Exhibit 99.2
FINANCIAL SUPPLEMENT
THIRD QUARTER 2019
THE HANOVER INSURANCE GROUP |
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| FINANCIAL SUPPLEMENT |
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| TABLE OF CONTENTS |
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| Business Descriptions................................................................................................... | 1 |
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| Financial Highlights........................................................................................................ | 2 |
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| Consolidated Financial Statements |
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| Income Statements.................................................................................................... | 3 |
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| Balance Sheets.......................................................................................................... | 4 |
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| GAAP Underwriting Results |
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| Consolidated.............................................................................................................. | 5-7 |
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| Commercial Lines..................................................................................................... | 8-10 |
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| Personal Lines........................................................................................................... | 11-13 |
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| Investments |
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| Net Investment Income and Yields........................................................................... | 14 |
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| Investment Portfolio................................................................................................... | 15 |
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| Credit Quality and Duration of Fixed Maturities..................................................... | 16 |
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| Top 10 Corporate and Municipal Fixed Maturity Holdings.................................... | 17 |
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| Reconciliation of Operating Income to Net Income................................................ | 18 |
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| Other Information |
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| Non-GAAP Financial Measures............................................................................... | 19 |
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| Corporate Information............................................................................................... | 20 |
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| Market and Dividend Information............................................................................. | 20 |
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| Financial Strength and Debt Ratings....................................................................... | 20 |
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THE HANOVER INSURANCE GROUP |
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BASIS OF PRESENTATION |
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BUSINESS DESCRIPTIONS |
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COMMERCIAL LINES |
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Commercial multiple peril coverage insures businesses against third party liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products sold. It also insures business property for damage, such as that caused by fire, wind, hail, water damage (except for flooding), theft and vandalism. |
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Commercial automobile coverage insures businesses against losses incurred from personal bodily injury, bodily injury to third parties, property damage to an insured’s vehicle, and property damage to other vehicles and property. |
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Workers’ compensation coverage insures employers against employee medical and indemnity claims resulting from injuries related to work. Workers’ compensation policies are often written in conjunction with other commercial policies. |
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Other Commercial Lines is comprised of inland marine, which insures businesses against physical losses to property, such as contractor’s equipment, builders’ risk and goods in transit. We also offer underwriting and managing of program business, including to under-served markets where there are specialty coverage or risk management needs. Other Commercial Lines also includes bonds, which provides businesses with contract surety coverage in the event of performance or payment claims, and commercial surety coverage related to fiduciary or regulatory obligations. Also included in Other Commercial Lines coverages are umbrella, general liability, fire, specialty property, and professional and management liability. |
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PERSONAL LINES |
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Personal automobile coverage insures individuals against losses incurred from personal bodily injury, bodily injury to third parties, property damage to an insured's vehicle, and property damage to other vehicles and other property. |
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Homeowners coverage insures individuals for losses to their residences and personal property, such as those caused by fire, wind, hail, water damage (except for flooding), theft and vandalism, and against third party liability claims. |
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Other Personal Lines are comprised of personal inland marine (jewelry, art, etc.), umbrella, fire, personal watercraft, earthquake and other miscellaneous coverages. |
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OTHER |
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Included in Other are Opus, which provides investment advisory services to affiliates and also manages assets for unaffiliated institutions such as insurance companies, retirement plans and foundations; earnings on holding company assets; and a discontinued voluntary pools business. |
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THE HANOVER INSURANCE GROUP |
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FINANCIAL HIGHLIGHTS |
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| Q3 |
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| Q4 |
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| Q1 |
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| Q2 |
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| Q3 |
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| Sep-YTD |
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| Sep-YTD |
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(In millions, except earnings per share) |
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| 2018 |
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| 2018 |
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| 2019 |
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| 2019 |
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| 2019 |
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| 2018 |
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| 2019 |
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PREMIUMS |
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Gross premiums written |
| $ |
| 1,296.7 |
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| $ |
| 1,161.6 |
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| $ |
| 1,226.3 |
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| $ |
| 1,271.5 |
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| $ |
| 1,385.8 |
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| $ |
| 3,682.1 |
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| $ |
| 3,883.6 |
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Net premiums written |
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| 1,177.2 |
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| 1,044.7 |
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| 1,098.0 |
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| 1,137.8 |
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| 1,242.9 |
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| 3,340.1 |
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| 3,478.7 |
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Net premiums earned |
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| 1,071.7 |
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| 1,082.0 |
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| 1,095.1 |
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| 1,111.0 |
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| 1,124.1 |
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| 3,172.4 |
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| 3,330.2 |
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EARNINGS |
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Operating income before interest and taxes |
| $ |
| 112.8 |
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| $ |
| 93.1 |
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| $ |
| 109.8 |
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| 107.0 |
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| $ |
| 126.3 |
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| $ |
| 313.4 |
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| $ |
| 343.1 |
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Operating income after taxes |
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| 84.9 |
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| 64.9 |
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| 80.7 |
