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  4. [8-K] HANOVER INSURANCE GROUP, INC. Reports Material Event

Record Q2 2026 earnings for The Hanover Insurance Group (NYSE: THG)

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

The Hanover Insurance Group reported record second-quarter 2026 net income of $191.6 million, or $5.38 per diluted share, up from $157.1 million, or $4.30, a year earlier. Operating income was $189.2 million, or $5.31 per diluted share. The consolidated combined ratio was 91.2%, and 85.5% excluding catastrophes, with catastrophe losses of $91.8 million, or 5.7 points of the combined ratio. Net premiums written grew 4.6% to $1,656.8 million, and net investment income increased 13.4% to $119.6 million. Net and operating return on equity were 21.2% and 19.8%, respectively.

By segment, Core Commercial net premiums written rose 7.2% and Specialty 4.4%, while Personal Lines grew 2.6%. Core Commercial and Specialty generated operating income before taxes of $77.5 million and $68.4 million, respectively, while Personal Lines operating income before taxes increased to $104.9 million, with a combined ratio of 88.9% versus 95.5% in the prior-year quarter. Book value per share was $105.40 at June 30, 2026, compared to $89.62 a year earlier; excluding net unrealized depreciation on fixed maturity investments, net of tax, book value per share was $111.26. The company repurchased approximately 291,000 shares for about $55 million in the quarter and 827,000 shares for about $149 million year-to-date through July 24, 2026, and had approximately $660 million of remaining capacity under its $700 million share repurchase authorization.

Positive

  • Record profitability: Q2 2026 net income reached $191.6 million ($5.38 diluted EPS), with operating income of $189.2 million ($5.31 per diluted share) and net and operating ROE of 21.2% and 19.8%, respectively.
  • Stronger Personal Lines performance: Personal Lines combined ratio was 88.9% versus 95.5% a year earlier, while operating income before taxes rose to $104.9 million from $57.4 million, reflecting improved underwriting results.
  • Capital strength and returns: Book value per share was $105.40 at June 30, 2026, and the company repurchased 827,000 shares year-to-date for about $149 million, with approximately $660 million remaining under its share repurchase authorization.

Negative

  • None.

Filing Explained

A planned CEO succession leaves current leadership in place through year-end, with the named successor and strategy update still ahead.

The July 28 Form 8-K furnishes the company’s second-quarter results under Item 2.02 and discloses that President and CEO John C. Roche plans to retire at the end of 2026, with COO Richard W. Lavey named CEO-elect; the structural change is planned, not completed.

The filing identifies July 29, 2026, as the date for the earnings call and September 17, 2026, as the date for a strategic outlook and financial update covering strategic priorities and updated long-term financial targets.

Item 2.02 Results of Operations and Financial Condition Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Net income $191.6 million Second quarter 2026
Net income per diluted share $5.38 Second quarter 2026
Operating income after taxes $189.2 million Second quarter 2026 operating income after income taxes
Combined ratio 91.2% Second quarter 2026 consolidated combined ratio
Net premiums written $1,656.8 million Second quarter 2026 net premiums written, 4.6% growth year over year
Net investment income $119.6 million Second quarter 2026, up 13.4% from the prior-year quarter
Book value per share $105.40 At June 30, 2026
Share repurchases 291,000 shares for approximately $55 million Shares repurchased in the second quarter of 2026
combined ratio financial
"Combined ratio of 91.2%; combined ratio, excluding catastrophes(1), of 85.5%"
The combined ratio is a way insurance companies measure how well they are doing by adding up all their costs and claims and comparing them to the money they earn from premiums. If the ratio is below 100%, it means the company is making a profit; if it's above 100%, they are losing money. It helps see if an insurance company is financially healthy or not.
catastrophe losses financial
"Catastrophe losses of $91.8 million, or 5.7 points of the combined ratio"
Catastrophe losses are large, unexpected insurance payouts that follow major disasters such as hurricanes, earthquakes, wildfires or pandemics. They matter to investors because they can sharply reduce an insurer’s profits, drain reserves and force special financing or rate increases — much like a sudden flood overwhelming a city’s budget — and can also ripple through markets by affecting reinsurers, bondholders and stock prices.
operating income financial
"Operating income(5) was $189.2 million, or $5.31 per diluted share"
Operating income is the profit a company earns from its regular business activities after subtracting the costs directly related to running the business, such as wages, rent, and supplies. It shows how well the core operations are performing, ignoring income or expenses from non-regular activities like investments or one-time events. Investors use it to assess the company's efficiency and profitability from its main work.
book value per share financial
"Book value per share of $105.40, up 3.5% from March 31, 2026"
Book value per share is a company’s net worth on paper — total assets minus liabilities — divided by the number of outstanding shares, showing the equity value attributable to each share. Investors use it like a per-slice estimate of a company’s underlying value to compare with the market price; if the market price is far above the book value, the stock may be priced for strong future profits, and if it’s below, the stock might look undervalued or reflect asset concerns.
operating return on equity financial
"operating return on equity(6) of 21.2% and 19.8%, respectively"
Operating return on equity measures how much profit a company's regular, ongoing business activities generate for each dollar of shareholders' equity, calculated by dividing operating profit by average shareholder equity and excluding one‑time gains, interest and taxes. Investors use it like checking how efficiently a shop turns owners' invested cash into steady operating profit: a higher number suggests management is using equity more effectively and that earnings are likely more sustainable.
Net income $191.6 million 22.0% increase from $157.1 million in the prior-year quarter
Operating income after taxes $189.2 million compared to $158.7 million in the prior-year quarter
Net income per diluted share $5.38 compared to $4.30 in the prior-year quarter
Operating income per diluted share $5.31 compared to $4.35 in the prior-year quarter
Combined ratio 91.2% compared to 92.5% in the prior-year quarter
Net premiums written $1,656.8 million 4.6% growth from $1,583.8 million in the prior-year quarter
Net investment income $119.6 million 13.4% increase from $105.5 million in the prior-year quarter

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FAQ

How did The Hanover Insurance Group (THG) perform financially in Q2 2026?
THG reported net income of $191.6 million, or $5.38 per diluted share, in Q2 2026. Operating income was $189.2 million, or $5.31 per diluted share, with a consolidated combined ratio of 91.2% and net return on equity of 21.2%.

What were THG's premiums and growth metrics in Q2 2026?
In Q2 2026, THG’s net premiums written were $1,656.8 million, a 4.6% increase from the prior-year quarter. Net premiums written grew 7.2% in Core Commercial, 4.4% in Specialty, and 2.6% in Personal Lines, reflecting broad-based top-line expansion.

How did THG’s business segments perform in Q2 2026?
Core Commercial generated $77.5 million of operating income before taxes with a 95.7% combined ratio. Specialty produced $68.4 million and an 88.3% combined ratio. Personal Lines delivered $104.9 million and an 88.9% combined ratio, compared to 95.5% a year earlier.

What were THG’s catastrophe losses and combined ratios in Q2 2026?
THG recorded catastrophe losses of $91.8 million, contributing 5.7 points to the combined ratio in Q2 2026. The consolidated combined ratio was 91.2%, and 85.5% excluding catastrophes, matching the combined ratio excluding catastrophes in the prior-year quarter.

How strong were THG’s investment results and portfolio in Q2 2026?
Net investment income was $119.6 million in Q2 2026, up 13.4% from the prior-year quarter. The company held $11.2 billion in cash and invested assets at June 30, 2026, with approximately 95% of fixed maturities rated investment grade.

What capital management actions did THG take in Q2 2026?
THG repurchased approximately 291,000 shares for about $55 million in Q2 2026. Year-to-date through July 24, it repurchased 827,000 shares for about $149 million and had roughly $660 million remaining under a $700 million buyback authorization.

What were THG’s book value and operating return on equity in Q2 2026?
At June 30, 2026, THG’s book value per share was $105.40, or $111.26 excluding net unrealized depreciation on fixed maturities, net of tax. Operating return on average equity was 19.8% for the quarter, based on annualized operating income after tax.
false000094469500009446952026-07-282026-07-28

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 28, 2026

 

THE HANOVER INSURANCE GROUP, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

1-13754

04-3263626

(State or other jurisdiction

of incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

 

440 Lincoln Street, Worcester, Massachusetts

(Address of principal executive offices)

01653

(Zip Code)

 

(508) 855-1000

Registrant’s telephone number, including area code:

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, $.01 par value

 

THG

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

The following information is being furnished under Item 2.02 – Results of Operations and Financial Condition. Such information, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.

On July 28, 2026, The Hanover Insurance Group, Inc. (the Company) issued a press release announcing its financial results for the quarter ended June 30, 2026. The release is furnished as Exhibit 99.1 hereto. Additionally, on July 28, 2026, the Company made available on its website unaudited financial information contained in its Financial Supplement for the period ended June 30, 2026. The supplement is furnished as Exhibit 99.2 hereto.

Item 9.01 Financial Statements and Exhibits.

(a)

Not applicable.

(b)

Not applicable.

(c)

Not applicable.

(d)

Exhibits.

The following exhibits are furnished herewith.

 

Exhibit 99.1

Press Release, dated July 28, 2026, announcing the Company’s financial results for the quarter ended June 30, 2026.

Exhibit 99.2

The Hanover Insurance Group, Inc. Unaudited Financial Supplement for the period ended June 30, 2026.

Exhibit 104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

2

 

Exhibit Index

 

Exhibit 99.1

Press Release, dated July 28, 2026, announcing the Company’s financial results for the quarter ended June 30, 2026.

Exhibit 99.2

The Hanover Insurance Group, Inc. Unaudited Financial Supplement for the period ended June 30, 2026.

Exhibit 104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

3

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

The Hanover Insurance Group, Inc.

(Registrant)

Date: July 28, 2026

By:

/s/ Jeffrey M. Farber

Jeffrey M. Farber

Executive Vice President and

Chief Financial Officer

 

4

Exhibit 99.1

img12594962_0.jpg

The Hanover Reports Record Second Quarter Net Income and

Operating Income of $5.38 and $5.31 per Diluted Share, Respectively;

Record Second Quarter Net and Operating Return on Equity of 21.2% and 19.8%, Respectively

 

Second Quarter Highlights

•
Combined ratio of 91.2%; combined ratio, excluding catastrophes(1), of 85.5%
•
Catastrophe losses of $91.8 million, or 5.7 points of the combined ratio
•
Net premiums written increase of 4.6%*
•
Renewal price increases(2) of 8.7% in Personal Lines, 7.8% in Core Commercial and 3.6% in Specialty
•
Rate increases(2) of 7.0% in Core Commercial, 4.8% in Personal Lines and 2.1% in Specialty
•
Loss and loss adjustment expense (LAE) ratio of 60.2%, 1.7 points below the prior-year quarter
•
Current accident year loss and LAE ratio, excluding catastrophes(3), of 55.8%, 0.3 points below the prior-year quarter
•
Net investment income of $119.6 million, up 13.4% from the prior-year quarter
•
Book value per share of $105.40, up 3.5% from March 31, 2026; excluding net unrealized depreciation on fixed maturity investments, net of tax(4), book value per share increased 3.8%

 

WORCESTER, Mass., July 28, 2026 - The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income of $191.6 million, or $5.38 per diluted share, in the second quarter of 2026, compared to $157.1 million, or $4.30 per diluted share, in the prior-year quarter. Operating income(5) was $189.2 million, or $5.31 per diluted share, in the second quarter of 2026, compared to $158.7 million, or $4.35 per diluted share, in the prior-year quarter. The company reported net and operating return on equity(6) of 21.2% and 19.8%, respectively, in the second quarter of 2026, and 21.0% and 20.0% in the first six months of 2026, respectively.

 

“Our very successful second quarter is a testament to the strength of our business model, the durable earnings power we have built across The Hanover and the disciplined execution of our team,” said John C. Roche, president and chief executive officer at The Hanover. “We posted operating return on equity of approximately 20% and operating earnings of $5.31 per share, both second quarter records, as well as accelerated top-line premium growth. We are effectively navigating evolving market conditions, and achieving healthy pricing, while building growth momentum in the most attractive areas of our portfolio.”

 

“This quarter reflects the talent of our employees, the strength of our leadership team, the depth of our agency relationships and the trust our customers place in us every day,” said Roche. “As we announced earlier this month, I plan to retire at the end of 2026. It's been a great honor to serve the last nine years as CEO, and I could not be more optimistic about The Hanover’s future. Dick Lavey has been one of the key architects of our strategy and the transformation of our company. We

 

 

(1) See information about this and other non-GAAP measures and definitions, including Operating Income and Operating Return on Equity in the headline, used throughout this press release on the final pages of this document.

*Unless otherwise stated, net premiums written growth and other growth comparisons are to the same period of the prior year.

 

The Hanover Insurance Group, Inc. may also be referred to as “The Hanover” or “the company” interchangeably throughout this press release.

 

 

 

 

 

will continue to work closely together through the remainder of the year to ensure a seamless transition. Dick's leadership, expertise and strategic vision position him well to successfully lead The Hanover into its next chapter.”

 

“We are pleased with our excellent performance, including outstanding underwriting profitability as demonstrated by our combined ratio of 91.2%, and 85.5% excluding catastrophes,” said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover. “Additionally, we delivered robust net investment income, up 13%, driven by higher earned yields and strong operating cash flows, while continued favorable development reinforces our confidence in the strength of our reserve position. The profitability of our business continues to build capital, enabling increased share repurchases while maintaining the balance sheet strength and financial flexibility for future growth opportunities and deployment. Following a really strong start to the year, we enter the second half of 2026 with confidence, supported by our varied earnings streams, resilient balance sheet and disciplined focus on capital allocation.”

 

 

Second Quarter 2026 Highlights

 

 

Three months ended

 

 

 

Six months ended

 

 

 

 

June 30

 

 

 

June 30

 

 

  ($ in millions, except per share data)

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

 

Net premiums written

$

1,656.8

 

 

$

1,583.8

 

 

$

3,216.5

 

 

$

3,094.6

 

 

Growth

 

4.6

%

 

 

4.1

%

 

 

3.9

%

 

 

4.0

%

 

Net premiums earned

$

1,597.6

 

 

$

1,545.3

 

 

$

3,168.2

 

 

$

3,053.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current accident year loss and LAE ratio,
  excluding catastrophes

 

55.8

%

 

 

56.1

%

 

 

56.1

%

 

 

57.2

%

 

Prior-year development ratio

 

(1.3)

%

 

 

(1.2)

%

 

 

(1.5)

%

 

 

(1.3)

%

 

Catastrophe ratio

 

5.7

%

 

 

7.0

%

 

 

6.0

%

 

 

6.7

%

 

Expense ratio(7)

 

31.0

%

 

 

30.6

%

 

 

30.8

%

 

 

30.7

%

 

Combined ratio

 

91.2

%

 

 

92.5

%

 

 

91.4

%

 

 

93.3

%

 

Combined ratio, excluding catastrophes

 

85.5

%

 

 

85.5

%

 

 

85.4

%

 

 

86.6

%

 

Current accident year combined ratio,
  excluding catastrophes

 

86.8

%

 

 

86.7

%

 

 

86.9

%

 

 

87.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

191.6

 

 

$

157.1

 

 

$

378.4

 

 

$

285.3

 

 

per diluted share

 

5.38

 

 

 

4.30

 

 

 

10.58

 

 

 

7.80

 

 

Operating income

 

189.2

 

 

 

158.7

 

 

 

377.7

 

 

 

300.5

 

 

per diluted share

 

5.31

 

 

 

4.35

 

 

 

10.55

 

 

 

8.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value per share

$

105.40

 

 

$

89.62

 

 

$

105.40

 

 

$

89.62

 

 

Ending shares outstanding (in millions)

 

34.9

 

 

 

35.9

 

 

 

34.9

 

 

 

35.9

 

 

 

 

 

 

 

 

 

 

 

 

2

 

 

Second Quarter Operating Highlights

 

Core Commercial

Core Commercial operating income before income taxes was $77.5 million in the second quarter of 2026, compared to $83.9 million in the second quarter of 2025. The Core Commercial combined ratio was 95.7%, compared to 93.0% in the prior-year quarter. Catastrophe losses in the second quarter of 2026 were $26.4 million, or 4.6 points of the combined ratio. This compared to catastrophe losses of $22.7 million, or 4.1 points, in the prior-year quarter.

