Good morning. Good morning and welcome to all of you. Welcome to the annual meeting of the shareholders of The Hanover Insurance Group. I'm Mike Angelini. I have the great privilege of being chair of the board of directors of the company. The board is here, and I will introduce them in a minute. Let me particularly welcome those of you who are employees of the company and also shareholders. As you know, we have a very vibrant employee stock purchase plan. The board and management of the company is delighted that so many of our employees have chosen to express their confidence in this company, not only by the work they do every day, but by participating in the ownership of this company. We're delighted, in particular, to welcome you and thank you for your participation.
As chairman, my job is to lead the formal part of this meeting, which is somewhat scripted. After we conclude the formal part of the meeting, Fred Eppinger will, as he always does, provide an overview of the company's progress and our current position. Will comment on the state of the industry and discuss some of the reasons why we are so extraordinarily optimistic about this company and its future. This meeting is being transmitted by audio, and the slides of Fred's presentation, which he'll be making, are being transmitted through a webcast posted on our website for the benefit of interested listeners in various places, including the U.K. Let me, at this time, call the meeting to order, and introduce our board of directors.
In addition to me and Fred, the other directors who are here, all of the board is here, are Richard Booth, Kevin Condron, Cynthia Egan, Neil Finnegan, Karen Francis, Dan Henry, Wendell Knox, Joe Ramrath, and T. Taggart. I'd ask the board to stand and be recognized. Thank you. Somewhat sadly, this is the last opportunity I or anyone else will have to introduce to the shareholders, Neil Finnegan. Neil is, by force of limitations of our bylaws and age requirement, is retiring from the board, effective as of this meeting. I want to mention Neil's service to the company because it has been extraordinary, and we are very sad to be losing his services. Neil has been a director for 10 years.
He came to Hanover after a very distinguished career as the chief executive officer of several banks and of an insurance company, and has served as a director in a very versatile way. He has served on every one of the committees of the board, has taken on a number of special projects for the board. He has been an extraordinary board member. Neil is the former chairman of the board of Northeastern University, which is a great university in Boston, and more than anyone else, Neil led the transformation of Northeastern University from what was at one time a commuter school, to what is now one of the great universities of our country. I hope you will join me in thanking Neil for his great service to Hanover.
The company's transfer agent, Computershare, has delivered to me an affidavit of mailing, establishing that notice of this meeting was appropriately given. A copy of the notice of meeting and of that affidavit of mailing, provided to me by Computershare, will be filed with the minutes of this meeting. All shareholders of record as of the close of business on March 28th, 2016, are entitled to vote at this meeting, and most have. Representatives from Computershare are here today. They have been appointed as inspectors of election. The inspectors have told me that the company has received valid proxies representing a majority of the outstanding shares of the company, and though therefore a quorum is present. There are three items proposed for consideration today, and for discussion and voting. They are as follows. First, the election of directors.
Karen Francis, whom you've met, and I have each been nominated to serve as a one-year term, and Richard Booth and Joe Ramrath, whom you've also met, have each been nominated to serve for a three-year term. That's the first item. The second is consideration of an advisory vote on executive compensation, the so-called say on pay matter. The final item is the ratification of the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for 2016. I would ask for a motion with respect to this, and as one of his last acts, I'd ask Mr. Finnegan, will you make that motion? Thank you. Is there a second? I think I heard one. Mr. Roach, thank you very much. The floor is open for discussion.
Representatives of PricewaterhouseCoopers are here today, and if there are any questions with respect to their work on behalf of the company, they're available to answer those questions. If there are any other matters by any shareholders, we will entertain them now. Following any discussion, if there is any. If you are here and you wish to vote and have not yet voted, or if you have voted and wish to change your vote, we can make a ballot available to you. If now anyone present has any question regarding the three proposals which I identified, raise your hand and we'll come to you. And I'll ask you to state your name and address and whether you are a shareholder or a proxy.
