The Hanover Insurance Group (THG) investor relations material

Executive summary

• Achieved record first quarter net and operating income per diluted share of $5.20 and $5.25, respectively, with net income up 45.7% year-over-year to $186.8 million, and operating ROE of 20.3% reflecting strong execution and portfolio resilience.

• Net premiums written grew 3.2% year-over-year, with balanced contributions and renewal price increases across Core Commercial, Specialty, and Personal Lines segments.

• Combined ratio improved to 91.7%, with ex-catastrophe combined ratio at 85.4%, both first quarter records, indicating disciplined underwriting.

• Net investment income rose 19.6% year-over-year to $126.9 million, driven by higher yields and improved partnership income.

• Book value per share rose 1% sequentially to $101.86; excluding unrealized losses, up 2.8%.

Financial highlights

• Net income increased to $186.8 million from $128.2 million year-over-year; operating income after tax rose to $188.5 million from $141.8 million.

• Net investment income grew 19.6% year-over-year to $126.9 million.

• Book value per share: $101.86, up 1.0% from year-end; $107.14 excluding unrealized depreciation, up 2.8%.

• Repurchased 580,000 shares year-to-date for $101 million.

• Debt/total capital improved to 19.1% from 20.5% year-over-year.

Outlook and guidance

• Management expects continued growth, with pricing actions, underwriting discipline, and growth initiatives anticipated to accelerate in subsequent quarters.

• Full-year expense ratio guidance remains at 30.3%, with growth leverage expected later in the year.

• Second quarter catastrophe load projected at 7.9%.

• Cautions on risks from catastrophe losses, inflation, regulatory changes, and competitive pressures.

• Continued emphasis on balanced growth and margin improvement across all segments.