 

Second quarter 2026 results included net favorable prior-year reserve development, excluding catastrophes, of $0.6 million, or 0.1 points, compared to $3.0 million, or 0.5 points, in the second quarter of 2025.

 

Core Commercial current accident year combined ratio, excluding catastrophes, increased 1.8 points, to 91.2% in the second quarter of 2026, compared to 89.4% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, was 58.7%, 2.2 points higher than the prior-year quarter, but 0.4 points improved from the full year of 2025. In the second quarter of 2026, the company prudently increased loss ratio selections in liability coverages. Additionally, the loss ratio in the prior-year quarter benefited from lower-than-usual property losses.

 

The expense ratio decreased by 0.4 points, to 32.5%, in the second quarter of 2026, compared to the prior-year quarter, reflecting fixed cost leverage and efficiency gains.

 

Net premiums written were $574.8 million in the second quarter of 2026, up 7.2% from the prior-year quarter, an acceleration from the first quarter of 2026, reflecting growth of 6.0% in small commercial and 9.4% in middle market (approximately 7% growth in middle market excluding non-recurring items). Core Commercial renewal price increases averaged 7.8%, including average rate increases of 7.0%.

 

The following table summarizes premiums and the components of the combined ratio for Core Commercial:

 

 

Three months ended

 

 

 

Six months ended

 

 

 

 

June 30

 

 

 

June 30

 

 

  ($ in millions)

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

 

Net premiums written

$

574.8

 

 

$

536.0

 

 

$

1,205.2

 

 

$

1,140.6

 

 

Growth

 

7.2

%

 

 

4.4

%

 

 

5.7

%

 

 

4.1

%

 

Net premiums earned

 

579.3

 

 

 

554.3

 

 

 

1,143.1

 

 

 

1,095.3

 

 

Operating income before taxes

 

77.5

 

 

 

83.9

 

 

 

152.3

 

 

 

110.7

 

 

Loss and LAE ratio

 

63.2

%

 

 

60.1

%

 

 

63.5

%

 

 

65.0

%

 

Expense ratio

 

32.5

%

 

 

32.9

%

 

 

32.6

%

 

 

33.2

%

 

Combined ratio

 

95.7

%

 

 

93.0

%

 

 

96.1

%

 

 

98.2

%

 

Prior-year development ratio

 

(0.1)

%

 

 

(0.5)

%

 

 

(0.2)

%

 

 

(0.4)

%

 

Catastrophe ratio

 

4.6

%

 

 

4.1

%

 

 

5.0

%

 

 

6.3

%

 

Combined ratio, excluding catastrophes

 

91.1

%

 

 

88.9

%

 

 

91.1

%

 

 

91.9

%

 

Current accident year combined ratio,
  excluding catastrophes

 

91.2

%

 

 

89.4

%

 

 

91.3

%

 

 

92.3

%

 

 

 

 

 

 

3

 

 

Specialty

Specialty operating income before income taxes was $68.4 million in the second quarter of 2026, compared to $71.2 million in the second quarter of 2025. The Specialty combined ratio was 88.3%, compared to 86.5% in the prior-year quarter. Catastrophe losses in the second quarter of 2026 were $10.0 million, or 2.7 points of the combined ratio. This compared to catastrophe losses of $14.6 million, or 4.1 points, in the prior-year quarter.

 

Second quarter 2026 results included net favorable prior-year reserve development, excluding catastrophes, of $10.8 million, or 3.0 points, with widespread favorability. Net favorable prior-year reserve development, excluding catastrophes, was $12.5 million, or 3.5 points, in the second quarter of 2025.

 

Specialty current accident year combined ratio, excluding catastrophes, increased 2.7 points, to 88.6% in the second quarter of 2026, from 85.9% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, of 51.6% in the second quarter of 2026 was consistent with the company's long-term expectations for the segment and increased 2.6 points compared to the prior-year quarter, which saw lower-than-expected property losses.

 

Net premiums written were $384.4 million in the second quarter of 2026, up 4.4% from the prior-year quarter, an acceleration from the first quarter of 2026. Specialty renewal price increases averaged 3.6%, including average rate increases of 2.1%.

 

The following table summarizes premiums and the components of the combined ratio for Specialty:

 

 

Three months ended

 

 

 

Six months ended

 

 

 

 

June 30

 

 

 

June 30

 

 

  ($ in millions)

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

 

Net premiums written

$

384.4

 

 

$

368.2

 

 

$

751.1

 

 

$

726.5

 

 

Growth

 

4.4

%

 

 

4.6

%

 

 

3.4

%

 

 

5.0

%

 

Net premiums earned

 

365.8

 

 

 

355.9

 

 

 

725.7

 

 

 

695.5

 

 

Operating income before taxes

 

68.4

 

 

 

71.2

 

 

 

152.4

 

 

 

135.8

 

 

Loss and LAE ratio

 

51.3

%

 

 

49.6

%

 

 

49.6

%

 

 

50.1

%

 

Expense ratio

 

37.0

%

 

 

36.9

%

 

 

36.7

%

 

 

36.9

%

 

Combined ratio

 

88.3

%

 

 

86.5

%

 

 

86.3

%

 

 

87.0

%

 

Prior-year development ratio

 

(3.0)

%

 

 

(3.5)

%

 

 

(3.4)

%

 

 

(4.1)

%

 

Catastrophe ratio

 

2.7

%

 

 

4.1

%

 

 

2.7

%

 

 

4.2

%

 

Combined ratio, excluding catastrophes

 

85.6

%

 

 

82.4

%

 

 

83.6

%

 

 

82.8

%

 

Current accident year combined ratio,
  excluding catastrophes

 

88.6

%

 

 

85.9

%

 

 

87.0

%

 

 

86.9

%

 

 

 

 

 

 

 

 

 

 

4

 

 

Personal Lines

Personal Lines operating income before income taxes was $104.9 million in the second quarter of 2026, compared to $57.4 million in the second quarter of 2025. The Personal Lines combined ratio was 88.9%, compared to 95.5% in the prior-year quarter. Catastrophe losses in the second quarter of 2026 were $55.4 million, or 8.5 points of the combined ratio. This compared to catastrophe losses of $70.2 million, or 11.1 points of the combined ratio, in the prior-year quarter.

 

Second quarter 2026 results included net favorable prior-year reserve development, excluding catastrophes, of $10.1 million, or 1.5 points, compared to $2.6 million, or 0.4 points, in the second quarter of 2025.

 

Personal Lines current accident year combined ratio, excluding catastrophe losses, decreased 2.9 points, to 81.9%, in the second quarter of 2026, from 84.8% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, decreased 4.2 points from the prior-year quarter, to 55.6%, driven by the continued benefit of earned pricing outpacing loss trends and benign property claims frequency, as well as lower large loss experience in homeowners in the quarter.

 

The expense ratio increased by 1.3 points, to 26.3%, in the second quarter of 2026, compared to the prior-year quarter, primarily reflecting the timing of variable agency compensation expenses due to meaningfully better-than-expected results to date.

 

Net premiums written were $697.6 million in the second quarter of 2026, up 2.6% compared to the prior-year quarter. The increase was primarily due to higher new business, and to a lesser extent, the impact of renewal price increases. Personal Lines renewal price increases averaged 8.7%, including average rate increases of 4.8%. Policies in force (PIF) in the second quarter of 2026 were essentially flat compared to the first quarter of 2026.

 

 

The following table summarizes premiums and components of the combined ratio for Personal Lines:

 

Three months ended

 

 

 

Six months ended

 

 

 

 

June 30

 

 

 

June 30

 

 

  ($ in millions)

 

2026

 

 

 

2025

 

 

 

2026

 

 

 

2025

 

 

Net premiums written

$

697.6

 

 

$

679.6

 

 

$

1,260.2

 

 

$

1,227.5

 

 

Growth

 

2.6

%

 

 

3.7

%

 

 

2.7

%

 

 

3.4

%

 

Net premiums earned

 

652.5

 

 

 

635.1

 

 

 

1,299.4

 

 

 

1,263.0

 

 

Operating income before taxes

 

104.9

 

 

 

57.4

 

 

 

194.1

 

 

 

151.6

 

 

Loss and LAE ratio

 

62.6

%

 

 

70.5

%

 

 

64.2

%

 

 

67.5

%

 

Expense ratio

 

26.3

%

 

 

25.0

%

 

 

26.0

%

 

 

25.1

%

 

Combined ratio

 

88.9

%

 

 

95.5

%

 

 

90.2

%

 

 

92.6

%

 

Prior-year development ratio

 

(1.5)

%

 

 

(0.4)

%

 

 

(1.5)

%

 

 

(0.4)

%

 

Catastrophe ratio

 

8.5

%

 

 

11.1

%

 

 

8.8

%

 

 

8.3

%

 

Combined ratio, excluding catastrophes

 

80.4

%

 

 

84.4

%

 

 

81.4

%

 

 

84.3

%

 

Current accident year combined ratio,
  excluding catastrophes

 

81.9

%

 

 

84.8

%

 

 

82.9

%

 

 

84.7

%

 

 

 

 

 

 

 

5

 

 

Investments

Net investment income was $119.6 million in the second quarter of 2026, an increase of 13.4% from the prior-year quarter, primarily due to the continued investment of cashflows from operations and the impact of higher earned yields on the fixed maturity investment portfolio. Total pre-tax earned yield on the investment portfolio for the second quarter of 2026 was 4.28%, up from 4.11% in the prior-year quarter. The average pre-tax earned yield on fixed maturities was 4.45% for the second quarter of 2026, up from 4.24% in the prior-year quarter.

 

Net realized and unrealized investment gains recognized in earnings were $2.8 million in the second quarter of 2026. This compared to net realized and unrealized investment losses recognized in earnings of $2.5 million in the second quarter of 2025.

 

The company held $11.2 billion in cash and invested assets at June 30, 2026. Fixed maturities and cash represented approximately 93% of the investment portfolio. Approximately 95% of the company’s fixed maturity portfolio is rated investment grade. As of June 30, 2026, net unrealized losses on the fixed maturity portfolio were $259.5 million before income taxes, compared to $235.6 million at March 31, 2026.

 

Shareholders’ Equity and Capital Actions

At June 30, 2026, book value per share was $105.40, up 3.5% from March 31, 2026, driven by strong earnings, partially offset by share repurchases, the ordinary quarterly cash dividends, and an increase in the unrealized loss position on the fixed maturity portfolio. Book value per share, excluding net unrealized depreciation on fixed maturity investments, net of tax, was $111.26 at June 30, 2026, up 3.8% from March 31, 2026.

 

At June 30, 2026, operating insurance company’s statutory capital and surplus was $3.54 billion, slightly higher compared to March 31, 2026.

 

The company repurchased approximately 291,000 shares of common stock in the second quarter of 2026, totaling approximately $55 million. Year-to-date through July 24th, the company has repurchased approximately 827,000 shares, totaling approximately $149 million. The company has approximately $660 million of remaining capacity under its new $700 million share repurchase authorization announced on May 13, 2026.

 

 

6

 

 

Earnings Conference Call

The company will host a conference call to discuss its second quarter results on Wednesday, July 29, at 10:00 a.m. E.T. A presentation will accompany the prepared remarks and has been posted on The Hanover’s website. Interested investors and others can listen to the call and access the presentation through The Hanover's website, located in the “Investors” section at www.hanover.com. Investors may access the conference call by dialing 1-844-413-3975 in the U.S. and 1-412-317-5458 internationally. Webcast participants should go to the website 15 minutes early to register, download and install any necessary audio software. A re-broadcast of the conference call will be available on The Hanover’s website approximately two hours after the call.

 

The Hanover Strategic Outlook and Financial Update

The company will hold a virtual strategic outlook and financial update on Thursday, September 17, at 10:00 a.m. ET, highlighting the next chapter of The Hanover, its strategic priorities, and updated long-term financial targets. The event will include a live question and answer session with members of the executive team. A live webcast of the event will be available through the "Investors" section of the company's website. A replay of the webcast will be available following the event.

 

 

About The Hanover

The Hanover Insurance Group, Inc. is the holding company for several property and casualty insurance companies, which together constitute one of the largest insurance businesses in the United States. The company provides exceptional insurance solutions through a select group of independent agents and brokers. Together with its agent partners, the company offers standard and specialized insurance protection for small and mid-sized businesses, as well as for homes, automobiles, and other personal items. For more information, please visit hanover.com.

 

Contact Information

Investors:

Oksana Lukasheva

olukasheva@hanover.com

1-508-525-6081

Media:

Emily P. Trevallion

etrevallion@hanover.com

1-508-855-3263

 

 

 

Definition of Segments

Continuing operations include four reporting segments: Core Commercial, Specialty, Personal Lines and Other. The Core Commercial segment includes commercial multiple peril, commercial automobile, workers’ compensation and other core commercial lines coverages provided to small and mid-sized businesses. The Specialty segment includes four divisions of business: marine and industrial property, professional and executive lines (such as management and professional liability), E&S and alternative markets, and surety and other. E&S and alternative markets includes coverages such as excess and surplus lines, program business (providing commercial insurance to markets with specialized coverage or risk management need related to groups of similar businesses), and specialty general liability coverage. The Personal Lines segment markets automobile, homeowners and ancillary coverages to individuals and families. The Other segment primarily includes the operations of the holding company, and our run-off direct asbestos and environmental business, run-off voluntary assumed property and casualty pools business, and run-off product liability business.

 

 

 

Financial Supplement

7

 

 

The Hanover's second quarter news release and financial supplement are available in the “Investors” section of the company’s website at hanover.com.

The Hanover Insurance Group, Inc.

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income

 

 

Three months ended

 

Six months ended

 

 

 

 

June 30

 

June 30

 

($ in millions)

 

 

2026

 

2025

 

2026

 

2025

 

Revenues

 

 

 

 

 

 

 

 

 

 

Premiums earned

 

$

1,597.6

$

1,545.3

$

3,168.2

$

3,053.8

 

Net investment income

 

 

119.6

 

105.5

 

246.5

 

211.6

 

Net realized and unrealized investment gains (losses):

 

 

 

 

 

 

 

 

 

 

Net realized losses from sales and other

 

 

(5.4)

 

(4.6)

 

(10.3)

 

(23.4)

 

Net change in fair value of equity securities and other

 

 

10.5

 

5.0

 

15.1

 

6.0

 

Impairments on investments:

 

 

 

 

 

 

 

 

 

 

Credit-related impairments

 

 

(1.4)

 

(2.5)

 

(3.0)

 

(2.5)

 

Losses on intent to sell securities

 

 

(0.9)

 

(0.4)

 

(1.3)

 

(0.4)

 

Total impairments on investments

 

 

(2.3)

 

(2.9)

 

(4.3)

 

(2.9)

 

Total net realized and unrealized investment gains (losses)

 

 

2.8

 

(2.5)

 

0.5

 

(20.3)

 

Fees and other income

 

 

6.2

 

6.1

 

12.4

 

12.5

 

Total revenues

 

 

1,726.2

 

1,654.4

 

3,427.6

 

3,257.6

 

 

 

 

 

 

 

 

 

 

 

 

Losses and expenses

 

 

 

 

 

 

 

 

 

 

Losses and loss adjustment expenses

 

 

962.5

 

957.2

 

1,920.1

 

1,912.5

 

Amortization of deferred acquisition costs

 

 

338.0

 

319.0

 

671.2

 

632.9

 

Interest expense

 

 

10.1

 

8.6

 

20.9

 

17.1

 

Other operating expenses

 

 

171.0

 

170.8

 

333.7

 

336.2

 

Total losses and expenses

 

 

1,481.6

 

1,455.6

 

2,945.9

 

2,898.7

 

Income before income taxes

 

 

244.6

 

198.8

 

481.7

 

358.9

 

Income tax expense

 

 

53.2

 

41.9

 

103.5

 

73.8

 

Income from continuing operations

 

 

191.4

 

156.9

 

378.2

 

285.1

 

Discontinued operations (net of taxes):

 

 

 

 

 

 

 

 

 

 

Income from discontinued life businesses

 

 

0.2

 

0.2

 

0.2

 

0.2

 

Net income

 

$

191.6

$

157.1

$

378.4

$

285.3

 

 

The Hanover Insurance Group, Inc.

