MAPFRE Accuses AAA of Violating Long-Time Exclusive Marketing Agreement
The biggest auto insurer in Massachusetts is at odds with the AAA Northeast division it says is violating an exclusive 20-year joint marketing agreement that is worth $200 million a year in premiums to the insurer.
In a lawsuit in state court, insurer MAPFRE contends that AAA Northeast’s insurance agency has already begun selling auto insurance policies from its affiliated insurer, Motor Club Insurance Co. (MCIC), to its auto club members even though the exclusive joint marketing agreement (JMA) with MAPFRE is still in effect.
According to MAPFRE, the JMA gives it the exclusive right to market and sell to AAA Northeast members using the AAA Emblem at preferential or discount pricing under the state’s group insurance law until December 31, 2026.
But, the insurer alleges, AAA Northeast is seeking to “undercut MAPFRE’s relationship with Massachusetts consumers by improperly promoting and selling insurance” through MCIC starting January 1, 2026 — a full year before the agreement is set to expire, despite MAPFRE giving notice of AAA Northeast’s violations and requesting AAA to adhere to its obligations.
The insurer said the JMA, which has been in place since 2007, generated more than $200 million in premiums for MAPFRE from AAA Northeast customers in 2025 alone.
Under the agreement, MAPFRE pays commissions and a profit-sharing bonus to AAA for all MAPFRE auto policies sold to AAA members by the insurer’s participating agents.
“The extensive history between the parties has been mutually beneficial, with MAPFRE enjoying exclusive rights and AAA Northeast receiving substantial compensation in return,” the insurer claims in its lawsuit. “Massachusetts consumers have benefited from this relationship, as AAA Northeast members have received excellent automobile insurance coverage through MAPFRE at a competitive price.”
The JMA does allow AAA Northeast to sell up to 50% of its business (as measured by policy premium) through carriers other than MAPFRE, but these other carriers may not use the AAA Emblem, nor can any other carrier provide a discount or preferential pricing for AAA members.
The JMA can be cancelled by AAA if MAPFRE starts a group discount arrangement with any automobile club not affiliated with AAA or if the insurer’s AM Best rating drops below B+. MAPFRE is rated A (Excellent) by AM Best.
Documents with the complaint indicate that MCIC has filed discounted group auto insurance rates with the state insurance department. MAPFRE says MCIC first got approval for rates that gave AAA Northeast members a 2% discount. MCIC later refiled to eliminate the 2% discount but cut its rates 67%-84% with a January 1, 2026 effective date.
“For MCIC to offer any discount targeted at AAA Northeast members in 2026 would be a direct violation of the JMA and this deeply reduced rate is a ‘discount’ in everything but name,” the lawsuit contends.
The insurer further claims that AAA Northeast is violating the JMA in its use of the AAA Emblem on its website in relation to MCIC and by having its sales associates advising members on insurance mention MCIC but not mention MAPFRE.
“This entrance into the Massachusetts market is in direct breach of the JMA, as AAA Northeast cannot use its subsidiary, MCIC, to compete with MAPFRE, nor can it use the AAA Emblem to sell automobile insurance in Massachusetts under the JMA,” the lawsuit maintains.
MAPFRE seeks damages and injunctive relief, asserting claims of breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, tortious interference with advantageous business relationships, and violations of the state’s consumer protection law (Chapter 93A) that prohibits unfair business practices.
AAA Northeast has not yet responded to a request for comment.