MetLife to Merge With Boston Firm : Insurance: New England Mutual deal called a record.

Metropolitan Life Insurance Co. and New England Mutual Life Insurance Co. agreed Wednesday to merge, a rare consolidation of the tradition-steeped life insurance industry.

The merger, described as the largest ever among mutual life insurers, involves no exchange of stock or cash. As mutual insurers, the companies’ assets are owned by policyholders rather than shareholders.

The merger with much smaller New England Mutual would allow MetLife, the nation’s second-largest life insurer, to become a more formidable rival to No. 1 Prudential Insurance Co. of America. The merged company would hold more than $9 billion in capital and about $152.6 billion in assets.

The combination accelerates an infant trend in an industry that has seen few large mergers but is bracing for tougher competition in the financial-services sector.

Legislation in Congress that would permit banks to expand into other financial services is one of the forces driving insurance companies to try to become more efficient.

“I think that the key issue is the growing competitiveness, both within the industry and with outside parties trying to get in the industry,” MetLife Chairman and Chief Executive Harry P. Kamen said in a telephone interview.

The combination would wed New England Mutual’s affluent clientele with MetLife’s financial strength. In one potential benefit, New England Mutual sales agents could try to sell customers a broader product line that includes MetLife insurance products.

New York-based MetLife focuses on selling insurance and retirement products to middle-class clients, while New England Mutual targets high-income clients with its life insurance and investment products.

In addition, New England Mutual expects its credit rating to be raised to MetLife’s level, which could potentially attract more wealthy clients. Affluent policy buyers are particularly sensitive to low ratings of insurance companies.

The higher credit rating is also expected to make it easier for New England Mutual to dispose of troubled real estate assets that have dragged down its rating in recent years.

The deal proposes to keep New England Mutual a separate unit of MetLife. Under the pact, New England Mutual would retain its base in Boston and keep its own sales and other staff. Bob Shafto, its chief executive, would stay on in that position and as chairman.