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets

 

 

 

 

 

 

 

 

 

June 30

 

 

December 31

 

($ in millions)

 

 

2026

 

 

2025

 

Assets

 

 

 

 

 

Total investments

 

$

10,902.0

 

$

10,382.7

 

Cash and cash equivalents

 

 

266.1

 

 

1,122.7

 

Premiums and accounts receivable, net

 

 

1,950.1

 

 

1,861.3

 

Reinsurance recoverable on paid and unpaid losses and unearned premiums

 

 

2,078.9

 

 

2,011.1

 

Other assets

 

 

1,582.2

 

 

1,484.5

 

Assets of discontinued businesses

 

 

84.6

 

 

83.6

 

Total assets

 

$

16,863.9

 

$

16,945.9

 

Liabilities

 

 

 

 

 

 

 

Loss and loss adjustment expense reserves

 

$

8,001.7

 

$

7,755.2

 

Unearned premiums

 

 

3,479.6

 

 

3,440.4

 

Short-term debt

 

 

50.1

 

 

375.0

 

Long-term debt

 

 

793.9

 

 

843.3

 

Other liabilities

 

 

761.3

 

 

851.9

 

Liabilities of discontinued businesses

 

 

104.8

 

 

108.6

 

Total liabilities

 

 

13,191.4

 

 

13,374.4

 

Total shareholders’ equity

 

 

3,672.5

 

 

3,571.5

 

Total liabilities and shareholders’ equity

 

$

16,863.9

 

$

16,945.9

 

The following is a reconciliation from operating income to income from continuing operations and net income(5)(8):

8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The Hanover Insurance Group, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended June 30

 

 

Six months ended June 30

 

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

($ in millions, except per share data)

 

$
Amount

 

Per Share (Diluted)

 

$
Amount

 

Per Share (Diluted)

 

$
Amount

 

Per Share (Diluted)

 

$
Amount

 

Per Share (Diluted)

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Commercial

 

$

77.5

 

 

 

 

$

83.9

 

 

 

 

$

152.3

 

 

 

 

$

110.7

 

 

 

 

Specialty

 

 

68.4

 

 

 

 

 

71.2

 

 

 

 

 

152.4

 

 

 

 

 

135.8

 

 

 

 

Personal Lines

 

 

104.9

 

 

 

 

 

57.4

 

 

 

 

 

194.1

 

 

 

 

 

151.6

 

 

 

 

Other

 

 

1.1

 

 

 

 

 

(2.6)

 

 

 

 

 

3.3

 

 

 

 

 

(1.8)

 

 

 

 

Total

 

 

251.9

 

 

 

 

 

209.9

 

 

 

 

 

502.1

 

 

 

 

 

396.3

 

 

 

 

Interest expense

 

 

(10.1)

 

 

 

 

 

(8.6)

 

 

 

 

 

(20.9)

 

 

 

 

 

(17.1)

 

 

 

 

Operating income before income taxes

 

 

241.8

 

$

6.79

 

 

201.3

 

$

5.51

 

 

481.2

 

$

13.44

 

 

379.2

 

$

10.37

 

Income tax expense on operating income

 

 

(52.6)

 

 

(1.48)

 

 

(42.6)

 

 

(1.16)

 

 

(103.5)

 

 

(2.89)

 

 

(78.7)

 

 

(2.15)

 

Operating income after income taxes

 

 

189.2

 

 

5.31

 

 

158.7

 

 

4.35

 

 

377.7

 

 

10.55

 

 

300.5

 

 

8.22

 

Non-operating items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized losses from sales and other

 

 

(5.4)

 

 

(0.15)

 

 

(4.6)

 

 

(0.12)

 

 

(10.3)

 

 

(0.29)

 

 

(23.4)

 

 

(0.63)

 

Net change in fair value of equity securities and other

 

 

10.5

 

 

0.30

 

 

5.0

 

 

0.13

 

 

15.1

 

 

0.43

 

 

6.0

 

 

0.16

 

Impairments on investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Credit-related impairments

 

 

(1.4)

 

 

(0.04)

 

 

(2.5)

 

 

(0.07)

 

 

(3.0)

 

 

(0.08)

 

 

(2.5)

 

 

(0.07)

 

Losses on intent to sell securities

 

 

(0.9)

 

 

(0.03)

 

 

(0.4)

 

 

(0.01)

 

 

(1.3)

 

 

(0.04)

 

 

(0.4)

 

 

(0.01)

 

Total impairments on investments

 

 

(2.3)

 

 

(0.07)

 

 

(2.9)

 

 

(0.08)

 

 

(4.3)

 

 

(0.12)

 

 

(2.9)

 

 

(0.08)

 

Income tax benefit (expense) on non-operating items

 

 

(0.6)

 

 

(0.02)

 

 

0.7

 

 

0.02

 

 

-

 

 

-

 

 

4.9

 

 

0.13

 

Income from continuing operations, net of taxes

 

 

191.4

 

 

5.37

 

 

156.9

 

 

4.30

 

 

378.2

 

 

10.57

 

 

285.1

 

 

7.80

 

Discontinued operations (net of taxes):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued life businesses

 

 

0.2

 

 

0.01

 

 

0.2

 

 

-

 

 

0.2

 

 

0.01

 

 

0.2

 

 

-

 

Net income

 

$

191.6

 

$

5.38

 

$

157.1

 

$

4.30

 

$

378.4

 

$

10.58

 

$

285.3

 

$

7.80

 

Dilutive weighted average shares outstanding

 

 

 

 

 

35.6

 

 

 

 

 

36.5

 

 

 

 

 

35.8

 

 

 

 

 

36.6

 

Basic weighted average shares outstanding

 

 

 

 

 

35.0

 

 

 

 

 

35.9

 

 

 

 

 

35.1

 

 

 

 

 

35.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward-Looking Statements and Non-GAAP Financial Measures

9

 

 

Forward-Looking Statements

Certain statements in this document may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements may address, among other things, expectations regarding our growth, the strength of our reserves, certain statements regarding our performance for the remainder of 2026 and beyond, as well as our expectations, intentions and other statements that are not historical facts. Words such as: “believes,” “anticipates,” “expects,” “intends,” “may,” “projects,” “plan,” “likely,” “potential,” “targeted,” “forecasts,” “should,” “could,” “continue,” and other similar expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. The company cautions investors that any such forward-looking statements are estimates, beliefs, expectations and/or projections that involve significant judgment, are not guarantees and are not necessarily indicative of future performance. Actual results could differ materially from those anticipated. Investors should not place undue reliance on forward-looking statements, which speak only as of the date they are made and should understand the risks and uncertainties inherent in or particular to the company’s business. Some of the factors that could cause actual results to differ include, but are not limited to: changes in the demand for our products; risks and uncertainties related to our growth and operating strategies, including our ability to attract, grow and retain profitable policies in force, to increase rates commensurate with, or in excess of, loss trends, and to manage expenses and execute strategic initiatives effectively; adverse claims experience or changes in our estimates of loss and loss adjustment expense reserves, including those arising from catastrophes, inflationary pressures or global unrest, which may result in lower current year underwriting results or adverse loss development, and which could negatively impact our carried reserves; uncertainties with respect to the long-term profitability of our products, including with respect to newer products, or longer-tail products covering casualty losses; disruption in our distribution channels, including the loss or disruption of our independent agency channel, and the impact of competition and consolidation in the industry and among agents and brokers; changes in frequency and loss severity trends, exacerbated by fluctuations in economic conditions; changes in regulatory, legislative, economic, market and political conditions, particularly with respect to rates, policy terms and conditions, the use of artificial intelligence and other technologies, privacy and data security, payment flexibility, and regions where we have geographical concentration; volatile and unpredictable developments, including severe weather (whether arising from changing climate conditions or weather patterns, or otherwise) and other natural physical events, catastrophes, pandemics, civil unrest, war, global conflicts, and terrorist actions, and the uncertainty in estimating the resulting losses; and, other risks, uncertainties and factors discussed in the company's most recently filed quarterly report on Form 10-Q and its 2025 Annual Report filed on Form 10-K and in the company's other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference. The company does not undertake the responsibility to update or revise such forward-looking statements, except as required by law.

 

Non-GAAP Financial Measures

As discussed on page 39 of the company’s Annual Report on Form 10-K for the year ended December 31, 2025, the company uses non-GAAP financial measures as important measures of its operating performance, including operating income, operating income before interest expense and income taxes, operating income per diluted share, and components of the combined ratio, both excluding and/or including catastrophe losses, prior-year reserve development and the expense ratio. Management believes these non-GAAP financial measures are important indications of the company’s operating performance. The definition of other non-GAAP financial measures and terms can be found in the 2025 Annual Report on pages 61-64.

 

10

 

 

Operating income and operating income per diluted share are non-GAAP measures. They are defined as net income excluding the after-tax impact of net realized and unrealized investment gains (losses), gains and/or losses on the repayment of debt, other non-operating items, and results from discontinued operations. Net realized and unrealized investment gains (losses), which include changes in the fair value of equity securities still held, are excluded for purposes of presenting operating income, as they are, to a certain extent, determined by interest rates, financial markets and the timing of sales. Operating income also excludes net gains and losses from disposals of businesses, gains and losses related to the repayment of debt, costs to acquire businesses, restructuring costs, the cumulative effect of accounting changes, and certain other items. Operating income is the sum of the segment income from: Core Commercial, Specialty, Personal Lines, and Other, after interest expense and income taxes. In reference to one of the company’s four reporting segments, “operating income” is the segment income before both interest expense and income taxes. The company also uses “operating income per diluted share” (which is after both interest expense and income taxes). Operating income per share is calculated by dividing operating income by the weighted average number of diluted shares of common stock. Operating loss per share is calculated by dividing operating loss by the weighted average number of basic shares of common stock due to antidilution. The company believes that metrics of operating income and operating income in relation to its four reporting segments provide investors with a valuable measure of the performance of the company’s continuing businesses because they highlight the portion of net income attributable to the core operations of the business. Income from continuing operations is the most directly comparable GAAP measure for operating income (and operating income before income taxes) and measures of operating income that exclude the effects of catastrophe losses and/or prior-year reserve development. These non-GAAP measures should not be misconstrued as substitutes for income from continuing operations or net income determined in accordance with GAAP. A reconciliation of operating income to income from continuing operations and net income for the relevant periods is included on page 9 of this news release and in the Financial Supplement.

 

Operating return on average equity (ROE) is a non-GAAP measure. See end note (6) for a detailed explanation of how this measure is calculated. Operating ROE is based on non-GAAP operating income. In addition, the portion of shareholder equity attributed to unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is excluded. The company believes this measure is helpful in that it provides insight to the capital used by, and results of, the continuing business exclusive of interest expense, income taxes, and other non-operating items. These measures should not be misconstrued as substitutes for GAAP ROE, which is based on net income and shareholders’ equity of the entire company and without adjustments.

 

Book value per share is total shareholders’ equity divided by the number of common shares outstanding. Book value per share excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is a non-GAAP measure and is total shareholders’ equity excluding the after-tax effect of unrealized appreciation (depreciation) on fixed maturities and market risk divided by the number of common shares outstanding.

 

The company may provide measures of operating income and combined ratios that exclude the impact of catastrophe losses (which in all respects include prior accident year catastrophe loss development). A catastrophe is a severe loss, resulting from natural or manmade events including, but is not limited to, hurricanes, tornadoes and other windstorms, hail, flood, earthquakes, fires, drought, explosions, severe winter weather and other convective storms, riots, and terrorism. Due to the unique characteristics of each catastrophe loss, there is an inherent inability to reasonably estimate the timing or loss amount in advance. The company believes a separate discussion excluding the effects of catastrophe losses is meaningful to understand the underlying trends and variability of earnings, loss and combined ratio results, among others.

11

 

 

 

Prior accident year reserve development, which can either be favorable or unfavorable, represents changes in the company’s estimate of costs related to claims from prior years. Calendar year loss and loss adjustment expense (LAE) ratios determined in accordance with GAAP, excluding prior accident year reserve development, are sometimes referred to as “current accident year loss ratios.” The company believes a discussion of loss and combined ratios excluding prior accident year reserve development is helpful since it provides insight into both estimates of current accident year results and the accuracy of prior-year estimates.

 

The loss and combined ratios in accordance with GAAP are the most directly comparable GAAP measures for the loss and combined ratios calculated excluding the effects of catastrophe losses and/or prior-year reserve development. The presentation of loss and combined ratios calculated excluding the effects of catastrophe losses and/or prior-year reserve development should not be misconstrued as substitutes for the loss and/or combined ratios determined in accordance with GAAP.

 

 

 

 

12

 

 

Endnotes

 

(1)
Combined ratio, excluding catastrophes, and current accident year combined ratio, excluding catastrophes, are non-GAAP measures. These and other non-GAAP measures are used throughout this document. See the disclosure on the use of this and other non-GAAP measures under the headings “Forward-Looking Statements" and "Non-GAAP Financial Measures.” The combined ratio (which includes catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. A reconciliation of the GAAP combined ratio to the combined ratio, excluding catastrophes, and to the current accident year combined ratio, excluding catastrophes, is shown below.

 

 

 

Three months ended

 

 

 

 

 

June 30, 2026

 

 

 

 

 

Core Commercial

 

Specialty

 

Personal Lines

 

Total

 

 

Total combined ratio (GAAP)

 

95.7

%

 

88.3

%

 

88.9

%

 

91.2

%

 

 

Less: Catastrophe ratio

 

4.6

%

 

2.7

%

 

8.5

%

 

5.7

%

 

 

Combined ratio, excluding catastrophe losses (non-GAAP)

 

91.1

%

 

85.6

%

 

80.4

%

 

85.5

%

 

 

Less: Prior-year reserve development ratio

 

(0.1)

%

 

(3.0)

%

 

(1.5)

%

 

(1.3)

%

 

 

Current accident year combined ratio, excluding
     catastrophe losses (non-GAAP)

 

91.2

%

 

88.6

%

 

81.9

%

 

86.8

%

 

 

 

 

June 30, 2025

 

 

 

Total combined ratio (GAAP)

 

93.0

%

 

86.5

%

 

95.5

%

 

92.5

%

 

 

Less: Catastrophe ratio

 

4.1

%

 

4.1

%

 

11.1

%

 

7.0

%

 

 

Combined ratio, excluding catastrophe losses (non-GAAP)

 

88.9

%

 

82.4

%

 

84.4

%

 

85.5

%

 

 

Less: Prior-year reserve development ratio

 

(0.5)

%

 

(3.5)

%

 

(0.4)

%

 

(1.2)

%

 

 

Current accident year combined ratio, excluding
     catastrophe losses (non-GAAP)

 

89.4

%

 

85.9

%

 

84.8

%

 

86.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

 

 

 

June 30, 2026

 

 

 

 

 

Core Commercial

 

Specialty

 

Personal Lines

 

Total

 

 

Total combined ratio (GAAP)

 

96.1

%

 

86.3

%

 

90.2

%

 

91.4

%

 

 

Less: Catastrophe ratio

 

5.0

%

 

2.7

%

 

8.8

%

 

6.0

%

 

 

Combined ratio, excluding catastrophe losses (non-GAAP)

 

91.1

%

 

83.6

%

 

81.4

%

 

85.4

%

 

 

Less: Prior-year reserve development ratio

 

(0.2)

%

 

(3.4)

%

 

(1.5)

%

 

(1.5)

%

 

 

Current accident year combined ratio, excluding
     catastrophe losses (non-GAAP)

 

91.3

%

 

87.0

%

 

82.9

%

 

86.9

%

 

 

 

 

June 30, 2025

 

 

 

Total combined ratio (GAAP)

 

98.2

%

 

87.0

%

 

92.6

%

 

93.3

%

 

 

Less: Catastrophe ratio

 

6.3

%

 

4.2

%

 

8.3

%

 

6.7

%

 

 

Combined ratio, excluding catastrophe losses (non-GAAP)

 

91.9

%

 

82.8

%

 

84.3

%

 

86.6

%

 

 

Less: Prior-year reserve development ratio

 

(0.4)

%

 

(4.1)

%

 

(0.4)

%

 

(1.3)

%

 

 

Current accident year combined ratio, excluding
     catastrophe losses (non-GAAP)

 

92.3

%

 

86.9

%

 

84.7

%

 

87.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
(2)
Renewal price changes in Core Commercial and Specialty represent the average change in premium on renewed policies caused by the estimated net effect of base rate changes, discretionary pricing, specific inflationary changes or changes in policy level exposure or insured risks. Rate increases in Core Commercial and Specialty represent the average change in premium on renewed policies caused by the base rate changes, discretionary pricing, and inflation, excluding the impact of changes in policy level exposure or insured risks. Renewal price change in Personal Lines represents the average change in premium on policies charged at renewal caused by the net effects of filed rate, inflation adjustments or other changes in policy level exposure or insured risks, regardless of whether or not the policies are retained for the duration of their contractual terms. Rate change in Personal Lines is the estimated cumulative premium effect of approved rate actions applied to policies at renewal, regardless of whether or not policies are actually renewed. Accordingly, rate changes do not represent actual increases or decreases realized by the company. Personal Lines rate changes do not include inflation or changes in policy level exposure or insured risks.

