The Hanover Insurance Group, Inc. is an insurance company based in
Worcester, Massachusetts
Worcester ( , ) is the List of municipalities in Massachusetts, second-most populous city in the U.S. state of Massachusetts and the list of United States cities by population, 113th most populous city in the United States. Named after Worcester ...
. It was the original name of a property-liability insurance firm established 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.
[Allmerica Financial Corporation](_blank)
/ref>[Standard & Poor's Stock Guide, various issues]
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
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
.
History
The Hanover Insurance Group, Inc.
The Hanover Insurance Group was established in 1852 near Hanover Square in Manhattan
Manhattan ( ) is the most densely populated and geographically smallest of the Boroughs of New York City, five boroughs of New York City. Coextensive with New York County, Manhattan is the County statistics of the United States#Smallest, larg ...
in New York City
New York, often called New York City (NYC), is the most populous city in the United States, located at the southern tip of New York State on one of the world's largest natural harbors. The city comprises five boroughs, each coextensive w ...
. It paid a cash dividend
A dividend is a distribution of profits by a corporation to its shareholders, after which the stock exchange decreases the price of the stock by the dividend to remove volatility. The market has no control over the stock price on open on the ex ...
to shareholders every year since 1853.
Though remaining a relatively small company over the next 125 years, Hanover's common stock
Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other C ...
price multiplied between 1971 and 1983 by over 23 times from its low point in the decade to its eventual peak. During the 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, now called the NASDAQ
The Nasdaq Stock Market (; National Association of Securities Dealers Automated Quotations) is an American stock exchange based in New York City. It is the most active stock trading venue in the U.S. by volume, and ranked second on the list ...
.
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
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 ...
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
By 1994, Hanover Insurance had changed its name to Allmerica Property & Casualty Companies, Inc. It moved from the NASDAQ to the New York Stock Exchange
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...
, where it traded publicly under the new symbol, APY.
In summer 1995 the stock price climbed above its 1993 peak high, as the economy came out of its soft landing
A soft landing is any type of aircraft, rocket or spacecraft landing that does not result in significant damage to or destruction of the vehicle or its payload, as opposed to a hard landing. The average vertical speed in a soft landing should b ...
, 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. 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.
On October 11, 1995, Allmerica Financial Corporation began to trade on the NYSE
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District, Manhattan, Financial District of Lower Manhattan in New York City. It is the List of stock exchanges, largest stock excha ...
, under the new symbol AFC. The initial offering price was $21.00.
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.[ALLMERICA PROPERTY & CASUALTY COMPANIES INC Unscheduled Material Events (8-K) Exhibit 2](_blank)
, EdgarOnline, SEC Form:8-K, Filing Date:2/20/1997/
In 1997 Allmerica Property & Casualty Companies, Inc. was 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. 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
In business and investing, term microcap stock (also micro-cap) refers to the stock of Public company, public companies in the United States which have a market capitalization of roughly $50 million to $250 million. The shares of companies with a ...
with US$20 million market capitalization.
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 Sachs
The Goldman Sachs Group, Inc. ( ) is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered in Lower Manhattan in New York City, with regional headquarters in many internationa ...
Company. In January 2009, CommonWealth Annuity and Life Insurance Company acquired First Allmerica Life Insurance Company (FAFLIC) from The Hanover Group. In 2008, Hanover acquired AIX Group. In 2011, it acquired Chaucer Holdings.
In August 2020, The Hanover Insurance Group dropped the malpractice insurance of Mark S. Zaid, the lawyer for the whistleblower in the Trump-Ukraine scandal. Hanover said it had reviewed Zaid's website and discovered that his law firm practiced whistleblower
Whistleblowing (also whistle-blowing or whistle blowing) is the activity of a person, often an employee, revealing information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe, unethical or ...
law. Zaid said that Hanover's action served to protect those who wish to silence whistleblowers.
References
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Companies listed on the New York Stock Exchange
Financial services companies established in 1852
Companies based in Massachusetts
Companies based in Worcester, Massachusetts
Insurance companies of the United States
1852 establishments in Massachusetts
Companies in the S&P 400