NEWSMAKER-Rock'n'roller takes charge at John Hancock
By Bill Rigby
Wednesday May 31, 9:04 am Eastern Time
NEW YORK, May 31 (Reuters) - David D'Alessandro is probably the world's only insurance chief with a guitar signed by the Rolling Stones in his office.
Or at least he will be on Thursday, when he takes over as the youngest-ever chief executive of John Hancock Financial Services (NYSE:JHF - news), the No. 13 U.S. life insurer, which went public earlier this year.
D'Alessandro, 49, who majored in journalism and public relations, and once owned a memorabilia store in Baltimore, is not a typical insurance manager. But then he doesn't have a typical job -- getting the 138-year-old John Hancock performing as a stock company after years as a slow-moving mutual.
``We're about 60-70 percent of where we need to be as a stock company'', said D'Alessandro, in his office on the top floor of the John Hancock tower, Boston's highest building, in an interview with Reuters earlier this month.
``Culturally, I think a lot of change has happened,'' said D'Alessandro, surrounded by pop posters and a pine table that would not look out of place in a country kitchen: ``But there's lots more to do.''
D'Alessandro will get the chance to push these changes when he takes the reins from 62-year-old Chief Executive Stephen Brown, who will remain chairman. He inherits an insurer with 10,000 employees, a market value of $7 billion, $128 billion in assets under management, and revenues of about $8 billion a year.
DOING IT HIS WAY
D'Alessandro has been shaking things up at Hancock for 16 years already. When he joined in 1984 as head of corporate communications, his straightforward style marked him out immediately at the old-fashioned mutual company.
``There's no way he's ever going to make it. A guy like that will get buried,'' said one Hancock executive after D'Alessandro's first meeting at the firm, recalls John Connors, Jr., chief executive of advertising firm Hill, Holliday, Connors, Cosmopulos, Inc., and a member of John Hancock's board.
D'Alessandro made his first real mark when he was put in charge of Hancock's loss-making health division in 1986. He turned them around to make a small profit in a couple of years, then told the board the company should sell the business.
A couple of years later it did, and the board saw the wisdom of D'Alessandro's idea that an insurer can really be good in only one or two areas.
After D'Alessandro went on to take charge of Hancock's main retail life insurance and annuities businesses in 1991, he steered the company to concentrating on upscale customers, and established Hancock at the top end of the market.
D'Alessandro's ascent to the top was sealed when he was made president and chief operations officer in January 1998. The next year, in 1999, Hancock's annual profit jumped to $613 million in 1999 from $444 million in 1998.
In 16 years, D'Alessandro turned every part of the company around to his way of thinking, Connors said. ``He's a very creative businessman and a blue-collar style executive -- he works.''
MAKING A NAME
At the same time, D'Alessandro put Hancock in the public eye with ground-breaking sports sponsorship including the Boston Marathon, the Olympics, and Major League Baseball in the United States, all firsts for insurance companies.
``He's stood out in the company and in the industry as visionary,'' said Mike Bell, managing director of strategic consulting firm Monitor Clipper Partners, who has known and worked with D'Alessandro since 1987.
``He made Hancock one of the best-known insurers,'' said Bell, and with the sports sponsorship, helped turn insurance into a more customer-focused business. ``Coming from a public relations background, he has a market-oriented perspective. Before that, insurance had not been very customer-friendly, '' said Bell.
``But when you are trying to change organisations that have strong histories, its inevitable that you are going to break some glass,'' Bell said: ``There's no question that there are a lot of people over the years that were not very happy with him -- but that's what happens when you get someone who excels and is different and a leader''.
NEW STOCK ON THE BLOCK
So far, D'Alessandro's straight-talking style and Hancock's performance have also impressed Wall Street analysts and investors.
Hancock's shares have risen about 30 percent to around $22 in the four months since its $1.7 billion initial public offering at the end of January.
So far Hancock's employees have made a handy paper profit on the stocks, as they all got an option to buy 200 shares at around $14 not long after the IPO, although the directors, including D'Alessandro, have only been able to buy stock with their own money. Stock options will not form part of their compensation for another year.
``He's a fluid thinker -- that's how it struck me, he embraced change,'' said Joan Zief, life insurance analyst at Goldman Sachs, who has a market outperformer rating on the life insurer's stock.
``You need a personality that doesn't get entrenched, and sometimes the best part of the resume of a life insurance manager is what they've done other than being in life insurance,'' Zief said.
``Wow!'' is all Merrill Lynch analyst Edward Spehar had to say after Hancock's first quarter results, announced in May, grew 40 percent, smashing Wall Street estimates.
``We need 18 months in this market,'' D'Alessandro said, ``for the market to really see us''.
``Acquisitions? I don't have an appetite for anything too big,'' he said: ``I'd like to run the company for a period of time and get it settled as a stock company first.'' |
