President, Chief Executive Officer & Director, HANOVER INSURANCE GROUP INC
WBJ Executive to Executive: Jack Roche & Dr. Eric Dickson
In this new recurring Worcester Business Journal feature where leading executives interview each other, the president & CEO of ...
About John Roche
Jack Roche, president and CEO of Hanover Insurance Group, said in May 2025 that the company views the impact of tariffs as manageable. He stated that the company has analyzed which parts and construction materials come from which countries and how they might be affected by tariffs, and that the company understands where costs will come from and has a sense for how to adjust pricing. Roche added that the company has diversified its earnings stream, spread its risk geographically, and become less susceptible to any one industry, describing the current earnings stream as the best in the company's history. He summarized the environment by saying "the world is getting riskier" and that the company's goal is to avoid passing along every cost increase to consumers. Roche has also discussed the insurance industry's transformation, stating that the COVID-19 pandemic accelerated digitization and changed how the company interfaces with agents and customers. He said the company was able to have over 95% of employees work from home productively and is pursuing flexible work arrangements. Roche has emphasized the company's focus on innovation, data and technology tools, and its commitment to contributing to communities. He has also been involved in charitable efforts, including fundraising for cystic fibrosis research, where he encouraged employees to donate and use United Way designations to support the cause.
Transcript (22 segments)
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Brad0:00
So this is a first for Worcester Business Journal. We are launching a new feature called Executive to Executive. In print, it will be a Q&A style feature where heads of leading organizations and leading companies in Central Massachusetts sort of just chat and talk shop about what it's like to do business here, and hopefully learn a little bit from each other. Then we can learn a lot from them. So the first one, very strong out of the gate, we have Jack Roche, President and CEO of The Hanover Insurance Group in Worcester, and then we have Dr. Eric Dickson, the President and CEO of UMass Memorial Healthcare in Worcester. So Jack and Eric, I'll let you guys take the wheel now. Go back and forth. I'm actually going to jump off the video, so just to let you two guys have at it, but I will be behind the scenes.
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Eric Dickson0:59
Well, thank you Brad, and thank you Jack for the opportunity. This is a real pleasure. I guess I always wanted to be a reporter, so to get to interview Jack Roche right out of the gate, I'm doing all right. So Jack, I'll start you off with the first question if you don't mind. A lot of people understand how COVID-19 has impacted health care, obviously caring for the patients, but I don't think a lot of people understand how it's impacted the insurance industry. So how has it impacted you?
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John Roche1:32
Well, as you can imagine, almost all of our customers, whether they be families or businesses, have been affected by this pandemic. So we insure businesses as well as personal goods and families. We're acutely aware of all the challenges that folks are going through these days. There is an impact on us from a business standpoint. There are certain types of coverages that apply to the pandemic, whether it be workers compensation or some select business interruption type coverages. Probably the biggest thing from a business perspective is that as companies in particular have to shelter in place and the economy pulls back a bit, we essentially insure the GDP. So as the GDP comes down, so do our revenues. We'll have to endure a little bit of financial setback on the top line, but we'll be fine. We have a profitable, well-balanced portfolio, so I have every confidence that our business will endure this and be there for our customers. Internally, Eric, I would tell you that I'm really impressed with the way our 4,300 employees have been able to respond. Our technology and our virtual capabilities have exceeded our expectations, so we're ready to serve, and our culture is alive and kicking despite the obstacles that we're all facing together. We're in reasonably good shape. Maybe I'll bounce one back at you if that's okay. This is a pleasure, really a joy, this format that Brad has put together here. I was reflecting as we were talking about doing this interview that soon after I took this role two and a half years ago, you were one of the first people that rang my phone and asked to come pay a visit and extended your assistance to help me as I transition into the CEO role of The Hanover. But you also expressed an interest to further strengthen the networking of the business community and the overall leadership community inside of Worcester, and you thought that business leaders could play a critical role in the community development. So maybe you could elaborate for the Worcester Business Journal audience on your passions around this.
