Hanover Insurance
Encyclopedia
The Hanover Insurance Group, Inc. , based in Worcester, Massachusetts
, is one of the oldest continuous businesses in the United States, still operating within its original industry. It was the original name of a property-liability insurance firm born in 1852, and it remained a publicly-traded company under that name until the early 1990s, when it changed its name to Allmerica Property & Casualty Companies.
In 1996 it spun off Allmerica Financial Corporation as a property and casualty insurance and financial services holding company, which then bought out the original firm, and grew to become one of the 500 largest publicly-traded companies of the United States. In 2005, Allmerica Financial Corporation reverted its name back to Hanover.
to shareholders every year since 1853.
Though remaining a relatively small company over the next 1¼ centuries, Hanover's stock performed extremely well through the malaise of the 1970s, as did many small companies during that period. Between 1971 and 1983, Hanover's common stock
price, from its low point early within that decade, multiplied in price by over 23 times at its eventual peak. During the late end of that period, in 1981, it split its shares three-for-two. The stock was traded publicly on the Over the Counter (OTC) exchange, as the NASDAQ
was still commonly referred to back then.
The rapid growth of the company continued into the mid 1980s, and in 1984 it split again, two-for-one, and by 1985 nearly doubled in price once more, trading then at a high price/earnings ratio of 61. At that time the company was debt-free, and carried a book value
of nearly US$330 million. However, by then the company's earnings had fallen to about a third of what they had been in the early 1980s.
In 1987, the company split its stock two-for-one again, and was yet again on its way to another double in price, even as its PE ratio dropped back down to a bargain five times earnings. Those earnings had grown to nearly US$100 million, more than double what the company had earned at the prior peak of 1981. Book value by 1987 stood at US$550 million.
However, by the early 1990s recession, Hanover's earnings had declined once more, to about US$50 million.
By 1994, Hanover Insurance had changed its name to Allmerica Property & Casualty Companies, Inc., and had moved from the NASDAQ to the New York Stock Exchange
, where it traded publicly under the new symbol, APY. The company's rapid growth was back on track, as the company shares again split, three-for-one in 1994. By 1994, book value had doubled from the late 1980s to $US 1.2 billion.
In summer 1995 the stock price climbed above its 1993 peak high, as the economy came out of its soft landing, and PE ratios began their historic late 1990s ascent.
It held a diversified group of insurance and financial services companies with total assets of $19 billion. Allmerica Financial products included insurance and retirement savings accounts and group benefit programs, mostly variable annuity and variable life products. That company in turn owned about a majority 60% of the original entity, Allmerica Properties & Casualty Companies.
By year end 1995 the new independent holding company (AFC) had a book value of over US$1.4 billion, nearly identical in size to its debt-free predecessor, which remained a majority-owned also a publicly-traded subsidiary of AFC.
In early 1996, Allmerica Financial Corporation began to trade on the NYSE, under the new symbol AFC.
At the time, John F. O'Brien was the chief executive officer
of Allmerica Financial Corporation.
By 1997, Allmerica Property & Casualty Companies was among the top 30 property and casualty insurers in the United States, based on net written premiums. By then its regional focus included Michigan as well as its traditional Northeast territory. It operated two primary subsidiaries. One subsidiary, The Hanover Insurance Company, was the company's original business.
And the second subsidiary, Citizens Corporation, was a publicly-traded stock which issued personal property and casualty insurance. It had been a dividend-paying public company since 1993. By 1996, Citizens Corporation had shareholders equity of over US$650 million.
On February 20, 1997 Allmerica Property & Casualty Companies, Inc. filed U.S. Securities and Exchange Commission (SEC) Form 8-K
, following its announcement on the day before of its intention to be acquired by Allmerica Financial Corporation (AFC). The surviving company, AFC, would acquire the 40.5% of Allmerica P&C that it did not already own, for approximately US$800 million. Shareholders of APC would receive $17.60 in cash and 0.40 shares of AFC. The merger deal was expected to be completed by the third quarter of 1997.
The stock of Allmerica Property & Casualty Companies then ceased to trade, and its old ticker symbol APY was ultimately taken over on the AMEX exchange by Aspyra Inc., a microcap stock with US$20 million market capitalization.
On August 28, 2003, Frederick Eppinger was elected as President, Chief Executive Officer and Director of Allmerica Financial Corporation.
On September 18, 2003, Allmerica Financial Corporation announced that Robert P. Restrepo, Jr. had resigned as president of the Allmerica Property and Casualty Companies.
Worcester, Massachusetts
Worcester is a city and the county seat of Worcester County, Massachusetts, United States. Named after Worcester, England, as of the 2010 Census the city's population is 181,045, making it the second largest city in New England after Boston....
, is one of the oldest continuous businesses in the United States, still operating within its original industry. It was the original name of a property-liability insurance firm born in 1852, and it remained a publicly-traded company under that name until the early 1990s, when it changed its name to Allmerica Property & Casualty Companies.
In 1996 it spun off Allmerica Financial Corporation as a property and casualty insurance and financial services holding company, which then bought out the original firm, and grew to become one of the 500 largest publicly-traded companies of the United States. In 2005, Allmerica Financial Corporation reverted its name back to Hanover.
Hanover Insurance
Hanover Insurance Group was established in 1852. It paid a cash dividendDividend
Dividends are payments made by a corporation to its shareholder members. It is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business , or it can be distributed to...
to shareholders every year since 1853.
