Well, good morning, ladies and gentlemen, and welcome. This is the annual meeting of the shareholders of The Hanover Insurance Group. My name is Michael Angelini. I am very proud to be Chairman of the Board of Directors of this company. The board is here. I'll introduce them in a moment. Fred Eppinger, also a member of the board and our Chief Executive Officer is here. The plan is for me to lead the formal part of our meeting, and after our formal business is concluded, Fred is going to provide an overview of the company's progress over the past year and our current position and comment on the state of the industry and tell you why we all believe that Hanover is extraordinarily well-positioned to take advantage of many opportunities which are before us.
We are transmitting the audio portion of this meeting and the slides that Fred will be presenting through our website for the benefit of interested listeners. I welcome them as well. I call the meeting to order. As I mentioned, each of the directors and a number of the officers of the company are here. In addition to me and Fred, the other directors who are here are Jack Brennan, Kevin Condron, Neal Finnegan, Dave Galatano, Wendell Knox, Robert Murray, Joe Ramrath, and T. Taggart. Directors, I'd ask you to please stand and be recognized. To get on with the business. Computershare, which is the company's transfer agent, has delivered to me an affidavit of mailing indicating that notice of this meeting has been appropriately given.
A copy of that notice and the affidavit of mailing is going to be filed with the minutes of this meeting. We will have votes at this meeting, of course, and shareholders of record as of March 20, 2013, are entitled to vote. Representatives from Computershare are here today. They are the inspectors of elections, and are the inspectors for this election. They've informed me that the company has received valid proxies representing a majority of the outstanding shares. Therefore, I declare that a quorum is present. There are three items for consideration today. I'll briefly repeat them. The first item is the election of directors. I and Neal Finnegan have each been nominated to serve a two-year term as directors of this company, and Kevin Condron and Fred Eppinger have each been nominated to serve a three-year term. That's the first item.
The second item is the consideration of an advisory vote on executive compensation. Finally, the last item is the ratification of the appointment of PricewaterhouseCoopers to serve as the independent registered public accounting firm for the company for the year 2013. I, at this time, would entertain a motion with respect to these three proposals. Mr. Knox? Moved. Thank you very much. The floor is now open for discussion if there is to be any of these proposals. Then following any discussion, we'll distribute ballots to any shareholders who have not yet voted who are here and wish to have a ballot. If you are a shareholder and if you have a question regarding any of these three proposals, raise your hand and we'll recognize you, give you an opportunity to speak, ask you to state your name and state your question.
Are there any such questions? History repeats. All right. There will be a further opportunity for questions, by the way, following Fred's presentation. Any questions regarding the company, which anyone here would like to raise, will be open and received following Fred's presentation. In the absence of discussion regarding these proposals, the polls are open to receipt of ballots. Most of our shareholders have already voted, but if you have voted and you wish to change your vote, or if you have not voted and wish to vote, raise your hand and we will deliver a ballot to you. I see no hands raised, and therefore, the polls are closed. Relying on the votes that have already been submitted, I am pleased to announce that the nominees for election to the board of directors have been duly elected. Thank you.
The shareholders have approved the advisory vote on executive compensation, PricewaterhouseCoopers has been appointed. Their appointment has been ratified as the company's independent public accountant for the year 2013. In this formal part of the meeting, is there any other business? Well, let me turn to Fred Eppinger and introduce him. It's hard to believe for those of us who have been at this for the 10 years, but it was 10 years ago this year that we reached out to who was then a younger than he is now executive at Hartford, and convinced him to come to what was then a, I think fairly said, a troubled and struggling life and property and casualty insurance company here in Worcester.
It has been an extraordinary 10 years, we have benefited enormously from not only from Fred's extraordinary leadership, but from the leadership of people he has brought here, convinced to join the team, and from all of you. I know many of you in the audience are employees of this company. Those of us who have the responsibility of being directors are not only proud of what we've accomplished, but enormously proud of you and proud of your leadership expressed in so many ways. We're particularly proud that Fred made the journey, invited us to join his journey and to be where we are today. With that, Fred Eppinger. Thank you.
Good morning. What I'd like to do is I have every year, is give an introduction to those that don't know us as well, but for most of you, it's just to give an update of the progress of the company, and where we are, and probably most importantly, where we're going. It has been a interesting last few years. Obviously, a lot of things have happened, particularly around weather. I want to give everybody just a sense of where the company is, where it's going. With that, with the business of the day gone here, I'd like to leave a few points out there for us to consider. One, the institution is in a very good position. Probably the best we've ever had. We have a balanced book of business. Our businesses are quite distinctive now. Our talent has really never been better.