13

 

 

 

(3)
Current accident year loss and LAE ratio, excluding catastrophe losses, is a non-GAAP measure, which is equal to the loss and LAE ratio (loss ratio), excluding prior-year reserve development and catastrophe losses. The loss ratio (which includes losses, LAE, catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. The following is a reconciliation of the GAAP loss ratio to the current accident year loss ratio, excluding catastrophe losses.

 

 

 

Three months ended

 

 

 

 

 

June 30, 2026

 

 

 

 

 

Core Commercial

 

Specialty

 

Personal
Lines

 

Total

 

 

Total loss and LAE ratio

 

63.2

%

 

51.3

%

 

62.6

%

 

60.2

%

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior-year reserve development ratio

 

(0.1)

%

 

(3.0)

%

 

(1.5)

%

 

(1.3)

%

 

 

Catastrophe ratio

 

4.6

%

 

2.7

%

 

8.5

%

 

5.7

%

 

 

Current accident year loss and LAE ratio, excluding catastrophes

 

58.7

%

 

51.6

%

 

55.6

%

 

55.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

 

 

Total loss and LAE ratio

 

60.1

%

 

49.6

%

 

70.5

%

 

61.9

%

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior-year reserve development ratio

 

(0.5)

%

 

(3.5)

%

 

(0.4)

%

 

(1.2)

%

 

 

Catastrophe ratio

 

4.1

%

 

4.1

%

 

11.1

%

 

7.0

%

 

 

Current accident year loss and LAE ratio, excluding catastrophes

 

56.5

%

 

49.0

%

 

59.8

%

 

56.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six months ended

 

 

 

 

 

June 30, 2026

 

 

 

 

 

Core Commercial

 

Specialty

 

Personal
Lines

 

Total

 

 

Total loss and LAE ratio

 

63.5

%

 

49.6

%

 

64.2

%

 

60.6

%

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior-year reserve development ratio

 

(0.2)

%

 

(3.4)

%

 

(1.5)

%

 

(1.5)

%

 

 

Catastrophe ratio

 

5.0

%

 

2.7

%

 

8.8

%

 

6.0

%

 

 

Current accident year loss and LAE ratio, excluding catastrophes

 

58.7

%

 

50.3

%

 

56.9

%

 

56.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

 

 

Total loss and LAE ratio

 

65.0

%

 

50.1

%

 

67.5

%

 

62.6

%

 

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior-year reserve development ratio

 

(0.4)

%

 

(4.1)

%

 

(0.4)

%

 

(1.3)

%

 

 

Catastrophe ratio

 

6.3

%

 

4.2

%

 

8.3

%

 

6.7

%

 

 

Current accident year loss and LAE ratio, excluding catastrophes

 

59.1

%

 

50.0

%

 

59.6

%

 

57.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

(4)
Book value per share, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is a non-GAAP measure. Book value per share is the most directly comparable GAAP measure and is reconciled in the table below.

 

 

 

 

 

 

 

 

 

 

 

Period ended

 

 

 

 

 

March 31

 

June 30

 

 

 

 

 

2026

 

2026

 

 

Book value per share

 

$101.86

 

$105.40

 

 

Less: Net unrealized appreciation (depreciation) on fixed
  maturity investments, net of tax, per share

 

(5.28)

 

(5.86)

 

 

Book value per share, excluding net unrealized appreciation
  (depreciation) on fixed maturity investments, net of tax

 

$107.14

 

$111.26

 

 

 

 

 

 

 

 

 

 

Versus prior quarter

 

 

 

 

 

 

 

Change in book value per share

 

 

 

 

3.5 %

 

 

Change in book value per share, excluding net unrealized
  appreciation (depreciation) on fixed maturity investments, net of tax

 

 

 

3.8 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5)
Operating income and operating income per diluted share are non-GAAP measures. Operating income before income taxes, as referenced in the results of the reporting segments, is defined as, with respect to such segment, operating income before interest expense and income taxes. The reconciliation of operating income and operating income per diluted share to the closest GAAP measures, income from continuing operations and income from continuing operations per diluted share, respectively, and to net income and net income per diluted share, respectively, is provided on the preceding pages of this news release.
(6)
Operating return on average equity (operating ROE) is a non-GAAP measure. Operating ROE is calculated by dividing annualized operating income after tax for the applicable period (see under the heading in this news release “Non-GAAP Financial Measures” and end note (5)), by average shareholders’ equity, excluding unrealized appreciation (depreciation) on fixed maturity investments, net of tax, for the period presented. Total shareholders’ equity, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is also a non-GAAP measure. Total shareholders’ equity is the most directly comparable GAAP measure and is reconciled in the following table. For the calculation of operating ROE, the average of beginning and ending shareholders’ equity, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is used for the period as shown and reconciled in the following table.

15

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period Ended

 

 

($ in millions)

 

December 31

 

 

March 31

 

 

June 30

 

 

 

 

2025

 

 

2026

 

 

2026

 

 

Total shareholders' equity (GAAP)

 $

3,571.5

 

 $

3,570.4

 

 $

3,672.5

 

 

Less: net unrealized appreciation (depreciation)
     on fixed maturity investments, net of tax

 

(117.1)

 

 

(185.0)

 

 

(204.1)

 

 

Total shareholders' equity, excluding net
     unrealized appreciation (depreciation)
     on fixed maturity investments, net of tax

 $

3,688.6

 

 $

3,755.4

 

 $

3,876.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Averages

 

 

 

 

 

 

 

 

 

 

Average shareholders' equity (GAAP)

 

 

 

 

 

 

 $

3,621.5

 

 

Average shareholders' equity, excluding net
     unrealized appreciation (depreciation) on
     fixed maturity investments, net of tax

 

 

 

 

 

 

 $

3,816.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Year-to-date Averages

 

 

 

 

 

 

 

 

 

 

Average shareholders' equity (GAAP)

 

 

 

 

 

 

 $

3,604.8

 

 

Average shareholders' equity, excluding net
     unrealized appreciation (depreciation) on
     fixed maturity investments, net of tax

 

 

 

 

 

 

 $

3,773.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

Three months ended

 

Six months ended

 

 

 

 

June 30

 

June 30

 

 

Net Income ROE

 

2026

 

2026

 

 

Net income (GAAP)

 

$

191.6

 

 

$

378.4

 

 

 

Annualized net income*

 

 

766.4

 

 

 

756.8

 

 

 

Average shareholders' equity (GAAP)

 

$

3,621.5

 

 

$

3,604.8

 

 

 

Return on equity

 

 

21.2

%

 

 

21.0

%

 

 

Operating Income ROE (non-GAAP)

 

 

 

 

 

 

 

 

 

 

Operating income after taxes

 

$

189.2

 

 

$

377.7

 

 

 

Annualized operating income, net of tax*

 

 

756.8

 

 

 

755.4

 

 

 

Average shareholders' equity, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax

 

$

3,816.0

 

 

$

3,773.5

 

 

 

Operating return on equity

 

 

19.8

%

 

 

20.0

%

 

 

 

 

 

 

 

 

 

 

 

 

*For three months ended June 30, 2026, annualized net income and operating income after taxes is calculated by multiplying three months ended net income and

operating income after taxes, respectively, by 4. For six months ended June 30, 2026, annualized net income and operating income after taxes is calculated by

multiplying six months ended net income and operating income after taxes, respectively, by 2.

 

(7)
Here, and throughout this document, the expense ratio is reduced by installment and other fee revenues for purposes of the ratio calculation.
(8)
The separate financial information of each reporting segment is presented consistent with the way results are regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Management evaluates the results of the aforementioned reporting segments without consideration of interest expense on debt and on a pre-tax basis.

16

 

 

Exhibit 99.2

img13518483_0.gif

 

 

 

FINANCIAL SUPPLEMENT
SECOND QUARTER 2026

 

 

 

 

 

 

 

 

 

 

THE HANOVER INSURANCE GROUP

 

 

FINANCIAL SUPPLEMENT

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

Segment Descriptions....................................................................................................

1

Financial Highlights.........................................................................................................

2

Consolidated Financial Statements

 

Income Statements.............................................................................................................

3

Balance Sheets...................................................................................................................

4

Pre-tax Operating Results and Related Metrics

 

Consolidated.......................................................................................................................

5-7

Core Commercial...............................................................................................................

8-9

Specialty..............................................................................................................................

10-11

Personal Lines....................................................................................................................

12-15

Investments

 

Net Investment Income and Yields.....................................................................................

16

Investment Portfolio.............................................................................................................

17

Credit Quality and Duration of Fixed Maturities...............................................................

18

Top 10 Corporate and Municipal Fixed Maturity Holdings.............................................

19

Reconciliation of Operating Income to Net Income................................................

20

Other Information

Non-GAAP Financial Measures........................................................................................

21

Premium Related Metric Definitions.................................................................................

22

Corporate Information.........................................................................................................

23

Market and Dividend Information......................................................................................

23

Financial Strength and Debt Ratings................................................................................

23

 

 

 

i

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

BASIS OF PRESENTATION

SEGMENT DESCRIPTIONS

 

 

 

 

 

 

 

 

CORE COMMERCIAL

 

 

 

 

 

 

 

 

Sub-segment

Customer and business type

 

Primary lines of business

Small Commercial

Coverage to small businesses, with annual premiums of $50,000 or less;
Products are tailored to specific industry segments as needed.

 

● Business owners’ policy/commercial multiple peril
● Commercial automobile
● Workers’ compensation
● Other (general liability, commercial umbrella, monoline property)

Middle Market

Coverage to mid-sized businesses with annual premiums starting at $50,000, focusing on those between $50,000 and $250,000. Products are tailored to certain specific industry segments, including technology, manufacturing, human services, retail, real estate, among others.

 

● Commercial multiple peril
● Commercial automobile
● Workers’ compensation
● Other (general liability, commercial umbrella, monoline property)

SPECIALTY

 

 

 

 

 

 

 

 

Sub-segment

Customer and business type

 

Primary lines of business

Marine and Industrial Property

Inland and ocean marine - insures against physical losses to property, such as contractor's equipment, builders' risk and goods in transit. Also covers jewelers block, fine art and other valuables.
Hanover Specialty Industrial (HSI) - coverage to small and medium chemical, paint, solvent and other manufacturers and distributors.

 

● Inland/ocean marine
● Ancillary lines of business written through marine agents
● Property, fire and allied lines

Professional and Executive Lines

Coverage to small to mid-sized non-public companies, including lawyer, engineer, accountant, and various other professional and advisory firms including healthcare; provide protection for directors, officers and employees against actual or alleged errors, negligence or bad faith, employment practices.

 

● Professional liability
● Management liability
● Fidelity and crime
● Other property and liability lines for healthcare firms

E&S and Alternative Markets

Excess & surplus - non-admitted general liability and property coverage to risks outside of the appetite of standard commercial lines;
Program business - coverage to markets with specialty or risk management needs related to groups of similar businesses;
Specialty general liability - admitted coverage for higher-hazard liability risks

 

● Commercial multiple peril
● Commercial automobile
● Workers’ compensation
● Other (general liability, commercial umbrella, monoline property)

Surety and Other

Provides coverage for construction and other firms, as well as sole proprietors in the event of claims for non-performance or non-payment, and commercial surety coverage related to fiduciary or regulatory obligations.

 

● Bond

PERSONAL LINES

 

 

 

 

 

 

 

 

Sub-segment

Customer and business type

 

Primary lines of business

Personal Automobile

Includes coverage for individuals against losses incurred from personal bodily injury, bodily injury to third parties, property damage to an insured's vehicle, and property damage to other vehicles and other property.

 

● Personal automobile

Homeowners and Other

Includes coverage for individuals for losses to their residences and personal property, such as those caused by fire, wind, hail, water damage (excluding flood), theft and vandalism, and against third-party liability claims.

 

● Homeowners
● Personal umbrella
● Inland Marine (jewelry, art, etc.)
● Other (fire, personal watercraft, other miscellaneous)

OTHER

 

 

 

 

 

 

 

 

The Other segment primarily includes earnings on holding company assets; holding company and other expenses, including certain costs associated with retirement benefits due to our former life insurance subsidiaries' employees and agents; and our run-off direct asbestos and environmental business, run-off voluntary assumed property and casualty pools, and run-off product liability business.

 

1

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL HIGHLIGHTS

 

 

Q1

 

 

Q2

 

 

Q3

 

 

Q4

 

 

Q1

 

 

Q2

 

 

Jun-YTD

 

 

Jun-YTD

 

(In millions, except earnings per share)

 

2025

 

 

2025

 

 

2025

 

 

2025

 

 

2026

 

 

2026

 

 

2025

 

 

2026

 

PREMIUMS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

$

1,689.9

 

$

1,752.6

 

$

1,913.5

 

$

1,666.6

 

$

1,742.3

 

$

1,828.3

 

$

3,442.5

 

$

3,570.6

 

Net premiums written

 

1,510.8

 

 

1,583.8

 

 

1,738.9

 

 

1,488.6

 

 

1,559.7

 

 

1,656.8

 

 

3,094.6

 

 

3,216.5

 

Net premiums earned

 

1,508.5

 

 

1,545.3

 

 

1,550.7

 

 

1,556.6

 

 

1,570.6

 

 

1,597.6

 

 

3,053.8

 

 

3,168.2

 

EARNINGS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income before interest and taxes

$

186.4

 

$

209.9

 

$

247.7

 

$

289.0

 

$

250.2

 

$

251.9

 

$

396.3

 

$

502.1

 

Operating income after taxes

 

141.8

 

 

158.7

 

 

185.6

 

 

210.1

 

 

188.5

 

 

189.2

 

 

300.5

 

 

377.7

 

Income from continuing operations

 

128.2

 

 

156.9

 

 

178.6

 

 

197.0

 

 

186.8

 

 

191.4

 

 

285.1

 

 

378.2

 

Net income

 

128.2

 

 

157.1

 

 

178.7

 

 

198.5

 

 

186.8

 

 

191.6

 

 

285.3

 

 

378.4

 

PER SHARE DATA (DILUTED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income after taxes

$

3.87

 

$

4.35

 

$

5.09

 

$

5.79

 

$

5.25

 

$

5.31

 

$

8.22

 

$

10.55

 

Income from continuing operations

 

3.50

 

 

4.30

 

 

4.90

 

 

5.43

 

 

5.20

 

 

5.37

 

 

7.80

 

 

10.57

 

Net income

 

3.50

 

 

4.30

 

 

4.90

 

 

5.47

 

 

5.20

 

 

5.38

 

 

7.80

 

 

10.58

 

Dilutive weighted average shares outstanding

 

36.6

 

 

36.5

 

 

36.4

 

 

36.3

 

 

35.9

 

 

35.6

 

 

36.6

 

 

35.8

 

Basic weighted average shares outstanding

 

36.0

 

 

35.9

 

 

35.8

 

 

35.5

 

 

35.2

 

 

35.0

 

 

35.9

 

 

35.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BALANCE SHEET

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31

 

 

June 30

 

 

September 30

 

 

December 31

 

 

March 31

 

 

June 30

 

 

 

 

 

 

 

(In millions, except per share data)

 

2025

 

 

2025

 

 

2025

 

 

2025

 

 

2026

 

 

2026

 

 

 

 

 

 

 

Total assets

$

15,470.3

 

$

15,732.1

 

