8-K
HANOVER INSURANCE GROUP, INC. (THG)
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): March 28, 2022
THE HANOVER INSURANCE GROUP, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 1-13754 | 04-3263626 |
|---|---|---|
| (State or other jurisdiction<br><br><br>of incorporation) | (Commission File Number) | (IRS Employer<br><br><br>Identification No.) |
| 440 Lincoln Street, Worcester, Massachusetts<br><br><br>(Address of principal executive offices) | 01653<br><br><br>(Zip Code) | |
| (508) 855-1000<br><br><br>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 Symbols | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $.01 par value | THG | New York Stock Exchange |
| 7 5/8% Senior Debentures due 2025 | 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 7.01 Regulation FD Disclosure
The following information is being furnished under Item 7.01 – Regulation FD Disclosure. 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 March 28, 2022, The Hanover Insurance Group, Inc. (the “Company”) published select historical quarterly and annual financial information reflecting the planned changes to the Company’s segment reporting. As publicly announced during the Company’s fourth quarter earnings call on February 3, 2022, the Company plans to change its segment reporting, beginning with the quarterly financial information to be released for the first quarter ending March 31, 2022, to disaggregate the former Commercial Lines segment into Core Commercial and Specialty segments, including expenses, allocated net investment income, and other income and expenses for each. Additionally, the Company will expand its reporting of top-line measures to include line of business and sub-segment net premiums written, renewal price change, retention, and other such measures. Concurrently, the Company will no longer report supplemental loss ratio information by product line for its Core Commercial segment. Finally, although the Company’s Personal Lines segment definition did not change, in order to streamline reporting and better align with industry practice, its homeowners sub-segment will be combined with other personal lines, which is primarily comprised of the Company’s personal umbrella product. A copy of the select historical financial information for 2019 through 2021 to reflect the changes discussed above is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is hereby incorporated by reference in this Item 7.01.
The changes in reportable segment structure discussed above, as reflected in the information included in this Current Report on Form 8-K, do not affect the Company’s previously reported consolidated results of operations, underwriting ratios, financial condition or cash flows and affects only the presentation of the segment information previously reported.
A copy of the March 28, 2022, press release discussing both the planned changes to the Company’s segment reporting and the publication of the select historical quarterly and annual financial information to reflect the changes in segment reporting is furnished herewith as Exhibit 99.1 to this Current Report on Form 8-K.
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 March 28, 2022, discussing the Company’s planned changes to its segment reporting. |
|---|---|
| Exhibit 99.2 | The Hanover Insurance Group, Inc. Unaudited Select Historical Financial Information for 2019 through 2021. |
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
Exhibit Index
| Exhibit 99.1 | Press Release, dated March 28, 2022, discussing the Company’s planned changes to its segment reporting. |
|---|---|
| Exhibit 99.2 | The Hanover Insurance Group, Inc. Unaudited Select Historical Financial Information for 2019 through 2021. |
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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.<br><br><br>(Registrant) | ||
|---|---|---|
| Date: March 28, 2022 | By: | /s/ Jeffrey M. Farber |
| Jeffrey M. Farber | ||
| Executive Vice President and<br><br><br>Chief Financial Officer |
4
thg-ex991_7.htm
Exhibit 99.1
The Hanover Publishes Select Historical Financial Information
Reflecting Planned Changes in Business Segment Reporting;
Expects to Issue First Quarter Financial Results Under New Segment Reporting on May 3
WORCESTER, Mass., March 28, 2022 - The Hanover Insurance Group, Inc. (NYSE: THG) today published select historical quarterly and annual financial information reflecting the planned changes to the company’s segment reporting, as was announced on its fourth quarter earnings call. The change in segment reporting does not affect the company’s previously reported consolidated results of operations, underwriting ratios, financial condition or cash flows.
Beginning with first quarter 2022 reporting, the company will disaggregate the former Commercial Lines segment into Core Commercial and Specialty segments, including expenses, allocated net investment income, and other income and expenses for each. Additionally, the company will expand its reporting of top-line measures to include line of business and sub-segment net premiums written, renewal price change, retention, and other such measures. Concurrently, the company will no longer report supplemental loss ratio information by product line for its Core Commercial segment. Finally, although the company’s Personal Lines segment definition did not change, in order to streamline reporting and better align with industry practice, its homeowners sub-segment will be combined with other personal lines, which is primarily comprised of the company’s personal umbrella product.
Select historical financial information for 2019 through 2021, a supplemental presentation reflecting the changes discussed in this news release, and additional descriptions and definitions, are available in the “Investors” section of the company’s website at hanover.com.
“We are excited to provide further transparency and visibility into additional growth and profitability levers of our business,” said Jeffrey M. Farber, chief financial officer at The Hanover. “We believe the changes we have made to our reporting will give our investors and analysts an enhanced view of both our Specialty and Core Commercial businesses. Over the last decade, we have built a successful Specialty business, which has now surpassed $1 billion in net premiums written, while our Core Commercial business is approaching $2 billion in net premiums written. We are excited about the prospects within each of these businesses and look forward to discussing the financials of each in more detail on our first quarter earnings call.”
The company’s first quarter financial results are expected to be published after the market closes on Tuesday, May 3. The company expects to webcast a discussion of its results on Wednesday, May 4, at 10:00 a.m. ET, through its website at hanover.com.
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: | 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 |
Definition of Reported Segments
Continuing operations following this change in segment reporting include four operating segments: Core Commercial, Specialty, Personal Lines and Other. The Core Commercial segment offers a suite of products targeted at the small to mid-size business markets, which include commercial multiple peril, commercial automobile, workers’ compensation and other commercial lines. The Specialty segment includes coverages such as management and professional liability, marine, Hanover Programs, specialty industrial and commercial property, monoline general liability, surety and other commercial lines, as well as Core Commercial products provided to Specialty customers. The Personal Lines segment markets automobile, homeowners and ancillary coverages to individuals and families. The “Other” segment includes Opus Investment Management, Inc., which provides investment management services to institutions, pension funds and other organizations, the operations of the holding company, as well as a block of run-off voluntary property and casualty pools business in which the company has not actively participated since 1995.
Forward-Looking Statements and Risk Factors
Certain statements in this document and comments made by management may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as, but not limited to, “believes,” “anticipates,” “expects,” “may,” “projects,” “projections,” “prospects,” “plan,” “likely,” “potential,” “targeted,” “forecasts,” “should,” “could,” “continue,” “outlook,” “guidance,” “modeling,” “look forward” 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, and that historical results, trends and forward-looking statements 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. The company does not undertake the responsibility to update or revise such forward-looking statements.
