Independent agents appointed with The Hanover Group will be watching closely over the next few days as the insurer attempts to forge a path forward following the departure of its chief executive, president and director, Frederick Eppinger.
Eppinger, who confirmed he would be stepping down in 2016, is widely credited for The Hanover’s success since assuming the post in the early 2000s. In the hours after his Wednesday announcement, shares of the insurer slipped 2% and analysts began discussing the long-term ramifications of life without Eppinger.
If you listen to Meyer Shields, an analyst with Keefe, Bruyette & Woods, The Hanover’s lack of an obvious successor will mean company shares will continue to trade down slightly and investors will pause for reevaluation.
Rumors have even circulated that The Hanover may be a ripe target for acquisition, given the industry’s current trend toward greater consolidation.
Shields is more hesitant on that score, though, telling the
Worcester Telegram that he doubts a buyer is imminent.
“If that had been the case, Mr. Eppinger likely would have stayed with the company through that transition,” he said.
Regardless, Eppinger leaves behind a “pretty impressive” track record that the analyst thinks will be difficult to forget in a hurry – particularly for its appointed agents, whom Eppinger was always quick to credit for any of the insurer’s success.
“Agents want certainty,” Shields said. “It’s important to settle this question [of a successor] as quickly as possible.”
During his tenure, Eppinger helped guide the company from a 2002 accumulation of $306.1 million in net losses to its 2014 profit of $282 million. He oversaw the expansion of The Hanover into California and other western states, restored the
Hanover Insurance Group name (previously Alllmerica Financial Corp.) and supervised the acquisitions of specialty insurer AIX Holdings, chemical insurer Verlan and attorneys specialist Professionals Direct.
“Fred made extraordinary contributions to The Hanover during what was a critical period and he has positioned our company for the future with a distinctive strategy and distribution platform, a highly experienced team, and a growing global presence,” said Hanover Board Chairman Michael Angelini. “We appreciate all that Fred has done for our organization and wish him all the best.”