As we look into 2013, and we look at from where we are, we all feel pretty good. Now we have some work to do. While our financial position is strong, we need to continue to improve. We've done a lot of investment. We've done a lot of launching of new businesses. We've got a lot of new geographies that are maturing and getting better. We're fortunate to be on the right side, if you will, of momentum, but we need to continue to capitalize on that.
As we look forward, it is very important for us as we look into 2013, to continue our progress to build the world-class company that we so want to build, to improve the financial composition of the company, to continue to deepen our relationships with the best agents in the country, and to make sure that we create something that's sustainable as an institution. While we feel really good about where we are, we understand the stresses of the new world. I'm going to talk a little bit about the weather and the yields and what's happening in the competitive environment, all of which is relevant to us as we try to become one of the best companies in the industry. Let me just go through a few points today that kind of set us up.
Now, again, for those that don't know us as well, I thought I'd do a quick snapshot. For the first time in our history, we hit $5 billion in gross premium this year, became one of the most significant companies in the industry. We are now at about $2.2 billion in market cap, at about $3.6 billion in total capital. A much more diverse and sizable company than when we started 10 years ago, and a pretty significant company in the competitive marketplace that people talk about. If you look at our spread, it is much different than when we started. We have over 5,000 employees. We have about 4,300 employees in the U.S., with gross premium of about $3.8 billion. We have about 33 offices in the U.S., pretty widespread from where we were as a northeastern-based company when we started.
We have about 800 employees now overseas out of the Lloyd's platform and eight international offices, which represent about $1.4 billion of our business. As we look forward, our vision has not changed. For those of you that have watched me present for 10 years, there's a part of this chart that you've seen every single year. Part of it is I am boring, but part of it is because of the institution's focus. The goal from the beginning has been to build this world-class company, to have consistent returns through the cycle. As an institution, we've worked hard to try to build more distinctiveness.
Our focus has been on better portfolio business that's more distinctive, that adds value, better distribution, that brings franchise value to the better agents in this country, that gives us preferred shelf space so that we can both be successful today, but to grow together. To be with those that are investing and growing and innovative and can sell value. Probably is most important of all, is to attract the talent so that we can execute and have the excellence in underwriting we need to be distinctive in all these portfolio businesses with these great agents. That focus has been the same. The goal has been the same as well, to be consistently financially strong, to be vibrant in a very competitive marketplace. We like to talk about our industry as quietly difficult.
In 1999, if you look at the top 38 companies from 1999, 18 are gone. This is an industry that the wind get better and the weak lose and leave. For us to continue to flourish and grow, we're fortunate enough, and I think people remember that we're 161 years old as a company. We're one of the 40-year old companies in the New York Stock Exchange. What we're trying to do is build the distinctiveness so we can last another 160 years to flourish and be successful. As we look at where we are going, we get very excited about our ability to improve. The reason being is that it's pretty clear that what we have right now is a very strong mix of business getting better.
The balance of our business, both geographically and line, the distinctiveness of those businesses and operating models are better and get better every day. On top of that, we have repositioned the company really truly with the best agents in the country. We have tremendous momentum with probably 1,000 of the best agents in the country right now. Our ability to get better on all dimensions by the mix, by the distinctiveness of our business, by the penetration of the best agents, all three of those dimensions are available to us. If you look at our progress as we end 2012, we now have domestically a very balanced book of business geographically. We've gone from about 70% when we started 10 years ago in four states to about 60% in a way, to now basically a third in our previous lead four states.
We're a very balanced book of business across the geography. On top of that, our mix has gone from mostly personal lines to a great balance of both casualty and property, which is about 50/50, but also around a third of personal, third commercial, third specialty. That balance in a very volatile world is important. It is important to be able to sustain the kind of returns in a more volatile world going forward. Balance is excellent. Probably most importantly, was the hard work that each of our businesses and all of our folks have done to make each business distinctive. We are not a commodity player in any business. We are focused on value-added in every particular business we're in.
In personal lines, it is really about value-added accounts and the investment we are making in Hanover Platinum to be truly distinctive for those accounts that want value and multiple line coverage. If you look at what we have done in core commercial, we are very focused on industry solutions in middle market. We are very focused on having professionals responsive in small commercial. Not only are we efficient and easy to use in small commercial, we have distributive underwriters that can handle that account that needs underwriting. Very distinctive, very unique. If you look at Chaucer, we now have a very distinct portfolio of specialty business that has a global reach, whether it is any energy or aviation or marine. It is a wonderful portfolio that over time will become accessible to our partner agents in the U.S. That is also distinctive.