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Eric Dickson4:23
Yeah, and I do try to visit with every new CEO and stay in touch with all of the CEOs in Central Massachusetts, really for two reasons. One is that our mission is to improve the health of the diverse populations of Central Massachusetts. That's why UMass Memorial exists. Our owners are the people of Massachusetts as a not-for-profit. An important part of improving the health is ensuring that good jobs are available for people. It gives them a sense of purpose, it gives them the ability to feed their family, and good housing is available. I think that all of the businesses in this region, and especially Hanover because it's so big and has played such a leadership role for decades in terms of developing this community, we all have this responsibility to try to create a thriving community. That means that we have to do things that we might not typically do as part of our business: invest in downtown, as Hanover has done, put money into lower income housing, hire from zip codes that are of the poorest people in the region. We have zip codes in Central Massachusetts and Worcester in particular where there's a 15-year difference in life expectancy two miles apart. So I think the businesses in this community have a responsibility and an ability to impact the health by their hiring practices, by their investment practices. I see it as part of my job in healthcare to make sure that business leaders understand what a positive impact they can have on the overall health of their community and of their own employees. The second thing is you're a customer to us. We sell health care services, and you have one of the largest employee bases in Central Mass. So I like to go out and meet the customers and understand where we're doing a good job and where we need to work on it. I get a lot of great information by going out and meeting with the HR directors and the CEOs of local companies about how well we're meeting their needs and ways that they can sometimes save money on the cost of their medical insurance, which is probably a significant cost for your employees. I've learned a great deal by doing those early visits and continuing to network with local CEOs.
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John Roche7:18
Well, that's awesome, and I for one was very appreciative of that early visit. It shows you really do care about our community. Thank you. So COVID has changed our business forever in a couple of different ways. I like to say that the genie is out of the bottle when it comes to telemedicine. Our providers, our physicians, often didn't think they would want to do this, our patients didn't think they would want to do this, and then suddenly COVID strikes, and it's been accepted by the providers and the patients, and it continues on even past needing to do virtual medicine visits. We're also seeing changes in our workforce, whether we bring them back or keep them at home. Do you have a sense as to whether in your industry there's going to be more virtual, more work from home? Is there an equivalent of a telemedicine visit in an insurance business?
Yeah, Eric, I believe that this pandemic and the economic fallout will be a major catalyst for industry change inside the property and casualty business. Both in terms of how we interface with our agents and our customers ultimately, I think is going to change. It's been changing, but I think the pace of change will accelerate substantially. I'll mention a couple of things on that front, and then I'll come back to the employee piece because we've been on a journey as a company to provide more flexible work arrangements, and I think this situation is going to allow us to accelerate that. But we want to make sure that we come to a healthy balance because we have a culture where people like interacting with each other. Quickly on the industry front, much of the process and the interaction between customers and the independent agents that we work through and the insurance carriers is still pretty archaic if we're really honest with ourselves. I've been at this for 35 years, and while the computers are a little bit different and there's a lot more data being involved, the interactions are still not what other industries have evolved to. So we have been on a path to increase our digitization and our ability to augment face-to-face interactions with better ways to allow customers to explore insurance solutions, better ways to settle particularly smaller claims that don't require the face-to-face interactions. As you can imagine, this pandemic has forced that to happen almost overnight. We're using cameras and video apps, and the take-up rate is substantial. Now people are comfortable working in this kind of remote environment and interfacing, and frankly, we're seeing some productivity improvements almost instantaneously. You can imagine appraisers that are looking at cars that have had accidents that have to drive out and look at the car, and those things are now being done. The technology was evolving, but the take-up rate was relatively slow. This will truly serve as a catalyst to get some of that capability to just come alive faster, and people have grown comfortable with this new way of doing business quite quickly. Again, on the employee side, we're really excited that we are able to stand up over 95% of our employees to work from home, to be safe, to be productive. That's a very positive thing. But we also hear from particularly some people where their personal arrangement at home isn't highly conducive to working from home. So we've tried not to broad brush across 4,300 employees with one homogeneous view or message. We've been trying to accommodate those that have more challenges working from home, but at the same point, take advantage of the fact that there are many that can. As we look forward, we're really excited about taking the flexible work arrangement approach that we were advancing before the pandemic hit. We were up to about 47% of our employees had some form of flexible arrangement, whether that was working Fridays from home or shortening their work week and doing some things after hours, all relatively well managed. But this will allow us to go faster. I heard somebody use a term the other day: not work-life balance, but work-life blending. I thought that was a nice terminology because work-life balance makes it feel like you don't want to work hard, but work-life blending says that we can really be productive, but it shouldn't really matter when and how I do my work as long as the outcomes are what we were looking to achieve. I thought that was a great concept.
