•

Operating income⁽¹⁾ of $117.7 million increased 91.6% from $61.4 million in the prior-year quarter

•

Combined ratio of 93.4%; combined ratio, excluding catastrophes⁽²⁾ of 89.8%

•

Net premiums written increase of 9.7%*, with strong growth from each segment

•

Rate increases⁽³⁾ of 6.3% in Core Commercial, 8.4% in Specialty, and 2.7% in Personal Lines

•

Renewal price change⁽³⁾ up 9.7% in Core Commercial, 12.6% in Specialty and 4.3% in Personal Lines

•

Catastrophe loss ratio of 3.6%, below the company’s first quarter catastrophe assumption by 1.2 points

•

Current accident year loss and loss adjustment expense (“LAE”) ratio, excluding catastrophes⁽⁴⁾, of 59.2%, as continued favorable loss frequency in personal auto and the earning-in of rate increases across commercial lines businesses were offset by the impact of higher property severity in Personal Lines

•

Net investment income of $76.9 million, in line with the prior-year quarter, as both periods benefited from similar elevated levels of partnership income

•

Book value per share of $79.58, down 10.2% from December 31, 2021, driven by a decrease in the fair value of fixed maturity investments resulting from higher interest rates. Book value per share, excluding net unrealized depreciation on fixed maturity investments, net of tax⁽⁵⁾, increased 2.0% from December 31, 2021

(1)

See information about this and other non-GAAP measures and definitions used throughout this press release on the final pages of this document.

Three months ended

March 31

  ($ in millions, except per share data)

2022

2021

Net premiums written

$1,312.3

$1,196.1

Growth

9.7%

5.2%

Net premiums earned

1,263.8

1,161.8

Current accident year loss and LAE ratio, excluding catastrophes

59.2 %

56.4 %

Prior-year development ratio

(0.5)%

(0.7)%

Catastrophe ratio

3.6 %

11.5 %

Expense ratio

31.1 %

31.6 %

Combined ratio

93.4 %

98.8 %

Combined ratio, excluding catastrophes

89.8 %

87.3 %

Current accident year combined ratio, excluding catastrophes⁽²⁾

90.3 %

88.0 %

Net income

$104.8

$92.7

per diluted share

2.90

2.51

Operating income

117.7

61.4

per diluted share

3.26

1.66

Book value per share

$79.58

$84.21

Ending shares outstanding (in millions)

35.6

36.2

Three months ended

March 31

  ($ in millions)

2022

2021

Net premiums written

$526.6

$480.6

Growth

9.6%

4.3%

Net premiums earned

474.7

435.2

Operating income (loss) before taxes

67.5

(14.8)

Loss and LAE ratio

60.2%

78.7%

Expense ratio

32.8%

33.0%

Combined ratio

93.0%

111.7%

Prior-year development ratio

(1.3)%

(0.6)%

Catastrophe ratio

4.1 %

21.7 %

Combined ratio, excluding catastrophes

88.9 %

90.0 %

Current accident year combined ratio, excluding catastrophes

90.2 %

90.6 %

Three months ended

March 31

  ($ in millions)

2022

2021

Net premiums written

$302.8

$276.8

Growth

9.4%

12.1%

Net premiums earned

283.8

257.7

Operating income before taxes

50.0

17.0

Loss and LAE ratio

52.3%

62.9%

Expense ratio

35.4%

35.9%

Combined ratio

87.7%

98.8%

Prior-year development ratio

(4.7)%

(0.2)%

Catastrophe ratio

2.7 %

9.5 %

Combined ratio, excluding catastrophes

85.0 %

89.3 %

Current accident year combined ratio, excluding catastrophes

89.7 %

89.5 %

Three months ended

March 31

  ($ in millions)

2022

2021

Net premiums written

$482.9

$438.7

Growth

10.1%

2.2%

Net premiums earned

505.3

468.9

Operating income before taxes

36.3

81.8

Loss and LAE ratio

69.9%

59.0%

Expense ratio

27.2%

28.0%

Combined ratio

97.1%

87.0%

Prior-year development ratio

2.7 %

(1.1)%

Catastrophe ratio

3.6 %

3.1 %

Combined ratio, excluding catastrophes

93.5 %

83.9 %

Current accident year combined ratio, excluding catastrophes

90.8 %

85.0 %

Investors:

Media:

Oksana Lukasheva

Michael F. Buckley

Emily P. Trevallion

Email: olukasheva@hanover.com

Email:  mibuckley@hanover.com

Email:  etrevallion@hanover.com

1-508-525-6081

1-508-855-3099

1-508-855-3263

The Hanover Insurance Group, Inc.