Our specialty business, which we have spent a lot of money investing in a platform that allows us to reach directly into the best specialists and retail agents in this country with our specialty capability. Very expensive, but very special. As we build that out, we have also created distinctiveness there. In every single business, we have something we can build from that is distinctive, that is different, that is things that people need. If you look at probably the most interesting part of our strategy, has been our value proposition around the best agents in the country. When we began, we were mostly with small agents in four states. We have now become a preferred partner for the best 1,000 agents in the country across their portfolio. Significantly different. We have $4 billion with the top 1,000 agents in this country.
We didn't have $500 million seven years ago. The ability to really change our position with the best agents in the country not only gives us a great future, but it also sustains our ability to be differentiated because these are agents that sell value. We have selected these folks because they are agents that know how to sell value and are consistent with our value proposition of our products and our industry solutions and our approach to the marketplace. We are at a very good place. Now, what is fascinating about this as somebody thinking about the future, these 1,000 agents, we represent about 4% of their business. The headroom, while it is a terrific place to be today, the headroom is also significant. These are agents that are growing as well. The upside for us is tremendous.
The position we have also is very supportive. From a financial point of view, while we have work to be done, we have a very solid position. Not only have we consistently grown our business, our ex-cat contribution, our earnings power of the company, continues to grow, which is important given the investments we have made, and we project it to grow even more in 2013. On top of the work we have done around mix and growth, we have also done a lot of work about trying to reduce our volatility, and I am going to talk a little bit about that in a minute. Our earnings power continues to grow. If you look at what we have done with shareholders, again, while we need to continue to improve, we have made good progress. Our dividend per share has increased every year since 2005.
If you look at our book value, it's the highest it's been in our 161-year history. If you look at the capital return to shareholders, we do, even when we make investments and we try to grow our business, we're thoughtful about returning excess capital. We've been able to return significant excess capital, about $610 million, back to shareholders since 2005. The total return for our shareholders has been good, even though we invest in our business and grow. We feel like there's a balance here and there's an approach here that benefits our shareholders. When you take it all together from a financial point of view, we've clearly grown our business. The purpose was not to just get bigger. The purpose has been to become stronger, more distinctive, more sustainable.
One of the things we're proud about is as the strategy comes together, our accident year combined ratios have significantly decreased every year. We need to do more. We need to continue to improve. What's happening is our mix is getting better and our position is getting better. Again, we're in a good place in 2012. I'm going to talk a little bit about the future, but let me just take a step back and say why we're excited about the opportunity we have in the industry. Because obviously, our industry has gone through a very difficult period, as has our economy and our country. It used to be that we used to say that the P&C business was separate, our cycle was separate from the economy.
What we've learned the hard way in the last five or six years is we're very tied to the economy, very tied. As construction got difficult and employment got difficult, our industry had a downturn that was unprecedented in our history. If you look at what happened since 2007, before this four or five-year period, 2007 to 2010 our industry had never had more than two years in a row downturn. In the Great Depression, we only had two years of a downturn. Our industry, because it's needed and it's necessary and often required, tends to be a little bit more resilient. That did not happen in this downturn. Partly because so much of our industry is around construction, which completely collapsed.
Partly because what you saw in workers' comp, which is a huge line in our business, was a total collapse because of employment, because of shift from manufacturing to services to lower-paid jobs. The entire industry kind of imploded in a bunch of lines. What we saw on the commercial side is four years of shrinkage, three years of shrinkage in personal lines. That stress to the system was severe. It not only affected earnings of all the participants, it affected jobs in the industry, it affected the strength of the balance sheets of the industry, which is only being kind of coming to the fore now. This was a difficult time. Now, what's interesting is we're coming back.
You can see in this chart, you can see in kind of the day-to-day workings around you, as construction comes back, as workers' comp comes back, what we're seeing is the growth is there. Our industry is coming back. Even though there's a little bit of wind at the back of the industry, there is tremendous challenges. It's a very unique time in our industry, something we haven't really experienced before of a dynamic of four or five things coming together to create tremendous disruption. Let me just talk about those things briefly, because it's an important part of who we are as a company and how we're positioned to continue to improve and to grow. There's five things that are happening in the industry, all of which that are coming together, to hurt the weaker companies, and particularly the smaller, weaker companies.