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Eric Dickson13:04
Okay, so let me move down my list here of questions that I have for you. I think you and I have talked about this in the past, but we're both internal successors to the CEO role within our firms. That's a very positive reflection on both companies, frankly, when you can develop the talent from within. But obviously there are challenges with being that internal successor. You've worked with a lot of folks, a lot of folks that were your peers before. So maybe you could share with the audience what that transition was like for you and how that internal succession helped you in that transition, and what were some of the challenges that came with being the insider.
Yeah, and in some ways it was even a little bit harder for me because I was a student here before as a medical student and a resident, and people remember you in those roles often and have a hard time thinking of you as CEO. So I had a great boss for many years here, John O'Brien, who was the longest-running CEO of UMass Memorial Healthcare. When John was retiring and making this transition, he had picked up the organization in really rough shape when he came in as CEO and turned it around. What I watched him do then is what I recognized I needed to do. He immediately set a vision for the organization and said we want to be a top 10 academic health sciences center. We had cups that said that and t-shirts, and it was a little bit hard to imagine given where the place was at that time, but John said we want to be here, and that's the goal, and that's what we're working towards. He established that vision, and for the 11 years that he was CEO, he stayed true to that and worked towards it despite a lot of things that were trying to keep the organization down, an external environment, governmental regulations, everything that could come in. But one thing that most importantly I learned from John is establish that vision and drive to it. But as John was leaving, he did six weeks with me and just introduced me to everyone and transitioned the role. He was such a good friend during that period of time. He said, 'Eric, you're going to have to come out with a new vision. You can't just pick it up and stay with that. They're going to want to see something different.' So I put everyone in a movie theater, all the top 400 managers in the organization, and what the team had come up with is really focusing on two things: perfecting the customer experience, which was our patient and their family's experience, and perfecting the caregiver experience. That piece had been neglected, I think, and forgotten about how important it is to take care of our workforce. So we came up with a new slogan, and we had a contest for coming up with an image symbol that would remind us of it. What we finally came up with was 'Best place to give care, best place to get care.' Every move we made moving forward, every decision we made, was going to work to make things better for our patients and our people. We said 'best place to give care' intentionally first, not because it was more important, but just so everyone understood that if we didn't take great care of our people, our frontline workforce, they weren't going to be able to take great care of our patients. So it became a compact of sorts between management and the frontline workforce: we're going to do everything we can to take care of you, and we'll depend on you to do everything you can to take great care of our patients. It's driven us now for seven years, and certainly through the crisis that we've just been through. We had to make a decision about layoffs and furloughs. A lot of other healthcare systems had a big decline as we did in revenue. We have a culture built on respect for people as the foundation, and we made the decision we're not going to do that right now. This is scary for everyone. They're coming in and working in a hazardous environment, they feel insecure with their job, and we probably could have saved five to ten million dollars in doing that. But I believe because we didn't, we've recovered from this much faster than the other healthcare systems around us. So establishing that vision, I think, is the absolute key, and then holding to it so it's not just a tagline, it actually becomes part of the culture. Putting our people first so they can put our patients first has been what it's all about. It was on John's advice, and he's been a wonderful friend throughout the most recent crisis. I'll get a text from him: 'Great article I saw of you in the paper, you're doing a wonderful job.' I think it's a source of pride for him that somebody that he helped develop moved into the role, and I know it's a source of pride for Fred seeing you in this role. When I bump into him, he just eats laudatory about the great job that you're doing.
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John Roche18:52
Yeah, that's awesome. I think we've talked in the past that vision-based organizations have an advantage. Employees need to know where they're going, they need to feel like they're part of something special. That's certainly what attracted me to The Hanover 15 years ago. I thought Fred and the team had put together a pretty good business strategy, but more importantly had laid out where they thought the industry was going, not where it was, and how we could reposition the company to be an even more significant player and eventually leader in this business. Most people know in the Worcester community that we had had a bit of a fall from grace. The life and annuity business had gone sideways on Allmerica, but there was this precious property casualty company within called The Hanover, and we were able to reposition that and let the property casualty company come to the forefront. What made that possible was a similar story where Fred and the team had laid out a vision that said the industry will transform, independent agents will need to think of their insurance carriers as partners, not just suppliers of insurance. We were able to spend really the last decade and a half repositioning the company to be a very unique partner to the best distributors in our business. That's what got 4,300 people jazzed about what we're doing because they saw that's where we were going. Each day, each month, each year, as that vision became a reality, the engagement level of the firm just got stronger and stronger. So there's a real parallel between the journey you've been on and certainly the journey we've been on.
