John J. Byrne, whose turnaround of auto insurer Geico Corp. led billionaire Warren Buffett to buy the company and call him "the Babe Ruth of insurance," died March 7 at his home in Etna, N.H., according to Robert E. Snyder, a family spokesman. He was 80 and had prostate cancer.
In his letter to Berkshire shareholders reviewing 1980, Buffett credited Byrne's "managerial brilliance" with resuscitating Geico after his arrival in 1976.
"There aren't many Jack Byrnes in the managerial world, or Geicos in the business world," Buffett wrote. "What could be better than buying into a partnership with both of them?"
At the time of the letter, Buffett's Berkshire Hathaway Inc. owned about one-third of Geico. Buffett bought the remaining two-thirds in 1996 for about $2.3 billion and made it a unit of Berkshire. By then, Byrne had left Geico for White Mountains Insurance Group Ltd.
"Jack's performance in reviving Geico from near-bankruptcy was truly extraordinary, and his work resulted in enormous gains for Berkshire," Buffett wrote in his letter summarizing 1985, noting Byrne's departure. "We owe him a great deal for that."
Byrne's tough-love tenure at Geico entered the annals of corporate turnarounds.
He arrived in 1976 as president and chairman of Geico — an acronym for Government Employees Insurance Co. — after working as executive vice president at the Travelers Corp. Geico was near bankruptcy, having posted a net loss of $126 million in 1975, Forbes magazine reported in 1981.
Byrne closed about 100 offices, cut the workforce to about 4,000 from 7,000, quit the highly regulated auto-insurance markets of New Jersey and Massachusetts and raised rates by as much as 40%, Forbes said. He also reached a reinsurance agreement with competitors, potentially saving the industry, and sold $75 million in preferred stock to restore the company's capital, Forbes said.
By 1980 the company was back to health, with $44 million in net operating income in the first nine months, Forbes said.
The next year, Buffett was hailing Byrne as the "Babe Ruth of insurance."
John Joseph Byrne was born July 11, 1932, in Paterson, N.J., and as a teenager worked at his father's insurance agency.
He graduated from Rutgers University in 1954 and earned a graduate degree in mathematics from the University of Michigan. He began his career as an actuary at Lincoln National Life Insurance Co.
After Geico, Byrne led the Fireman's Fund Insurance Co. until its acquisition in 1991 by Allianz. He retained control of the fund's holding company, which he renamed Fund American Enterprises Inc. Today it is White Mountains Insurance Group.
Byrne is survived by his wife, Dorothy; three sons, seven grandchildren and a brother.Copyright © 2015, Los Angeles Times