There's obviously the whole workers' comp results. Workers' comp results are in the 118, 120 range in many states, and it's very, very damaging to many, many companies who have over 30% of their premium. Many companies have over 30% of their premium in it. You have that challenge. Even though the growth is back, the results are still challenging. Because of healthcare reform, it's likely to be a very difficult line for a long period of time. The second point is that we just went through a seven-and-a-half year of price decreases.
We've had a couple years of turning around, but before that, with seven and a half years, in a period of inflation and a period where costs were going up, we actually had seven and a half years of decreasing, which has again, put a lot of pressure on a lot of folks' balance sheets. On top of that, because of the volatility of weather and other results in the regulatory environment, because of the crisis, there's been a lot of extra demands on capital. What has happened is, whether it's Solvency II in Europe or it's the dynamics of the models here in the U.S., on top of all that stress, there is a requirement, growing requirement for capital. Those three stresses are across essentially the industry.
I want to focus on a couple of them, which really are driving some of the opportunity and the movement of business that we're all seeing so much. One is low investment returns, and one is weather. I want to talk about each of them, because these are a little bit unique to what has occurred in the last decade, last five years for investment yield, but they're profound. They're something that has never really happened all together, all at once, and is creating a massive billions of dollars of business to shift around the industry and rebalance the industry. I want to talk about weather first. We just have to look outside, or if you're in New England, we all know what it's been like over the last couple of years. Weather is always a big part of who we are as an industry.
There's no question. The issue is that the nature and intensity of weather has changed dramatically. I show these dots for a couple effects. When we talked about catastrophes and weather, 10 years ago, we'd think about Florida hurricanes. We'd think about the Southeast. What has happened over the last few years, and frankly, the last few decades quietly, is that the weather has become different. A lot of the losses have come from what we call kitty cats, intense local storms, what we saw in New England in the floods and the hurricanes across the country. When you look at that, where they are is hard to know, right? In the old days, when we were growing up as kids, we used to talk about Tornado Alley, right? Kansas.
Well, if you recall in the last two years, we've had our employees in this building in Worcester, Mass., go in the basement. In Michigan, we had to go to protection as well. We all went to bed in Massachusetts and woke up in Kansas, right? The breadth of where these storms are happening are hard to predict, which changes our business, right? Because to predict where the costs are going to be is harder. The chart on the right is actually more important because we talk about tornadoes, but the real issue is really intense other weather, like hail, which is everywhere. The losses that are coming from hail or winter storms or straight-line winds are very broad. This is profound because our industry has been born from small, little local companies.
What we have is hundreds of companies that are concentrated in one state, two states, with huge micro concentrations. They were never built for this kind of volatility in a very small area. What is happening is the need for spread and price and the ability to balance your book. Now, if you look at the numbers that people say, "Well, it's only temporary," the reality is this has been a long time coming. In the decades of the '60s, the '70s, and the '80s, weather represented about 1% of our combined ratio. What we saw in the '90s, the decade of the '90s, is that tripled. That held in the 2000s, and in the decade of 2010, it went up again. These are decades. These aren't years. What we saw in 2012 is a spike.
We saw in 2011, we saw a spike even greater. Again, this is something that you can't ignore as an industry. This is something that you have to understand. This is something that you have to reflect in the way you think of pricing. Because this is something that you don't know what's going to happen, but it looks like it's going to happen. Again, it's something that it's changed the way people think about their mix, their spread, and how they do business. The second thing that has happened is yields. You all know the insurance industry, we're just one big balance sheet. We take in premium and we invest it in investments, typically investment-grade debt. While we're waiting to pay claims, we make money on the returns from that debt. That's what we do. We're all big investment portfolios, essentially.
What has happened is the returns on that have gone away. What we have seen since 2007 is roughly 300 to 400 basis points of reduction in the return that you get on your investments. Because of that, the economics of our industry change. Instead of making some money on investments and some money on underwriting, in essence, you have to make all your money from underwriting or most all your money from underwriting. If you're in the long-tail line businesses, which we used to take advantage of a lot of investments, the impact is very significant. What's the so what? If you have a 1% difference in interest returns on an average commercial policy, you lose 3% of combined ratio.
