The Hanover Insurance Group (THG) investor relations material

Executive summary

• Q3 operating income was $183.1 million, or $5.15 per diluted share; operating ROE was 18.7%. Net income was $172.6 million, or $4.86 per diluted share.

• Net premiums written grew 3.1%; the combined ratio was 92.3%, or 85.5% excluding catastrophes, with $109.7 million of catastrophe losses.

• Nine-month net income rose to $551.0 million from $464.0 million, supported by premium growth, higher investment income and improved current-year underwriting.

Financial highlights

• Q3 revenue was $1,735.5 million versus $1,665.0 million YoY; nine-month revenue was $5,163.1 million versus $4,922.6 million.

• Q3 operating income was $183.1 million versus $185.6 million YoY; nine-month operating income rose to $560.8 million from $486.1 million.

• Nine-month diluted EPS was $15.43 versus $12.70; operating diluted EPS was $15.70 versus $13.31.

• Q3 net investment income rose 12.7% to $131.9 million; nine-month net investment income increased to $378.4 million from $328.6 million.

• Nine-month net cash from operating activities was $850.9 million versus $799.9 million.

Outlook and guidance

• Full-year combined ratio is expected to clearly beat original guidance, despite higher agent profit-sharing and employee incentive expenses; Q4 catastrophe load is 5.2%.

• Strategy emphasizes independent-agent distribution, profitable growth, selective underwriting and managing earnings volatility; management cited longer-term opportunity over the next 3–5 years.

• Specialty management expects current growth conditions to hold up into 2027–2028 and, in a number of cases, improve.

• Continued investment in technology and AI is intended to support business impact; capital priorities include business investment and shareholder returns.