The Hanover Insurance Group (THG) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $102.1M ($2.80 per diluted share), a significant increase year-over-year, with operating income of $111.3M ($3.05 per diluted share) and operating ROE of 14.4%.

• Combined ratio improved to 95.5% (88.3% ex-catastrophes), with catastrophe losses of $105.9M (7.2 points), mainly from hurricanes and severe weather.

• Book value per share rose 12.6% sequentially to $79.90, driven by unrealized gains and strong earnings.

• All major segments—personal lines, specialty, and Core Commercial—showed strong performance, with healthy reserves and favorable prior year development.

• Net income for the nine months ended September 30, 2024 was $258.1M, reversing a net loss of $72.6M in the prior year period, driven by higher operating income and lower catastrophe losses.

Financial highlights

• Net premiums written grew 4.2% year-over-year to $1.66B in Q3, with strong renewal price increases across all segments.

• Net investment income increased 9.0% to $91.8M, with fixed maturities income up 15.4%.

• Book value per share, excluding unrealized gains, was $86.81 at quarter-end.

• Combined ratio improved to 95.5% for Q3 (down 8.9 points year-over-year); ex-cat combined ratio was 88.3%.

• Net income return on equity was 15.0% for Q3 2024, up from 1.6% in Q3 2023.

Outlook and guidance

• Expecting full-year 2024 ex-cat combined ratio to be below original guidance of 90%-91%.

• Management expects to return to target profitability in Personal Lines on an earned basis next year.

• Projecting consolidated net written premium growth above 6% in Q4; specialty and Core Commercial segments anticipate growth acceleration in Q4 2024 and 2025.

• Minimal impact expected from Hurricane Milton; catastrophe load guidance for Q4 remains at 5.7%.

• Personal Lines focus on growth in profitable states and further mitigation of catastrophe exposures.