$

16,774.2

 

$

16,945.9

 

$

16,527.7

 

$

16,863.9

 

 

 

 

 

 

 

Total loss and loss adjustment expense reserves

 

7,608.9

 

 

7,636.2

 

 

7,706.5

 

 

7,755.2

 

 

7,911.1

 

 

8,001.7

 

 

 

 

 

 

 

Total shareholders' equity

 

3,044.4

 

 

3,216.3

 

 

3,426.3

 

 

3,571.5

 

 

3,570.4

 

 

3,672.5

 

 

 

 

 

 

 

Total shareholders' equity, excluding net unrealized appreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(depreciation) on fixed maturity investments, net of tax

 

3,335.3

 

 

3,451.0

 

 

3,573.4

 

 

3,688.6

 

 

3,755.4

 

 

3,876.6

 

 

 

 

 

 

 

Property and Casualty Companies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statutory surplus

$

3,098.3

 

$

3,097.0

 

$

3,273.1

 

$

3,337.9

 

$

3,535.1

 

$

3,540.9

 

 

 

 

 

 

 

Premium to surplus ratio

 

1.98:1

 

 

2.00:1

 

 

1.92:1

 

 

1.90:1

 

 

1.80:1

 

 

1.81:1

 

 

 

 

 

 

 

Book value per share

$

84.56

 

$

89.62

 

$

96.00

 

$

100.90

 

$

101.86

 

$

105.40

 

 

 

 

 

 

 

Book value per share, excluding net unrealized appreciation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(depreciation) on fixed maturity investments, net of tax

$

92.64

 

$

96.16

 

$

100.13

 

$

104.21

 

$

107.14

 

$

111.26

 

 

 

 

 

 

 

Tangible book value per share (total book value excluding goodwill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

and intangibles)

$

79.10

 

$

84.12

 

$

90.46

 

$

95.34

 

$

96.26

 

$

99.79

 

 

 

 

 

 

 

Shares outstanding

 

36.0

 

 

35.9

 

 

35.7

 

 

35.4

 

 

35.1

 

 

34.9

 

 

 

 

 

 

 

Total debt/equity

 

25.8 %

 

 

24.4 %

 

 

37.4 %

 

 

34.1 %

 

 

23.6 %

 

 

23.0 %

 

 

 

 

 

 

 

Total debt/total capital

 

20.5 %

 

 

19.6 %

 

 

27.2 %

 

 

25.4 %

 

 

19.1 %

 

 

18.7 %

 

 

 

 

 

 

 

 

2

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months ended June 30

 

Six Months ended June 30

(In millions)

 

2026

 

2025

% Change

 

 

2026

 

2025

% Change

 

 

 

 

 

 

 

 

 

 

 

 

 Premiums earned

$

1,597.6

$

1,545.3

3.4

 

$

3,168.2

$

3,053.8

3.7

 Net investment income

 

119.6

 

105.5

13.4

 

 

246.5

 

211.6

16.5

 Net realized and unrealized investment gains (losses):

 

 

 

 

 

 

 

 

 

 

 

       Net realized losses from sales and other

 

(5.4)

 

(4.6)

17.4

 

 

(10.3)

 

(23.4)

(56.0)

       Net change in fair value of equity securities and other

 

10.5

 

5.0

N/M

 

 

15.1

 

6.0

N/M

 Impairments on investments:

 

 

 

 

 

 

 

 

 

 

 

 Credit-related impairments

 

(1.4)

 

(2.5)

(44.0)

 

 

(3.0)

 

(2.5)

20.0

 Losses on intent to sell securities

 

(0.9)

 

(0.4)

N/M

 

 

(1.3)

 

(0.4)

N/M

 Total impairments on investments

 

(2.3)

 

(2.9)

(20.7)

 

 

(4.3)

 

(2.9)

48.3

 Total net realized and unrealized investment gains (losses)

 

2.8

 

(2.5)

N/M

 

 

0.5

 

(20.3)

N/M

 Fees and other income

 

6.2

 

6.1

1.6

 

 

12.4

 

12.5

(0.8)

 Total revenues

 

1,726.2

 

1,654.4

4.3

 

 

3,427.6

 

3,257.6

5.2

 

 

 

 

 

 

 

 

 

 

 

 LOSSES AND EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Losses and loss adjustment expenses

 

962.5

 

957.2

0.6

 

 

1,920.1

 

1,912.5

0.4

 Amortization of deferred acquisition costs

 

338.0

 

319.0

6.0

 

 

671.2

 

632.9

6.1

 Interest expense

 

10.1

 

8.6

17.4

 

 

20.9

 

17.1

22.2

 Other operating expenses

 

171.0

 

170.8

0.1

 

 

333.7

 

336.2

(0.7)

 Total losses and expenses

 

1,481.6

 

1,455.6

1.8

 

 

2,945.9

 

2,898.7

1.6

 

 

 

 

 

 

 

 

 

 

 

 

 Income before income taxes

 

244.6

 

198.8

23.0

 

 

481.7

 

358.9

34.2

 Income tax expense

 

53.2

 

41.9

27.0

 

 

103.5

 

73.8

40.2

 Income from continuing operations

 

191.4

 

156.9

22.0

 

 

378.2

 

285.1

32.7

 Discontinued operations (net of taxes):

 

 

 

 

 

 

 

 

 

 

 

 Income from discontinued life businesses

 

0.2

 

0.2

-

 

 

0.2

 

0.2

-

 Net income

$

191.6

$

157.1

22.0

 

$

378.4

$

285.3

32.6

 

3

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

CONSOLIDATED BALANCE SHEETS

 

 

June 30

 

December 31

 

 

(In millions, except per share data)

 

2026

 

2025

 

% Change

ASSETS

 

 

 

 

 

 

Investments:

 

 

 

 

 

 

Fixed maturities, at fair value (amortized cost of $10,320.6 and $9,685.7)

$

10,061.1

$

9,536.5

 

5.5

Equity securities, at fair value

 

203.3

 

184.8

 

10.0

Other investments

 

637.6

 

661.4

 

(3.6)

Total investments

 

10,902.0

 

10,382.7

 

5.0

Cash and cash equivalents

 

266.1

 

1,122.7

 

(76.3)

Accrued investment income

 

88.0

 

80.1

 

9.9

Premiums and accounts receivable, net

 

1,950.1

 

1,861.3

 

4.8

Reinsurance recoverable on paid and unpaid losses and unearned premiums

 

2,078.9

 

2,011.1

 

3.4

Deferred acquisition costs

 

716.2

 

703.0

 

1.9

Deferred income tax asset

 

108.7

 

83.3

 

30.5

Goodwill

 

178.8

 

178.8

 

-

Other assets

 

490.5

 

439.3

 

11.7

Assets of discontinued businesses

 

84.6

 

83.6

 

1.2

Total assets

$

16,863.9

$

16,945.9

 

(0.5)

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

LIABILITIES

 

 

 

 

 

 

Loss and loss adjustment expense reserves

$

8,001.7

$

7,755.2

 

3.2

Unearned premiums

 

3,479.6

 

3,440.4

 

1.1

Expenses and taxes payable

 

716.2

 

806.7

 

(11.2)

Reinsurance premiums payable

 

45.1

 

45.2

 

(0.2)

Short-term debt

 

50.1

 

375.0

 

(86.6)

Long-term debt

 

793.9

 

843.3

 

(5.9)

Liabilities of discontinued businesses

 

104.8

 

108.6

 

(3.5)

Total liabilities

 

13,191.4

 

13,374.4

 

(1.4)

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Preferred stock, par value $0.01 per share;

 

 

 

 

 

 

20.0 million shares authorized; none issued

 

-

 

-

 

-

Common stock, par value $0.01 per share; 300.0 million shares

 

 

 

 

 

 

authorized; 60.5 million shares issued

 

0.6

 

0.6

 

-

Additional paid-in capital

 

2,032.0

 

2,013.5

 

0.9

Accumulated other comprehensive loss

 

(255.7)

 

(171.4)

 

49.2

Retained earnings

 

4,052.5

 

3,741.6

 

8.3

Treasury stock at cost (25.6 and 25.1 million shares)

 

(2,156.9)

 

(2,012.8)

 

7.2

Total shareholders' equity

 

3,672.5

 

3,571.5

 

2.8

Total liabilities and shareholders' equity

$

16,863.9

$

16,945.9

 

(0.5)

 

4

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP UNDERWRITING AND OPERATING INCOME (LOSS) INFORMATION AND RATIOS

CONSOLIDATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months ended June 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core

 

 

 

Personal

 

 

 

 

 

 

Core

 

 

 

Personal

 

 

 

 

(In millions, except percentage data)

 

 

Commercial

 

Specialty

 

Lines

 

Other

 

Total

 

 

Commercial

 

Specialty

 

Lines

 

Other

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

 

$

661.7

$

441.3

$

725.3

$

-

$

1,828.3

 

$

622.4

$

424.4

$

705.8

$

-

$

1,752.6

 

 

 

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

Net premiums written

 

$

574.8

$

384.4

$

697.6

$

-

$

1,656.8

 

$

536.0

$

368.2

$

679.6

$

-

$

1,583.8

 

 

 

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

Net premiums earned

 

$

579.3

$

365.8

$

652.5

$

-

$

1,597.6

 

$

554.3

$

355.9

$

635.1

$

-

$

1,545.3

 

 

 

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

Losses and LAE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

-

 

 

 

 

 

 

-

 

 

 

-

 

 

Current year, excluding catastrophe losses

 

 

340.6

 

188.5

 

363.1

 

-

 

892.2

 

 

313.6

 

174.3

 

380.0

 

-

 

867.9

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Prior year favorable development, excluding catastrophe losses

 

 

(0.6)

 

(10.8)

 

(10.1)

 

-

 

(21.5)

 

 

(3.0)

 

(12.5)

 

(2.6)

 

(0.1)

 

(18.2)

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Current year catastrophe losses

 

 

34.2

 

13.2

 

57.3

 

-

 

104.7

 

 

25.2

 

16.1

 

72.2

 

-

 

113.5

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Prior year favorable catastrophe development

 

 

(7.8)

 

(3.2)

 

(1.9)

 

-

 

(12.9)

 

 

(2.5)

 

(1.5)

 

(2.0)

 

-

 

(6.0)

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Total losses and LAE

 

 

366.4

 

187.7

 

408.4

 

-

 

962.5

 

 

333.3

 

176.4

 

447.6

 

(0.1)

 

957.2

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Amortization of deferred acquisition costs and other underwriting expenses

 

 

189.7

 

135.9

 

174.7

 

-

 

500.3

 

 

183.8

 

131.7

 

162.3

 

-

 

477.8

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

GAAP underwriting profit

 

 

23.2

 

42.2

 

69.4

 

-

 

134.8

 

 

37.2

 

47.8

 

25.2

 

0.1

 

110.3

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Net investment income

 

 

55.3

 

27.2

 

33.3

 

3.8

 

119.6

 

 

47.7

 

24.3

 

30.2

 

3.3

 

105.5

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Other income

 

 

1.3

 

1.2

 

3.7

 

-

 

6.2

 

 

1.3

 

1.1

 

3.7

 

-

 

6.1

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Other operating expenses

 

 

(2.3)

 

(2.2)

 

(1.5)

 

(2.7)

 

(8.7)

 

 

(2.3)

 

(2.0)

 

(1.7)

 

(6.0)

 

(12.0)

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

 

 

 

-

 

 

Operating income (loss) before income taxes

 

$

77.5

$

68.4

$

104.9

$

1.1

$

251.9

 

$

83.9

$

71.2

$

57.4

$

(2.6)

$

209.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

 

58.7 %

 

51.6 %

 

55.6 %

 

N/M

 

55.8 %

 

 

56.5 %

 

49.0 %

 

59.8 %

 

N/M

 

56.1 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable development, excluding catastrophe losses

 

 

(0.1)%

 

(3.0)%

 

(1.5)%

 

N/M

 

(1.3)%

 

 

(0.5)%

 

(3.5)%

 

(0.4)%

 

N/M

 

(1.2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

 

 

5.9 %

 

3.6 %

 

8.8 %

 

N/M

 

6.5 %

 

 

4.6 %

 

4.5 %

 

11.4 %

 

N/M

 

7.4 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable catastrophe development

 

 

(1.3)%

 

(0.9)%

 

(0.3)%

 

N/M

 

(0.8)%

 

 

(0.5)%

 

(0.4)%

 

(0.3)%

 

N/M

 

(0.4)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loss and LAE ratio

 

 

63.2 %

 

51.3 %

 

62.6 %

 

N/M

 

60.2 %

 

 

60.1 %

 

49.6 %

 

70.5 %

 

N/M

 

61.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio

 

 

32.5 %

 

37.0 %

 

26.3 %

 

N/M

 

31.0 %

 

 

32.9 %

 

36.9 %

 

25.0 %

 

N/M

 

30.6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio

 

 

95.7 %

 

88.3 %

 

88.9 %

 

N/M

 

91.2 %

 

 

93.0 %

 

86.5 %

 

95.5 %

 

N/M

 

92.5 %

 

5

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP UNDERWRITING AND OPERATING INCOME (LOSS) INFORMATION AND RATIOS

CONSOLIDATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months ended June 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2026

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core

 

 

 

Personal

 

 

 

 

 

 

Core

 

 

 

Personal

 

 

 

 

(In millions, except percentage data)

 

 

Commercial

 

Specialty

 

Lines

 

Other

 

Total

 

 

Commercial

 

Specialty

 

Lines

 

Other

 

Total

Gross premiums written

 

$

1,383.5

$

873.7

$

1,313.4

$

-

$

3,570.6

 

$

1,315.5

$

848.8

$

1,278.2

$

-

$

3,442.5

Net premiums written

 

$

1,205.2

$

751.1

$

1,260.2

$

-

$

3,216.5

 

$

1,140.6

$

726.5

$

1,227.5

$

-

$

3,094.6

Net premiums earned

 

$

1,143.1

$

725.7

$

1,299.4

$

-

$

3,168.2

 

$

1,095.3

$

695.5

$

1,263.0

$

-

$

3,053.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and LAE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

 

671.8

 

365.3

 

738.8

 

-

 

1,775.9

 

 

647.8

 

347.6

 

752.2

 

-

 

1,747.6

Prior year favorable development, excluding catastrophe losses

 

 

(2.2)

 

(25.0)

 

(19.3)

 

-

 

(46.5)

 

 

(4.3)

 

(28.4)

 

(5.4)

 

(0.1)

 

(38.2)

Current accident year catastrophe losses

 

 

86.3

 

28.6

 

137.5

 

-

 

252.4

 

 

79.7

 

33.3

 

108.1

 

-

 

221.1

Prior year favorable catastrophe development

 

 

(29.5)

 

(9.0)

 

(23.2)

 

-

 

(61.7)

 

 

(11.0)

 

(4.0)

 

(3.0)

 

-

 

(18.0)

Total losses and LAE

 

 

726.4

 

359.9

 

833.8

 

-

 

1,920.1

 

 

712.2

 

348.5

 

851.9

 

(0.1)

 

1,912.5

Amortization of deferred acquisition costs and other underwriting expenses

 

 

375.7

 

267.5

 

343.9

 

-

 

987.1

 

 

365.9

 

258.0

 

324.2

 

-

 

948.1

GAAP underwriting profit

 

 

41.0

 

98.3

 

121.7

 

-

 

261.0

 

 

17.2

 

89.0

 

86.9

 

0.1

 

193.2

Net investment income

 

 

113.6

 

55.9

 

68.5

 

8.5

 

246.5

 

 

95.7

 

48.6

 

60.7

 

6.6

 

211.6

Other income

 

 

2.7

 

2.4

 

7.3

 

-

 

12.4

 

 

2.6

 

2.4

 

7.4

 

0.1

 

12.5

Other operating expenses

 

 

(5.0)

 

(4.2)

 

(3.4)

 

(5.2)

 

(17.8)

 

 

(4.8)

 

(4.2)

 

(3.4)

 

(8.6)

 

(21.0)

Operating income (loss) before income taxes

 

$

152.3

$

152.4

$

194.1

$

3.3

$

502.1

 

$

110.7

$

135.8

$

151.6

$

(1.8)

$

396.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

 

58.7 %

 

50.3 %

 

56.9 %

 

