Exhibit 99.1

The Hanover Reports Second Quarter Net Income and

Operating Income of $0.63 and $2.32 per Diluted Share, Respectively;

Combined Ratio of 96.2%; Combined Ratio, Excluding Catastrophes, of 90.2%

Second Quarter Highlights

WORCESTER, Mass., August 2, 2022 - The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income of $22.6 million, or $0.63 per diluted share, in the second quarter of 2022, compared to $128.5 million, or $3.52 per diluted share, in the prior-year quarter. Operating income(3) was $83.9 million, or $2.32 per diluted share, for the second quarter of 2022. This compared to operating income of $104.0 million, or $2.85 per diluted share, in the prior-year quarter. The difference between net and operating income in the second quarter of 2022 was primarily due to the after-tax decrease in the fair value of equity securities of $46.6 million, or $1.29 per fully diluted share, which is excluded from operating income.

“We are pleased to report another strong quarter – punctuated by an 11.1% operating return on equity(4) and operating earnings per share of $2.32, as well as double-digit premium growth,” said John C. Roche, president and chief executive officer at The Hanover. “Year-to-date, we generated an operating ROE of 13.4% and a 24.0% increase in operating income per share to $5.58, reflecting our continued business momentum, and demonstrating our adeptness to navigate our business through the unprecedented complexities of the current economic environment.

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

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

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

“We remain focused on pricing and other levers to address the ongoing headwinds in Personal Lines, in particular in homeowners,” said Roche. “At the same time, very strong performance and returns across our commercial businesses helped to largely offset these pressures, culminating in a consolidated ex-CAT combined ratio(5) of 90.2% in the second quarter. We are pleased with the impressive results within our Core Commercial and Specialty lines as they delivered improved profitability, significant renewal price increases of 11% and 12%, and net written premium growth of 7.7% and 14.0%, respectively. With the ongoing support of our robust agency relationships and talented team, we continue to have confidence in our ability to profitably grow our business and deliver superior returns to our valued shareholders.”

“Our diversified book of business, proven insurance portfolio and analytical acumen are serving us exceptionally well in this dynamic environment, allowing us to produce consistent underwriting profit,” said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover. “Additionally, our high-quality investment portfolio generated pre-tax net investment income of $70.5 million. Looking ahead, we expect the current rising interest rate environment to be a long-term positive as robust insurance cashflow and maturing assets are reinvested at higher yields.

“Given the continued elevated inflation and supply chain disruption, we are updating our full year outlook," said Farber. "We expect our ex-CAT combined ratio to be in the range of 90.5% to 91.5%, an increase of one point from our original 2022 outlook. The updated range incorporates our year-to-date performance and assumes no additional prior-year development. In addition, we expect pre-tax net investment income to be in the range of $280 to $285 million, up approximately 5% from our original expectations. While we anticipate some continuing near-term pressure within Personal Lines, we have full confidence in our ability to achieve our 14% long-term operating ROE target as we leverage our specialized capabilities and deliver substantial shareholder value.”

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Second Quarter Operating Highlights

Core Commercial

Core Commercial operating income before taxes was $66.9 million in the second quarter of 2022, compared to $69.9 million in the second quarter of 2021. The Core Commercial combined ratio was 92.6%, compared to 91.9% in the prior-year quarter. Catastrophe losses in the second quarter of 2022 were $17.8 million, or 3.7 points of the combined ratio, which is net of $10.9 million of favorable prior-year catastrophe development. This compared to catastrophe losses of $13.8 million, or 3.1 points, in the prior-year quarter, which was net of $8.7 million of favorable prior-year catastrophe development.

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Second quarter 2022 results included $2.8 million, or 0.6 points, of net favorable prior-year reserve development, excluding catastrophes, driven primarily by continued favorability in workers’ compensation. This compared to net favorable prior-year reserve development of $4.6 million, or 1.0 point, in the second quarter of 2021.