This release should be read and interpreted in conjunction with information regarding risk factors and forward-looking information as set forth in the company’s most recently filed reports on Form 10-K and Form 10-Q and other documents filed by The Hanover Insurance Group, Inc. with the Securities and Exchange Commission (“SEC”) and that are also available at hanover.com under “Investors.”
2
thg-ex992_6.htm
Exhibit 99.2
Select Historical
Financial Information
2019 - 2021
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SELECT HISTORICAL FINANCIAL INFORMATION | |||||||||||||||||||||||||||||||||
| TABLE OF CONTENTS | |||||||||||||||||||||||||||||||||
| Segment Descriptions.................................................................................................... | 1 | ||||||||||||||||||||||||||||||||
| Pre-tax Operating Results and Related Metrics | |||||||||||||||||||||||||||||||||
| Consolidated Eight Quarter Trending...................................................................... | 2 | ||||||||||||||||||||||||||||||||
| Core Commercial...................................................................................................... | 3-4 | ||||||||||||||||||||||||||||||||
| Specialty..................................................................................................................... | 5-6 | ||||||||||||||||||||||||||||||||
| Personal Lines........................................................................................................... | 7-10 | ||||||||||||||||||||||||||||||||
| Other Information | |||||||||||||||||||||||||||||||||
| Non-GAAP Financial Measures............................................................................... | 11 | ||||||||||||||||||||||||||||||||
| Premium Related Metric Definitions........................................................................ | 12 | ||||||||||||||||||||||||||||||||
| 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.<br><br><br>Products are tailored to specific industry segments as needed. | ● Business owners' policy/commercial multiple peril<br><br><br>● Commercial automobile<br><br><br>● Workers' compensation<br><br><br>● 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<br><br><br>● Commercial automobile<br><br><br>● Workers' compensation<br><br><br>● 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, and employment practices. | ● Professional liability<br><br><br>● Management liability<br><br><br>● Fidelity and crime<br><br><br>● 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;<br><br><br>Hanover Specialty Industrial (HSI) - coverage to small and medium chemical, paint, solvent and other manufacturers and distributors;<br><br><br>Excess & Surplus - non-admitted general liability and property coverage to risks outside of the appetite of standard commercial lines;<br><br><br>Specialty General Liability - admitted coverage for higher-hazard liability risks | ● Commercial multiple peril<br><br><br>● Commercial automobile<br><br><br>● Workers' compensation<br><br><br>● 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<br><br><br>● 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<br><br><br>● Personal umbrella<br><br><br>● Inland marine (jewelry, art, etc.)<br><br><br>● 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 business. | |||||||||||||||||||||||||||||||||
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS | |||||||||||||||||||||||||||||||||
| CONSOLIDATED | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Gross premiums written | 1,288.9 | 1,224.0 | 1,406.1 | 1,235.5 | 1,337.6 | 1,342.8 | 1,493.2 | 1,170.7 | 5,118.5 | 5,154.5 | 5,344.3 | ||||||||||||||||||||||
| Net premiums written | 1,136.9 | 1,081.0 | 1,268.5 | 1,112.1 | 1,196.1 | 1,207.2 | 1,375.2 | 1,214.9 | 4,581.7 | 4,598.5 | 4,993.4 | ||||||||||||||||||||||
| Net premiums earned | 1,141.4 | 1,096.6 | 1,135.4 | 1,154.0 | 1,161.8 | 1,179.8 | 1,186.0 | 1,242.6 | 4,474.5 | 4,527.4 | 4,770.2 | ||||||||||||||||||||||
| Losses and LAE: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 692.3 | 569.1 | 645.7 | 666.2 | 656.2 | 680.9 | 711.4 | 739.2 | 2,696.2 | 2,573.3 | 2,787.7 | ||||||||||||||||||||||
| Prior year favorable development, excluding catastrophe losses | (2.0 | ) | (4.9 | ) | (2.6 | ) | (6.0 | ) | (8.2 | ) | (12.6 | ) | (20.9 | ) | (14.4 | ) | (0.9 | ) | (15.5 | ) | (56.1 | ) | |||||||||||
| Current year catastrophe losses | 37.9 | 154.8 | 75.5 | 35.6 | 133.3 | 91.8 | 153.5 | 39.0 | 196.8 | 303.8 | 417.6 | ||||||||||||||||||||||