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Eric Dickson20:54
So Jack, one of the things that surprised me becoming CEO was that people want you to comment or take a position often on things that have nothing to do with your business, or seemingly have nothing to do with your business at the time. Climate change: I got a note from one of our doctors who wanted me to support a bill related to climate change, and obviously it has a long-term health impact. And we see the social unrest that we have right now because of racism still existing in this country. It always seems like these potential hot button issues that you'd want to stay away from, but people look to us as CEOs to take a stance or a position, or at least to use the megaphone we've been given in these roles to speak on things. How do you balance that? Your personal beliefs, what's best for the company, with over 4,000 employees you're never going to say something that everyone's going to agree on. Have you found that to be a challenge, and any advice for me in terms of how to manage this in this role?
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John Roche22:21
Well, there is no doubt that comes with the job these days. I think that as a publicly traded company, a good portion of the capital that we attract is coming from active institutional investors who now look beyond just quarterly earnings and pure financial views. They look at the sustainability of the company, and they use an ESG type format, which is environmental, social, and governance. They essentially grade publicly traded companies on how well they treat the environment, how well they help the society that they work and live in, and how well the companies govern, including whether they're a good corporate citizen. So I think in some ways this was harder five and ten years ago where there was this feeling that investors wanted to get higher return on equity and they didn't care so much about how you got the job done. Today it's a requirement, and that helps. You do have a forum by which you can speak about the multiple stakeholders that you're trying to satisfy: shareholders, employees, in our case our independent agents that we do business with, and certainly the communities that we work in. What I'm most grateful for, and again one of the reasons why I joined the firm, is that the culture that was built here always made that important long ahead of it becoming fashionable. So if you work for The Hanover and you came here because you wanted that to be part of the new and improved company we were building, but to your point Eric, it is the challenge. I think it's to make sure that you don't take your personal views and drive them through the front door of the organization. You have to get a sense for what it is that a company should be stepping up on. You and I have talked about the racial equality issues, the unrest that lives today. This is a problem for our society, and essentially it's a problem for our business if we don't step up and help make some of the systemic issues go away and get better. So we've been spending time inside the firm with our executive team, which is called our Partner Group where we truly partner to run this company. We have some business resource groups inside the company, including a Black American group called Kinship Village. I recently had a session with our board of directors on this topic because of the importance of it. I've been trying to bring those views together and trying to establish what it is beyond the inclusion and diversity efforts that we've made over the last two and a half, three years to really advance our awareness and our inclusive environment. What else can we do? I won't go into it in detail here, but we're going to step up and we're going to do more than just say nice things. We're going to change the way we recruit into the community, we're going to change the folks that we engage with to try to help some of these issues come alive and really sustain themselves so that when we look back a year or two from now, we don't say a lot of people said some nice things but all that enthusiasm and engagement went away. The number one thing that I heard from our folks inside the company is that they want to see these courageous conversations perpetuate. They want to see us create venues and forums to have the conversation, to get people closer to what the issues are so that we can start to solve together. Frankly, we're really motivated to do so.
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Eric Dickson27:06
Wonderful. So building off of that, I would say we've been through a lot over the last few months with this pandemic. Being in the healthcare business, I can only imagine this has been daunting for you and your team. I was wondering, as particularly the surge built and you started to feel the temperature rising in terms of the capacity within the hospital, the concerns that were coming upon your employees, particularly when some of the PPE maybe wasn't optimal in the early days, what did you do to try to keep the optimism and to keep folks encouraged when things were feeling quite desperate? I wonder if you could share some of that with us.