Core Commercial current accident year combined ratio, excluding catastrophes, decreased 0.3 points to 89.5%

in the second quarter of 2022, from 89.8% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, decreased by 0.6 points to 57.0%, primarily driven by the benefit of rate increases earning in.

Net premiums written were $454.2 million in the quarter, up 7.7% from the prior-year quarter, primarily driven by strong growth of 10.5% in small commercial. Core Commercial average rate increased 6.9% in the second quarter, while renewal price change averaged 11.0%.

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

Specialty

Specialty operating income before taxes was $45.2 million in the second quarter of 2022, compared to $34.5 million in the second quarter of 2021. The Specialty combined ratio was 89.4%, compared to 92.3% in the prior-year quarter. Catastrophe losses in the second quarter of 2022 were $6.6 million, or 2.2 points of the combined ratio, which is net of $3.1 million of favorable prior-year catastrophe development. This compared to catastrophe losses of $4.4 million, or 1.7 points, in the prior-year quarter, which was net of $3.3 million of favorable prior-year catastrophe development.

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Second quarter 2022 results included $1.2 million, or 0.4 points, of net favorable prior-year reserve development, excluding catastrophes. This compared to net favorable prior-year reserve development of $3.3 million, or 1.3 points, in the second quarter of 2021.

Specialty current accident year combined ratio, excluding catastrophes, decreased 4.3 points to 87.6%

in the second quarter of 2022, from 91.9% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, decreased by 4.7 points to 52.3%, due to the benefit of rate increases earning in, as well as the impact of a large property loss in the prior-year second quarter.

Net premiums written were $302.3 million in the quarter, up 14.0% from the prior-year quarter, driven primarily by rate and exposure increases. Specialty average rate increased 8.0% in the second quarter, while renewal price change averaged 12.0%.

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

Personal Lines

Personal Lines operating income before taxes was $2.8 million in the second quarter of 2022, compared to $32.2 million in the second quarter of 2021. The Personal Lines combined ratio was 103.2%, compared to 97.6% in the prior-year quarter. Catastrophe losses in the second quarter of 2022 were $53.0 million, or 10.2 points of the combined ratio, which includes $2.0 million of unfavorable prior-year catastrophe development. This compared to catastrophe losses of $58.6 million, or 12.3 points of the combined ratio, in the prior-year quarter, which was net of $3.0 million of favorable prior-year catastrophe development.

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Second quarter 2022 results included net favorable prior-year reserve development, excluding catastrophes, of $5.2 million, or 1.0 point, driven by both auto and homeowners. This compared to net favorable prior-year reserve development of $5.0 million, or 1.0 point, in the second quarter of 2021, driven by auto.

Personal Lines current accident year combined ratio, excluding catastrophe losses, increased 7.7 points to 94.0% in the second quarter of 2022, from 86.3% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, increased 9.2 points to 67.3%. The loss ratio increase in auto was attributable to increased property severity, and higher frequency as compared to the unusually low level of claims experienced in the second quarter of 2021. Loss frequency in auto remains below pre-pandemic levels. The increase in the homeowners loss ratio was primarily due to higher than usual large loss activity, and, to a lesser extent, non-CAT weather and continued inflationary pressures on claims costs.

The expense ratio(6) decreased by 1.5 points to 26.7% in the second quarter of 2022, compared to the second quarter of 2021, primarily attributable to fixed cost leverage from premium growth and lower performance-based agency compensation.

Net premiums written were $576.3 million in the quarter, up 10.7% from the prior-year quarter, driven by strong retention. Personal Lines renewal price change averaged 5.4% in the second quarter of 2022, while average rate increases were 3.2%.

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

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Investments

Net investment income was $70.5 million for the second quarter of 2022, below the prior-year quarter of $75.6 million, primarily due to elevated partnership income in the prior-year quarter, partially offset by the continued investment of operational cashflow. Total pre-tax earned yield on the investment portfolio for the quarter ended June 30, 2022, was 3.19%, down from 3.65% in the prior-year quarter. The average pre-tax earned yield on fixed maturities was 2.97% and 3.02% for the quarters ended June 30, 2022, and 2021, respectively.