| Prior year favorable catastrophe development | - | (7.0 | ) | (9.6 | ) | (0.5 | ) | - | (15.0 | ) | - | - | (27.5 | ) | (17.1 | ) | (15.0 | ) | |||||||||||||||
| Total losses and LAE | 728.2 | 712.0 | 709.0 | 695.3 | 781.3 | 745.1 | 844.0 | 763.8 | 2,864.6 | 2,844.5 | 3,134.2 | ||||||||||||||||||||||
| Amortization of deferred acquisition costs and other underwriting expenses | 362.0 | 346.3 | 365.0 | 374.7 | 371.2 | 371.7 | 372.9 | 394.2 | 1,430.6 | 1,448.0 | 1,510.0 | ||||||||||||||||||||||
| GAAP underwriting profit (loss) | 51.2 | 38.3 | 61.4 | 84.0 | 9.3 | 63.0 | (30.9 | ) | 84.6 | 179.3 | 234.9 | 126.0 | |||||||||||||||||||||
| Net investment income | 69.6 | 57.7 | 67.6 | 70.2 | 76.8 | 75.6 | 78.8 | 79.5 | 281.3 | 265.1 | 310.7 | ||||||||||||||||||||||
| Other income | 6.7 | 6.1 | 8.1 | 6.4 | 6.0 | 5.8 | 6.1 | 6.0 | 25.5 | 27.3 | 23.9 | ||||||||||||||||||||||
| Other operating expenses | (10.4 | ) | (13.2 | ) | (8.7 | ) | (10.3 | ) | (7.0 | ) | (7.1 | ) | (7.0 | ) | (7.2 | ) | (32.5 | ) | (42.6 | ) | (28.3 | ) | |||||||||||
| Operating income before income taxes | 117.1 | 88.9 | 128.4 | 150.3 | 85.1 | 137.3 | 47.0 | 162.9 | 453.6 | 484.7 | 432.3 | ||||||||||||||||||||||
| Loss and LAE ratio: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 60.7 | % | 51.8 | % | 56.8 | % | 57.8 | % | 56.4 | % | 57.8 | % | 60.1 | % | 59.6 | % | 60.2 | % | 56.8 | % | 58.5 | % | |||||||||||
| Prior year favorable development, excluding catastrophe losses | (0.2 | )% | (0.4 | )% | (0.2 | )% | (0.5 | )% | (0.7 | )% | (1.1 | )% | (1.8 | )% | (1.2 | )% | - | (0.3 | )% | (1.2 | )% | ||||||||||||
| Current year catastrophe losses | 3.3 | % | 14.1 | % | 6.6 | % | 3.0 | % | 11.5 | % | 7.8 | % | 12.9 | % | 3.1 | % | 4.4 | % | 6.7 | % | 8.7 | % | |||||||||||
| Prior year favorable catastrophe development | - | (0.6 | )% | (0.8 | )% | - | - | (1.3 | )% | - | - | (0.6 | )% | (0.4 | )% | (0.3 | )% | ||||||||||||||||
| Total loss and LAE ratio | 63.8 | % | 64.9 | % | 62.4 | % | 60.3 | % | 67.2 | % | 63.2 | % | 71.2 | % | 61.5 | % | 64.0 | % | 62.8 | % | 65.7 | % | |||||||||||
| Expense ratio | 31.4 | % | 31.3 | % | 31.8 | % | 32.1 | % | 31.6 | % | 31.2 | % | 31.1 | % | 31.4 | % | 31.6 | % | 31.6 | % | 31.3 | % | |||||||||||
| Combined ratio | 95.2 | % | 96.2 | % | 94.2 | % | 92.4 | % | 98.8 | % | 94.4 | % | 102.3 | % | 92.9 | % | 95.6 | % | 94.4 | % | 97.0 | % | |||||||||||
| Combined ratio, excluding catastrophe losses | 91.9 | % | 82.7 | % | 88.4 | % | 89.4 | % | 87.3 | % | 87.9 | % | 89.4 | % | 89.8 | % | 91.8 | % | 88.1 | % | 88.6 | % | |||||||||||
| Combined ratio, excluding catastrophe losses and prior year development | 92.1 | % | 83.1 | % | 88.6 | % | 89.9 | % | 88.0 | % | 89.0 | % | 91.2 | % | 91.0 | % | 91.8 | % | 88.4 | % | 89.8 | % |
All values are in US Dollars.
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS | |||||||||||||||||||||||||||||||||
| CORE COMMERCIAL | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Gross premiums written | 517.3 | 431.4 | 547.4 | 453.3 | 539.9 | 473.6 | 601.1 | 484.9 | 1,928.5 | 1,949.4 | 2,099.5 | ||||||||||||||||||||||
| Net premiums written | 460.6 | 378.6 | 486.4 | 400.6 | 480.6 | 421.7 | 534.6 | 427.9 | 1,727.0 | 1,726.2 | 1,864.8 | ||||||||||||||||||||||
| Net premiums earned | 431.0 | 417.4 | 420.1 | 435.2 | 435.2 | 447.6 | 459.7 | 468.4 | 1,689.9 | 1,703.7 | 1,810.9 | ||||||||||||||||||||||
| Losses and LAE: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 275.8 | 218.5 | 250.4 | 254.8 | 250.6 | 258.2 | 281.7 | 271.9 | 1,001.1 | 999.5 | 1,062.4 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) development, excluding catastrophe losses | 0.1 | (2.8 | ) | (3.6 | ) | (6.3 | ) | (2.7 | ) | (4.6 | ) | (3.3 | ) | (7.2 | ) | (37.8 | ) | (12.6 | ) | (17.8 | ) | ||||||||||||
| Current year catastrophe losses | 20.2 | 57.9 | 22.0 | 4.2 | 94.5 | 22.5 | 57.3 | 10.9 | 80.8 | 104.3 | 185.2 | ||||||||||||||||||||||
| Prior year favorable catastrophe development | (2.9 | ) | (4.7 | ) | (7.0 | ) | (0.1 | ) | (0.1 | ) | (8.7 | ) | (0.9 | ) | - | (12.2 | ) | (14.7 | ) | (9.7 | ) | ||||||||||||
| Total losses and LAE | 293.2 | 268.9 | 261.8 | 252.6 | 342.3 | 267.4 | 334.8 | 275.6 | 1,031.9 | 1,076.5 | 1,220.1 | ||||||||||||||||||||||
| Amortization of deferred acquisition costs and other underwriting expenses | 141.5 | 140.2 | 141.9 | 146.1 | 144.2 | 145.1 | 150.6 | 158.4 | 565.0 | 569.7 | 598.3 | ||||||||||||||||||||||
| GAAP underwriting profit (loss) | (3.7 | ) | 8.3 | 16.4 | 36.5 | (51.3 | ) | 35.1 | (25.7 | ) | 34.4 | 93.0 | 57.5 | (7.5 | ) | ||||||||||||||||||