If you have questions about other matters, that is independent of the three items that I've mentioned, we will certainly be happy to entertain those questions, but ask you to defer them until after the formal part of this meeting. Now we will entertain questions with respect to the three items identified. Are there any? Yes, sir. We'll bring a microphone to you. Stay right there. And who has one? Okay, go ahead. And please identify yourself, sir.
Yes, Mr. Chairman. My name is David Minasian, and I represent Carpenters Union Pension Funds that hold shares in Hanover Insurance. Carpenters Union Pension Funds collectively have $45 billion in assets, and they hold 486,000 shares in Hanover Insurance common stock. In addition to our long-term interest in Hanover Insurance, our New England Pension Annuity Funds invested $20 million in Mercantile Center in downtown Worcester, adjacent to Hanover Insurance's real estate investment at CitySquare. We would not have been able to do that if it wasn't for the bold initiative that Hanover took downtown in transforming economic development there. Not only we are proud shareholders, but we're proud to invest alongside that.
In terms of the election of directors, as that takes place, and on behalf of our pension funds, we would like to wish Mr. Eppinger well on his future endeavors, and we would really like to thank him for a job well done. Mr. Chairman, I'd like to commend the board on actions they've taken to institute a majority vote standard for the director elections. The board's actions have really created a meaningful director election vote for Hanover Insurance shareholders and has transformed uncontested director elections into meaningful accountability events. While many institutional investors oppose a classified board structure, we believe that a classified board structure alongside a majority vote standard really may create a long-term perspective for the company at the board level.
My question is, could you please describe the board's view on how a classified board structure may create that long-term perspective for the company?
Certainly. Thank you for your question. Our view is that this company has a strong and embedded business plan and culture. That the secret to our success, in part, lies in a long-term view and retention of that culture and of that plan. Our view is that by having a staggered election of directors, we retain consistency of our approach to the business affairs of this company. There will always be some directors who have service and years of service and can pass on to those who succeed them the company's business plan, its relationship with its CEO. We believe that this company, as reflected by the history, is on a trajectory and a very positive trajectory.
By retaining a board which has a classified election, that is to say, a certain number of the directors every year are appointed, we think we retain consistency to that trajectory. It's said that to have a clear view of the future, you need a clear view of the past. By having a classified board, we think we're in exactly that position. Thank you.
Thank you, Mr. Chairman.
Thank you. I appreciate the question. I know you're here with Jack Donahue, who's also attending and active in labor matters in Worcester and a great supporter of this company. We appreciate your support. I hope all the questions are just as tough. Thank you.
Is it an appropriate time to ask a question on the auditor or should I-
Absolutely.
Okay. Thank you, Mr. Chairman. Our funds believe that audit firm independence is critically important to the issue of the integrity of corporate financial reporting. To that end, I was curious if the Chairman of the audit committee or maybe a PwC representative could just briefly describe the lead partner rotation process that maintains that integrity in that process.
Great question. Joe, would you like to handle it? Joe Ramrath is Chairman of the audit committee of the company.
Good morning. Thank you for the question. We certainly, as an audit committee and as a board, believe very strongly in the need for a strong, independent public accounting firm to audit the firm's financial statements. The standard in the industry is a five-year rotation of audit partners. We've had that experience here at The Hanover every five years. We've had a new audit partner who's come in and taken a fresh look at the approach to the audit at the financial statements of the company. Our audit partner, Darlene Martin, is actually in her final year of service under that five-year kind of rotation plan. She will be working with us, and we will be working with other senior partners at PricewaterhouseCoopers to identify a successor.
We'll be obviously working closely with a new Chief Financial Officer when that individual is appointed. We expect to retain that kind of independence through that process.
Thank you.
Thank you, Mr. Minasian. Are there any other questions? Great. In the absence of any other questions, I declare the polls are now open. As I said earlier, if you'd like to vote, and you haven't voted, you may. If you've voted and would like to change your vote, you may, but you need to tell us. If you're either one of those categories and would like a ballot, please raise your hand and we'll get one to you. I see no hands raised, and therefore, the polls having been opened, they are now closed. We will rely on the votes which have been made. According to those votes, the nominees for election of the board of directors have been duly elected. All other matters submitted to the shareholders have been approved, and they have been approved by at least 98% of the shareholder vote.