N/M

 

56.1 %

 

 

59.1 %

 

50.0 %

 

59.6 %

 

N/M

 

57.2 %

Prior year favorable development, excluding catastrophe losses

 

 

(0.2)%

 

(3.4)%

 

(1.5)%

 

N/M

 

(1.5)%

 

 

(0.4)%

 

(4.1)%

 

(0.4)%

 

N/M

 

(1.3)%

Current year catastrophe losses

 

 

7.6 %

 

3.9 %

 

10.6 %

 

N/M

 

7.9 %

 

 

7.3 %

 

4.8 %

 

8.5 %

 

N/M

 

7.3 %

Prior year favorable catastrophe development

 

 

(2.6)%

 

(1.2)%

 

(1.8)%

 

N/M

 

(1.9)%

 

 

(1.0)%

 

(0.6)%

 

(0.2)%

 

N/M

 

(0.6)%

Total loss and LAE ratio

 

 

63.5 %

 

49.6 %

 

64.2 %

 

N/M

 

60.6 %

 

 

65.0 %

 

50.1 %

 

67.5 %

 

N/M

 

62.6 %

Expense ratio

 

 

32.6 %

 

36.7 %

 

26.0 %

 

N/M

 

30.8 %

 

 

33.2 %

 

36.9 %

 

25.1 %

 

N/M

 

30.7 %

Combined ratio

 

 

96.1 %

 

86.3 %

 

90.2 %

 

N/M

 

91.4 %

 

 

98.2 %

 

87.0 %

 

92.6 %

 

N/M

 

93.3 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RELATED RATIOS

CONSOLIDATED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Jun-YTD

 

Jun-YTD

(In millions, except percentage data)

 

2025

 

2025

 

2025

 

2025

 

2026

 

2026

 

2025

 

2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

$

1,689.9

$

1,752.6

$

1,913.5

$

1,666.6

$

1,742.3

$

1,828.3

$

3,442.5

$

3,570.6

Net premiums written

$

1,510.8

$

1,583.8

$

1,738.9

$

1,488.6

$

1,559.7

$

1,656.8

$

3,094.6

$

3,216.5

Net premiums earned

$

1,508.5

$

1,545.3

$

1,550.7

$

1,556.6

$

1,570.6

$

1,597.6

$

3,053.8

$

3,168.2

Losses and LAE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

879.7

 

867.9

 

893.0

 

882.8

 

883.7

 

892.2

 

1,747.6

 

1,775.9

Prior year favorable development, excluding catastrophe losses

 

(20.0)

 

(18.2)

 

(12.1)

 

(20.1)

 

(25.0)

 

(21.5)

 

(38.2)

 

(46.5)

Current year catastrophe losses

 

107.6

 

113.5

 

46.2

 

35.0

 

147.7

 

104.7

 

221.1

 

252.4

Prior year favorable catastrophe development

 

(12.0)

 

(6.0)

 

-

 

(8.0)

 

(48.8)

 

(12.9)

 

(18.0)

 

(61.7)

Total losses and LAE

 

955.3

 

957.2

 

927.1

 

889.7

 

957.6

 

962.5

 

1,912.5

 

1,920.1

Amortization of deferred acquisition costs and other underwriting expenses

 

470.3

 

477.8

 

490.3

 

500.9

 

486.8

 

500.3

 

948.1

 

987.1

GAAP underwriting profit

 

82.9

 

110.3

 

133.3

 

166.0

 

126.2

 

134.8

 

193.2

 

261.0

Net investment income

 

106.1

 

105.5

 

117.0

 

125.8

 

126.9

 

119.6

 

211.6

 

246.5

Other income

 

6.4

 

6.1

 

6.3

 

6.1

 

6.2

 

6.2

 

12.5

 

12.4

Other operating expenses

 

(9.0)

 

(12.0)

 

(8.9)

 

(8.9)

 

(9.1)

 

(8.7)

 

(21.0)

 

(17.8)

Operating income before income taxes

$

186.4

$

209.9

$

247.7

$

289.0

$

250.2

$

251.9

$

396.3

$

502.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

58.3 %

 

56.1 %

 

57.6 %

 

56.8 %

 

56.3 %

 

55.8 %

 

57.2 %

 

56.1 %

Prior year favorable development, excluding catastrophe losses

 

(1.3)%

 

(1.2)%

 

(0.8)%

 

(1.3)%

 

(1.6)%

 

(1.3)%

 

(1.3)%

 

(1.5)%

Current year catastrophe losses

 

7.1 %

 

7.4 %

 

3.0 %

 

2.2 %

 

9.4 %

 

6.5 %

 

7.3 %

 

7.9 %

Prior year favorable catastrophe development

 

(0.8)%

 

(0.4)%

 

-

 

(0.5)%

 

(3.1)%

 

(0.8)%

 

(0.6)%

 

(1.9)%

Total loss and LAE ratio

 

63.3 %

 

61.9 %

 

59.8 %

 

57.2 %

 

61.0 %

 

60.2 %

 

62.6 %

 

60.6 %

Expense ratio

 

30.8 %

 

30.6 %

 

31.3 %

 

31.8 %

 

30.7 %

 

31.0 %

 

30.7 %

 

30.8 %

Combined ratio

 

94.1 %

 

92.5 %

 

91.1 %

 

89.0 %

 

91.7 %

 

91.2 %

 

93.3 %

 

91.4 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio, excluding catastrophe losses

 

87.8 %

 

85.5 %

 

88.1 %

 

87.3 %

 

85.4 %

 

85.5 %

 

86.6 %

 

85.4 %

Current accident year combined ratio, excluding catastrophe losses

 

89.1 %

 

86.7 %

 

88.9 %

 

88.6 %

 

87.0 %

 

86.8 %

 

87.9 %

 

86.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS

CORE COMMERCIAL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Jun-YTD

 

Jun-YTD

(In millions, except percentage data)

 

2025

 

2025

 

2025

 

2025

 

2026

 

2026

 

2025

 

2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

$

693.1

$

622.4

$

709.5

$

599.1

$

721.8

$

661.7

$

1,315.5

$

1,383.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written

$

604.6

$

536.0

$

620.3

$

512.8

$

630.4

$

574.8

$

1,140.6

$

1,205.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned

$

541.0

$

554.3

$

554.2

$

561.5

$

563.8

$

579.3

$

1,095.3

$

1,143.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and LAE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

334.2

 

313.6

 

335.6

 

322.2

 

331.2

 

340.6

 

647.8

 

671.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable development, excluding catastrophe losses

 

(1.3)

 

(3.0)

 

(1.2)

 

(1.6)

 

(1.6)

 

(0.6)

 

(4.3)

 

(2.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

 

54.5

 

25.2

 

17.8

 

26.9

 

52.1

 

34.2

 

79.7

 

86.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable catastrophe development

 

(8.5)

 

(2.5)

 

-

 

-

 

(21.7)

 

(7.8)

 

(11.0)

 

(29.5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total losses and LAE

 

378.9

 

333.3

 

352.2

 

347.5

 

360.0

 

366.4

 

712.2

 

726.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of deferred acquisition costs and other underwriting expenses

 

182.1

 

183.8

 

187.8

 

193.2

 

186.0

 

189.7

 

365.9

 

375.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP underwriting profit (loss)

 

(20.0)

 

37.2

 

14.2

 

20.8

 

17.8

 

23.2

 

17.2

 

41.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

48.0

 

47.7

 

51.8

 

55.0

 

58.3

 

55.3

 

95.7

 

113.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

1.3

 

1.3

 

1.3

 

1.3

 

1.4

 

1.3

 

2.6

 

2.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

(2.5)

 

(2.3)

 

(2.2)

 

(2.0)

 

(2.7)

 

(2.3)

 

(4.8)

 

(5.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income before income taxes

$

26.8

$

83.9

$

65.1

$

75.1

$

74.8

$

77.5

$

110.7

$

152.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

61.7 %

 

56.5 %

 

60.6 %

 

57.4 %

 

58.8 %

 

58.7 %

 

59.1 %

 

58.7 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable development, excluding catastrophe losses

 

(0.2)%

 

(0.5)%

 

(0.2)%

 

(0.3)%

 

(0.3)%

 

(0.1)%

 

(0.4)%

 

(0.2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

 

10.1 %

 

4.6 %

 

3.2 %

 

4.8 %

 

9.2 %

 

5.9 %

 

7.3 %

 

7.6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable catastrophe development

 

(1.6)%

 

(0.5)%

 

-

 

-

 

(3.8)%

 

(1.3)%

 

(1.0)%

 

(2.6)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loss and LAE ratio

 

70.0 %

 

60.1 %

 

63.6 %

 

61.9 %

 

63.9 %

 

63.2 %

 

65.0 %

 

63.5 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio

 

33.4 %

 

32.9 %

 

33.7 %

 

34.2 %

 

32.7 %

 

32.5 %

 

33.2 %

 

32.6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio

 

103.4 %

 

93.0 %

 

97.3 %

 

96.1 %

 

96.6 %

 

95.7 %

 

98.2 %

 

96.1 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio, excluding catastrophe losses

 

94.9 %

 

88.9 %

 

94.1 %

 

91.3 %

 

91.2 %

 

91.1 %

 

91.9 %

 

91.1 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current accident year combined ratio, excluding catastrophe losses

 

95.1 %

 

89.4 %

 

94.3 %

 

91.6 %

 

91.5 %

 

91.2 %

 

92.3 %

 

91.3 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

 

 

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PREMIUMS WRITTEN AND RELATED METRICS

CORE COMMERCIAL

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Jun-YTD

 

Jun-YTD

(In millions, except percentage data)

 

2025

 

2025

 

2025

 

2025

 

2026

 

2026

 

2025

 

2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Written Premium

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

$

693.1

$

622.4

$

709.5

$

599.1

$

721.8

$

661.7

$

1,315.5

$

1,383.5

Ceded

 

(88.5)

 

(86.4)

 

(89.2)

 

(86.3)

 

(91.4)

 

(86.9)

 

(174.9)

 

(178.3)

Net

$

604.6

$

536.0

$

620.3

$

512.8

$

630.4

$

574.8

$

1,140.6

$

1,205.2

Growth

 

3.8%

 

4.4%

 

3.5%

 

2.5%

 

4.3%

 

7.2%

 

4.1%

 

5.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written by sub-segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Small Commercial

$

341.8

$

334.3

$

333.5

$

315.7

$

363.6

$

354.2

$

676.0

$

717.8

Middle Market

 

262.8

 

201.7

 

286.8

 

197.1

 

266.8

 

220.6

 

464.6

 

487.4

Total

$

604.6

$

536.0

$

620.3

$

512.8

$

630.4

$

574.8

$

1,140.6

$

1,205.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written by line of business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Multiple Peril

$

298.8

$

264.9

$

327.7

$

267.8

$

306.0

$

281.5

$

563.7

$

587.5

Commercial Automobile

 

114.2

 

104.6

 

112.1

 

96.4

 

123.4

 

113.6

 

218.8

 

237.0

Workers’ Compensation

 

123.5

 

102.3

 

100.1

 

92.9

 

120.8

 

104.1

 

225.8

 

224.9

Other Core Commercial

 

68.1

 

64.2

 

80.4

 

55.7

 

80.2

 

75.6

 

132.3

 

155.8

Total

$

604.6

$

536.0

$

620.3

$

512.8

$

630.4

$

574.8

$

1,140.6

$

1,205.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Retention

 

84.4%

 

85.1%

 

84.4%

 

85.3%

 

85.2%

 

85.7%

 

84.8%

 

85.4%

Renewal Price Change

 

11.1%

 

10.7%

 

9.9%

 

9.4%

 

8.6%

 

7.8%

 

10.9%

 

8.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS

SPECIALTY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Jun-YTD

 

Jun-YTD

(In millions, except percentage data)

 

2025

 

2025

 

2025

 

2025

 

2026

 

2026

 

2025

 

2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

$

424.4

$

424.4

$

437.7

$

401.7

$

432.4

$

441.3

$

848.8

$

873.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Net premiums written

$

358.3

$

368.2

$

379.2

$

335.8

$

366.7

$

384.4

$

726.5

$

751.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned

$

339.6

$

355.9

$

353.9

$

348.9

$

359.9

$

365.8

$

695.5

$

725.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and LAE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

173.3

 

174.3

 

172.7

 

179.3

 

176.8

 

188.5

 

347.6

 

365.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable development, excluding catastrophe losses

 

(15.9)

 

(12.5)

 

(10.0)

 

(18.4)

 

(14.2)

 

(10.8)

 

(28.4)

 

(25.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

 

17.2

 

16.1

 

6.0

 

(1.2)

 

15.4

 

13.2

 

33.3

 

28.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable catastrophe development

 

(2.5)

 

(1.5)

 

-

 

-

 

(5.8)

 

(3.2)

 

(4.0)

 

(9.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total losses and LAE

 

172.1

 

176.4

 

168.7

 

159.7

 

172.2

 

187.7

 

348.5

 

359.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of deferred acquisition costs and other underwriting expenses

 

126.3

 

131.7

 

132.4

 

133.7

 

131.6

 

135.9

 

258.0

 

267.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP underwriting profit

 

41.2

 

47.8

 

52.8

 

55.5

 

56.1

 

42.2

 

89.0

 

98.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

24.3

 

24.3

 

26.1

 

27.9

 

28.7

 

27.2

 

48.6

 

55.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

1.3

 

1.1

 

1.3

 

1.1

 

1.2

 

1.2

 

2.4

 

2.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

(2.2)

 

(2.0)

 

(2.0)

 

(2.4)

 

(2.0)

 

(2.2)

 

(4.2)

 

(4.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income before income taxes

$

64.6

$

71.2

$

78.2

$

82.1

$

84.0

$

68.4

$

135.8

$

152.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

51.1 %

 

49.0%

 

48.8 %

 

51.4 %

 

49.0 %

 

51.6 %

 

50.0%

 

50.3 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable development, excluding catastrophe losses

 

(4.7)%

 

(3.5)%

 

(2.8)%

 

(5.3)%

 

(3.9)%

 

(3.0)%

 

(4.1)%

 

(3.4)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

 

5.0 %

 

4.5%

 

1.7 %

 

(0.3)%

 

4.3 %

 

3.6 %

 

4.8%

 

3.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable catastrophe development

 

(0.7)%

 

(0.4)%

 

-

 

-

 

(1.6)%

 

(0.9)%

 

(0.6)%

 

(1.2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loss and LAE ratio

 

50.7 %

 

49.6 %

 

47.7 %

 

45.8 %

 

47.8 %

 

51.3 %

 

50.1 %

 

49.6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio

 

37.0 %

 

36.9 %

 

37.2 %

 

38.1 %

 

36.4 %

 

37.0 %

 

36.9 %

 

36.7 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio

 

87.7 %

 

86.5 %

 

84.9 %

 

83.9 %

 

84.2 %

 

88.3 %

 

87.0 %

 

86.3 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Combined ratio, excluding catastrophe losses

 

83.4 %

 

82.4 %

 

83.2 %

 

84.2 %

 

81.5 %

 

85.6 %

 

82.8 %

 

83.6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current accident year combined ratio, excluding catastrophe losses

 

88.1 %

 

85.9 %

 

86.0 %

 

89.5 %

 

85.4 %

 

88.6 %

 

86.9 %

 

87.0 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PREMIUMS WRITTEN AND RELATED METRICS

SPECIALTY

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Jun-YTD

 

Jun-YTD

(In millions, except percentage data)

 

2025

 

2025

 

2025

 

2025

 

2026

 

2026

 

2025

 

2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Written Premiums

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

$

424.4

$

424.4

$

437.7

$

401.7

$

432.4

$

441.3

$

848.8

$

873.7

Ceded

 

(66.1)

 

(56.2)

 

(58.5)

 

(65.9)

 

(65.7)

 

(56.9)

 

(122.3)

 

(122.6)

Net

$

358.3

$

368.2

$

379.2

$

335.8

$

366.7

$

384.4

$

726.5

$

751.1

Growth

 

5.4%

 

4.6%

 

8.3%

 

1.2%

 

2.3%

 

4.4%

 

5.0%

 

3.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Net premiums written by sub-segment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marine and Industrial Property(1)

$

137.5

$

150.3

$

145.2

$

121.8

$

137.4

$

145.2

$

287.8

$

282.6

Professional and Executive Lines

 

120.4

 

108.7

 

120.0

 

112.8

 

126.2

 

118.8

 

229.1

 

245.0

E&S and Alternative Markets(1)

 

77.2

 

85.8

 

86.3

 

74.9

 

76.3

 

85.8

 

163.0

 

162.1

Surety and Other

 

23.2

 

23.4

 

27.7

 

26.3

 

26.8

 

34.6

 

46.6

 

61.4

Total

$

358.3

$

368.2

$

379.2

$

335.8

$

366.7

$

384.4

$

726.5

$

751.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Related Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premium Retention

 

80.1%

 

81.8%

 

83.2%

 

81.1%

 

83.3%

 

82.1%

 

81.0%

 

82.7%

Renewal Price Change

 

8.4%

 

7.8%

 

8.3%

 

6.4%

 

4.6%

 

3.6%

 

8.1%

 

4.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) During the first quarter of 2026, the former Specialty Property and Casualty and Marine sub-segments were reorganized into Marine and Industrial Property and E&S and Alternative Markets (Excess & surplus, Program business and Specialty general liability). Prior periods reflect this new presentation.