| Net investment income | 32.9 | 26.8 | 31.5 | 33.0 | 36.9 | 35.0 | 37.0 | 37.6 | 124.0 | 124.2 | 146.5 | ||||||||||||||||||||||
| Other income | 1.1 | 0.9 | 1.3 | 1.0 | 0.8 | 0.8 | 0.9 | 0.8 | 4.6 | 4.3 | 3.3 | ||||||||||||||||||||||
| Other operating expenses | (2.4 | ) | (3.8 | ) | (1.7 | ) | - | (1.2 | ) | (1.0 | ) | (1.2 | ) | (0.9 | ) | (5.2 | ) | (7.9 | ) | (4.3 | ) | ||||||||||||
| Operating income (loss) before income taxes | 27.9 | 32.2 | 47.5 | 70.5 | (14.8 | ) | 69.9 | 11.0 | 71.9 | 216.4 | 178.1 | 138.0 | |||||||||||||||||||||
| Loss and LAE ratio: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 64.0 | % | 52.4 | % | 59.6 | % | 58.5 | % | 57.6 | % | 57.6 | % | 61.2 | % | 58.0 | % | 59.2 | % | 58.6 | % | 58.7 | % | |||||||||||
| Prior year favorable development, excluding catastrophe losses | - | (0.7 | )% | (0.9 | )% | (1.4 | )% | (0.6 | )% | (1.0 | )% | (0.7 | )% | (1.5 | )% | (2.2 | )% | (0.7 | )% | (1.0 | )% | ||||||||||||
| Current year catastrophe losses | 4.7 | % | 13.8 | % | 5.3 | % | 0.9 | % | 21.7 | % | 5.0 | % | 12.5 | % | 2.3 | % | 4.8 | % | 6.2 | % | 10.2 | % | |||||||||||
| Prior year favorable catastrophe development | (0.7 | )% | (1.1 | )% | (1.7 | )% | - | - | (1.9 | )% | (0.2 | )% | - | (0.7 | )% | (0.9 | )% | (0.5 | )% | ||||||||||||||
| Total loss and LAE ratio | 68.0 | % | 64.4 | % | 62.3 | % | 58.0 | % | 78.7 | % | 59.7 | % | 72.8 | % | 58.8 | % | 61.1 | % | 63.2 | % | 67.4 | % | |||||||||||
| Expense ratio | 32.6 | % | 33.4 | % | 33.5 | % | 33.4 | % | 33.0 | % | 32.2 | % | 32.6 | % | 33.6 | % | 33.2 | % | 33.2 | % | 32.9 | % | |||||||||||
| Combined ratio | 100.6 | % | 97.8 | % | 95.8 | % | 91.4 | % | 111.7 | % | 91.9 | % | 105.4 | % | 92.4 | % | 94.3 | % | 96.4 | % | 100.3 | % | |||||||||||
| Combined ratio, excluding catastrophe losses | 96.6 | % | 85.1 | % | 92.2 | % | 90.5 | % | 90.0 | % | 88.8 | % | 93.1 | % | 90.1 | % | 90.2 | % | 91.1 | % | 90.6 | % | |||||||||||
| Combined ratio, excluding catastrophe losses and prior year development | 96.6 | % | 85.8 | % | 93.1 | % | 91.9 | % | 90.6 | % | 89.8 | % | 93.8 | % | 91.6 | % | 92.4 | % | 91.8 | % | 91.6 | % |
All values are in US Dollars.
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PREMIUMS WRITTEN AND RELATED METRICS | |||||||||||||||||||||||||||||||||
| CORE COMMERCIAL | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Written Premiums | |||||||||||||||||||||||||||||||||
| Gross | 517.3 | 431.4 | 547.4 | 453.3 | 539.9 | 473.6 | 601.1 | 484.9 | 1,928.5 | 1,949.4 | 2,099.5 | ||||||||||||||||||||||
| Ceded | (56.7 | ) | (52.8 | ) | (61.0 | ) | (52.7 | ) | (59.3 | ) | (51.9 | ) | (66.5 | ) | (57.0 | ) | (201.5 | ) | (223.2 | ) | (234.7 | ) | |||||||||||
| Net | 460.6 | 378.6 | 486.4 | 400.6 | 480.6 | 421.7 | 534.6 | 427.9 | 1,727.0 | 1,726.2 | 1,864.8 | ||||||||||||||||||||||
| Growth | 5.0 | % | (5.0 | )% | 0.1 | % | (0.9 | )% | 4.3 | % | 11.4 | % | 9.9 | % | 6.8 | % | 3.8 | % | - | 8.0 | % | ||||||||||||
| Net premiums written by segment | |||||||||||||||||||||||||||||||||
| Small Commercial | 237.2 | 220.0 | 233.1 | 222.3 | 257.1 | 246.8 | 256.3 | 243.2 | 872.4 | 912.6 | 1,003.4 | ||||||||||||||||||||||
| Middle Market | 223.4 | 158.6 | 253.3 | 178.3 | 223.5 | 174.9 | 278.3 | 184.7 | 854.6 | 813.6 | 861.4 | ||||||||||||||||||||||
| Total | 460.6 | 378.6 | 486.4 | 400.6 | 480.6 | 421.7 | 534.6 | 427.9 | 1,727.0 | 1,726.2 | 1,864.8 | ||||||||||||||||||||||
| Net premiums written by line of business | |||||||||||||||||||||||||||||||||
| Commercial Multiple Peril | 230.3 | 199.6 | 269.5 | 204.7 | 237.2 | 219.0 | 284.2 | 217.3 | 893.5 | 904.1 | 957.7 | ||||||||||||||||||||||
| Commercial Automobile | 87.9 | 76.0 | 87.0 | 78.0 | 90.0 | 80.6 | 92.9 | 77.3 | 329.6 | 328.9 | 340.8 | ||||||||||||||||||||||
| Workers' Compensation | 95.5 | 64.0 | 77.8 | 78.2 | 95.7 | 76.6 | 92.7 | 84.3 | 329.6 | 315.5 | 349.3 | ||||||||||||||||||||||
| Other Core Commercial | 46.9 | 39.0 | 52.1 | 39.7 | 57.7 | 45.5 | 64.8 | 49.0 | 174.3 | 177.7 | 217.0 | ||||||||||||||||||||||
| Total | 460.6 | 378.6 | 486.4 | 400.6 | 480.6 | 421.7 | 534.6 | 427.9 | 1,727.0 | 1,726.2 | 1,864.8 | ||||||||||||||||||||||
| Related Metrics | |||||||||||||||||||||||||||||||||
| Premium Retention | 85.3 | % | 86.9 | % | 87.1 | % | 85.3 | % | 87.3 | % | 84.9 | % | 87.8 | % | 86.7 | % | 83.4 | % | 86.2 | % | 86.7 | % | |||||||||||
| Renewal Price Change | 6.0 | % | 1.2 | % | 4.9 | % | 6.7 | % | 6.3 | % | 9.3 | % | 9.4 | % | 9.5 | % | 6.2 | % | 4.7 | % | 8.6 | % |
All values are in US Dollars.