We are now concluding the formal part of this meeting, and in the absence of any other further business, this formal part of this meeting is closed. Let me now move on and introduce Fred Eppinger. I will have more to say about Fred following Fred's presentation. Let me say by way of introduction that Wendell Knox, whom you've met, and I had the responsibility 13 years ago of finding a Chief Executive Officer for this company. It was a privilege that we had. I must say, among the good things that we've been able to do for this company, selecting Fred Eppinger as our Chief Executive Officer 13 years ago was one of the best things we've ever done for this company. I look forward to Fred's presentation to you, and will have a few words to say about Fred after that. Fred Eppinger.
Thanks, Michael. Good morning. It always makes me a little nervous when he's going to talk after me. Good morning. As I have every year for 13 years, what I'm going to do is give a little bit of a overview, kind of a state of the state of the company, and talk a little bit about how we see the next 12-24 months. In essence, the company, we feel, is in a incredibly strong position right now. 2015 was another very good year for the company, both improving our market position and our financials results. We've been very fortunate to have both record earnings in 2014 and then again in 2015. We have a lot of momentum to our business right now.
I would tell you that because of our distinctive position, we feel really good about our ability to continue to both grow the business, but also to grow earnings. It is a difficult time, and I'm going to talk a little bit about the market right now. It's a little bit of a part of the cycle where it's very challenging in pricing. There's a lot of excess capacity. There's very little growth in the world. We are uniquely poised given our strength and our distribution and our product set and frankly our distributed talent, to take advantage of the market and continue to grow and prosper for the next couple of years. Let me just go through some of those points. For those that don't know the company as well, I always like to give a quick overview.
We ended the year at almost $5.5 billion of gross premium. We are now currently at about $3.7 billion in market cap. Importantly, that breadth and capability that we've now built has created a portfolio that is pretty resilient and one that can, we believe, deliver returns through the cycle because of that breadth, resilience, and diversity. You see us at the end of the year kind of split equally among the four businesses, roughly. The international domestic, international specialty, the core personal, and the core commercial are all kind of quarter of the business. What you see is a business that is both financially strong and well-positioned. If you look at the geography of our business now, we have about 4,400 employees and $4 billion domestically.
We have about $1 billion if you take out the auto business we sold this year, and about 400 employees internationally. We're also very diverse geographically as a company now with a nice even spread. Very different than where we started. If you look at kind of a slide that most of you have not seen in the last 13 years. I think at the heart and soul of the institution is the focus and the focus on building something special. We talk about a world-class company, and the key to that was building something that was resilient for a long time to come, something that could be distinctive enough to earn top quartile returns through the cycle.
While we did a lot of good work at the beginning and when the weather was good, we had good years, we now find ourselves in a position that this is a company that can go through the cycle in a very strong way. That was through the partnership strategy we talked so much about by getting preferred shelf space with the best agents in the country, being aligned with them, creating a broad product set of value-added positions that is distinctive. Also having an operating model that not only delivers those value-added products well, it has distributed professionals that can react quickly and take advantage of opportunities quickly. What we've done with that strategy is position ourselves very uniquely in the marketplace today. If you think about The market.
I want to take just a second because we all know, we all live in the world that's a challenging world today. Our business is no different, and we find ourselves from the carrier perspective in a market that's going to see very little growth, organic growth. Our business tends to grow with GDP. GDP, as you know, most parts around the world is very slow growth. That'll continue. We also see an environment where there's very low yields. In our business, the inability to make investment returns puts stress on the ability to earn money. We have that front and center for the next couple of years. We also see a market where we have more excess capacity probably than in any time in history.