If you had a 95 combined ratio, and that's what you had returned, all of a sudden, with 100 basis points, 1% interest change, you had to get a 91 or a 92 to make the same exact amount of ROE. In total, what you're seeing is what used to be good at 95 is now good at 90. Nothing else changed, not inflation, not cost, not weather, just because of yields. The danger of that is, obviously, for our business, is you don't know your cost of goods sold sometimes for three, four, five years. If you're in a long-tail line, you're betting on inflation, you're betting on returns. All of this makes pricing and underwriting excellence go up. It makes balance sheet strength more important. Again, you go back to these little companies, they're having all this volatility.
The stress on small companies that represent about $110 billion of a $450 billion industry is tremendous. That group of companies has shrunk about $40 billion in the last 12 years. The likelihood that they'll continue to shrink with the stress is tremendous, which is why we're well-positioned. If you look at what's happening in the marketplace, the combination of those five factors I talked about, the volatility of the weather and the yields thrown in, is the decay of the results in the industry. Again, what I was just saying is that, we're at a 103 or 107 last year. That 107, 10 years ago, was a better result because we had yields. Today's results are as bad as they've ever been, in essence, if you think about the yields and the ROE implications of these numbers.
What you're seeing is pricing across the board. What's fascinating about it is typically we'd always used to talk about pricing because of a capital event, big storm or September 11th, but today it's not about a big event. There's plenty of capital in the industry. It's about getting enough return on your capital. This is a very gradual thing, but a real thing. If we look at it causes two things. It causes a market that we think will have good rate increases for the next few years. More importantly, what's happening is companies are rebalancing their portfolio. If they have a lot of long-tail lines and they've got a bad price position, they're just getting off of them. You've seen some companies get out of excess comp as an example because of the length of the tail.
You've seen a lot of weather-related movement. People get rid of micro-concentrations. There are $billions of business, many of the top 20 companies are shrinking as they change their mix. As a company like ours that's strong and has less share in a lot of areas, the opportunity to rebalance and to continue to grow and improve is significant because of this change. If you take all this in and you say, "How was 2012 for the company? How was 2012 with all this stuff going on and the opportunity?" It was a transition year for us. We made a lot of progress on a lot of our businesses. The weather affected us pretty significantly, particularly Sandy. We had some legacy issues with auto like the industry did and a couple of specialty businesses that we had to address.
We made tremendous progress. If you look at the numbers, we were able to grow our book value, we were able to grow our dividends, we were able to deliver about a 20% growth because of Chaucer coming into the family and repositioning of a lot of businesses in the West and a lot of growth we've had from our specialty businesses. Results-wise, wasn't very good. It was about 104. Our weather-related cats were 75% greater than normal, particularly driven by Sandy. Across the board, improvement. In many of the businesses, our position is better. What you saw is we were able to make money because of our balance. We were able to make about $1.23 in net income.
It was a good year in the sense we made progress. It said how important it is to continue to move forward and get a better portfolio, better pricing, better balance. As we look forward, probably the biggest issue that we're addressing and doing quite effectively is this volatility that I talked about facing the industry. We were a Northeast company. We had some concentrations in the Midwest and pockets in the South as well. Over the last 18 months, through transactions, through organic work, we got rid of about $175 million of premium that we have thinned out and changed our portfolio. Because of our momentum, we still were able to grow. That work we've done allows for much less volatility. What you look at when you look at Sandy is a little bit of a success story.
Clearly for us, Sandy was the second largest event in our company's history, over 161 years. It was the third biggest event in U.S. history. Our name is Hanover. We started in Hanover Square. This thing hit ground zero for us as far as our share. If you think about it, those areas where this storm hit was really where we started as a company. What is really terrific and what we should all be proud of is that the good work we've done over the last five or six years made this event very successful for us in a lot of ways. Our service was terrific. We got great grades in our responsiveness. We were able to pay claims on a timely basis and be well-positioned with our agents because of it. Our losses were much less than our share. Much less than our share.
What we had done is we were thoughtful about the kind of business, where it was, the spread of business. Any comparison of our share in these zip codes to what we had in losses was less, which demonstrated the good work we've done as a company. Matter of fact, we didn't even use our reinsurance. For the second largest event in our history and the third largest event in history, we didn't have to use our reinsurance, and we were still able to make money for the year, which all shows that we're making progress. It all shows that the balance and the strength of this company is tremendous and even better things are ahead of us. As we look at 2013, it's very straightforward.
There's really three things that we're focusing on as we stretch to become a world-class company now and go to the next step in our journey to be world-class. It's really around three things. We're continuing to work on our financial performance and strength. That has a lot to do with our operating model work and the maturity of some of our newer businesses, has a lot to do with pricing and making sure that retaining and improving the mix on policy by policy as we go forward. It has a lot to do with our portfolio in general and making sure that we have less volatility and less micro concentration and making sure that our mix is attractive and matches the geography and the opportunity in those geographies that we're in.