Condensed Consolidated Income Statements

Three months ended

March 31

($ in millions)

2022

2021

Revenues

Premiums earned

$1,263.8

$1,161.8

Net investment income

76.9

76.8

Net realized and unrealized investment gains (losses):

Net realized gains (losses) from sales and other

3.0

(1.6)

Net change in fair value of equity securities

(18.0)

39.1

   Impairment losses on investments

(0.9)

-

Total net realized and unrealized investment gains (losses)

(15.9)

37.5

Fees and other income

5.9

6.0

Total revenues

1,330.7

1,282.1

Losses and expenses

Losses and loss adjustment expenses

787.5

781.3

Amortization of deferred acquisition costs

262.9

240.3

Interest expense

8.5

8.5

Other operating expenses

141.8

137.9

Total losses and expenses

1,200.7

1,168.0

Income from continuing operations before income taxes

130.0

114.1

Income tax expense

24.7

21.3

Income from continuing operations

105.3

92.8

Discontinued operations (net of taxes):

Loss from discontinued life businesses

(0.5)

(0.1)

Net income

$104.8

$92.7

The Hanover Insurance Group, Inc.

Condensed Consolidated Balance Sheets

March 31

December 31

($ in millions)

2022

2021

Assets

Total investments

$8,775.3

$9,152.6

Cash and cash equivalents

272.0

230.9

Premiums and accounts receivable, net

1,483.1

1,469.5

Reinsurance recoverable on paid and unpaid losses and unearned premiums

1,940.3

1,907.3

Other assets

1,271.9

1,386.9

Assets of discontinued businesses

104.6

107.1

Total assets

$13,847.2

$14,254.3

Liabilities

Loss and loss adjustment expense reserves

$6,512.2

$6,447.6

Unearned premiums

2,760.4

2,734.9

Debt

781.8

781.6

Other liabilities

839.8

1,023.6

Liabilities of discontinued businesses

120.2

121.7

Total liabilities

11,014.4

11,109.4

Total shareholders’ equity

2,832.8

3,144.9

Total liabilities and shareholders’ equity

$13,847.2

$14,254.3

The Hanover Insurance Group, Inc.

Three months ended March 31

2022

2021

($ in millions, except per share data)

$

Amount

Per Share (Diluted)

$

Amount

Per Share (Diluted)

Operating income (loss)

Core Commercial

$67.5

($14.8)

Specialty

50.0

17.0

Personal Lines

36.3

81.8

Other

0.6

1.1

Total

154.4

85.1

Interest expense

(8.5)

(8.5)

Operating income before income taxes

145.9

$4.04

76.6

$2.07

Income tax expense on operating income

(28.2)

(0.78)

(15.2)

(0.41)

Operating income after income taxes

117.7

3.26

61.4

1.66

Non-operating items:

Net realized gains (losses) from sales and other

3.0

0.08

(1.6)

(0.04)

Net change in fair value of equity securities

(18.0)

(0.50)

39.1

1.06

Impairment losses on investments

(0.9)

(0.02)

-

-

Income tax benefit (expense) on non-operating items

3.5

0.09

(6.1)

(0.16)

Income from continuing operations, net of taxes

105.3

2.91

92.8

2.52

Discontinued operations (net of taxes):

Loss from discontinued life businesses

(0.5)

(0.01)

(0.1)

(0.01)

Net income

$104.8

$2.90

$92.7

$2.51

Dilutive weighted average shares outstanding

36.1

36.9

•

The company’s outlook and its ability to achieve components or the sum of the respective period guidance on its future results of operations including: the combined ratio, excluding or including both prior-year reserve development and/or catastrophe losses; catastrophe losses; net investment income; growth of net premiums written and/or net premiums earned in total or by line of business; expense ratio; operating return on equity; and/or the effective tax rate;

•

The continued impacts of the global pandemic (“Pandemic”) and related economic conditions on the company’s operating and financial results, including, but not limited to, the impact on the company’s investment portfolio, changes in claims frequency as a result of  fluctuations in economic activity, severity from higher cost of repairs due to, among other things, supply chain disruptions, inflation, declines in premium as a result of, among other things, credits or returns to the company’s customers, lower submissions, changes in renewals and policy endorsements, public health guidance, and the impact of government orders and restrictions in the states and jurisdictions in which the company operates;

•

Uses of capital for share repurchases, special or ordinary cash dividends, business investments or growth, or otherwise, and outstanding shares in future periods as a result of various share repurchase mechanisms, capital management framework, especially in the current environment, and overall comfort with liquidity and capital levels;