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS | |||||||||||||||||||||||||||||||||
| SPECIALTY | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Gross premiums written | 313.2 | 295.0 | 337.3 | 306.1 | 344.1 | 332.1 | 327.2 | 346.0 | 1,198.8 | 1,251.6 | 1,349.4 | ||||||||||||||||||||||
| Net premiums written | 247.0 | 236.3 | 274.1 | 249.5 | 276.8 | 265.1 | 292.2 | 284.8 | 980.2 | 1,006.9 | 1,118.9 | ||||||||||||||||||||||
| Net premiums earned | 244.9 | 241.2 | 245.0 | 248.5 | 257.7 | 255.8 | 238.9 | 277.5 | 964.3 | 979.6 | 1,029.9 | ||||||||||||||||||||||
| Losses and LAE: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 137.9 | 131.3 | 134.7 | 130.7 | 138.3 | 145.7 | 125.8 | 145.7 | 554.0 | 534.6 | 555.5 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) development, excluding catastrophe losses | (3.8 | ) | (2.3 | ) | (0.3 | ) | - | (0.6 | ) | (3.3 | ) | (8.1 | ) | (4.2 | ) | 9.1 | (6.4 | ) | (16.2 | ) | |||||||||||||
| Current year catastrophe losses | 6.9 | 12.9 | 20.5 | 6.4 | 24.3 | 7.7 | 17.5 | 4.6 | 27.0 | 46.7 | 54.1 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) catastrophe development | (0.4 | ) | (1.3 | ) | (1.9 | ) | (0.5 | ) | 0.1 | (3.3 | ) | 0.9 | - | (12.4 | ) | (4.1 | ) | (2.3 | ) | ||||||||||||||
| Total losses and LAE | 140.6 | 140.6 | 153.0 | 136.6 | 162.1 | 146.8 | 136.1 | 146.1 | 577.7 | 570.8 | 591.1 | ||||||||||||||||||||||
| Amortization of deferred acquisition costs and other underwriting expenses | 90.2 | 87.6 | 89.7 | 92.5 | 93.6 | 90.3 | 87.3 | 98.2 | 358.1 | 360.0 | 369.4 | ||||||||||||||||||||||
| GAAP underwriting profit | 14.1 | 13.0 | 2.3 | 19.4 | 2.0 | 18.7 | 15.5 | 33.2 | 28.5 | 48.8 | 69.4 | ||||||||||||||||||||||
| Net investment income | 13.5 | 11.1 | 12.9 | 13.6 | 14.9 | 16.0 | 15.9 | 16.1 | 56.1 | 51.1 | 62.9 | ||||||||||||||||||||||
| Other income | 1.2 | 1.3 | 1.5 | 1.4 | 1.6 | 1.7 | 1.6 | 1.5 | 4.6 | 5.4 | 6.4 | ||||||||||||||||||||||
| Other operating expenses | (2.1 | ) | (2.3 | ) | (1.9 | ) | (1.7 | ) | (1.5 | ) | (1.9 | ) | (1.6 | ) | (1.8 | ) | (5.5 | ) | (8.0 | ) | (6.8 | ) | |||||||||||
| Operating income before income taxes | 26.7 | 23.1 | 14.8 | 32.7 | 17.0 | 34.5 | 31.4 | 49.0 | 83.7 | 97.3 | 131.9 | ||||||||||||||||||||||
| Loss and LAE ratio: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 56.3 | % | 54.5 | % | 54.9 | % | 52.6 | % | 53.6 | % | 57.0 | % | 52.7 | % | 52.4 | % | 57.5 | % | 54.7 | % | 54.0 | % | |||||||||||
| Prior year favorable development, excluding catastrophe losses | (1.6 | )% | (1.0 | )% | (0.1 | )% | - | (0.2 | )% | (1.3 | )% | (3.4 | )% | (1.5 | )% | 0.9 | % | (0.7 | )% | (1.6 | )% | ||||||||||||
| Current year catastrophe losses | 2.9 | % | 5.3 | % | 8.4 | % | 2.6 | % | 9.5 | % | 3.0 | % | 7.3 | % | 1.7 | % | 2.8 | % | 4.7 | % | 5.2 | % | |||||||||||
| Prior year unfavorable (favorable) catastrophe development | (0.2 | )% | (0.5 | )% | (0.8 | )% | (0.2 | )% | - | (1.3 | )% | 0.4 | % | - | (1.3 | )% | (0.4 | )% | (0.2 | )% | |||||||||||||
| Total loss and LAE ratio | 57.4 | % | 58.3 | % | 62.4 | % | 55.0 | % | 62.9 | % | 57.4 | % | 57.0 | % | 52.6 | % | 59.9 | % | 58.3 | % | 57.4 | % | |||||||||||
| Expense ratio | 36.6 | % | 36.1 | % | 36.3 | % | 36.9 | % | 35.9 | % | 34.9 | % | 36.2 | % | 35.1 | % | 37.0 | % | 36.5 | % | 35.5 | % | |||||||||||
| Combined ratio | 94.0 | % | 94.4 | % | 98.7 | % | 91.9 | % | 98.8 | % | 92.3 | % | 93.2 | % | 87.7 | % | 96.9 | % | 94.8 | % | 92.9 | % | |||||||||||
| Combined ratio, excluding catastrophe losses | 91.3 | % | 89.6 | % | 91.1 | % | 89.5 | % | 89.3 | % | 90.6 | % | 85.5 | % | 86.0 | % | 95.4 | % | 90.5 | % | 87.9 | % | |||||||||||
| Combined ratio, excluding catastrophe losses and prior year development | 92.9 | % | 90.6 | % | 91.2 | % | 89.5 | % | 89.5 | % | 91.9 | % | 88.9 | % | 87.5 | % | 94.5 | % | 91.2 | % | 89.5 | % |
All values are in US Dollars.