There's a lot of excess capital looking for ways to be deployed that pressures pricing, and we're seeing pricing in many of the commodity-like segments being pressured. We would argue lots of the business is under duress. Whether it's the reinsurance business or it's the national account business, a lot of places where that capacity flows in easily is quite challenging. On the carrier on the distribution side, what we've seen is a resilient independent agency distribution that's held its own, much to many people's surprise. What is happening is the consolidation, the have and have nots, where a lot of the better agents are growing at twice the rest of the agency world as they consolidate. They're also thinking about their economics. Imagine them in the same low pricing, low growth environment.
They have to, as they grow, think about better ways to deliver value-added service in a cost-effective way to their clients. They're under pressure to think about their business a little different and how do they collaborate, if you will, with their carriers to deliver that cost-effective service so that they can do their job better. In that environment, I look at our strategy and I say, "No one's better positioned." What we've done is avoided the commodity segment. We've avoided those places where excess capacity flows easily, focused on value-added, attractive segments that are hard to come in and out. We've built tremendous amount of capability to help agent economics to service their business with them, to consolidate their business to fewer partners if they'd like.
In that position, you've seen us be a little bit more resilient, grow a little bit more, retain a little bit better than most of our competitors. I see that being consistent over the next few years because this environment isn't going to change. This disruption that we're seeing in the marketplace, the consolidation on the carrier on the independent agent side is going to continue. We are well positioned in a challenging market to participate in this consolidation and continue to grow, which is an important notion as we look forward. If those of you that have followed us, what's fascinating about this is that I think what we've done is got there in time. At the beginning, this was about turnaround and stabilizing the company.
We had obviously lost a lot of money at the beginning of the decade, and were able to both stop the bleeding and fix the company. More importantly, from 2010, 2013, took the aggressive action to build a distinctive company, to build a portfolio that was sustainable, to build positions and bring in talent and work together to create a portfolio that was special. In some years, that was challenging as we did it. We all remember the 2011 year, which was so challenging, where we added 1,700 new people and that we filed about 1,400 new products. This was about a journey to build something distinctive. Where we are now, and we're right in the midst of it, is essentially executing against that portfolio.
Delivering that value that we built, growing those businesses, getting scale in many of those businesses, getting smarter about each of the opportunities that exist in the marketplace with this new position. That's where we live. If you look at the numbers, and as we ended up 2015, what you see is how dramatically different the company is from 70% in four states and personal lines to a company that makes two and a half times more than it did before with a more resilient portfolio that's spread. That gives us comfort that we can both sustain what we're doing but also give us a much more resilience stability in our earnings going forward. A different footprint than we used to have.
If you look at the short-term leverage that you've seen in our business, what's beautiful right now about the company, if we execute properly, is not only have we grown our absolute loss ratio, combined ratios and loss ratios have improved every year. What you're seeing is the earnings power of this company, the ex-cat earnings power, continues to grow. Pretty much all our businesses are showing a three, four-point improvement. Again, that kind of leverage of the installed base of our business sets us up really nicely. I would argue that we also have maturity in our businesses now. We kind of know where we are, what we're good at, what we're focused on, which allows us to capitalize quickly on market opportunities. Good trends, we feel good about it, and we think that this will continue.
One of the reasons we have some confidence in our success in the next year or two is this notion that while the market is challenging, both from a pricing and a retention point of view, we're a tad better than the market in pretty much all our businesses. What it shows is that both our strategy and our approach to the market has given us the stability. You've seen pretty nice consistent price leverage in the market as well as retention, and that'll earn through the market, as you all know, over the next few quarters and help us as we continue to get better. It's a stable situation we find ourselves in the market.
To take a step back and say, "Well, what's the magic for this company as far as the ability to grow?" The ability to leverage these better skills that we've demonstrated financially. We all know at the heart and soul of this company is this partner strategy. What we have decided to do over the last few years is focus on the best agents in the country and think deeply about how we help their economics and ours. We have fewer agents than any of the other major competitors we compete with. We are closer to those agents, more aligned to those agents. We invest more in tools and capabilities to help them more broadly than just products. That has created not only a closeness, if you will, an insight about them, it has demonstrated where the best opportunities are.
