Hanover Insurance Group Inc · NYSE:THG
Hanover Insurance — Q2 2024 Earnings Presentation
22 slides from Hanover Insurance's earnings presentation, Aug 1, 2024
Slide 1: The Hanover Insurance Group, Inc. Second Quarter 2024 Results
The Hanover Insurance Group, Inc. Second Quarter 2024 Results July 31, 2024 To be read in conjunction with the press release dated July 31, 2024, and conference call scheduled for August 1, 2024. Please also see important information regarding forward-looking statements and additional risks and unce
Slide 2: Strong Second Quarter 2024 Operating Highlights
Strong Second Quarter 2024 Operating Highlights • Combined ratio of 99.2%; combined ratio, excluding catastrophes(1), of 88.5% • Catastrophe losses of $157.1 million, or 10.7 points of the combined ratio • Net premiums written increase of 5.1%* • Renewal price increases(2) of 18.5% in Personal Lines
Slide 3: Consolidated Financial Results
Consolidated Financial Results Three months ended Six months ended ($ in millions, except per share amounts) June 30, June 30, June 30, June 30, 2023 2024 2023 2024 Net income (loss) ($69.2) $40.5 ($81.2) $156.0 Per diluted/(basic) share ($1.94) $1.12 ($2.27) $4.30 (6) Operating income (loss) before
Slide 4: Second Quarter 2024 Underwriting Results
Second Quarter 2024 Underwriting Results • Combined ratio (CR) of 99.2% in the second quarter ($ in millions) Net premiums written and growth of 2024, improved 12.1 points from the prior-year quarter, driven by lower catastrophe losses, as well ↑ 6.0% ↑ 5.1% as improvement in the current accident ye
Slide 5: Core Commercial Underwriting Highlights
Core Commercial Underwriting Highlights • Second quarter 2024 combined ratio, ex-CAT, Three months ended Six months ended June 30 June 30 improved 0.6 points from the prior-year quarter ($ in millions) 2023 2024 2023 2024 Net premiums written $486.8 $513.4 $1,052.1 $1,095.8 • Net favorable prior-yea
Slide 6: Core Commercial Growth Highlights
Core Commercial Growth Highlights ($ in millions) Net premiums written and growth ↑ 5.5% $513.4 $486.8 • Net premiums written increased 5.5% in the $195.0 $196.9 second quarter, up from 3.0% in the first quarter of 2024. Second quarter growth driven by: • Growth of 8.5% in small commercial, $291.8 $
Slide 7: Specialty Underwriting Highlights
Specialty Underwriting Highlights Three months ended Six months ended June 30 June 30 • Second quarter 2024 combined ratio, ex- ($ in millions) 2023 2024 2023 2024 CAT, increased 0.8 points from the prior-year Net premiums written $325.4 $352.1 $649.7 $691.9 quarter, driven by an increase in the exp
Slide 8: Specialty Growth Highlights
Specialty Growth Highlights ($ in millions) Net premiums written and growth $352.1 $325.4 ↑ 8.2% $18.0 $20.7 • Specialty net premiums written growth of 8.2% in the second quarter of 2024, with $115.3 $104.4 strong double-digit growth across many sub- segments $103.6 $109.5 • On track to deliver uppe
Slide 9: Personal Lines Underwriting Highlights
Personal Lines Underwriting Highlights Three months ended Six months ended • Combined ratio, ex-CAT, improved 10.5 points June 30 June 30 from the prior-year quarter, primarily driven by ($ in millions) 2023 2024 2023 2024 strong improvement in the underlying loss Net premiums written $634.6 $655.6
Slide 10: Personal Lines Growth Highlights
Personal Lines Growth Highlights ($ in millions) Net premiums written and growth ↑3.3% • Net premiums written growth of 3.3% compared to the prior-year quarter, as strong $634.6 $655.6 pricing increases were partially offset by the impact of margin improvement initiatives and targeted non-renewals,
Slide 11: Net Investment Income Trends
Net Investment Income Trends ($ in millions) Net investment income* • Net investment income of $90.4 million in the second quarter $87.6 $84.2 $89.7 $90.4 of 2024, up 3.2% from the prior-year quarter, reflecting: $81.6 $18.2 $12.9 $7.4 $14.0 $13.9 • Positive impact of higher interest rates and the c
Slide 12: Investment Portfolio – Total Invested Assets and Cash of $9.3 Billion
Investment Portfolio – Total Invested Assets and Cash of $9.3 Billion As of June 30, 2024 High quality, well-diversified investment portfolio Fixed maturities: $8.0 Billion Equities, cash and other: $1.3 Billion 7% 1% Industrials Marketable 6% 26% Securities ETFs 8% 2% 27% 9% 27% Financials 20% 16%
Slide 13: 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 14: 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 15: 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 16: 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 17: 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 18: 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 19: End notes continued
End notes continued (4) 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
Slide 20: End notes continued
End notes continued (5) 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 (6)), by average shareholders’ equity, excluding unrealized appreciation (dep
Slide 21: End notes continued
End notes continued (6) 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 (7) 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 June 30 March 31 J
Hanover Insurance Group — Q2 2024 Earnings Presentation on 6ix