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HISTORY

Two eras: Before David, After David

The 141-year history of John Hancock Financial Services Inc. is split into two distinct phases: before David D'Alessandro arrived in 1984 and after.

Before D'Alessandro, John Hancock was the sort of plodding, methodical outfit you'd expect a life insurance company owned by its policyholders to be. About the most controversial thing the firm ever did was build a stunning, glass-sheathed tower for its Back Bay headquarters in the 1970s.

Bostonians were first shocked by architect I.M. Pei & Partners' minimalist design. Then they were outraged when the 500-pound glass panels started to fall out, a problem solved only by replacing all 10,334 windows. Thirty years later, the Hancock Tower is widely admired by architects and is an icon of the Boston skyline.

Hancock did little to raise blood pressures in its first 100 years. The Boston businessmen who founded the company had considered naming their company after Benjamin Franklin, but ultimately chose Hancock, the first signer of the Declaration of Independence. The company was started after a mathematician, Elizur Wright -- unconnected with the new company -- developed the first accurate actuarial tables and persuaded the Massachusetts Legislature to adopt a set of reforms requiring all life insurance companies doing business in the state to maintain adequate reserves.

Hancock's first century was marked by incremental improvements in insurance products and the way it sold them. In 1879, it pioneered so-called industrial insurance, policies sold to blue-collar workers who paid weekly premiums, according to Hoover's Inc., a provider of corporate information. Agents sold the policies by staking out factories and signing up workers leaving at the end of their shifts. In 1902, agents began selling life insurance with annual premiums.

Other additions to its product lines included annuities, group insurance, and individual health insurance, according to Hoover's.

In the 1970s, the company diversified into a variety of financial services. It added brokerage services, an equipment leasing business, a credit card operation, mutual funds, and property and casualty insurance coverage.

The firm's stodgy image was swept away after D'Alessandro took over public relations in 1984. In 1985, Hancock signed a deal to become the first sponsor of the Boston Marathon, paying $1 million a year to defray the costs of the race and enabling the Boston Athletic Association to pay prize money. The company was viewed as the savior of a beloved local tradition.

"We were really very surprised how precious the Marathon appeared to be to the Greater Boston public," D'Alessandro said in a 1996 Globe interview.

Quickly, Hancock became a brand and the company became highly visible. An '80s ad campaign built around the tag line, "Real Life, Real Answers," positioned Hancock as a trusted partner in handling the financial challenges that come with major life changes. D'Alessandro won praise as an innovative marketer.

Hancock later became a major sponsor of the US Olympics. In 1999, during the investigation into bribery of Olympic officials in the site selection of Salt Lake City, D'Alessandro canceled Hancock's television advertising for the Atlanta Games and threatened to pull its support from the Olympics altogether.

Hancock has generated some controversy from its own actions, too. In 1994, the company paid fines of $1 million to settle charges it improperly wined and dined Massachusetts state legislators in an effort to influence their votes. The settlement staved off possible criminal charges, prosecutors said at the time.

In 1997, Hancock paid $350 million to settle a class-action suit that claimed it used deceptive sales practices to sell insurance policies. Consumers charged that agents sold life insurance policies as though they were investments with fixed returns.

Most recently, Hancock stirred controversy with its 2000 conversion from a mutual company, owned by the policyholders, to a stock company, listed on the New York Stock Exchange. Hancock said it needed to go public to raise the capital it needed to survive in a more competitive marketplace.

Critics said the IPO was driven in part by top executives looking to reap the potential stock rewards of a public company. D'Alessandro always argued that was not the case.

Hancock sold $1.7 billion of shares Jan. 27, 2000, at a price of $17 apiece. The shares first slid, but then rebounded and doubled in price in a tough year for the stock market.

On Friday, they closed at a 52-week high of $34.30 on heavy volume that was triggered by a story in the Globe that Hancock was in advanced stages of negotiations.

Based on terms of the $10.9 billion stock deal with Manulife Financial Corp. of Toronto that the boards of both companies yesterday agreed to, Hancock shareholders will receive the equivalent of $37.60 of Manulife shares for each Hancock share they own. Both companies hope the deal will close some time next year.

Jeffrey Krasner can be reached at krasner@globe.com.

Hancock sold

(Globe Staff Graphic / John Bohn)
Video NECN: Manulife Purchases John Hancock
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