Second Quarter Highlights
Combined ratio of 91.2%; combined ratio, excluding catastrophes(1), of 85.5%
Catastrophe losses of $91.8 million, or 5.7 points of the combined ratio
Net premiums written increase of 4.6%*
Renewal price increases(2) of 8.7% in Personal Lines, 7.8% in Core Commercial and 3.6% in Specialty
Rate increases(2) of 7.0% in Core Commercial, 4.8% in Personal Lines and 2.1% in Specialty
Loss and loss adjustment expense (LAE) ratio of 60.2%, 1.7 points below the prior-year quarter
Current accident year loss and LAE ratio, excluding catastrophes(3), of 55.8%, 0.3 points below the prior-year quarter
Net investment income of $119.6 million, up 13.4% from the prior-year quarter
Book value per share of $105.40, up 3.5% from March 31, 2026; excluding net unrealized depreciation on fixed maturity investments, net of tax(4), book value per share increased 3.8%
WORCESTER, Mass., July 28, 2026 /PRNewswire/ -- The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income of $191.6 million, or $5.38 per diluted share, in the second quarter of 2026, compared to $157.1 million, or $4.30 per diluted share, in the prior-year quarter. Operating income(5) was $189.2 million, or $5.31 per diluted share, in the second quarter of 2026, compared to $158.7 million, or $4.35 per diluted share, in the prior-year quarter. The company reported net and operating return on equity(6) of 21.2% and 19.8%, respectively, in the second quarter of 2026, and 21.0% and 20.0% in the first six months of 2026, respectively.
"Our very successful second quarter is a testament to the strength of our business model, the durable earnings power we have built across The Hanover and the disciplined execution of our team," said John C. Roche, president and chief executive officer at The Hanover. "We posted operating return on equity of approximately 20% and operating earnings of $5.31 per share, both second quarter records, as well as accelerated top-line premium growth. We are effectively navigating evolving market conditions, and achieving healthy pricing, while building growth momentum in the most attractive areas of our portfolio."
"This quarter reflects the talent of our employees, the strength of our leadership team, the depth of our agency relationships and the trust our customers place in us every day," said Roche. "As we announced earlier this month, I plan to retire at the end of 2026. It's been a great honor to serve the last nine years as CEO, and I could not be more optimistic about The Hanover's future. Dick Lavey has been one of the key architects of our strategy and the transformation of our company. We will continue to work closely together through the remainder of the year to ensure a seamless transition. Dick's leadership, expertise and strategic vision position him well to successfully lead The Hanover into its next chapter."
"We are pleased with our excellent performance, including outstanding underwriting profitability as demonstrated by our combined ratio of 91.2%, and 85.5% excluding catastrophes," said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover. "Additionally, we delivered robust net investment income, up 13%, driven by higher earned yields and strong operating cash flows, while continued favorable development reinforces our confidence in the strength of our reserve position. The profitability of our business continues to build capital, enabling increased share repurchases while maintaining the balance sheet strength and financial flexibility for future growth opportunities and deployment. Following a really strong start to the year, we enter the second half of 2026 with confidence, supported by our varied earnings streams, resilient balance sheet and disciplined focus on capital allocation."
