Hanover Insurance Group Inc · NYSE:THG
Hanover Insurance — Q3 2024 Earnings Presentation
23 slides from Hanover Insurance's earnings presentation, Oct 31, 2024
Slide 1: Third Quarter 2024 Results
The Hanover Insurance Group, Inc. Third Quarter 2024 Results October 30, 2024 To be read in conjunction with the press release dated October 30, 2024, and conference call scheduled for October 31, 2024. Please also see important information regarding forward-looking statements and additional risks a
Slide 2: Excellent Third Quarter 2024 Operating Highlights
Excellent Third Quarter 2024 Operating Highlights • Combined ratio of 95.5%; combined ratio, excluding catastrophes(1), of 88.3% • Catastrophe losses of $105.9 million, or 7.2 points of the combined ratio • Net premiums written increase of 4.2%* • Renewal price increases(2) of 15.4% in Personal Line
Slide 3: Consolidated Financial Results
Consolidated Financial Results Three months ended Nine months ended ($ in millions, except per share amounts) September 30, September 30, September 30, September 30, 2023 2024 2023 2024 Net income (loss) $8.6 $102.1 ($72.6) $258.1 Per diluted/(basic) share $0.24 $2.80 ($2.03) $7.10 (5) Operating inc
Slide 4: Third Quarter 2024 Underwriting Results
Third Quarter 2024 Underwriting Results • Combined ratio (CR) of 95.5% in the third quarter of 2024, improved 8.9 points from the prior-year quarter, ($ in millions) Net premiums written and growth driven by lower catastrophe losses, as well as improvement in the current accident year loss and LAE r
Slide 5: Core Commercial Underwriting Highlights
Core Commercial Underwriting Highlights Three months ended Nine months ended • Third quarter 2024 combined ratio, ex-CAT, September 30 September 30 increased 1.0 point from the prior-year quarter ($ in millions) 2023 2024 2023 2024 Net premiums written $589.4 $599.2 $1,641.5 $1,695.0 • Net favorable
Slide 6: Committed to navigating the evolving liability environment with vigilance and agility
Committed to navigating the evolving liability environment with vigilance and agility Grew slower than the industry • Maintaining attentive focus on current Relatively smaller exposure to liability trends, which have remained within liability versus most public peers in occurrence liability lines* e
Slide 7: Core Commercial Growth Highlights
Core Commercial Growth Highlights ($ in millions) Net premiums written and growth ↑ 1.7% $599.2 $589.4 • Net premiums written increased 1.7% in the third quarter of 2024: $297.4 $289.2 • Growth of 6.2% in small commercial, propelled by strong pricing; remain extremely optimistic about our advanced $
Slide 8: Specialty Underwriting Highlights
Specialty Underwriting Highlights Three months ended Nine months ended • Third quarter 2024 combined ratio, ex-CAT, September 30 September 30 increased 1.3 points from the prior-year ($ in millions) 2023 2024 2023 2024 quarter, driven by an increase in the expense Net premiums written $338.7 $350.2
Slide 9: Specialty Growth Highlights
Specialty Growth Highlights ($ in millions) Net premiums written and growth • Specialty net premiums written growth of $350.2 3.4% in the third quarter of 2024: $338.7 ↑ 3.4% • Impacted by profitability actions, most $22.8 $25.4 notably in program business; excluding $107.4 $112.2 programs, Specialt
Slide 10: Personal Lines Underwriting Highlights
Personal Lines Underwriting Highlights Three months ended Nine months ended • Combined ratio, ex-CAT, improved 7.2 points September 30 September 30 from the prior-year quarter, driven by strong ($ in millions) 2023 2024 2023 2024 improvement in the underlying loss ratio Net premiums written $668.3 $
Slide 11: Personal Lines Growth Highlights
Personal Lines Growth Highlights ($ in millions) Net premiums written and growth ↑6.8% • Net premiums written growth of 6.8% compared to the prior-year quarter, driven by $668.3 $714.0 strong pricing increases • Renewal price increases of 15.4%, including 3Q23 3Q24 16.2% in homeowners and 14.9% in a
Slide 12: Net Investment Income Trends
Net Investment Income Trends ($ in millions) Net investment income* • Net investment income of $91.8 million in the third quarter of $89.7 $90.4 $91.8 2024, up 9.0% from the prior-year quarter, reflecting: $84.2 $81.6 $12.9 $7.4 $14.0 $13.9 $9.5 • Positive impact of higher earned yields and the cont
Slide 13: Investment Portfolio – Total Invested Assets and Cash of $10.0 Billion
Investment Portfolio – Total Invested Assets and Cash of $10.0 Billion As of September 30, 2024 High quality, well-diversified investment portfolio Fixed maturities: $8.6 billion Equities, cash and other: $1.4 billion 1% 8% Industrials Marketable 7% 27% securities ETFs 9% 2% 7% 32% 25% Financials 20
Slide 14: About The Hanover
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 ind
Slide 15: Forward-Looking Statements
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 s
Slide 16: Additional Risks and Uncertainties
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 docu
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures As discussed on page 40 of the company’s Annual Report on Form 10-K for the year ended December 31, 2023, the company uses non-GAAP financial measures as important measures of its operating performance, including operating income (loss), operat
Slide 18: End notes
End notes (1) 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. This and other n
Slide 19: End notes continued
End notes continued (2) Renewal price changes in Core Commercial and Specialty represent the average change in premium on renewed policies caused by the estimated net effect of base rate changes, discretionary pricing, specific inflationary changes or changes in policy level exposure or insured risk
Slide 20: End notes continued
End notes continued (4) Operating return on average equity (operating ROE) is a non-GAAP measure. Operating ROE is calculated by dividing annualized operating income (loss) after tax for the applicable period (see end note (5)), by average shareholders’ equity, excluding unrealized appreciation (dep
Slide 21: End notes continued
End notes continued (5) Operating income (loss) and operating income (loss) per diluted (basic) share are non-GAAP measures. The following table provides the reconciliation of operating income (loss) and operating income (loss) per diluted (basic) share to the most directly comparable GAAP measures,
Slide 22: End notes continued
End notes continued (6) 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 September 30 June
Slide 23: End notes continued
End notes continued (8) Net investment income, excluding limited partnership income, is a non-GAAP measure. Net investment income (which includes limited partnership income) is the most directly comparable GAAP measure. A reconciliation of GAAP net investment income to net investment income, excludi
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