Though remaining a relatively small company over the next 1¼ centuries, Hanover's stock performed extremely well through the malaise of the 1970s, as did many small companies during that period. Between 1971 and 1983, Hanover's common stock
Common stock
Common stock is a form of corporate equity ownership, a type of security. It is called "common" to distinguish it from preferred stock. In the event of bankruptcy, common stock investors receive their funds after preferred stock holders, bondholders, creditors, etc...
price, from its low point early within that decade, multiplied in price by over 23 times at its eventual peak. During the late end of that period, in 1981, it split its shares three-for-two. The stock was traded publicly on the Over the Counter (OTC) exchange, as the NASDAQ
NASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
was still commonly referred to back then.
The rapid growth of the company continued into the mid 1980s, and in 1984 it split again, two-for-one, and by 1985 nearly doubled in price once more, trading then at a high price/earnings ratio of 61. At that time the company was debt-free, and carried a book value
Book value
In accounting, book value or carrying value is the value of an asset according to its balance sheet account balance. For assets, the value is based on the original cost of the asset less any depreciation, amortization or Impairment costs made against the asset. Traditionally, a company's book value...
of nearly US$330 million. However, by then the company's earnings had fallen to about a third of what they had been in the early 1980s.
In 1987, the company split its stock two-for-one again, and was yet again on its way to another double in price, even as its PE ratio dropped back down to a bargain five times earnings. Those earnings had grown to nearly US$100 million, more than double what the company had earned at the prior peak of 1981. Book value by 1987 stood at US$550 million.
However, by the early 1990s recession, Hanover's earnings had declined once more, to about US$50 million.
Allmerica Property & Casualty Cos
In 1993, earnings reached another peak, up fivefold from the recession years, at over US$250 million. The stock price also reached another multi-year peak that year.By 1994, Hanover Insurance had changed its name to Allmerica Property & Casualty Companies, Inc., and had moved from the NASDAQ to the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
, where it traded publicly under the new symbol, APY. The company's rapid growth was back on track, as the company shares again split, three-for-one in 1994. By 1994, book value had doubled from the late 1980s to $US 1.2 billion.
In summer 1995 the stock price climbed above its 1993 peak high, as the economy came out of its soft landing, and PE ratios began their historic late 1990s ascent.
Allmerica Financial
In late 1995, the company spun off Allmerica Financial Corporation, with US$200 million long-term debt assigned to that company, as a new property and casualty insurance and financial services holding company. In 1994, Allmerica Financial Corporation had pro forma earnings of almost US$75 million before extraordinary charges, and then over US$140 million in 1995.It held a diversified group of insurance and financial services companies with total assets of $19 billion. Allmerica Financial products included insurance and retirement savings accounts and group benefit programs, mostly variable annuity and variable life products. That company in turn owned about a majority 60% of the original entity, Allmerica Properties & Casualty Companies.
By year end 1995 the new independent holding company (AFC) had a book value of over US$1.4 billion, nearly identical in size to its debt-free predecessor, which remained a majority-owned also a publicly-traded subsidiary of AFC.
In early 1996, Allmerica Financial Corporation began to trade on the NYSE, under the new symbol AFC.
At the time, John F. O'Brien was the chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of Allmerica Financial Corporation.
By 1997, Allmerica Property & Casualty Companies was among the top 30 property and casualty insurers in the United States, based on net written premiums. By then its regional focus included Michigan as well as its traditional Northeast territory. It operated two primary subsidiaries. One subsidiary, The Hanover Insurance Company, was the company's original business.
And the second subsidiary, Citizens Corporation, was a publicly-traded stock which issued personal property and casualty insurance. It had been a dividend-paying public company since 1993. By 1996, Citizens Corporation had shareholders equity of over US$650 million.
On February 20, 1997 Allmerica Property & Casualty Companies, Inc. filed U.S. Securities and Exchange Commission (SEC) Form 8-K
Form 8-K
Form 8-K is a very broad form used to notify investors of any material event that is important to shareholders or the United States Securities and Exchange Commission. This is one of the most common types of forms filed with the SEC...
, following its announcement on the day before of its intention to be acquired by Allmerica Financial Corporation (AFC). The surviving company, AFC, would acquire the 40.5% of Allmerica P&C that it did not already own, for approximately US$800 million. Shareholders of APC would receive $17.60 in cash and 0.40 shares of AFC. The merger deal was expected to be completed by the third quarter of 1997.
The stock of Allmerica Property & Casualty Companies then ceased to trade, and its old ticker symbol APY was ultimately taken over on the AMEX exchange by Aspyra Inc., a microcap stock with US$20 million market capitalization.
On August 28, 2003, Frederick Eppinger was elected as President, Chief Executive Officer and Director of Allmerica Financial Corporation.
On September 18, 2003, Allmerica Financial Corporation announced that Robert P. Restrepo, Jr. had resigned as president of the Allmerica Property and Casualty Companies.
The Hanover Insurance Group
On December 1, 2005, Allmerica Financial Corporation changed its name to The Hanover Insurance Group, Inc. and is the parent company of two divisions, Hanover Insurance and Citizens Insurance. It publicly trades under its new ticker symbol since that time. Those companies serve customers with auto, home and business insurance.The Variable Life and Variable Annuity insurance businesses of Allmerica Financial Corporation became CommonWealth Annuity and Life Insurance Company, a Goldman SachsGoldman SachsThe Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
Company.
In January 2009, CommonWealth Annuity and Life Insurance Company acquired First Allmerica Life Insurance Company (FAFLIC) from The Hanover Group. FAFLIC includes closed blocks of traditional whole and term life insurance (originally issued by State Mutual Life Assurance Company of Worcester, MA), as well as variable annuities and variable universal life products sold in New York (originally issued by State Mutual Assurance Company).