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PREMIUMS WRITTEN AND RELATED METRICS | |||||||||||||||||||||||||||||||||
| SPECIALTY | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Written Premiums | |||||||||||||||||||||||||||||||||
| Gross | 313.2 | 295.0 | 337.3 | 306.1 | 344.1 | 332.1 | 327.2 | 346.0 | 1,198.8 | 1,251.6 | 1,349.4 | ||||||||||||||||||||||
| Ceded | (66.2 | ) | (58.7 | ) | (63.2 | ) | (56.6 | ) | (67.3 | ) | (67.0 | ) | (35.0 | ) | (61.2 | ) | (218.6 | ) | (244.7 | ) | (230.5 | ) | |||||||||||
| Net | 247.0 | 236.3 | 274.1 | 249.5 | 276.8 | 265.1 | 292.2 | 284.8 | 980.2 | 1,006.9 | 1,118.9 | ||||||||||||||||||||||
| Growth | 3.4 | % | (4.1 | )% | 5.3 | % | 6.3 | % | 12.1 | % | 12.2 | % | 6.6 | % | 14.1 | % | 3.5 | % | 2.7 | % | 11.1 | % | |||||||||||
| Net premiums written by segment | |||||||||||||||||||||||||||||||||
| Professional and Executive Lines | 86.0 | 75.3 | 88.5 | 81.0 | 94.4 | 81.3 | 98.0 | 93.3 | 306.4 | 330.8 | 367.0 | ||||||||||||||||||||||
| Specialty Property & Casualty | 73.1 | 72.6 | 84.1 | 80.9 | 79.3 | 79.8 | 87.1 | 101.4 | 319.6 | 310.7 | 347.6 | ||||||||||||||||||||||
| Marine | 72.7 | 72.8 | 85.2 | 73.6 | 91.1 | 86.6 | 90.4 | 77.1 | 288.6 | 304.3 | 345.2 | ||||||||||||||||||||||
| Surety and Other | 15.2 | 15.6 | 16.3 | 14.0 | 12.0 | 17.4 | 16.7 | 13.0 | 65.6 | 61.1 | 59.1 | ||||||||||||||||||||||
| Total | 247.0 | 236.3 | 274.1 | 249.5 | 276.8 | 265.1 | 292.2 | 284.8 | 980.2 | 1,006.9 | 1,118.9 | ||||||||||||||||||||||
| Related Metrics | |||||||||||||||||||||||||||||||||
| Premium Retention | 82.4 | % | 83.2 | % | 84.0 | % | 84.4 | % | 82.3 | % | 83.1 | % | 85.5 | % | 84.8 | % | 80.9 | % | 83.5 | % | 83.9 | % | |||||||||||
| Renewal Price Change | 8.9 | % | 5.8 | % | 7.9 | % | 10.1 | % | 8.7 | % | 11.3 | % | 10.8 | % | 12.7 | % | 6.1 | % | 8.1 | % | 10.9 | % |
All values are in US Dollars.
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS | |||||||||||||||||||||||||||||||||
| PERSONAL LINES | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Gross premiums written | 458.4 | 497.6 | 521.4 | 476.1 | 453.6 | 537.1 | 564.9 | 339.8 | 1,991.2 | 1,953.5 | 1,895.4 | ||||||||||||||||||||||
| Net premiums written | 429.3 | 466.1 | 508.0 | 462.0 | 438.7 | 520.4 | 548.4 | 502.2 | 1,874.5 | 1,865.4 | 2,009.7 | ||||||||||||||||||||||
| Net premiums earned | 465.5 | 438.0 | 470.3 | 470.3 | 468.9 | 476.4 | 487.4 | 496.7 | 1,820.3 | 1,844.1 | 1,929.4 | ||||||||||||||||||||||
| Losses and LAE: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 278.6 | 219.2 | 260.6 | 280.7 | 267.3 | 277.0 | 303.9 | 321.6 | 1,141.0 | 1,039.1 | 1,169.8 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) development, excluding catastrophe losses | (1.6 | ) | (0.1 | ) | 1.0 | - | (5.2 | ) | (5.0 | ) | (9.9 | ) | (3.0 | ) | 26.6 | (0.7 | ) | (23.1 | ) | ||||||||||||||
| Current year catastrophe losses | 10.8 | 84.0 | 33.0 | 25.0 | 14.5 | 61.6 | 78.7 | 23.5 | 89.0 | 152.8 | 178.3 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) catastrophe development | 3.3 | (1.0 | ) | (0.7 | ) | 0.1 | - | (3.0 | ) | - | - | (2.9 | ) | 1.7 | (3.0 | ) | |||||||||||||||||
| Total losses and LAE | 291.1 | 302.1 | 293.9 | 305.8 | 276.6 | 330.6 | 372.7 | 342.1 | 1,253.7 | 1,192.9 | 1,322.0 | ||||||||||||||||||||||
| Amortization of deferred acquisition costs and other underwriting expenses | 130.3 | 118.5 | 133.4 | 136.1 | 133.4 | 136.3 | 135.0 | 137.6 | 507.5 | 518.3 | 542.3 | ||||||||||||||||||||||
| GAAP underwriting profit (loss) | 44.1 | 17.4 | 43.0 | 28.4 | 58.9 | 9.5 | (20.3 | ) | 17.0 | 59.1 | 132.9 | 65.1 | |||||||||||||||||||||
| Net investment income | 20.3 | 16.5 | 19.5 | 20.4 | 22.1 | 21.8 | 22.6 | 22.9 | 80.1 | 76.7 | 89.4 | ||||||||||||||||||||||
| Other income | 2.7 | 1.8 | 3.5 | 2.6 | 2.3 | 2.2 | 2.6 | 2.6 | 11.4 | 10.6 | 9.7 | ||||||||||||||||||||||
| Other operating expenses | (2.2 | ) | (3.1 | ) | (1.8 | ) | (0.6 | ) | (1.5 | ) | (1.3 | ) | (1.3 | ) | (1.6 | ) | (5.7 | ) | (7.7 | ) | (5.7 | ) | |||||||||||
| Operating income before income taxes | 64.9 | 32.6 | 64.2 | 50.8 | 81.8 | 32.2 | 3.6 | 40.9 | 144.9 | 212.5 | 158.5 | ||||||||||||||||||||||
| Loss and LAE ratio: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 59.8 | % | 50.1 | % | 55.4 | % | 59.7 | % | 57.0 | % | 58.1 | % | 62.4 | % | 64.8 | % | 62.7 | % | 56.3 | % | 60.6 | % | |||||||||||
| Prior year unfavorable (favorable) development, excluding catastrophe losses | (0.3 | )% | - | 0.2 | % | - | (1.1 | )% | (1.0 | )% | (2.0 | )% | (0.6 | )% | 1.5 | % | - | (1.2 | )% | ||||||||||||||
| Current year catastrophe losses | 2.3 | % | 19.1 | % | 7.0 | % | 5.3 | % | 3.1 | % | 12.9 | % | 16.1 | % | 4.7 | % | 4.9 | % | 8.3 | % | 9.3 | % | |||||||||||
| Prior year unfavorable (favorable) catastrophe development | 0.7 | % | (0.2 | )% | (0.1 | )% | - | - | (0.6 | )% | - | - | (0.2 | )% | 0.1 | % | (0.2 | )% | |||||||||||||||
| Total loss and LAE ratio | 62.5 | % | 69.0 | % | 62.5 | % | 65.0 | % | 59.0 | % | 69.4 | % | 76.5 | % | 68.9 | % | 68.9 | % | 64.7 | % | 68.5 | % | |||||||||||
| Expense ratio | 27.5 | % | 26.7 | % | 27.9 | % | 28.4 | % | 28.0 | % | 28.2 | % | 27.3 | % | 27.3 | % | 27.4 | % | 27.7 | % | 27.7 | % | |||||||||||
| Combined ratio | 90.0 | % | 95.7 | % | 90.4 | % | 93.4 | % | 87.0 | % | 97.6 | % | 103.8 | % | 96.2 | % | 96.3 | % | 92.4 | % | 96.2 | % | |||||||||||
| Combined ratio, excluding catastrophe losses | 87.0 | % | 76.8 | % | 83.5 | % | 88.1 | % | 83.9 | % | 85.3 | % | 87.7 | % | 91.5 | % | 91.6 | % | 84.0 | % | 87.1 | % | |||||||||||
| Combined ratio, excluding catastrophe losses and prior year development | 87.3 | % | 76.8 | % | 83.3 | % | 88.1 | % | 85.0 | % | 86.3 | % | 89.7 | % | 92.1 | % | 90.1 | % | 84.0 | % | 88.3 | % |
All values are in US Dollars.
