Hanover Insurance Group Inc · NYSE:THG
Hanover Insurance — Q4 2024 Earnings Presentation
23 slides from Hanover Insurance's earnings presentation, Feb 5, 2025
Slide 1: Fourth Quarter and Full Year 2024 Results
The Hanover Insurance Group, Inc. Fourth Quarter and Full Year 2024 Results February 4, 2025 To be read in conjunction with the press release dated February 4, 2025, and conference call scheduled for February 5, 2025. Please also see important information regarding forward-looking statements and add
Slide 2: Excellent Fourth Quarter and Full Year 2024 Operating Results
Excellent Fourth Quarter and Full Year 2024 Operating Results Fourth quarter highlights • Record net and operating return on equity(1) of 23.5% and 24.4%, respectively; record net and operating income(2) per diluted share of $4.59 and $5.32, respectively • Combined ratio of 89.2%; combined ratio, ex
Slide 3: Consolidated Financial Results
Consolidated Financial Results Three months ended Year ended ($ in millions, except per share amounts) December 31, December 31, December 31, December 31, 2023 2024 2023 2024 Net income $107.9 $167.9 $35.3 $426.0 Per diluted share $2.98 $4.59 $0.98 $11.70 Operating income before interest expense and
Slide 4: Fourth Quarter 2024 Underwriting Results
Fourth Quarter 2024 Underwriting Results ($ in millions) Net premiums written and growth • Combined ratio (CR) of 89.2% in the fourth quarter of 2024, 5.0 points improved from the ↑ 4.2% prior-year quarter ↑ 2.3% ↑ 5.1% ↑ 7.4% • Combined ratio, ex-CAT, of 87.5%, improved 2.7 ↑ 1.5% points from the p
Slide 5: Full Year 2024 Underwriting Results
Full Year 2024 Underwriting Results • Combined ratio of 94.8% in the full year 2024, 8.7 points improved from the prior year ($ in millions) Net premiums written and growth • Combined ratio, ex-CAT, improved 2.9 points from the prior year, driven by improvement in the current ↑ 6.1% ↑ 4.7% accident
Slide 6: Core Commercial Underwriting Highlights
Core Commercial Underwriting Highlights • Combined ratio, ex-CAT, increased 2.5 points Fourth quarter results Three months ended Year ended December 31 December 31 from the prior-year quarter ($ in millions) 2023 2024 2023 2024 • Current accident year loss and LAE ratio, ex- Net premiums written $46
Slide 7: Core Commercial Growth Highlights
Core Commercial Growth Highlights • Net premiums written increased 7.5% in the ($ in millions) Net premiums written and growth fourth quarter: • Growth of 9.3% in small commercial, propelled ↑ 4.2% Fourth quarter results by strong pricing and new business ↑ 7.5% $500.5 $2,107.0 $2,195.5 $465.5 momen
Slide 8: Specialty Underwriting Highlights
Specialty Underwriting Highlights Three months ended Year ended • Combined ratio, ex-CAT, improved 1.1 points Fourth quarter results December 31 December 31 from the prior-year quarter, driven by an increase ($ in millions) 2023 2024 2023 2024 in net favorable prior-year reserve development, Net pre
Slide 9: Specialty Growth Highlights
Specialty Growth Highlights • Net premiums written growth accelerated to 8.8% in the fourth quarter, as expected Fourth quarter results ($ in millions) Net premiums written and growth • Delivered double-digit growth across most ↑ 8.8% ↑ 6.2% $1,373.9 profitable lines, including marine, E&S, and $331
Slide 10: Personal Lines Underwriting Highlights
Personal Lines Underwriting Highlights • Combined ratio, ex-CAT, improved 7.9 points Three months ended Year ended from the prior-year quarter, driven by strong December 31 December 31 improvement in the underlying loss ratio ($ in millions) 2023 2024 2023 2024 Net premiums written $575.1 $612.8 $2,
Slide 11: Personal Lines Growth Highlights
Personal Lines Growth Highlights ($ in millions) Net premiums written and growth • Net premiums written growth of 6.6% in the fourth quarter, driven by strong pricing quarter Results results ↑6.6% ↑ 4.3% increases and higher new business • Renewal price increases of 14.2%, including 14.6% in homeown
Slide 12: Net Investment Income Trends
Net Investment Income Trends ($ in millions) Net investment income* • Net investment income of $100.7 million in the fourth Fourth quarter quarter, up 23.4% from the prior-year quarter, reflecting $100.7 results a 21.2% increase in net investment income from fixed $89.7 $90.4 $91.8 $10.8 $81.6 $9.5
Slide 13: Investment Portfolio – Total Invested Assets and Cash of $9.9 Billion
Investment Portfolio – Total Invested Assets and Cash of $9.9 Billion As of December 31, 2024 High quality, well-diversified investment portfolio Fixed maturities: $8.6 billion Equities, cash and other: $1.3 billion 1% 8% Marketable Preferred and Industrials securities ETFs 2% 6% other 2% 6% 27% 8%
Slide 14: The Hanover Insurance Group 2025 Outlook
The Hanover Insurance Group 2025 Outlook* Metric Full year 2025 expectations** Net premiums written growth • 6%-7% Expense ratio • 30.5% Combined ratio, ex-CAT*** • 88.5% – 89.5% Catastrophe loss ratio • 6.5% Effective tax rate • 21% Net investment income growth • 12%-14% • Q1 2025 CAT load of 6.0%
Slide 15: 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 16: 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 17: 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 18: 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, operating inc
Slide 19: End notes
End notes (1) Operating return on average equity (operating ROE) is a non-GAAP measure. 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 Measur
Slide 20: End notes continued
End notes continued (2) Operating income and operating income per diluted share are non-GAAP measures. The following table provides the reconciliation of operating income and operating income per diluted share to the most directly comparable GAAP measures, income from continuing operations and incom
Slide 21: 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 22: 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 23: 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 December 31 Septem
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