It's allowed us to invest more aggressively without risk, and it's allowed us to really align incentives so that we can think of opportunities together as they grow their business and buy agencies and double their size. If you look at what's happened, we are represented now. We ended this year with about 2,200 agents that represent about 2,800 what we call planning locations. They have much more locations than that, but those are the locations that are sizable, and they plan with us. Those agents that are our partners represent $120 billion of the $300 billion agency market. They represent a particularly significant size of the market, but it's a very small sub-segment of the 35,000 agents. It's a selectivity that we give them. They represent real premium.
I would also say they grow at about twice the rest of the market because what we've done is selected those that are winners, people that are buying other agencies that are investing in their business, that know how to sell value. What we have is a really nice position and a lot of interesting upside. One of the charts that we watch very carefully is how much premium growth do we have with our partners, and who is it with, and what does it look like? About eight or nine years ago, we had $400 million of business with the top 1,000 trading partners. We now have $4 billion with those top 1,000 trading partners. The reason that's been so successful and helpful to us is that now we're important to them, and they're important to us, and we have aligned incentives.
Our ability to have more insight about the business than anybody else is right in front of us because of the closeness we have. What's fascinating about our 2,200 partners, our share is probably 5%. Our ability to double that and double that again is in front of us. There is plenty of headroom, but the insight we gain from this strategy and the comfort we gain that we have a lot of our strength in our business from our partners really gives us great confidence, if you will, in what's going to unfold as these folks keep buying other agencies, they keep thinking about consolidating their business. Okay? One of our, in my view, most distinctive aspects of the company, and it's hard to replicate, is the network we've built.
We have one of the four or five best networks in the industry as far as not just the agency partners, but the talent we have distributed. We have roughly of the 4,000 people in the United States, we have now roughly 1,800 people distributed, 300 alone just in specialty. That's about twice on a ratio of total employees that our competitors have. We have a much more distributed, embedded network of professionals than anybody we compete with. Why is that important? That's important because we are closer to market, we react faster, we have more insight about the business that exists than anybody in the industry. We've invested in a way to cost effectively use that network for pretty small face value policies, which would be very difficult for somebody to replicate.
As we step back and we say, "Okay, consolidating industry, particularly consolidating at this level of the agency world, who else can reach that market and understand that market better?" It's hard to see somebody else as well positioned as we are. We are confident that this kind of investment, which would cost hundreds of millions of dollars to replicate gives us a slight edge as we think about the challenges going forward in the next couple of years. Now, at the heart of what we are is underwriters. I want to close on our leverage talking about our businesses. Obviously, at the end of the day, it's all about how good we are and how distinctive we are in the businesses we've chosen to be in.
We've spent a lot of time picking more attractive businesses than we used to have and better balancing those businesses. What's really nice about our portfolio now is in each of our businesses, we have real capabilities that are distinctive and in most cases, of significant scale so that we can continue to leverage them. In personal lines, we've talked a lot about Platinum and our ability. We now have 80% full account solutions. We can service and deliver a product that's quite unique to the middle market and near affluent in the United States, probably the best product that exists. Our ability to serve the agent's best customers is really as good as anybody that exists.
What you've seen is the profit of that business has continued to improve, and now the growth is starting as agents realize a better way to service that business is through our offering. It's not just about the product, it's about the service that we do for them. Again, a lot of work, but really nicely positioned. By the way, that's about a $90 billion business in the agency channel. The opportunity for us is there. The second business I have on the left side is the international specialty. Now, we all know how effective Chaucer has been for us and this wonderful partnership we've had over the last few years.
