduardo Suarez, 8th of September 2001).
"Heterodox entrepreneur, catholic of the old standard, Carlist maverick, and work slave... started at Mapfre at 32 after an excellent academic career.
The first he did when confronted with the situation he fired the chauffeur and lowered the salaries and fired half of the other employees, about 100 at that time. Of those 100, only one was angry at me, the others understood it, he said. He faced this lay-off personally, which is the only one in such a circumstance he said.
... most meaningful perhaps is the legacy to his nine children; they inherit only his spirit: "I never wanted my kids to be like those millionaires children who always lived a fatal life. I think they have benefit knowing they wouldn't inherit anything. Neither income nor salary because don Ignacio prohibited all his family to occupy positions in the company..." Born the 18th of June in 1921, died on September seventh in 2001
H.J.B.
© Hans Bool
American Family Insurance | The Bennett Family
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