John ‘Jack’ Byrne, Insurance Executive and Philanthropist, Dies at 80
John "Jack" Byrne is shown in his Norwich office in Feb. 1993. (Valley News - Geoff Hansen) Purchase photo reprints »
John “Jack” Byrne catches up on paperwork in his Norwich office in 1993. (Valley News - Geoff Hansen) Purchase photo reprints »
Hanover — John “Jack” Byrne, a renowned insurance industry executive who rescued several faltering firms, built his own multibillion-dollar company and gave millions of dollars to a wide array of Upper Valley social service organizations, died at his home in Etna Thursday following a long battle with cancer. He was 80.
“He was a remarkable individual and businessman, both a human being and a CEO,” Byrne’s longtime friend and business partner, the legendary investor Warren Buffett, said in a telephone interview yesterday. “He was almost one of a kind.” (An obituary appears on page A4.)
Byrne and his wife, Dorothy, established the Jack and Dorothy Byrne Foundation, a philanthropic organization that supports cancer research, education and volunteerism, among many charitable endeavors. Dozens of Upper Valley institutions large and small — Dartmouth College, the Upper Valley Haven, the Upper Valley Land Trust, The Family Place — have benefited from the Byrne Foundation’s generosity over the years.
“Their caring for the community is one of the amazing gifts that the Upper Valley has had for so many years,” said Sara Kobylenski, executive director of the Haven in White River Junction, where the homeless shelter’s main building is named in their honor.
Over the decades, their support has provided a foundation for the Haven’s work, she said. “It has meant so much in our hearts, in terms of their belief in us, because they are people who are wise in their philanthropy.”
Jeanie McIntyre, president of Upper Valley Land Trust, said the Byrne Foundation helped nurture local nonprofit organizations and made them effective.
“They stepped in when there was a good need and they did what they could to make the Upper Valley the (caring, compassionate) place we want it to be,” McIntyre said.
The Byrnes’ support helped the land trust buy its new building and conserve the Mink Brook Natural Area in Hanover, land in Woodstock and other valuable parcels. An annual contribution “allows us to have strong staff and a really professional organization” that can make conservation happen, she said. “Jack Byrne knew that strong organizations make good outcomes.”
Bob Snyder, a Hanover accountant, was one of Byrne’s business partners. Over the years, they bought and sold several companies together.
“He was very, very smart,” Snyder said. “He understood people and he was incredibly generous and had a great sense of humor.”
He recalled doing an analysis of a company that Byrne was thinking of buying and emailing it to him at 2 a.m.
Later that morning, when they got together, Byrne complimented Snyder on the job and thanked him for working on it so late at night.
“Boy, I really, really appreciate somebody doing that for me,” Byrne said, putting his hand on Snyder’s shoulder. “This is some of the best work I’ve ever seen.”
Then he pointed out a few things that needed to be fixed.
By then, Snyder said, “you’re ready to … do anything for the guy.”
But Snyder said business didn’t come first for Byrne. “I can absolutely tell you that he loved his family more than anything in the world,” he said.
A spokeswoman for the family said Dorothy Byrne was unavailable for comment yesterday.
The Byrnes’ three sons, John, Mark and Patrick, are Dartmouth graduates, and he “really got attached to Dartmouth,” Snyder said. The foundation has given generously to the college over the years. A dining room and classroom facility at the Tuck School of Business, and another building on Dartmouth College campus, bear the family name.
Byrne also was a frequent — and popular — visitor to classes at Tuck, said Paul Danos, the school’s dean.
“He was down to earth and spoke about ordinary things and about the very big financial transactions that he was involved in,” Danos said. “I think students really love to talk with someone who made the big deals.”
Byrne had a special flair for combining an “old school” emphasis on business fundamentals — accounting, personnel and operations — with innovation.
“He was extremely imaginative and creative, but at same time imposed very high standards,” Danos said. “It was an interesting combination of business characteristics.”
And it was hard-earned.
Once lauded — by Buffett, no less — as “the Babe Ruth of insurance,” and by Forbes magazine as the man who “made insurance look sexy,” Byrne began his business career doing office chores at his father’s small insurance agency in Wildwood, N.J.
In a 2000 profile headlined, “See Jack Run,” Forbes said Byrne’s father advised him to become an actuary — advice he followed by working as an actuarial assistant at Travelers Insurance Co. during the summers while earning a mathematics degree at Rutgers University. He then completed a master’s degree in mathematics and served in the Air Force before joining Lincoln National Life Insurance as a reinsurance salesman.
The Byrne legend began when he moved to Travelers.
After starting there in 1966 as sales consultant making $30,000 a year, he rose quickly to the position of executive vice president in charge of the entire life insurance operation. When he was passed over for the president’s job in 1975, he promptly quit.
