Hanover Insurance Group Inc · NYSE:THG
Hanover Insurance — Q1 2025 Earnings Presentation
21 slides from Hanover Insurance's earnings presentation, May 1, 2025
Slide 1: First Quarter 2025 Results
The Hanover Insurance Group, Inc. First Quarter 2025 Results April 30, 2025 To be read in conjunction with the press release dated April 30, 2025, and conference call scheduled for May 1, 2025. Please also see important information regarding forward-looking statements and additional risks and uncert
Slide 2: Excellent First Quarter 2025 Operating Results
Excellent First Quarter 2025 Operating Results • Net and operating income(1) per diluted share of $3.50 and $3.87, respectively • Net and operating return on equity(2) of 17.4% and 17.2%, respectively • Combined ratio of 94.1%; combined ratio, excluding catastrophes(3), of 87.8% • Catastrophe losses
Slide 3: Consolidated Financial Results
Consolidated Financial Results Three months ended ($ in millions, except per share amounts) March 31, March 31, 2024 2025 Net income $115.5 $128.2 Per diluted share $3.18 $3.50 Operating income before interest expense and income taxes $149.7 $186.4 Operating income after income taxes $111.9 $141.8 P
Slide 4: First Quarter 2025 Underwriting Results
First Quarter 2025 Underwriting Results • Combined ratio (CR) of 94.1%, 1.4 points improved from the prior-year quarter ($ in millions) Net premiums written and growth • Catastrophe losses of $95.6 million, or 6.3 points, including 0.8 points of favorable CAT prior-year development, relatively in li
Slide 5: Core Commercial Underwriting Highlights
Core Commercial Underwriting Highlights Three months ended March 31 ($ in millions) 2024 2025 • Combined ratio, ex-CAT, increased 4.9 points Net premiums written $582.4 $604.6 from the prior-year quarter, driven by an Growth 3.0% 3.8% increase in the loss ratio Net premiums earned $528.9 $541.0 • Cu
Slide 6: Core Commercial Growth Highlights
Core Commercial Growth Highlights ($ in millions) Net premiums written and growth ↑ 3.8% $604.6 • Net premiums written increased 3.8% in the $582.4 first quarter: $246.4 $262.8 • Middle market premium growth of 6.7%, reflecting robust new business and improved retention; improved underlying business
Slide 7: Specialty Underwriting Highlights
Specialty Underwriting Highlights Three months ended March 31 • Combined ratio, ex-CAT, of 83.4%, an ($ in millions) 2024 2025 improvement of 2.0 points from the prior-year Net premiums written $339.8 $358.3 quarter, driven by higher favorable prior-year reserve development Growth 4.8% 5.4% Net prem
Slide 8: Specialty Growth Highlights
Specialty Growth Highlights ($ in millions) Net premiums written and growth • Net premiums written growth of 5.4% in the first $339.8 ↑ 5.4% $358.3 quarter: $23.2 $19.6 • Delivered upper-single to double-digit growth $99.5 $109.0 across most profitable lines, including surety, E&S, marine, and healt
Slide 9: Personal Lines Underwriting Highlights
Personal Lines Underwriting Highlights Three months ended March 31 ($ in millions) 2024 2025 • Combined ratio, ex-CAT, improved 7.0 points Net premiums written $531.8 $547.9 from the prior-year quarter, driven by strong Growth 0.0% 3.0% improvement in the underlying loss ratio Net premiums earned $5
Slide 10: Personal Lines Growth Highlights
Personal Lines Growth Highlights ($ in millions) Net premiums written and growth ↑3.0% • Net premiums written growth of 3.0% in the first quarter, driven by strong pricing increases $531.8 $547.9 and meaningfully higher new business • Excluding the Midwest, net premiums written grew 7.1% 1Q24 1Q25 P
Slide 11: Net Investment Income Trends
Net Investment Income Trends ($ in millions) Net investment income* $100.7 $106.1 • Net investment income of $106.1 million in the first $89.7 $90.4 $91.8 $12.8 quarter, up 18.3% from the prior-year quarter, reflecting $10.8 $9.5 a 23.2% increase in net investment income from fixed $14.0 $13.9 matur
Slide 12: Investment Portfolio – Total Invested Assets and Cash of $10.0 Billion
Investment Portfolio – Total Invested Assets and Cash of $10.0 Billion As of March 31, 2025 High quality, well-diversified investment portfolio Fixed maturities: $8.8 billion Equities, cash and other: $1.2 billion 9% Industrials Marketable ETFs 6% 27% 5% 3% Preferred securities 2%and other 5% 9% 26%
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 39 of the company’s Annual Report on Form 10-K for the year ended December 31, 2024, the company uses non-GAAP financial measures as important measures of its operating performance, including operating income, operating inc
Slide 17: End notes
End notes (1) Operating income and operating income per diluted share are non-GAAP measures. This and other non-GAAP measures are used throughout this document. See the disclosure on the use of this and other non-GAAP measures under the headings “Forward- Looking Statements” and “Non-GAAP Financial
Slide 18: End notes continued
End notes continued (2) Operating return on average equity (operating ROE) is a non-GAAP measure. Operating ROE is calculated by dividing annualized operating income after tax for the applicable period (see end note (1)), by average shareholders’ equity, excluding unrealized appreciation (depreciati
Slide 19: End notes continued
End notes continued (3) Combined ratio, excluding catastrophes, and current accident year combined ratio, excluding catastrophes, are non-GAAP measures. The combined ratio (which includes catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. A reco
Slide 20: End notes continued
End notes continued (4) 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 21: 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 March 31 December
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