You know, one of the interesting things in medicine is that when it's slow and you have time to complain about things, and there's no pressing issue and there's no critical patient before you, that's sometimes when it's the hardest time to keep people motivated and moving forward. But the trauma rolls in the door, the stroke rolls in the door, something happens, and in medicine it's almost automatic. We just put all that aside, we focus on the care of the patients, we put the patients first, and we take care of them. This we saw coming, and everyone just really united against this common enemy that was COVID. We were going to save as many lives as we could. We knew that we would lose people to this, we knew it was going to get bad, but what we talked about is saving as many lives as we can. My job really was to say we will get through this, this will peak, this will come down, and we will keep you safe. I tried to spend as much time as I could on the floors in the COVID units taking care of patients, working in the COVID tents, so that the workforce didn't think I was asking them to do something and put them into a hazardous environment that I wouldn't go in myself. Keeping them motivated was the easiest job in the world. When they recognized how bad of a disease this was and how much this community needed us, whether it be at the DCU Center or in our ICUs, they were incredibly focused and rallied. My job was to say this will pass, we will get through this. I must have said that a hundred times in our virtual town halls and things like that. Now the challenge for me is we're past this, and there's this lull, and we're tired, and we worked really hard. We've got to recover and get all these patients in. 90% of cancer screening stopped when COVID was here, and we're seeing late stage disease that we could have taken care of earlier. It's actually harder now to keep people rallying and focused now that we're back more towards status quo. But that's the role of leadership. You're climbing one hill after another, and you're going to keep people focused on that long-term vision, what you're trying to achieve, and make sure you tell them you're going to take care of them along the way and that they see that they're part of a company that they can be proud to be a part of. That's the environment we're trying to create. Brad, I don't know, do we have time for one more question?
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Brad31:02
All the time in the world. I think you've probably talked to your individual schedulers about your availability, but it's 9:35. I'm happy to keep recording as long as you guys want to talk, but I know you are busy people.
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Eric Dickson31:13
So what do you do when you're not CEO of Hanover, and what are your passions outside of work?
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John Roche31:21
Well, I have a great family, so I try to spend as much time as I can with them. Four children that are all grown up, two of them living down in Boston, one going to school in Maryland, and one that actually will be heading out to go to the Marines on Monday. So we've been spending a lot of time together. Together, when we can, we like to go down to Florida and spend some time on the beach and play some golf. Around here, I think we all enjoy the game of golf and to some degree tennis, and just get out and be outside. Frankly, during this time, that's been important. Golf, if you do it safely, has been one of the things that you can kind of social distance and still get out and breathe the air and not just stay cooped up inside. For Grace and I, my wife, we're kind of going into full empty nester syndrome. So once all this passes, I think we have a new leash on life. We're going to try to travel more and find additional ways to be active in the community. In the 15 years that I've been working in the Worcester community, I've enjoyed being part of it. I think that's something that I want to find where the next opportunities might be for me to make a difference as we try to build on the success of the Central Massachusetts area. Also, I think these times have really focused all of us on where the disconnects are, where are the people that aren't getting embraced into the community. What I love about Worcester as I've been here is that it really is a caring town. Yes, it's the second largest city in New England, but it's a caring town. I've been amazed in my time working with the United Way, now with the Worcester Together Fund. I mean, imagine in short order being able to raise almost 10 million dollars to help the less fortunate people get through this crazy pandemic. I think it's an absolutely remarkable thing, and frankly, it's been a real pleasure to be part of. So it motivates me to see what else we can do to make a difference.
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Eric Dickson34:06
That's wonderful. I just want to say it's been an absolute pleasure to speak with you today and to interview you. I appreciate Brad setting this up, and we're looking forward to seeing how it comes out.
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John Roche34:16
Yes, and maybe if I could in my final comments here, I would be remiss if I didn't really congratulate you for all the work that UMass did during this time. I know it's not over and we all can't declare victory yet, but I would be remiss if I didn't say thank you on behalf of a lot of people in this community that depended on your leadership and the services and the support of the hospital. So thank you.
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Eric Dickson34:42
Thank you, and I'll make sure I relay those thanks to the 14,000 people that did all the work to make it happen and take care of the community. Thanks, Brad.
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Brad34:54
Yes, thank you gentlemen. We're all set. I thought that was amazing. A lot of fun.
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John Roche35:00
Yeah, it was great.
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Brad35:02
We're getting good at this virtual thing, right? The Hollywood Squares or the Brady Bunch, I don't know which one we want to call this, but yeah, that's awesome. All right, Eric, let's stay in touch. When it's appropriate, we'll get together and break some bread. Look forward to it. Take care everyone. Thanks, Brad.