•

Variability of catastrophe losses due to risk concentrations, changes in weather patterns including climate change, wildfires, severe storms, hurricanes, terrorism, civil unrest, riots or other events, as well as the complexity in estimating losses from large catastrophe events due to delayed reporting of the existence, nature or extent of losses or where “demand surge,” regulatory assessments, litigation, coverage and technical complexities or other factors may significantly impact the ultimate amount of such losses;

•

Current accident year losses and loss selections (“picks”), excluding catastrophes, and prior accident year loss reserve development patterns, particularly in complex “longer-tail” liability lines, as well as the inherent variability in short-tail property and non-catastrophe weather losses;

•

Changes in frequency and loss severity trends;

•

Ability to manage the impact of inflationary pressures, as a result of the Pandemic, global market disruptions, geopolitical events or otherwise, including, but not limited to, supply chain disruptions, labor shortages, and increases in cost of goods, services, and materials;  

•

The confidence or concern that the current level of reserves is adequate and/or sufficient for future claim payments, whether due to losses that have been incurred but not reported, circumstances that delay the reporting of losses, business complexity, adverse judgments or developments with respect to case reserves, the difficulties and uncertainties inherent in projecting future losses from historical data, changes in replacement and medical costs, as well as complexities related to the Pandemic, including legislative, regulatory or judicial actions that expand the intended scope of coverages, or other factors;

•

Characterization of some business as being “more profitable” in light of inherent uncertainty of ultimate losses incurred, especially for “longer-tail” liability businesses;

•

Efforts to manage expenses, including the company’s long-term expense savings targets, while allocating capital to business investment, which is at management’s discretion;

•

Risks and uncertainties with respect to our ability to retain profitable policies in force and attract profitable policies and to increase rates commensurate with, or in excess of, loss trends;

•

Mix improvement, underwriting initiatives, coverage restrictions and pricing segmentation actions, among others, to grow businesses believed to be more profitable or reduce premiums attributable to products or lines of business believed to be less profitable; balance rate actions and retention; offset long-term and/or short-term loss trends due to increased frequency; increased “social inflation” from a more litigious environment and higher average cost of resolution, increased property replacement costs, and/or social movements;

•

The ability to generate growth in targeted segments through new agency appointments; rate increases (as a result of its market position, agency relationships or otherwise), retention improvements or new business; expansion into new geographies; new product introductions; or otherwise; and

•

Investment returns and the effect of macro-economic interest rate trends and overall security yields, including the macro-economic impact of the Pandemic, inflationary pressures and corresponding governmental and/or central banking initiatives taken in response thereto, and geopolitical circumstances on new money yields and overall investment returns.

•

The severity, duration and long-term impact related to the Pandemic, including, but not limited to, actual and possible government responses, legislative, regulatory and judicial actions, changes in frequency and severity of claims in Core Commercial, Specialty and/or Personal Lines, impacts to distributors (including agent partners), and the possibility of additional premium adjustments, including credits and returns, for the benefit of insureds;

•

Changes in regulatory, legislative, economic, market and political conditions, particularly in response to COVID-19 and the Pandemic (such as legislative or regulatory actions that would retroactively require insurers to cover business interruption or other types of claims irrespective of terms, exclusions or other conditions included in the contractual terms of the policies that would otherwise preclude coverage, mandatory returns and other rate-related actions, as well as presumption legislation in regards to workers’ compensation);

•

Heightened volatility, fluctuations in interest rates (which have a significant impact on the market value of our investment portfolio and thus our book value), inflationary pressures, default rates and other factors that affect investment returns from the investment portfolio;

•

Data security incidents, including, but not limited to, those resulting from a malicious cyber security attack on the company or its business partners and service providers, or intrusions into the company’s systems or data sources;

•

Adverse claims experience, including those driven by large or increased frequency of catastrophe events (including those related to terrorism, riots and civil unrest), and severe weather;

•

The uncertainty in estimating weather-related losses or the long-term impacts of the Pandemic, and the limitations and assumptions used to model other property and casualty losses (particularly with respect to products with longer-tail liability lines, such as casualty and bodily injury claims, or involving emerging issues related to losses incurred as the result of new lines of business, such as cyber or financial institutions coverage, or reinsurance contracts and reinsurance recoverables), leading to potential adverse development of loss and loss adjustment expense reserves;

•

Litigation and the possibility of adverse judicial decisions, including those which expand policy coverage beyond its intended scope and/or award “bad faith” or other non-contractual damages, and the impact of “social inflation” affecting judicial awards and settlements;