“That was the worst day of his life,” his youngest son, Patrick, told The Associated Press in a 2008 interview.
In 1976, however, Byrne bowed to pressure from colleagues and industry regulators and took over a faltering auto insurer called Government Employees Insurance Co. — better known today as Geico.
“Why in the world did I accept? I don’t know, other than I had just been severely disappointed” by being passed over at Travelers, Byrne told Phil Gusman for a story on the insurance news website PropertyCasualty360.com, last year.
“Looking back on it, I say, ‘What a screwball I was to take that job.’ Why would a sound man with a heavy mortgage and two kids in school take that job?”
It turned out, however, to be a good career move.
Geico (now owned by Buffett’s Berkshire Hathaway Inc.) returned to profitability within a year.
“It was just a miracle,” Byrne told Gusman. “A lot of very lucky things had to break for me.”
Others say more than luck was involved — in particular, Byrne’s sharp eye on the bottom line. Famously, the AP noted in its 2008 interview, Geico had determined that it could shrink the size of the bills it mailed to its customers a bit so they weighed less than an ounce, saving the company pennies with every invoice.
“He was Mr. Cost,” Patrick Byrne said.
More dramatically, one of the first things Byrne did at Geico was demand approval for a rate increase in New Jersey. “Told no, Byrne yanked Geico’s license to do business out of a pocket, used a blunt phrase to describe its value, and handed it over to the state’s insurance superintendent,” the AP reported. Byrne pulled Geico out of New Jersey, laid off thousands of workers, raised premiums and shed unprofitable divisions.
Forbes said Geico lost $126 million in 1975. Its stock price fell from a high of $42 in 1974 to $5 by early 1976. Five years after Byrne took over, though — and after Buffett bought a $4 million stake in the company — its shares were trading at $15.
Today, Geico is a household name, one of the most widely recognized consumer brands in the country, and a major player in the automobile insurance industry.
“There are 27,000 people working at Geico now that only have a job because of what Jack did back in the mid-1970s when he saved the company,” Buffet said yesterday.
Nobody else, he added, could have turned the company around at that time.
“(Byrne) had the ability to talk to his troops,” he said. “Even though you can’t see over the next mountain, I can, and I’m going to lead you to that.”
Byrne served as chairman of Geico from 1976 to 1985, when he and Buffett worked together again on the deal to take Fireman’s Fund — another faltering insurer that Forbes said had racked up $356 million in pretax losses in 1983 and 1984 — off of American Express’ hands and turn it into a public company.
“Like he did at Geico,” Gusman reported, “Byrne executed a remarkable turnaround at Fireman’s.”
“We did indeed make a much better company out of it,” Byrne said.
Byrne led Fireman’s Fund until selling it to the Munich-based financial services company Allianz Group in 1991 for $3 billion cash. He kept the holding company, Fund American Enterprises Inc., which today is known as White Mountains Insurance Group Ltd., a Bermuda-based insurance holding company that has its principal executive office in Hanover.
Byrne served as chairman — along with a couple of stints as chief executive — of White Mountains, until his retirement in 2007. In 2009, he was inducted into the Insurance Hall of Fame.
He also led — and invested millions in — the Internet retailer Overstock.com, a company run by his son Patrick, through a nine-year period in which Patrick Byrne was involved in a highly public battle with short-sellers and analysts he accused of conspiring to damage the company’s stock.
As of yesterday White Mountains Insurance Group had a market capitalization of more than $3.5 billion. Its stock closed at about $560 a share.
“Byrne got that result by playing his hunches, not by following the advice of Wall Street or the accounting standards it slavishly follows,” Forbes wrote in 2000. “He reasons that standard accounting, especially in insurance, allows companies to hide losses and inflate earnings. … His approach keeps Byrne from having to underwrite an unprofitable policy simply to garner more premiums to satisfy investors, which contributes to the industry’s boom-and-bust cycles. Result: When the industry is hurting, Byrne is ready to buy.”
“Where Byrne goes,” Forbes said, “investors will probably follow — with good reason.”
Yesterday, Buffett recalled his friend’s “Irish sense of humor” and his extraordinary leadership.
“He could inspire other people to take on tasks that they otherwise might have thought were impossible,” Buffett said.
In a 1993 interview with the Valley News, Byrne described his hero, Buffet, as “the master.”
“I am in third grade,” Byrne said.
Yesterday, Buffett laughed heartily at that, and at a follow-up question: Was he a mentor to Byrne?
“We both thought we were mentoring the other guy,” Buffett said.
Aimee Caruso can be reached at firstname.lastname@example.org or 603-727-3210. Ernie Kohlsaat can be reached at 603-727-3302 or email@example.com.