What's really exciting about Chaucer, while their market is challenging, and we probably won't see a lot of growth in the short term, the amount of investment we've made now to create a portfolio of specialty business that has access to markets, whether it's our distribution or you saw the latest announcement of what we're doing, the joint venture with AXA in Africa. That specialty capability will give us resilience in earnings for a long time to come. While in the short term it's challenging for growth, we know that's going to be a significant growth opportunity for the company as we look forward. They'll always have the strength in underwriting that they've demonstrated over the last decade. Both of those companies that I just talked about, great position. Let me take a moment.
I want to just touch on the three other businesses that I have on the right side, small commercial, middle market, and specialty, because we talk a lot about these businesses. We have invested a lot, but we're in a very interesting spot right now in each of these businesses. Let me just take a second for small commercial. It's a $78 billion-$80 billion business in the United States. You've heard a lot of things that people are doing at what I would call the micro small, the commodity business. They're going to go direct or they're going to go straight. It typically is one line of business, very commodity, and of little value in a lot of cases. Our approach is a little different.
We have taken an approach that it captures the entire business, from 50,000 down, both non-point of sale, the more kind of less automated to the automated. Our ability to service it is world-class now. We think of it holistically across many of the different industries. We think about it as a full account. We think about it as an operating model to assist agents who effectively do small commercial and add value. The average agent we deal with has 96 markets. In small commercial, they probably could get away with 12. That's where they're going to go over time to serve that business properly. People like us that have the skills that we have that can help them do that are in the driver's seat. What you've seen is a doubling of that business in the recent years with a significant growth.
If we continue to execute well, it's highly likely that that will continue. In middle market, it's a very similar story. We've invested a tremendous amount at what we would call the low-end of middle market or the schmiddle market, if you will, where we try to create more solutions, value added, if you will, at smaller face value in very interesting segments. Now virtually the entire middle market book we have is about solutions. Again, it positions us incredibly well. This is probably the most important business to most of our agent partners. It's their bread and butter. This is what they do every day. This is a place, again, that we've more than doubled our business. Again, we're positioned well. It's a challenging business. You got to watch pricing. You got to watch how you mix.
The quality of that business that we have has never been better, and we've never been better positioned. Finally, the specialty business. From the beginning, what we saw was that the economics of an agent has a lot to do with how they handle their specialty business, particularly small specialty. A lot of them are going through wholesalers and not capturing the true value. As these agents consolidate and get more sophisticated, they want to manage and drive that business themselves. What we've done is build a specialty business that goes directly to the retail agents, not through a wholesaler, that provides them with platform in a lot of these interesting specialty businesses that they have a lot of, a way to both manage that business, service that business, and capture that business in a more cost-effective way.
We've essentially gone from no business in this in the last 10 years to $820 million. Our ability to continue to grow this business in really interesting pockets of specialty is right in front of us. This is an area for me which is the most interesting because we know a lot of these partner agents very well. Every day, we learn more about this area of the business as they learn more about this area of the business, because remember, they've been buying agencies. They've been really thinking about their businesses differently, and this is a place that will just keep creating more opportunities as they think about their economics more deeply. Again, interesting. Well-positioned. I take a step back and I say, "Guys, where are we?" We're financially strong. We're doing pretty well. We can do better financially.
Our agency penetration and stability with our partners is great. They've given us great access to great opportunities. Our businesses are as stable and at scale with really interesting positions. If you look at our network, our talent is probably the best it's ever been. You add all those things together, and you say, even though the market is challenging, jeez, we're in a pretty good spot. Which is what you saw. First quarter, we had the best first quarter in the history of the company. The issue for us is to just make sure that we're focused and execute and keep our eye on the ball. Now, let me just talk about our shareholders. Obviously, in the last few years, we've invested a lot in fixing and building the company.
What we've also had is a philosophy that says, make sure that we get adequate returns. We're giving money back to our shareholders in a thoughtful way and creating value. That's our access to market. That's why we exist, is to be able to reward our shareholders and make sure we can continue to attract capital to continue to grow. I think if you look at our track record, we're proud of what we've accomplished. We've returned about $1.3 billion to our shareholders since 2005. That's virtually the same market cap for the company when we started 13 years ago. Both in dividends and share buyback. While we've invested a lot and retained capital to build our business, we are thoughtful, and we'll continue to be thoughtful to our shareholders and make sure that we return adequate returns to our shareholders.