•

The ability to increase or maintain insurance rates in line with anticipated loss costs and/or governmental action, including mandates by state departments of insurance to either raise or lower rates or provide credits or return premium to insureds;

•

Investment impairments, which may be affected by, among other things, the company’s ability and willingness to hold investment assets until they recover in value, as well as credit and interest rate risk, and general financial and economic conditions;

•

Disruption of the independent agency channel, including the impact of competition and consolidation in the industry and among agents and brokers;

•

Competition, particularly from competitors who have resource and capability advantages;

•

The global macroeconomic environment, including actions taken in response to the Pandemic, inflation, global trade disputes, war, energy market disruptions, equity price risk, and interest rate fluctuations, which, among other things, could result in reductions in market values of fixed maturities and other investments;

•

Adverse state and federal regulation, legislative and/or regulatory actions (including recent significant revisions to Michigan’s automobile personal injury protection system and related litigation, and various regulations, orders and proposed legislation related to business interruption and workers’ compensation coverages, premium grace periods and returns, and rate actions);

•

Financial ratings actions, in particular, downgrades to the company’s ratings;

•

Operational and technology risks and evolving technological and product innovation, including risks created by remote work environments, and the risk of cyber-security attacks on or breaches of the company’s systems and/or impacting our outsourcing relationships and third-party operations, or resulting in claim payments (including from products not intended to provide cyber coverage);

•

Uncertainties in estimating indemnification liabilities recorded in conjunction with obligations undertaken in connection with the sale of various businesses and discontinued operations; and

•

The ability to collect from reinsurers, reinsurance pricing, reinsurance terms and conditions, and the performance of the run-off voluntary property and casualty pools business (including those in the Other segment or in discontinued operations).

(1)

Operating income and operating income per diluted share are non-GAAP measures. Operating income (loss) before income taxes, as referenced in the results of the business segments, is defined as, with respect to such segment, operating income (loss) before interest expense and income taxes. These measures are used throughout this document. See the disclosure on the use of this and other non-GAAP measures under the heading “Forward-Looking Statements and Non-GAAP Financial Measures.” 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, is provided on the preceding pages of this news release.

(2)

Combined ratio, excluding catastrophes, and current accident year combined ratio, excluding catastrophes, are non-GAAP 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

March 31, 2022

Core Commercial

Specialty

Personal Lines

Total

Total combined ratio (GAAP)

93.0 %

87.7 %

97.1 %

93.4 %

Less: Catastrophe ratio

4.1 %

2.7 %

3.6 %

3.6 %

Combined ratio, excluding catastrophe losses (non-GAAP)

88.9 %

85.0 %

93.5 %

89.8 %

Less: Prior-year reserve development ratio

(1.3)%

(4.7)%

2.7 %

(0.5)%

Current accident year combined ratio, excluding

     catastrophe losses (non-GAAP)

90.2 %

89.7 %

90.8 %

90.3 %

March 31, 2021

Total combined ratio (GAAP)

111.7 %

98.8 %

87.0 %

98.8 %

Less: Catastrophe ratio

21.7 %

9.5 %

3.1 %

11.5 %

Combined ratio, excluding catastrophe losses (non-GAAP)

90.0 %

89.3 %

83.9 %

87.3 %

Less: Prior-year reserve development ratio

(0.6)%

(0.2)%

(1.1)%

(0.7)%

Current accident year combined ratio, excluding

     catastrophe losses (non-GAAP)

90.6 %

89.5 %

85.0 %

88.0 %

(3)

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, inflation 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 available to renew 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 available for 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.

(4)

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. A reconciliation of the GAAP loss ratio to the current accident year loss ratio, excluding catastrophe losses, is shown below.

Three months ended

March 31, 2022

Core Commercial

Specialty

Personal Lines

Total

Total loss and LAE ratio

60.2 %

52.3 %

69.9 %

62.3 %

Less:

Prior-year reserve development ratio

(1.3)%

(4.7)%

2.7 %

(0.5)%

Catastrophe ratio

4.1 %

2.7 %

3.6 %

3.6 %

Current accident year loss and LAE ratio, excluding catastrophes

57.4 %

54.3 %

63.6 %

59.2 %

March 31, 2021

Total loss and LAE ratio

78.7 %

62.9 %

59.0 %

67.2 %

Less:

Prior-year reserve development ratio

(0.6)%

(0.2)%

(1.1)%

(0.7)%

Catastrophe ratio

21.7 %

9.5 %

3.1 %

11.5 %

Current accident year loss and LAE ratio, excluding catastrophes

57.6 %

53.6 %

57.0 %

56.4 %

(5)

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

December

March

2021

2022

Book value per share

$88.59

$79.58

Less: Net unrealized appreciation (depreciation) on fixed

maturity investments, net of tax

5.21

(5.48)

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

$83.38

$85.06

Change in book value per share

(10.2)%

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

2.0 %

(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 (1)), 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 below. 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 on the following page.