 

11

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS

PERSONAL LINES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months ended June 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2026

 

2025

(In millions, except percentage data)

 

Auto

 

Home & Other

 

Total

 

 

Auto

 

Home & Other

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written

$

390.7

$

306.9

$

697.6

 

$

389.3

$

290.3

$

679.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned

$

371.2

$

281.3

$

652.5

 

$

368.3

$

266.8

$

635.1

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Losses and LAE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Current year, excluding catastrophe losses

 

240.0

 

123.1

 

363.1

 

 

243.5

 

136.5

 

380.0

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Prior year favorable development, excluding catastrophe losses

 

(3.6)

 

(6.5)

 

(10.1)

 

 

(1.0)

 

(1.6)

 

(2.6)

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Current year catastrophe losses

 

7.0

 

50.3

 

57.3

 

 

6.2

 

66.0

 

72.2

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Prior year unfavorable (favorable) catastrophe development

 

(0.2)

 

(1.7)

 

(1.9)

 

 

0.1

 

(2.1)

 

(2.0)

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Total losses and LAE

 

243.2

 

165.2

 

408.4

 

 

248.8

 

198.8

 

447.6

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Amortization of deferred acquisition costs and other underwriting expenses

 

 

 

 

 

174.7

 

 

 

 

 

 

162.3

 

 

 

 

 

 

-

 

 

 

 

 

 

-

GAAP underwriting profit

 

 

 

 

 

69.4

 

 

 

 

 

 

25.2

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Net investment income

 

 

 

 

 

33.3

 

 

 

 

 

 

30.2

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Other income

 

 

 

 

 

3.7

 

 

 

 

 

 

3.7

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Other operating expenses

 

 

 

 

 

(1.5)

 

 

 

 

 

 

(1.7)

 

 

 

 

 

 

-

 

 

 

 

 

 

-

Operating income before income taxes

 

 

 

 

$

104.9

 

 

 

 

 

$

57.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

64.7 %

 

43.7 %

 

55.6 %

 

 

66.2 %

 

51.1 %

 

59.8 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable development, excluding catastrophe losses

 

(1.0)%

 

(2.3)%

 

(1.5)%

 

 

(0.3)%

 

(0.6)%

 

(0.4)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

 

1.9 %

 

17.9 %

 

8.8 %

 

 

1.7 %

 

24.8 %

 

11.4 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable catastrophe development

 

(0.1)%

 

(0.6)%

 

(0.3)%

 

 

-

 

(0.8)%

 

(0.3)%

Total loss and LAE ratio

 

65.5 %

 

58.7 %

 

62.6 %

 

 

67.6 %

 

74.5 %

 

70.5 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio

 

 

 

 

 

26.3 %

 

 

 

 

 

 

25.0 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio

 

 

 

 

 

88.9 %

 

 

 

 

 

 

95.5 %

 

12

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS

PERSONAL LINES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months ended June 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2026

 

2025

(In millions, except percentage data)

 

Auto

 

Home & Other

 

Total

 

 

Auto

 

Home & Other

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written

$

717.9

$

542.3

$

1,260.2

 

$

713.1

$

514.4

$

1,227.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned

$

740.0

$

559.4

$

1,299.4

 

$

733.6

$

529.4

$

1,263.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and LAE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

485.8

 

253.0

 

738.8

 

 

488.0

 

264.2

 

752.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable development, excluding catastrophe losses

 

(4.0)

 

(15.3)

 

(19.3)

 

 

(3.0)

 

(2.4)

 

(5.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

 

11.2

 

126.3

 

137.5

 

 

8.6

 

99.5

 

108.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable catastrophe development

 

(1.4)

 

(21.8)

 

(23.2)

 

 

(0.3)

 

(2.7)

 

(3.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total losses and LAE

 

491.6

 

342.2

 

833.8

 

 

493.3

 

358.6

 

851.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of deferred acquisition costs and other underwriting expenses

 

 

 

 

 

343.9

 

 

 

 

 

 

324.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP underwriting profit

 

 

 

 

 

121.7

 

 

 

 

 

 

86.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

 

 

 

68.5

 

 

 

 

 

 

60.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

7.3

 

 

 

 

 

 

7.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

 

 

 

 

(3.4)

 

 

 

 

 

 

(3.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income before income taxes

 

 

 

 

$

194.1

 

 

 

 

 

$

151.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year, excluding catastrophe losses

 

65.6 %

 

45.2 %

 

56.9 %

 

 

66.5 %

 

49.9 %

 

59.6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable development, excluding catastrophe losses

 

(0.5)%

 

(2.7)%

 

(1.5)%

 

 

(0.4)%

 

(0.5)%

 

(0.4)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current year catastrophe losses

 

1.5 %

 

22.6 %

 

10.6 %

 

 

1.1 %

 

18.8 %

 

8.5 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior year favorable catastrophe development

 

(0.2)%

 

(3.9)%

 

(1.8)%

 

 

-

 

(0.5)%

 

(0.2)%

Total loss and LAE ratio

 

66.4 %

 

61.2 %

 

64.2 %

 

 

67.2 %

 

67.7 %

 

67.5 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio

 

 

 

 

 

26.0 %

 

 

 

 

 

 

25.1 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined ratio

 

 

 

 

 

90.2 %

 

 

 

 

 

 

92.6 %

 

13

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RELATED RATIOS

PERSONAL LINES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

Jun-YTD

 

Jun-YTD

(In millions, except percentage data)

 

2025

 

2025

 

2025

 

2025

 

2026

 

2026

 

2025

 

2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross premiums written

$

572.4

$

705.8

$

766.3

$

665.8

$

588.1

$

725.3

$

1,278.2

$

1,313.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Net premiums written

$

547.9

$

679.6

$

739.4

$

640.0

$

562.6

$

697.6

$

1,227.5

$

1,260.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Net premiums earned

$

627.9

$

635.1

$

642.6

$

646.2

$

646.9

$

652.5

$

1,263.0

$

1,299.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Losses and LAE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Current year, excluding catastrophe losses

 

372.2

 

380.0

 

384.7

 

381.3

 

375.7

 

363.1

 

752.2

 

738.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Prior year favorable development, excluding catastrophe losses

 

(2.8)

 

(2.6)

 

(0.9)

 

(0.9)

 

(9.2)

 

(10.1)

 

(5.4)

 

(19.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Current year catastrophe losses

 

35.9

 

72.2

 

22.4

 

9.3

 

80.2

 

57.3

 

108.1

 

137.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Prior year favorable catastrophe development

 

(1.0)

 

(2.0)

 

-

 

(8.0)

 

(21.3)

 

(1.9)

 

(3.0)

 

(23.2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Total losses and LAE

 

404.3

 

447.6

 

406.2

 

381.7

 

425.4

 

408.4

 

851.9

 

833.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Amortization of deferred acquisition costs and other underwriting expenses

 

161.9

 

162.3

 

170.1

 

174.0

 

169.2

 

174.7

 

324.2

 

343.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

GAAP underwriting profit

 

61.7

 

25.2

 

66.3

 

90.5

 

52.3

 

69.4

 

86.9

 

121.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

30.5

 

30.2

 

33.0

 

34.8

 

35.2

 

33.3

 

60.7

 

68.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

3.7

 

3.7

 

3.7

 

3.6

 

3.6

 

3.7

 

7.4

 

7.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

(1.7)

 

(1.7)

 

(1.9)

 

(1.8)

 

(1.9)

 

(1.5)

 

(3.4)

 

(3.4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income before income taxes

$

94.2

$

57.4

$

101.1

$

127.1

$

89.2

$

104.9

$

151.6

$

194.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss and LAE ratio:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Current year, excluding catastrophe losses

 

59.2 %

 

59.8 %

 

59.8 %

 

59.0 %

 

58.1 %

 

55.6 %

 

59.6 %

 

56.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Prior year favorable development, excluding catastrophe losses

 

(0.4)%

 

(0.4)%

 

(0.1)%

 

(0.1)%

 

(1.4)%

 

(1.5)%

 

(0.4)%

 

(1.5)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Current year catastrophe losses

 

5.8 %

 

11.4 %

 

3.5 %

 

1.4 %

 

12.4 %

 

8.8 %

 

8.5 %

 

10.6 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Prior year favorable catastrophe development

 

(0.2)%

 

(0.3)%

 

-

 

(1.2)%

 

(3.3)%

 

(0.3)%

 

(0.2)%

 

(1.8)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Total loss and LAE ratio

 

64.4 %

 

70.5 %

 

63.2 %

 

59.1 %

 

65.8 %

 

62.6 %

 

67.5 %

 

64.2 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Expense ratio

 

25.3 %

 

25.0 %

 

26.0 %

 

26.4 %

 

25.7 %

 

26.3 %

 

25.1 %

 

26.0 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Combined ratio

 

89.7 %

 

95.5 %

 

89.2 %

 

85.5 %

 

91.5 %

 

88.9 %

 

92.6 %

 

90.2 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

-

Combined ratio, excluding catastrophe losses

 

84.1 %

 

84.4 %

 

85.7 %

 

85.3 %

 

82.4 %

 

80.4 %

 

84.3 %

 

81.4 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current accident year combined ratio, excluding catastrophe losses

 

84.5 %

 

84.8 %

 

85.8 %

 

85.4 %

 

83.8 %

 

81.9 %

 

84.7 %

 

82.9 %

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PREMIUMS WRITTEN AND RELATED METRICS

PERSONAL LINES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

Jun-YTD

 

Jun-YTD

(In millions, except percentage data)

 

2025

 

2025

 

2025

 

2025

 

2026

 

2026

2025

 

2026

Written Premiums

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross

$

572.4

$

705.8

$

766.3

$

665.8

$

588.1

$

725.3

1,278.2

$

1,313.4

Ceded

 

(24.5)

 

(26.2)

 

(26.9)

 

(25.8)

 

(25.5)

 

(27.7)

(50.7)

 

(53.2)

Net

$

547.9

$

679.6

$

739.4

$

640.0

$

562.6

$

697.6

1,227.5

$

1,260.2

Growth

 

3.0%

 

3.7%

 

3.6%

 

4.4%

 

2.7%

 

2.6%

3.4%

 

2.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written by line of business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Automobile

$

323.8

$

389.3

$

416.5

$

360.3

$

327.2

$

390.7

713.1

$

717.9

Homeowners and Other

 

224.1

 

290.3

 

322.9

 

279.7

 

235.4

 

306.9

514.4

 

542.3

Total

$

547.9

$

679.6

$

739.4

$

640.0

$

562.6

$

697.6

1,227.5

$

1,260.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Related Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renewal Price Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Automobile

 

11.8%

 

9.8%

 

8.0%

 

6.9%

 

6.7%

 

7.1%

10.8%

 

6.9%

Homeowners

 

14.9%

 

15.7%

 

13.9%

 

12.3%

 

10.8%

 

10.9%

15.3%

 

10.8%

Total (1)

 

13.1%

 

12.3%

 

10.5%

 

9.2%

 

8.4%

 

8.7%

12.6%

 

8.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Policy Retention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Automobile

 

81.4%

 

83.5%

 

83.2%

 

82.4%

 

81.2%

 

82.5%

82.6%

 

81.9%

Homeowners

 

82.4%

 

85.1%

 

84.8%

 

83.7%

 

82.4%

 

84.6%

83.9%

 

83.6%

Total (1)

 

82.0%

 

84.3%

 

84.0%

 

83.1%

 

81.8%

 

83.6%

83.2%

 

82.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PIF change from prior year period

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Personal Automobile

 

-4.9%

 

-3.6%

 

-3.2%

 

-3.1%

 

-2.2%

 

-1.5%

-3.6%

 

-1.5%

Homeowners

 

-4.0%

 

-2.7%

 

-2.5%

 

-2.6%

 

-2.2%

 

-1.6%

-2.7%

 

-1.6%

Total (1)

 

-4.4%

 

-3.2%

 

-2.9%

 

-2.8%

 

-2.2%

 

-1.5%

-3.2%

 

-1.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Related metrics exclude Other Personal Lines.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INVESTMENT INCOME AND YIELDS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

Q4

 

Q1

 

Q2

 

YTD

 

YTD

(In millions, except yields)

 

2025

 

2025

 

2025

 

2025

 

2026

 

2026

 

2025

 

2026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities

$

93.3

$

98.4

$

103.3

$

106.4

$

109.2

$

114.4

$

191.7

$

223.6

 

Limited partnerships

 

7.5

 

3.5

 

6.8

 

9.3

 

11.0

 

3.6

 

11.0

 

14.6

 

Mortgage loans

 

2.9

 

3.0

 

2.6

 

2.7

 

2.5

 

2.2

 

5.9

 

4.7

 

Equity securities

 

0.9

 

0.9

 

0.9

 

0.9

 

0.9

 

0.9

 

1.8

 

1.8

 

Other investments

 

5.3

 

3.4

 

7.1

 

10.6

 

7.4

 

2.4

 

8.7

 

9.8

 

Investment expenses

 

(3.8)

 

(3.7)

 

(3.7)

 

(4.1)

 

(4.1)

 

(3.9)

 

(7.5)

 

(8.0)

Total

$

106.1

$

105.5

$

117.0

$

125.8

$

126.9

$

119.6

$

211.6

$

246.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax Yields

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities

 

4.08%

 

4.24%

 

4.33%

 

4.41%

 

4.42%

 

4.45%

 

4.16%

 

4.44%

 

Total

 

4.14%

 

4.11%

 

4.31%

 

4.44%

 

4.50%

 

4.28%

 

4.12%

 

4.39%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-tax yields represent annualized net investment income for the period divided by the monthly average invested assets at amortized cost or cost, which excludes accumulated changes in fair value for fixed maturities and equity securities.