Net realized and unrealized investment losses recognized in earnings were $77.9 million in the second quarter of 2022, primarily driven by the change in fair value of equity securities. This compared to net realized and unrealized investment gains recognized in earnings of $31.1 million in the second quarter of 2021.

The company held $8.6 billion in cash and invested assets on June 30, 2022. Fixed maturities and cash represented approximately 86% of the investment portfolio. Approximately 95% of the company’s fixed maturity portfolio is rated investment grade. Net unrealized losses on the fixed maturity portfolio as of June 30, 2022, were $587.0 million before taxes, a decrease in fair value of $324.4 million since March 31, 2022, primarily due to higher interest rates.

Shareholders’ Equity and Capital Actions

On June 30, 2022, book value per share was $72.20, down 9.3% from March 31, 2022, primarily driven by a decrease in the fair value of fixed maturity investments. Book value per share, excluding net unrealized depreciation on fixed maturity investments(7), net of tax, remained flat compared to March 31, 2022, and increased 2.1% from December 31, 2021.

During the quarter, the company repurchased approximately 27,000 shares of common stock in the open market for $4.1 million. The company has approximately $341 million of remaining capacity under its existing share repurchase program.

Earnings Conference Call

The company will host a conference call to discuss its second quarter results on Wednesday, August 3, at 10:00 a.m. E.T. A PowerPoint slide 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.

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.

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Definition of Reported Segments

Continuing operations include four operating segments: Core Commercial, Specialty, Personal Lines and Other. The Core Commercial segment includes commercial multiple peril, commercial automobile, workers’ compensation and other commercial lines coverages provided to small and mid-sized businesses. The Specialty segment includes four divisions of business: professional and executive lines, specialty P&C, marine, and surety and other. Specialty P&C includes coverages such as program business (provides commercial insurance to markets with specialized coverage or risk management needs related to groups of similar businesses), specialty industrial and commercial property, and excess and surplus lines. 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.

Financial Supplement

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

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Condensed Financial Statements and Reconciliations
 

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The following is a reconciliation from operating income to net income(8):

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Forward-Looking Statements and Non-GAAP Financial Measures

Forward-Looking Statements

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,” “plan,” “likely,” “potential,” “targeted,” “forecasts,” “should,” “could,” “continue,” “outlook,” “guidance,” “modeling,” “moving 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.

These statements include, but are not limited to, the company’s statements regarding:

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Additional Risks and Uncertainties

Investors are further cautioned and should consider the risks and uncertainties in the company’s business that may affect such estimates and future performance that are discussed 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 www.hanover.com under “Investors.” These risks and uncertainties include, but are not limited to:

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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.

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Non-GAAP Financial Measures

As discussed on page 37 of the company’s Annual Report on Form 10-K for the year ended December 31, 2021, 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 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 2021 Annual Report on pages 63-66.

Operating income and operating income per 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 segments, “operating income” is the segment income before both interest expense and income taxes. The company also uses “operating income per share” (which is after both interest expense and income taxes). It is calculated by dividing operating income by the weighted average number of diluted shares of common stock. The company believes that metrics of operating income and operating income in relation to its four 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 reserve development should not be misconstrued as substitutes for income from continuing operations or net income determined in accordance with GAAP. A reconciliation of operating income (loss) to income from continuing operations and net income for the relevant periods is included on page 10 of this news release and in the Financial Supplement.

Operating return on equity (“ROE”) is a non-GAAP measure. See end note (4) 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.

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The company may also 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, windstorms, earthquakes, hail, severe winter weather, freeze events, fire, explosions, civil unrest 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.

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 reserve development. The presentation of loss and combined ratios calculated excluding the effects of catastrophe losses and/or reserve development should not be misconstrued as substitutes for the loss and/or combined ratios determined in accordance with GAAP.

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Endnotes

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*For three months ended June 30, 2022, 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, 2022, 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.

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