Second Quarter 2026 Highlights
Three months ended | Six months ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
($ in millions, except per share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
Net premiums written | $ | 1,656.8 | $ | 1,583.8 | $ | 3,216.5 | $ | 3,094.6 | ||||||||
Growth | 4.6 | % | 4.1 | % | 3.9 | % | 4.0 | % | ||||||||
Net premiums earned | $ | 1,597.6 | $ | 1,545.3 | $ | 3,168.2 | $ | 3,053.8 | ||||||||
Current accident year loss and LAE ratio, | 55.8 | % | 56.1 | % | 56.1 | % | 57.2 | % | ||||||||
Prior-year development ratio | (1.3) | % | (1.2) | % | (1.5) | % | (1.3) | % | ||||||||
Catastrophe ratio | 5.7 | % | 7.0 | % | 6.0 | % | 6.7 | % | ||||||||
Expense ratio(7) | 31.0 | % | 30.6 | % | 30.8 | % | 30.7 | % | ||||||||
Combined ratio | 91.2 | % | 92.5 | % | 91.4 | % | 93.3 | % | ||||||||
Combined ratio, excluding catastrophes | 85.5 | % | 85.5 | % | 85.4 | % | 86.6 | % | ||||||||
Current accident year combined ratio, | 86.8 | % | 86.7 | % | 86.9 | % | 87.9 | % | ||||||||
Net income | $ | 191.6 | $ | 157.1 | $ | 378.4 | $ | 285.3 | ||||||||
per diluted share | 5.38 | 4.30 | 10.58 | 7.80 | ||||||||||||
Operating income | 189.2 | 158.7 | 377.7 | 300.5 | ||||||||||||
per diluted share | 5.31 | 4.35 | 10.55 | 8.22 | ||||||||||||
Book value per share | $ | 105.40 | $ | 89.62 | $ | 105.40 | $ | 89.62 | ||||||||
Ending shares outstanding (in millions) | 34.9 | 35.9 | 34.9 | 35.9 |
(1) See information about this and other non-GAAP measures and definitions, including Operating Income and Operating Return on Equity in the headline, used throughout this press release on the final pages of this document. |
*Unless otherwise stated, net premiums written growth and other growth comparisons are to the same period of the prior year. |
The Hanover Insurance Group, Inc. may also be referred to as "The Hanover" or "the company" interchangeably throughout this press release. |
Second Quarter Operating Highlights
Core Commercial
Core Commercial operating income before income taxes was $77.5 million in the second quarter of 2026, compared to $83.9 million in the second quarter of 2025. The Core Commercial combined ratio was 95.7%, compared to 93.0% in the prior-year quarter. Catastrophe losses in the second quarter of 2026 were $26.4 million, or 4.6 points of the combined ratio. This compared to catastrophe losses of $22.7 million, or 4.1 points, in the prior-year quarter.
Second quarter 2026 results included net favorable prior-year reserve development, excluding catastrophes, of $0.6 million, or 0.1 points, compared to $3.0 million, or 0.5 points, in the second quarter of 2025.
Core Commercial current accident year combined ratio, excluding catastrophes, increased 1.8 points, to 91.2% in the second quarter of 2026, compared to 89.4% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, was 58.7%, 2.2 points higher than the prior-year quarter, but 0.4 points improved from the full year of 2025. In the second quarter of 2026, the company prudently increased loss ratio selections in liability coverages. Additionally, the loss ratio in the prior-year quarter benefited from lower-than-usual property losses.
The expense ratio decreased by 0.4 points, to 32.5%, in the second quarter of 2026, compared to the prior-year quarter, reflecting fixed cost leverage and efficiency gains.
Net premiums written were $574.8 million in the second quarter of 2026, up 7.2% from the prior-year quarter, an acceleration from the first quarter of 2026, reflecting growth of 6.0% in small commercial and 9.4% in middle market (approximately 7% growth in middle market excluding non-recurring items). Core Commercial renewal price increases averaged 7.8%, including average rate increases of 7.0%.
The following table summarizes premiums and the components of the combined ratio for Core Commercial:
Three months ended | Six months ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
($ in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
Net premiums written | $ | 574.8 | $ | 536.0 | $ | 1,205.2 | $ | 1,140.6 | ||||||||
Growth | 7.2 | % | 4.4 | % | 5.7 | % | 4.1 | % | ||||||||
Net premiums earned | 579.3 | 554.3 | 1,143.1 | 1,095.3 | ||||||||||||
Operating income before taxes | 77.5 | 83.9 | 152.3 | 110.7 | ||||||||||||
Loss and LAE ratio | 63.2 | % | 60.1 | % | 63.5 | % | 65.0 | % | ||||||||
Expense ratio | 32.5 | % | 32.9 | % | 32.6 | % | 33.2 | % | ||||||||
Combined ratio | 95.7 | % | 93.0 | % | 96.1 | % | 98.2 | % | ||||||||
Prior-year development ratio | (0.1) | % | (0.5) | % | (0.2) | % | (0.4) | % | ||||||||
Catastrophe ratio | 4.6 | % | 4.1 | % | 5.0 | % | 6.3 | % | ||||||||
Combined ratio, excluding catastrophes | 91.1 | % | 88.9 | % | 91.1 | % | 91.9 | % | ||||||||
Current accident year combined ratio, | 91.2 | % | 89.4 | % | 91.3 | % | 92.3 | % |
Specialty
Specialty operating income before income taxes was $68.4 million in the second quarter of 2026, compared to $71.2 million in the second quarter of 2025. The Specialty combined ratio was 88.3%, compared to 86.5% in the prior-year quarter. Catastrophe losses in the second quarter of 2026 were $10.0 million, or 2.7 points of the combined ratio. This compared to catastrophe losses of $14.6 million, or 4.1 points, in the prior-year quarter.