It has everything to do with deepening the relationships with the best agents in the country. Because while we are very good, we still have 4% share with the top 1,000. We still have many folks where we're good in a couple lines of business, but we have more to go on others. The opportunity is tremendous. All three of those levers are in front of us. If I look forward on why I get excited, you can look at what's happening to us every day right now. I use pricing and retention in personal and commercial as an example. Because of our distinctiveness of our businesses, because most of our businesses are with our partners, we've been able to get very good price increases as is needed across the business and hold our retention in both personal and commercial.
What you're seeing from a lot of our competitors is they've had a much deeper reduction in retention for the same price increases. Our ability to retain and improve our mix because of our closeness, because our professionals are closer to their agents, because we're more targeted in what we do, because we are doing our business with fewer agents and distinctive product, our ability to leverage what's happening in the marketplace and improve is getting better. You can see it in the numbers every day. On the scale and maturity, we all know what happened in 2009 and 2010. We invested a lot. We bought 9 companies. We did a couple renewal rights deals. We did a lot of startups and geographies. Because of that, we made investments purposely. I'm very proud that we did.
I think as a group, we did a good job changing our mix and investing in the right places. That said, this was something that had to get better, that we had to digest these investments, mature and get to a more competitive expense ratio on what you've seen as we've done it every quarter and every year. We have more to go, but the trends are excellent, and we're digesting and maturing the businesses that we brought into the company nicely. As far as specialty, one of our big focuses going forward is making sure that we have a distinctive, robust, profitable specialty business. We're now at $700 million, a nice balance. Each of them is maturing nicely. We're getting over 12% rate increase in our specialty businesses across the board. We're getting better every day in that area as well, and we feel good about that.
Of course, Chaucer. Chaucer has been very successful for us in the last few months. More importantly, it's a wonderful set of distinctive capabilities, a very cost-effective and efficient capital model, and great talent that we can apply to our partner agents and to our future to continue to help our diversification and our stability of earnings. It's worked out well. It's a business that has been very stable for a long period of time, and we think it can only get better as part of the Hanover family. As we kind of close out and talk about the next year, what's exciting right now is that we've assembled Really terrific talent, great product set, a great group of agent partners. Together, we have tremendous momentum to capitalize on this disruption I talked about.
We just had the opportunity to be with our best partners at President's Club, and the amount of momentum, and the amount of support we are getting because of the talent we have, because of the capabilities we have, is tremendous. Whether it's on our mix, or it's on pricing, or it's on our exposure management, or it's on our ability to leverage something like the Chaucer capabilities, each of these allows us to look forward and say, we are at the part of the journey where we're really getting to capitalize on what we've done, and really set ourselves up for a better and more stable, successful future. I'll wrap it up for everyone with four points. The first is that we do believe the economy's getting better. Slowly, frustratingly slowly in cases.
For our industry, it's still very challenging because of these unique factors of yields and weather. Therefore, we are pretty excited about our ability because of our strength of product and financial situation and talent to capitalize on that disruption. While there'll be some growth in the industry, the disruption will create an opportunity for us to use the skills we've built to capitalize on that and continue to grow. As I reflect on 2012, as challenging as it was in a number of target areas, we made really good progress on the areas that we attacked. We addressed Sandy very well. Again, I get a chance to talk to a lot of agents, and our service gets consistent and resounding kudos for how responsive we were. We have come so far as a company.
Those of you that were here during Hurricane Katrina, how challenged we were in 2005 to be responsive. It's night and day, where we are as a company, our ability to respond, our ability to handle things like that, and move forward. Our objective for the next 12 to 18 months is very simple. It is really about delivering our enhanced capabilities to our partners, continuing to improve our mix and our pricing and the financial underwriting results of our company, and really delivering value to shareholders. As Michael said, this is my 10th year and I am a little older. I feel even older than that some days, Michael. What I'm so excited about is how the company is coming together.
I get an opportunity every day to meet with employees or agents or customers, and you look around the room and you say, "Wow." If you thought about it, if I really thought 10 years ago that we'd be able to assemble the kind of talent and have the kind of commitment and energy that the company has today, I don't know if I would've believed it. It's up to us now to continue this journey and be as good as we know we can be. I want to thank everybody that has joined the journey and for our shareholders to be supportive of us and know that we are focused every day on making the company better. Thank you very much