Period Ended

($ in millions)

March 31

June 30

September 30

December 31

March 31

2021

2021

2021

2021

2022

Total shareholders' equity (GAAP)

$

3,046.8

$

3,154.0

$

3,102.3

$

3,144.9

$

2,832.8

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

242.6

304.7

256.8

184.9

(195.0

)

Total shareholders' equity, excluding net

unrealized appreciation (depreciation)

on fixed maturity investments, net of tax

$

2,804.2

$

2,849.3

$

2,845.5

$

2,960.0

$

3,027.8

Average shareholders' equity (GAAP)

$

2,988.9

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

$

2,993.9

($ in millions)

Three months ended

March 31

Net Income ROE

2022

Net income (GAAP)

$

104.8

Annualized net income*

419.2

Average shareholders' equity (GAAP)

$

2,988.9

Return on equity

14.0

%

Operating Income ROE (non-GAAP)

Operating income after taxes

$

117.7

Annualized operating income, net of tax*

470.8

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

$

2,993.9

Operating return on equity

15.7

%

(7)

Here, and later in 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 operating 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 operating segments without consideration of interest expense on debt and on a pre-tax basis.

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..............................................................................................................

5-6

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

7-8

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

9-10

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

11-13

Investments

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

14

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

15

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

16

Top 25 Corporate and Municipal Fixed Maturity Holdings.........................................

17

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

18

Other Information

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

19

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

20

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

21

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

21

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

21

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

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

Specialty Property & Casualty

Program business - coverage to markets with specialty or risk management needs related to groups of similar businesses;

Hanover Specialty Industrial (HSI) - coverage to small and medium chemical, paint, solvent and other manufacturers and distributors;

Excess & Surplus - non-admitted general liability and property coverage to risks outside of the appetite of standard commercial lines;

Specialty General Liability - admitted coverage for higher-hazard liability risks

● Commercial multiple peril

● Commercial automobile

● Workers' compensation

● Other (general liability, commercial umbrella, monoline

    property)

Marine

Includes coverage for inland and ocean marine, and 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.

● Inland/ocean marine

● Ancillary lines of business written through marine agents

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

Included in Other are Opus, which provides investment advisory services to affiliates and also manages assets for unaffiliated institutions such as insurance companies, retirement plans and foundations; earnings on holding company assets; holding company and other expenses; and our run-off voluntary assumed property and casualty pools and run-off direct asbestos and environmental businesses.

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

Q1

Q2

Q3

Q4

Q1

(In millions, except earnings per share)

2021

2021

2021

2021

2022

PREMIUMS

Gross premiums written

$

1,337.6

$

1,342.8

$

1,493.2

$

1,170.7

$

1,470.1

Net premiums written

1,196.1

1,207.2

1,375.2

1,214.9

1,312.3

Net premiums earned

1,161.8

1,179.8

1,186.0

1,242.6

1,263.8

EARNINGS

Operating income before interest and taxes

$

85.1

$

137.3

$

47.0

$

162.9

$

154.4

Operating income after taxes

61.4

104.0

30.8

122.1

117.7

Income from continuing operations

92.8

129.6

34.8

162.8

105.3

Net income

92.7

128.5

34.0

163.5

104.8

PER SHARE DATA (DILUTED)

Operating income after taxes

$

1.66

$

2.85

$

0.85

$

3.38

$

3.26

Income from continuing operations

2.52

3.55

0.96

4.51

2.91

Net income

2.51

3.52

0.94

4.53

2.90

Dilutive weighted average shares outstanding

36.9

36.5

36.3

36.1

36.1

Basic weighted average shares outstanding

36.4

35.9

35.7

35.5

35.5

BALANCE SHEET

March 31

June 30

September 30

December 31

March 31

(In millions, except per share data)

2021

2021

2021

2021

2022

Total assets

$

13,448.0

$

13,728.1

$

14,105.3

$

14,254.3

$

13,847.2

Total loss and loss adjustment expense reserves

6,223.7

6,343.4

6,540.1

6,447.6

6,512.2

Total shareholders' equity

3,046.8

3,154.0

3,102.3

3,144.9

2,832.8

Total shareholders' equity, excluding net unrealized appreciation