Second quarter 2026 results included net favorable prior-year reserve development, excluding catastrophes, of $10.8 million, or 3.0 points, with widespread favorability. Net favorable prior-year reserve development, excluding catastrophes, was $12.5 million, or 3.5 points, in the second quarter of 2025.
Specialty current accident year combined ratio, excluding catastrophes, increased 2.7 points, to 88.6% in the second quarter of 2026, from 85.9% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, of 51.6% in the second quarter of 2026 was consistent with the company's long-term expectations for the segment and increased 2.6 points compared to the prior-year quarter, which saw lower-than-expected property losses.
Net premiums written were $384.4 million in the second quarter of 2026, up 4.4% from the prior-year quarter, an acceleration from the first quarter of 2026. Specialty renewal price increases averaged 3.6%, including average rate increases of 2.1%.
The following table summarizes premiums and the components of the combined ratio for Specialty:
Three months ended | Six months ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
($ in millions) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
Net premiums written | $ | 384.4 | $ | 368.2 | $ | 751.1 | $ | 726.5 | ||||||||
Growth | 4.4 | % | 4.6 | % | 3.4 | % | 5.0 | % | ||||||||
Net premiums earned | 365.8 | 355.9 | 725.7 | 695.5 | ||||||||||||
Operating income before taxes | 68.4 | 71.2 | 152.4 | 135.8 | ||||||||||||
Loss and LAE ratio | 51.3 | % | 49.6 | % | 49.6 | % | 50.1 | % | ||||||||
Expense ratio | 37.0 | % | 36.9 | % | 36.7 | % | 36.9 | % | ||||||||
Combined ratio | 88.3 | % | 86.5 | % | 86.3 | % | 87.0 | % | ||||||||
Prior-year development ratio | (3.0) | % | (3.5) | % | (3.4) | % | (4.1) | % | ||||||||
Catastrophe ratio | 2.7 | % | 4.1 | % | 2.7 | % | 4.2 | % | ||||||||
Combined ratio, excluding catastrophes | 85.6 | % | 82.4 | % | 83.6 | % | 82.8 | % | ||||||||
Current accident year combined ratio, | 88.6 | % | 85.9 | % | 87.0 | % | 86.9 | % |
Personal Lines
Personal Lines operating income before income taxes was $104.9 million in the second quarter of 2026, compared to $57.4 million in the second quarter of 2025. The Personal Lines combined ratio was 88.9%, compared to 95.5% in the prior-year quarter. Catastrophe losses in the second quarter of 2026 were $55.4 million, or 8.5 points of the combined ratio. This compared to catastrophe losses of $70.2 million, or 11.1 points of the combined ratio, in the prior-year quarter.
Second quarter 2026 results included net favorable prior-year reserve development, excluding catastrophes, of $10.1 million, or 1.5 points, compared to $2.6 million, or 0.4 points, in the second quarter of 2025.
Personal Lines current accident year combined ratio, excluding catastrophe losses, decreased 2.9 points, to 81.9%, in the second quarter of 2026, from 84.8% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, decreased 4.2 points from the prior-year quarter, to 55.6%, driven by the continued benefit of earned pricing outpacing loss trends and benign property claims frequency, as well as lower large loss experience in homeowners in the quarter.
The expense ratio increased by 1.3 points, to 26.3%, in the second quarter of 2026, compared to the prior-year quarter, primarily reflecting the timing of variable agency compensation expenses due to meaningfully better-than-expected results to date.
Net premiums written were $697.6 million in the second quarter of 2026, up 2.6% compared to the prior-year quarter. The increase was primarily due to higher new business, and to a lesser extent, the impact of renewal price increases. Personal Lines renewal price increases averaged 8.7%, including average rate increases of 4.8%. Policies in force (PIF) in the second quarter of 2026 were essentially flat compared to the first quarter of 2026.
The following table summarizes premiums and components of the combined ratio for Personal Lines:
Three months ended | Six months ended | |||||||||||||
June 30 | June 30 | |||||||||||||
($ in millions) | 2026 | 2025 | 2026 | 2025 |