If you look at our share price, again, very interesting. For me, if you look at it, some years we've challenged as we've built our business, and sometimes we were investing in the future. All told, we've been able to, in this timeframe, significantly outperform about 2.5 times the S&P and our peer group. The investments we've made at certain periods took time to develop. Frankly, it has developed nicely, particularly since the 2000s. You can see the 2010 and 2011, where we invested a lot altogether at a certain time, has really started to come back and return. Again, it's an important part of who we are. We don't think about this as the only end game.
We think about creating a great company that's sustainable, but it has resulted in, I think, the right kind of returns and a focus on the right kind of returns. Let me just close with a couple of points. We are out of the recession, there's no question. The economic environment is still tough. In our business, it is going to be a challenging period for probably the next three, four, five years with the excess capacity, the lack of growth, the disruption in the marketplace from lower yields. Within that environment, we believe we are well-positioned both to increase earnings like we've guided this year, but to continue to grow and grow earnings in the future as long as we continue to execute to our strategy and what we're trying to accomplish.
I'm very bullish on our ability to continue on the next 12 to 14 months. As I think about the future, we should all be very proud of what we've done the last 13 years. The reality is that the outlook is better in the next five than it was in the last five. I am really quite excited about what the team and Joe, the rest of our new CEO, is going to do. I think it has great potential for this company to really go to the next level. For me, just to close personally, let me make sure I do one last here, is really to say thank you. It's been an honor and a privilege to lead this institution and the great employees. I will be forever grateful to all of you.
I want to thank all our employees as well as our shareholders and our great partner agents for both their commitment, their support, and sometimes patience as we built this company. I also want to thank the board for giving me the shot 13 years ago. It's been a pleasure and an honor. Thank you very much.
Well done.
Thank you.
That was real. I was struck that Fred used a couple of times the phrase, "The magic of Hanover." You've just heard from the chief magician. None of us could express as fully as I'm going to try to express on behalf of the board our extraordinary indebtedness to Fred. As I think everyone in this room knows, last fall, Fred came to the board and announced his intention to retire from this company. He served us for 13 years. While it is unfortunate that we're losing Fred, we reflect on the fact that in the United States, the average tenure of a chief executive officer is six and a half years. Really, we've been quite lucky. We've had Fred for twice the average tenure of CEOs, and we've been blessed by his presence.
I'm going to try to say a few words about Fred, and I've selected this picture to begin because I want to talk about three words. One is passion, the second is commitment, and the third is accomplishment, and to do so in the context of this wonderful man. This picture reflects the passion of Fred Eppinger. It was taken at a time when Fred was announcing Hanover's commitment to CitySquare, a development in Worcester. In my mind, as I look back on a number of pictures of Fred, it reflected his earnestness, his commitment, his energy. Given the CitySquare connection, it also reflected his commitment to this community, which has been exemplary. If Fred ever decided to run for office, he could pick anyone he wants in Worcester. They're all his. Last night, the board met with Fred.
We reminisced about the time we've all spent together here at Hanover. As I mentioned, Wendell and I were there at the beginning, and I reflected on something I'll mention to you, which was when we interviewed Fred as a candidate to be CEO. We interviewed a number of people. We did so at the Hilton Boston Logan Airport in Boston, if I recall, Wendell, quite early. Candidates would show up well polished, well suited, with their resumes in hand and ready for any questions we could throw at them. Then along came Eppinger. Fred showed up, rushed in, his suit was a bit rumpled, and he came in carrying these books. Sat down and said, "You guys are really in the can. Let me tell you what you need to know." Right?