 

 

16

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT PORTFOLIO

June 30, 2026

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in

 

Change in

 

 

Weighted

 

Amortized

 

 

 

 

Net

 

Net

 

Net

 

 

Average

 

Cost

 

Fair Value /

% of

 

Unrealized

 

Unrealized

 

Unrealized

Investment Type

 

Quality

 

or Cost (1)

 

Carry Value

Total

 

Gain (Loss)

 

During Q2

 

YTD

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities:

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury and government agencies

 

AA+

$

476.7

$

434.9

3.9%

$

(41.8)

$

(2.8)

$

(6.0)

Foreign governments

 

A+

 

17.5

 

17.3

0.2%

 

(0.2)

 

(0.3)

 

(0.4)

Municipals:

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

AA

 

1,048.7

 

978.2

8.8%

 

(70.5)

 

(4.3)

 

(6.6)

Tax-exempt

 

AA

 

24.1

 

24.9

0.2%

 

0.8

 

0.4

 

-

Corporates:

 

 

 

 

 

 

 

 

 

 

 

 

 

NAIC 1

 

A

 

2,491.2

 

2,472.7

22.1%

 

(18.5)

 

(7.1)

 

(35.9)

NAIC 2

 

BBB

 

1,605.0

 

1,577.1

14.1%

 

(27.9)

 

(0.8)

 

(17.6)

NAIC 3 and below

 

B+

 

464.1

 

465.4

4.2%

 

1.3

 

2.9

 

(6.0)

Total corporates

 

BBB+

 

4,560.3

 

4,515.2

40.4%

 

(45.1)

 

(5.0)

 

(59.5)

Asset-backed:

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage-backed

 

AA+

 

2,308.1

 

2,236.0

20.0%

 

(72.1)

 

(6.6)

 

(21.7)

Commercial mortgage-backed

 

AAA

 

829.9

 

802.0

7.2%

 

(27.9)

 

(2.6)

 

(7.6)

Other asset-backed

 

AA+

 

1,055.3

 

1,052.6

9.4%

 

(2.7)

 

(2.7)

 

(8.5)

Total fixed maturities

 

A+

 

10,320.6

 

10,061.1

90.1%

 

(259.5)

 

(23.9)

 

(110.3)

Limited partnerships and other investments

 

 

 

432.5

 

432.5

3.9%

 

-

 

-

 

-

Mortgage and other loans

 

 

 

205.1

 

205.1

1.8%

 

-

 

-

 

-

Equity securities

 

 

 

203.3

 

203.3

1.8%

 

-

 

-

 

-

Total investments

 

 

 

11,161.5

 

10,902.0

97.6%

 

(259.5)

 

(23.9)

 

(110.3)

Cash and cash equivalents

 

 

 

266.1

 

266.1

2.4%

 

-

 

-

 

-

Total

 

 

$

11,427.6

$

11,168.1

100.0%

$

(259.5)

$

(23.9)

$

(110.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Net of allowance for credit losses of $9.3 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

CREDIT QUALITY AND DURATION OF FIXED MATURITIES

 

June 30, 2026

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CREDIT QUALITY OF FIXED MATURITIES

 

 

 

Rating Agency

 

Amortized

 

 

Fair

 

% of Total

 

NAIC Designation

Equivalent Designation

 

Cost (1)

 

 

Value

 

Fair Value

 

1

Aaa/Aa/A

$

 

8,166.4

 

$

 

7,933.9

 

 

78.8

%

2

Baa

 

 

1,666.0

 

 

 

1,638.3

 

 

16.3

%

3

Ba

 

 

279.1

 

 

 

282.2

 

 

2.8

%

4

B

 

 

177.6

 

 

 

177.7

 

 

1.8

%

5

Caa

 

 

30.9

 

 

 

28.7

 

 

0.3

%

6

In or near default

 

 

0.6

 

 

 

0.3

 

 

-

 

Total fixed maturities

 

$

 

10,320.6

 

$

 

10,061.1

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DURATION OF FIXED MATURITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortized

 

 

Fair

 

% of Total

 

 

 

 

 

Cost (1)

 

 

Value

 

Fair Value

 

 

0-2 Years

$

 

1,756.8

 

$

 

1,755.8

 

 

17.4

%

 

2-4 Years

 

 

2,825.6

 

 

 

2,783.2

 

 

27.7

%

 

4-6 Years

 

 

2,417.7

 

 

 

2,334.7

 

 

23.2

%

 

6-8 Years

 

 

2,768.3

 

 

 

2,681.4

 

 

26.7

%

 

8-10 Years

 

 

331.8

 

 

 

317.6

 

 

3.1

%

 

10+ Years

 

 

220.4

 

 

 

188.4

 

 

1.9

%

Total fixed maturities

 

 

$

 

10,320.6

 

$

 

10,061.1

 

 

100.0

%

Weighted Average Duration

 

 

 

 

 

 

4.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Net of allowance for credit losses of $0.3 million.

 

 

 

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

TOP 10 CORPORATE AND MUNICIPAL FIXED MATURITY HOLDINGS

June 30, 2026

 

 

 

 

 

(In millions, except percentage data)

 

 

 

 

Issuer

Amortized Cost

Fair Value

As a Percent of Invested Assets

Ratings (1)

JPMorgan Chase

$50.6

$50.3

0.45%

A

Texas Natural Gas Securitization Finance Corporation

48.7

48.1

0.43%

AAA

Morgan Stanley

46.4

46.3

0.41%

A-

Bank of America

45.1

44.9

0.40%

A-

The Goldman Sachs Group

44.0

44.1

0.40%

BBB+

Wells Fargo

39.0

39.1

0.35%

BBB+

State of Louisiana

36.3

35.7

0.32%

AAA

Minnesota Housing Finance Agency

36.1

29.0

0.26%

AA+

State of Ohio

33.8

28.9

0.26%

AAA

Duke Energy Corporation

29.5

29.4

0.26%

A-

     Top 10 Corporate and Municipal

$409.5

$395.8

3.54%

 

 

 

 

 

 

(1) - Represents nationally recognized rating agency sources.

 

 

 

 

 

 

 

 

 

 

 

 

 

19

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF OPERATING INCOME TO NET INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months ended June 30

 

Six Months ended June 30

 

 

2026

 

2025

 

2026

 

2025

 (In millions, except per share data)

 

 

$

Per
Share (Diluted)

 

 

$

Per
Share (Diluted)

 

 

$

Per
Share (Diluted)

 

 

$

Per
Share (Diluted)

 OPERATING INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Core Commercial

 

$

77.5

 

 

 

$

83.9

 

 

 

$

152.3

 

 

 

$

110.7

 

 

Specialty

 

 

68.4

 

 

 

 

71.2

 

 

 

 

152.4

 

 

 

 

135.8

 

 

Personal Lines

 

 

104.9

 

 

 

 

57.4

 

 

 

 

194.1

 

 

 

 

151.6

 

 

Other

 

 

1.1

 

 

 

 

(2.6)

 

 

 

 

3.3

 

 

 

 

(1.8)

 

 

 Total

 

 

251.9

 

 

 

 

209.9

 

 

 

 

502.1

 

 

 

 

396.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Interest expense

 

 

(10.1)

 

 

 

 

(8.6)

 

 

 

 

(20.9)

 

 

 

 

(17.1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Operating income before income taxes

 

 

241.8

$

6.79

 

 

201.3

$

5.51

 

 

481.2

$

13.44

 

 

379.2

$

10.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Income tax expense on operating income

 

 

(52.6)

 

(1.48)

 

 

(42.6)

 

(1.16)

 

 

(103.5)

 

(2.89)

 

 

(78.7)

 

(2.15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Operating income after income taxes

 

 

189.2

 

5.31

 

 

158.7

 

4.35

 

 

377.7

 

10.55

 

 

300.5

 

8.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Non-operating items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net realized losses from sales and other

 

 

(5.4)

 

(0.15)

 

 

(4.6)

 

(0.12)

 

 

(10.3)

 

(0.29)

 

 

(23.4)

 

(0.63)

 Net change in fair value of equity securities and other

 

 

10.5

 

0.30

 

 

5.0

 

0.13

 

 

15.1

 

0.43

 

 

6.0

 

0.16

 Impairments on investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Credit-related impairments

 

 

(1.4)

 

(0.04)

 

 

(2.5)

 

(0.07)

 

 

(3.0)

 

(0.08)

 

 

(2.5)

 

(0.07)

 Losses on intent to sell securities

 

 

(0.9)

 

(0.03)

 

 

(0.4)

 

(0.01)

 

 

(1.3)

 

(0.04)

 

 

(0.4)

 

(0.01)

 Total impairments on investments

 

 

(2.3)

 

(0.07)

 

 

(2.9)

 

(0.08)

 

 

(4.3)

 

(0.12)

 

 

(2.9)

 

(0.08)

 Income tax benefit (expense) on non-operating items

 

 

(0.6)

 

(0.02)

 

 

0.7

 

0.02

 

 

-

 

-

 

 

4.9

 

0.13

 Income from continuing operations, net of taxes

 

 

191.4

 

5.37

 

 

156.9

 

4.30

 

 

378.2

 

10.57

 

 

285.1

 

7.80

 Discontinued operations (net of taxes):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Income from discontinued life businesses

 

 

0.2

 

0.01

 

 

0.2

 

-

 

 

0.2

 

0.01

 

 

0.2

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 NET INCOME

 

$

191.6

$

5.38

 

$

157.1

$

4.30

 

$

378.4

$

10.58

 

$

285.3

$

7.80

 

 

 

 

 

 

20

 

THE HANOVER INSURANCE GROUP

 

Non-GAAP Financial Measures

 

The Hanover uses non-GAAP financial measures as important measures of the Company’s operating performance, which we believe provide investors with additional information regarding management’s evaluation of our results of operations and financial performance. The Company’s non-GAAP measures include operating income before interest expense and income taxes, total operating income after income taxes, total operating income after income taxes per diluted share, total book value per share, total book value per share excluding net unrealized gains and losses related to fixed maturity investments and market risk, net of tax, tangible book value per share and measures of operating income and combined ratios excluding catastrophe losses (catastrophe losses as discussed here and in all other measures include catastrophe loss development) and reserve development.

 

Operating income before interest expense and income taxes is net income, excluding interest expense on debt, income taxes and net realized and unrealized investment gains and losses, which includes changes in the fair value of equity securities still held because fluctuations in these gains and losses are determined by interest rates, financial markets and the timing of sales. Operating income before interest expense and income taxes also excludes net gains and losses on disposals of businesses, discontinued operations, restructuring costs, the cumulative effect of accounting changes and certain other items. Operating income before interest expense and income taxes is the sum of the operating income (loss) from: Core Commercial, Specialty, Personal Lines, and Other. After-tax operating income earnings per diluted share (sometimes referred to as “after-tax operating income per share”) is also a non-GAAP measure. It is defined as net income excluding the after-tax impact of net realized and unrealized investment gains (losses), as well as results from discontinued operations and other non-operating items for a period divided by the average number of diluted shares of common stock. The Hanover believes that measures of operating income before interest expense and income taxes provide investors with a valuable measure of the performance of the Company’s ongoing businesses because they highlight net income attributable to the core operations of the business.

 

Book value per share is total shareholders’ equity divided by the number of common shares outstanding. Book value per share excluding net unrealized gains and losses related to fixed maturity investments, net of tax, is total shareholders’ equity excluding the after-tax effect of unrealized investment gains and losses on fixed maturities and market risk divided by the number of common shares outstanding. Tangible book value per share is total shareholders’ equity, excluding goodwill and intangible assets, divided by the number of common shares outstanding.

 

The Hanover also provides measures of operating results and loss ratios that exclude the effects of catastrophe losses. A catastrophe is a severe loss, resulting from natural or manmade events. Catastrophes can be caused by various natural events including, among others, hurricanes, tornadoes and other windstorms, hail, flood, earthquakes, severe winter weather and other convective storms, fire, and explosions. Catastrophes can be caused by various manmade events including, among others, fire, explosions, riots, and terrorism. Each catastrophe has unique characteristics. Catastrophes are not predictable as to timing or loss amount in advance. The Hanover believes that providing certain financial metrics and trends excluding the effects of catastrophes is meaningful for investors to understand the variability of periodic earnings and loss ratios.

 

Prior year reserve development, which can be favorable or unfavorable, represents changes in our estimate of the costs to pay claims from prior years. We believe that a discussion of operating income excluding prior year reserve development is helpful to investors since it provides insight into both our estimate of current year accident results and changes to prior-year reserve estimates.

 

Operating income before and after interest expense and income taxes and measures of operating income that exclude the effects of catastrophe losses or reserve development should not be construed as substitutes for income before income taxes or income from continuing operations and operating income should not be construed as a substitute for net income determined in accordance with GAAP. A reconciliation of income from continuing operations to operating income before interest expense and income taxes and income from continuing operations per diluted share to operating income after taxes per diluted share for the three and six months ended June 30, 2026 and 2025 is set forth on page 20 of this document. The presentation of loss ratios calculated excluding the effects of reserve development and/or catastrophe losses should not be construed as a substitute for loss ratios determined in accordance with GAAP.

 

Additional reconciliations are provided in the press release relating to the current period(s) financial results, which is available on the Company’s website, www.hanover.com.

 

 

21

 

THE HANOVER INSURANCE GROUP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PREMIUM RELATED METRIC DEFINITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Renewal Price Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●

Core Commercial and Specialty: Represents the average change in premium on renewed policies caused by the estimated net effect of base rate changes, discretionary pricing, specific inflationary changes or changes in policy level exposure or insured risks.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●

Personal Lines: Represents the average change in premium on policies charged at renewal caused by the net effects of filed rate, inflation adjustments or other changes in policy level exposure or insured risks, regardless of whether or not the policies are retained for the duration of their contractual terms.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●

Core Commercial and Specialty: Represents the average change in premium on renewed policies caused by the base rate changes, discretionary pricing, and inflation, excluding the impact of changes in policy level exposure or insured risks.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●

Personal Lines: Represents the estimated cumulative premium effect of approved rate actions applied to policies at renewal, regardless of whether or not policies are actually renewed. Accordingly, rate changes do not represent actual increases or decreases realized by the company. Personal Lines rate changes do not include inflation or changes in policy level exposure or insured risks.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●

Core Commercial and Specialty: Represents the ratio of net retained premium for the noted period to the premium available to renew over the same period.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●

Personal Lines: Represents the ratio of net retained policies for the noted period to those policies available to renew over the same period and includes policies that were canceled and rewritten.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Policies in Force (PIF) Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

●

Represents the change in the number of policies in force at the end of a given period from the end of the same period in the prior year.

 

 

22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CORPORATE OFFICES AND

 

 

INDUSTRY RATINGS AS OF July 28, 2026

 

 

TRANSFER AGENT

PRINCIPAL SUBSIDIARIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE HANOVER INSURANCE GROUP, INC.

 

 

 

A.M.

 

 

 

 

Computershare Investor Services

440 Lincoln Street

 

 

Financial Strength Ratings

Best

S&P Global

Moody's

 

 

PO Box 43006

Worcester, MA 01653

 

 

The Hanover Insurance

 

 

 

 

 

Providence, RI 02940-3006

 

 

 

Company

A

A

A2

 

 

1-800-317-4454

The Hanover Insurance Company

 

 

Citizens Insurance Company

 

 

 

 

 

 

440 Lincoln Street

 

 

of America

A

A

-

 

 

 

Worcester, MA 01653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMMON STOCK

Citizens Insurance Company of America

 

 

 

A.M.

 

 

 

 

 

808 North Highlander Way

 

 

Debt Ratings

Best

S&P Global

Moody's

 

 

Common stock of The Hanover Insurance Group, Inc. is traded

Howell, MI 48843

 

 

The Hanover Insurance Group, Inc.

 

 

 

 

on the New York Stock Exchange under the symbol “THG”.

 

 

 

Senior Debt

bbb+

BBB

Baa2

 

 

 

 

 

 

Subordinated Debentures

bbb-

BB+

Baa3

 

 

 

MARKET AND DIVIDEND INFORMATION

 

 

 

 

 

 

 

 

INQUIRIES

 

 

 

 

 

 

 

 

 

 

The following tables set forth the high and low closing

 

 

The above ratings are accurate as of July 28, 2026, and may be revised,

 

 

Oksana Lukasheva

sale prices of our common stock and quarterly cash

 

 

superseded or withdrawn by the respective rating agency at any time. For

 

 

Senior Vice President

dividends for the periods indicated:

 

 

the most current information concerning the financial ratings of The Hanover

 

 

Corporate Finance

 

 

 

 

 

 

Insurance Group and its subsidiaries, please visit the websites of the

 

 

olukasheva@hanover.com

Quarter Ended

2026

 

 

respective rating agencies.

 

 

 

 

Price Range

Dividends

 

 

 

 

 

 

 

 

 

 

High

Low

Per Share

 

 

 

 

 

 

 

 

 

March 31

$181.68

$167.57

$0.950

 

 

 

 

 

 

 

 

 

June 30

$214.54

$172.31

$0.950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

2025

 

 

 

 

 

 

 

 

 

 

Price Range

Dividends

 

 

 

 

 

 

 

 

 

 

High

Low

Per Share

 

 

 

 

 

 

 

 

March 31

$174.61

$147.13

$0.900

 

 

 

 

 

 

 

 

 

June 30

$178.04

$150.66

$0.900

 

 

 

 

 

 

 

 

 

September 30

$182.10

$162.08

$0.900

 

 

 

 

 

 

 

 

 

December 31

$186.22

$168.39

$0.950

 

 

 

 

 

 

 

 

 

 

23

Source: View Original Filing on SEC EDGAR

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