John J. Byrne (born 1931) is a longtime insurance industry executive who was CEO of GEICO, White Mountain Insurance Group and Fireman's Fund. He also served as chairman of Overstock.com.^[1]

Early Backround

As a young man, Byrne worked for his father, who owned a small insurance agency in Wildwood, N.J. He attended Rutgers University, where he graduated with a mathematics degree, and then worked an actuarial assistant for Travelers Insurance Company. He then earned a master's degree in mathematics.Cite error: A <ref> tag is missing the closing </ref> (see the help page).

Insurance industry magnate

After being passed over for president in 1975, Byrne quit to become chief executive of GEICO, then a troubled Washington, D.C. auto insurer. GEICO sold insurance directly to low-risk drivers, but had begun to lose money after underwriting riskier drivers. The company's shares had declined and regulators wanted to shut it down.^[2]

Byrne fired more than 1,500 employees, reducing the staff to fewer than 6,400, and closed 23 sales offices. It also stopped writing policies in several states. ^[3]

GEICO had a turnaround as a result of these measures, which attracted the attention of investor Warren Buffett. He bought a position in the company and eventually his Berkshire Hathaway acquired the company. He has called Byrne the "Babe Ruth of insurance."^[4]

In 1985, Byrne was invited to run the troubled Fireman's Fund, then a subsidiary of American Express. Fireman's had incurred $356 million in pretax losses in 1983 and 1984. Byrne vastly improved Fireman's financial performance and initiated a public offering of some of Fireman's shares in 1985. The company was sold to Allianz AG in 1991.^[5] Byrne retained the Fireman's holding company, which he later renamed as White Mountains Insurance Group. ^[6][7]

Role at Overstock.com

Byrne's son Patrick M. Byrne founded Overstock.com, an Internet retailer. The elder Byrne served as an Overstock.com director from October 1999 until October 2002, and then rejoined the board in June 2004. He was elected chairman in October 2005.^[8]

In March 2006, the elder Byrne said that he was thinking of stepping down in disagreement over his son's "jihad" over naked short-selling. He said "I can't tell whether this jihad adds to the value of the stock or subtracts from it, but what it does is take from Patrick's time." He said his "headstrong" son has ignored his pleas to drop the fight. Byrne said, “I'd rather keep my relationship with my son than be the chairman of the board.” ^[9] Patrick Byrne said of his father, "You know, when you're 74, you feel differently every day, based on what you have for breakfast that morning" and that "I never really expected him to get this fight."^[10] In April 2006, John Byrne stepped down to become vice-chairman, and was replaced by Patrick Byrne. In July 2006, John Byrne resigned from Overstock's board of directors.

References