Presented to us over the course of about an hour and a half what became The Journey. Essentially Fred conducted, he was interviewing us to determine whether or not we were really worthy of joining him on The Journey. He had figured out by that time the road that he's taken us through so successfully over 13 years, and I'm sure Wendell's smiling. I'm sure you remember that as vibrantly as I do. I remember when Fred left the room, I said to Wendell, mentioned this last night, "Well, what do you think?" Wendell said, "Wow." It's been wow ever since. We have been really in very secure hands. I was going to spend some time talking about all that we've accomplished over those years. Fred's done a better job at that than I could.
In 2006, he published what became "The Journey," It's something he spoke about earlier, but decided to make it the catechism of this company and express to everyone who worked here at this company, in this document which he wrote, and I won't bother reading, what this company was all about. I said I wanted to talk about commitment. This document was a reflection of Fred's commitment to this company and commitment to all of you who work here and to the board and to the leadership team. It expressed in catechetical terms what we had to do and how we had to do it all together. It's no surprise that limited edition number one of "The Journey" reflected Fred's personal commitment by his signature. His leadership has not simply been leadership of passion. It's been leadership of action and leadership of demonstration.
He has had an impeccable effect on this company and an effect that we will be able to enjoy long after he unfortunately leaves us. This picture in my mind, I selected, because to me it reflects a sense of well-owned pride by Fred in all that he's been accomplished. It reflects that he's made it, that he made it for all of us, that he led us all through this journey and did it in a very successful way. Last night, as I said, we had a meeting with the board and Fred, and it was enjoyable and heartwarming and sometimes sad, but all of us buoyed by what has been accomplished. The board, and I got to accept some responsibility for this, we had this idea: what should we do for Fred? What can we do to signify, to make a tangible gift to him?
The idea came that we should give him a chair, This is the story about unintended consequence. It would be the first Hanover chair. You have these chairs, they go to university and university chairs and stuff. They make them up in Gardner. It was great. We had this chair we're going to give to Fred. Come to our surprise, the chair showed up yesterday at the place we had dinner. It turned out to be the least inappropriate gift one could imagine for Fred because it turned out to be a rocking chair. No. We all have views of Fred, but none of us can picture Fred in a rocking chair. One of the board members, I won't identify her, said maybe we should get him an Afghan and a kitten to go with it.
I hope Fred will someday excuse us. If you see a rocking chair on eBay with a Hanover insignia on it- you know that Fred's scrapping around for a few bucks. We had a better idea, I hope you will join us in this. As you know, this company gives annually President's Awards to those individuals who best reflect the accomplishments of this company. I said I want to talk about passion and commitment and accomplishment, We've accomplished a great deal. We felt at the board that the best present we could give to Fred was something that will be forever in this company, a reflection of his accomplishment, and of his leadership.
The board has voted, what you are seeing is a reflection of that vote, the designation of the President's Award forever now in the future as the Frederick H. Eppinger President's Service Award. Let me read to you this resolution. "Whereas Frederick H. Eppinger has served The Hanover Insurance Group with extraordinary distinction from August 2003 until June 2016, whereas in doing so, Mr. Eppinger has demonstrated vision, strategic thinking, commitment, and passion to this endeavor. Whereas Mr. Eppinger also committed the company to serve all of its many constituents, including policyholders, shareholders, agent partners, employees, and the communities in which those employees work and live. Now therefore, the board of directors hereby establishes the Frederick H.
Eppinger President's Service Award, dedicated to the recognition of Mr. Eppinger's many contributions to the company, intended to annually reward and recognize employees who best reflect the passion, commitment, loyalty, vision, and community service orientation that Mr. Eppinger embodied at The Hanover, who exhibit remarkable strategic thinking to advance the company's objectives." Fred, we give this to you with great thanks.
Thank you very much.
As you know, the board has selected a new CEO to succeed Fred. He is a man you will all enjoy. Fred mentioned him earlier. He will be a great successor to Fred, but he will never replace Fred Eppinger. We are grateful to you, Fred, for your extraordinary service. Thank you very much. Is there any other business? Okay. We are adjourned. Go back to work.