by Peter Panepento
The fact that Erie Indemnity Co. went outside of the family in hiring its new chief executive officer is a big deal.
When I covered the company, it was very clear from every corner that it was a “promote from within” culture.
The arrival of Terrence W. Cavanaugh and the departures of longtime execs such as Philip Garcia and Michael Krahe suggests the culture is changing.
Erie’s performance on Wall Street has been shaky in recent years. Its shares are down more than 17 percent since the beginning of 2005.
Shorter term performance has been even worse. Since peaking at $61.13 per share in September, the stock is down 29.2 percent.
Erie’s stock is trading at $43.29 this morning.
Let’s hope the new faces will help Erie Indemnity work through what is a troubling time for all insurers. Part of its recent performance is tied to the overall economy.
But it’s clear that the company itself is trying to bring in some fresh ideas to improve its position.
Erie needs a strong Erie Indemnity.
The company is Erie’s third largest, in terms of employees. And those employees are among Erie’s best paid.
So let’s hope Cavanaugh and his new team of execs are able to push the right buttons.
After more than six years working as a journalist in Erie, I'm now the web editor for the Chronicle of Philanthropy in Washington, D.C., and the publisher of GlobalErie.com. I still maintain close ties to Erie - a community that I care about deeply. I hope this Web site can help inspire a better future for Erie.
Jim
July 21st, 2008 at 9:48 am
Or perhaps simply the reassertion of certain reinstated personalities.
MGR
July 24th, 2008 at 12:46 pm
What is interesting is that the new CEO will certainly buck the street’s conventional wisdom that ERIE needs to leave the agent distribution model to save 10-15 percent. Clearly this move signals an embrace of the agent model so I would expect some realignment of policy offerings and an aggressive geographic expansion.