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS | |||||||||||||||||||||||||||||||||
| PERSONAL LINES - AUTOMOBILE | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Net premiums written | 279.4 | 276.8 | 311.6 | 283.7 | 280.7 | 318.6 | 330.8 | 300.3 | 1,186.1 | 1,151.5 | 1,230.4 | ||||||||||||||||||||||
| Net premiums earned | 293.3 | 263.9 | 295.2 | 293.4 | 291.1 | 295.6 | 301.8 | 305.3 | 1,152.4 | 1,145.8 | 1,193.8 | ||||||||||||||||||||||
| Losses and LAE: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 196.6 | 131.8 | 177.6 | 197.1 | 174.7 | 183.6 | 207.9 | 226.3 | 825.3 | 703.1 | 792.5 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) development, excluding catastrophe losses | 2.9 | - | (0.1 | ) | 1.7 | (5.3 | ) | (3.8 | ) | (10.0 | ) | (4.4 | ) | 22.0 | 4.5 | (23.5 | ) | ||||||||||||||||
| Current year catastrophe losses | 0.8 | 5.2 | 3.2 | 1.0 | 0.6 | 9.4 | 7.5 | 2.5 | 5.7 | 10.2 | 20.0 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) catastrophe development | 0.9 | (0.1 | ) | - | (0.1 | ) | - | (0.7 | ) | (0.3 | ) | (0.3 | ) | (0.4 | ) | 0.7 | (1.3 | ) | |||||||||||||||
| Total losses and LAE | 201.2 | 136.9 | 180.7 | 199.7 | 170.0 | 188.5 | 205.1 | 224.1 | 852.6 | 718.5 | 787.7 | ||||||||||||||||||||||
| Loss and LAE ratio: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 67.0 | % | 50.0 | % | 60.1 | % | 67.2 | % | 60.0 | % | 62.2 | % | 68.9 | % | 74.1 | % | 71.6 | % | 61.3 | % | 66.4 | % | |||||||||||
| Prior year unfavorable (favorable) development, excluding catastrophe losses | 1.0 | % | - | - | 0.6 | % | (1.8 | )% | (1.3 | )% | (3.3 | )% | (1.4 | )% | 1.9 | % | 0.4 | % | (2.0 | )% | |||||||||||||
| Current year catastrophe losses | 0.3 | % | 1.9 | % | 1.1 | % | 0.3 | % | 0.2 | % | 3.1 | % | 2.5 | % | 0.8 | % | 0.5 | % | 0.9 | % | 1.7 | % | |||||||||||
| Prior year unfavorable (favorable) catastrophe development | 0.3 | % | - | - | - | - | (0.2 | )% | (0.1 | )% | (0.1 | )% | - | 0.1 | % | (0.1 | )% | ||||||||||||||||
| Total loss and LAE ratio | 68.6 | % | 51.9 | % | 61.2 | % | 68.1 | % | 58.4 | % | 63.8 | % | 68.0 | % | 73.4 | % | 74.0 | % | 62.7 | % | 66.0 | % |
All values are in US Dollars.
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS | |||||||||||||||||||||||||||||||||
| PERSONAL LINES - HOME & OTHER | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Net premiums written | 149.9 | 189.3 | 196.4 | 178.3 | 158.0 | 201.8 | 217.6 | 201.9 | 688.4 | 713.9 | 779.3 | ||||||||||||||||||||||
| Net premiums earned | 172.2 | 174.1 | 175.1 | 176.9 | 177.8 | 180.8 | 185.6 | 191.4 | 667.9 | 698.3 | 735.6 | ||||||||||||||||||||||
| Losses and LAE: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 82.0 | 87.4 | 83.0 | 83.6 | 92.6 | 93.4 | 96.0 | 95.3 | 315.7 | 336.0 | 377.3 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) development, excluding catastrophe losses | (4.5 | ) | (0.1 | ) | 1.1 | (1.7 | ) | 0.1 | (1.2 | ) | 0.1 | 1.4 | 4.6 | (5.2 | ) | 0.4 | |||||||||||||||||
| Current year catastrophe losses | 10.0 | 78.8 | 29.8 | 24.0 | 13.9 | 52.2 | 71.2 | 21.0 | 83.3 | 142.6 | 158.3 | ||||||||||||||||||||||
| Prior year unfavorable (favorable) catastrophe development | 2.4 | (0.9 | ) | (0.7 | ) | 0.2 | - | (2.3 | ) | 0.3 | 0.3 | (2.5 | ) | 1.0 | (1.7 | ) | |||||||||||||||||
| Total losses and LAE | 89.9 | 165.2 | 113.2 | 106.1 | 106.6 | 142.1 | 167.6 | 118.0 | 401.1 | 474.4 | 534.3 | ||||||||||||||||||||||
| Loss and LAE ratio: | |||||||||||||||||||||||||||||||||
| Current year, excluding catastrophe losses | 47.6 | % | 50.2 | % | 47.4 | % | 47.3 | % | 52.1 | % | 51.7 | % | 51.6 | % | 49.8 | % | 47.3 | % | 48.1 | % | 51.2 | % | |||||||||||
| Prior year unfavorable (favorable) development, excluding catastrophe losses | (2.6 | )% | (0.1 | )% | 0.6 | % | (1.0 | )% | 0.1 | % | (0.7 | )% | 0.1 | % | 0.7 | % | 0.7 | % | (0.7 | )% | 0.1 | % | |||||||||||
| Current year catastrophe losses | 5.8 | % | 45.3 | % | 17.0 | % | 13.6 | % | 7.8 | % | 28.9 | % | 38.4 | % | 11.0 | % | 12.5 | % | 20.4 | % | 21.5 | % | |||||||||||
| Prior year unfavorable (favorable) catastrophe development | 1.4 | % | (0.5 | )% | (0.4 | )% | 0.1 | % | - | (1.3 | )% | 0.2 | % | 0.2 | % | (0.4 | )% | 0.1 | % | (0.2 | )% | ||||||||||||
| Total loss and LAE ratio | 52.2 | % | 94.9 | % | 64.6 | % | 60.0 | % | 60.0 | % | 78.6 | % | 90.3 | % | 61.7 | % | 60.1 | % | 67.9 | % | 72.6 | % |
All values are in US Dollars.
| THE HANOVER INSURANCE GROUP | |||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PREMIUMS WRITTEN AND RELATED METRICS | |||||||||||||||||||||||||||||||||
| PERSONAL LINES | |||||||||||||||||||||||||||||||||
| (In millions, except percentage data) | |||||||||||||||||||||||||||||||||
| Written Premiums | |||||||||||||||||||||||||||||||||
| Gross | 458.4 | 497.6 | 521.4 | 476.1 | 453.6 | 537.1 | 564.9 | 339.8 | 1,991.2 | 1,953.5 | 1,895.4 | ||||||||||||||||||||||
| Ceded | (29.1 | ) | (31.5 | ) | (13.4 | ) | (14.1 | ) | (14.9 | ) | (16.7 | ) | (16.5 | ) | 162.4 | (116.7 | ) | (88.1 | ) | 114.3 | |||||||||||||
| Net | 429.3 | 466.1 | 508.0 | 462.0 | 438.7 | 520.4 | 548.4 | 502.2 | 1,874.5 | 1,865.4 | 2,009.7 | ||||||||||||||||||||||
| Growth | 2.1 | % | -5.5 | % | 2.3 | % | -0.5 | % | 2.2 | % | 11.6 | % | 8.0 | % | 8.7 | % | 5.7 | % | -0.5 | % | 7.7 | % | |||||||||||
| Net premiums written by line of business | |||||||||||||||||||||||||||||||||
| Personal Automobile | 279.4 | 276.8 | 311.6 | 283.7 | 280.7 | 318.6 | 330.8 | 300.3 | 1,186.1 | 1,151.5 | 1,230.4 | ||||||||||||||||||||||
| Homeowners and Other | 149.9 | 189.3 | 196.4 | 178.3 | 158.0 | 201.8 | 217.6 | 201.9 | 688.4 | 713.9 | 779.3 | ||||||||||||||||||||||
| Total | 429.3 | 466.1 | 508.0 | 462.0 | 438.7 | 520.4 | 548.4 | 502.2 | 1,874.5 | 1,865.4 | 2,009.7 | ||||||||||||||||||||||
| Related Metrics | |||||||||||||||||||||||||||||||||
| Renewal Price Change | |||||||||||||||||||||||||||||||||
| Personal Automobile | 6.4 | % | 5.7 | % | 6.4 | % | 6.3 | % | 4.2 | % | 3.5 | % | 1.5 | % | 1.2 | % | 6.2 | % | 6.2 | % | 2.6 | % | |||||||||||
| Homeowners | 9.0 | % | 8.9 | % | 8.6 | % | 7.9 | % | 6.2 | % | 5.7 | % | 5.9 | % | 6.9 | % | 8.7 | % | 8.6 | % | 6.2 | % | |||||||||||
| Total ^(1)^ | 7.4 | % | 6.9 | % | 7.2 | % | 6.9 | % | 4.9 | % | 4.4 | % | 3.2 | % | 3.4 | % | 7.1 | % | 7.1 | % | 4.0 | % | |||||||||||
| Policy Retention | |||||||||||||||||||||||||||||||||
| Personal Automobile | 83.9 | % | 86.5 | % | 81.0 | % | 82.0 | % | 84.0 | % | 85.8 | % | 88.0 | % | 88.4 | % | 84.8 | % | 83.4 | % | 86.5 | % | |||||||||||
| Homeowners | 84.1 | % | 87.3 | % | 83.3 | % | 83.4 | % | 84.2 | % | 86.9 | % | 89.3 | % | 89.6 | % | 85.7 | % | 84.5 | % | 87.6 | % | |||||||||||
| Total ^(1)^ | 84.0 | % | 86.8 | % | 82.1 | % | 82.7 | % | 84.1 | % | 86.4 | % | 88.6 | % | 89.0 | % | 85.2 | % | 83.9 | % | 87.1 | % | |||||||||||
| PIF change from prior year period | |||||||||||||||||||||||||||||||||
| Personal Automobile | 0.7 | % | (0.1 | )% | (1.7 | )% | (2.8 | )% | (2.7 | )% | (0.9 | )% | 2.7 | % | 6.1 | % | 1.4 | % | (2.8 | )% | 6.1 | % | |||||||||||
| Homeowners | 1.5 | % | 0.8 | % | (0.2 | )% | (1.1 | )% | (0.9 | )% | 0.6 | % | 3.4 | % | 6.0 | % | 2.1 | % | (1.1 | )% | 6.0 | % | |||||||||||
| Total ^(1)^ | 1.1 | % | 0.4 | % | (0.9 | )% | (1.9 | )% | (1.8 | )% | (0.1 | )% | 3.1 | % | 6.1 | % | 1.8 | % | (1.9 | )% | 6.1 | % | |||||||||||
| (1) Related metrics exclude Other Personal Lines. |
All values are in US Dollars.
| 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, and measures of operating income and loss 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 (loss), 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. 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 (loss) attributable to the core operations of the business. | |
| The Hanover also provides measures of operating income (loss) and loss ratios that exclude the effects of catastrophe losses. A catastrophe is a severe loss, resulting from natural or manmade events, including, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, severe winter weather, fire, explosions 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 (loss) 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. | |
| 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. Actual written price changes may differ, as not all policies are retained. |
| 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. Actual written rate changes may differ, as not all policies are retained. 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. |
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