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| 77.7 |
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| 93.0 |
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| 227.2 |
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| 251.4 |
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Income from continuing operations |
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| 104.0 |
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| 2.1 |
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| 122.6 |
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| 85.0 |
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| 111.2 |
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| 236.9 |
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| 318.8 |
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Net income |
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| 100.4 |
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| 123.6 |
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| 122.4 |
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| 74.0 |
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| 118.9 |
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| 267.4 |
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| 315.3 |
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PER SHARE DATA (DILUTED) |
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Operating income after taxes |
| $ |
| 1.97 |
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| $ |
| 1.51 |
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| $ |
| 1.96 |
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| $ |
| 1.88 |
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| $ |
| 2.31 |
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| $ |
| 5.28 |
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| $ |
| 6.15 |
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Income from continuing operations |
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| 2.41 |
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| 0.05 |
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| 2.98 |
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| 2.06 |
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| 2.77 |
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| 5.50 |
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| 7.80 |
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Net income |
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| 2.33 |
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| 2.88 |
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| 2.97 |
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| 1.79 |
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| 2.96 |
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| 6.21 |
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| 7.71 |
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Weighted average shares outstanding |
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| 43.1 |
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| 42.9 |
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| 41.2 |
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| 41.2 |
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| 40.2 |
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| 43.1 |
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| 40.9 |
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BALANCE SHEET |
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| September 30 |
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| December 31 |
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| March 31 |
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| June 30 |
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| September 30 |
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(In millions, except per share data) |
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| 2018 |
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| 2018 |
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| 2019 |
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Total assets |
| $ |
| 15,624.3 |
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| $ |
| 12,399.7 |
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| 11,983.4 |
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| $ |
| 12,159.9 |
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| $ |
| 12,627.2 |
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Total loss and loss adjustment expense reserves |
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| 5,188.9 |
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| 5,304.1 |
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| 5,381.6 |
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| 5,478.5 |
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| 5,550.5 |
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Total shareholders' equity |
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| 2,982.4 |
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| 2,954.7 |
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| 2,927.0 |
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| 2,941.1 |
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| 3,086.8 |
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Total shareholders' equity, excluding net unrealized appreciation |
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depreciation on fixed maturity investments, net of tax |
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| 3,056.4 |
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| 2,981.9 |
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| 2,836.3 |
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| 2,748.8 |
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| 2,851.5 |
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U.S. Property and Casualty Companies |
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Statutory surplus |
| $ |
| 2,171.2 |
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| 2,172.5 |
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| $ |
| 2,301.1 |
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| $ |
| 2,249.7 |
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| 2,347.8 |
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Premium to surplus ratio |
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| 1.99:1 |
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| 2.02:1 |
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| 1.92:1 |
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| 1.98:1 |
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| 1.93:1 |
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Book value per share |
| $ |
| 70.40 |
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| 69.81 |
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| $ |
| 71.95 |
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| 74.39 |
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| $ |
| 78.01 |
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Book value per share, excluding net unrealized appreciation |
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depreciation on fixed maturity investments, net of tax |
| $ |
| 72.14 |
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| 70.46 |
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| 69.72 |
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| 69.52 |
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| $ |
| 72.06 |
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Tangible book value per share (total book value excluding goodwill |
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and intangibles) |
| $ |
| 63.90 |
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| $ |
| 64.71 |
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| $ |
| 66.67 |
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| 69.30 |
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| $ |
| 72.94 |
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Shares outstanding |
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| 42.4 |
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| 42.3 |
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| 40.7 |
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| 39.6 |
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| 39.6 |
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Total debt/equity |
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| 26.1 | % |
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| 26.3 | % |
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| 22.3 | % |
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| 22.2 | % |
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| 21.6 | % |
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Total debt/total capital |
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| 20.7 | % |
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| 20.8 | % |
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| 18.2 | % |
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| 18.2 | % |
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| 17.8 | % |
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2
THE HANOVER INSURANCE GROUP |
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CONSOLIDATED INCOME STATEMENTS |
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| Three Months ended September 30 |
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| Nine Months ended September 30 |
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(In millions) |
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| 2019 |
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| 2018 |
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| % Change |
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| 2019 |
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| 2018 |
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| % Change |
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REVENUES |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums earned |
| $ |
| 1,124.1 |
|
| $ |
| 1,071.7 |
|
|
| 4.9 |
|
| $ |
| 3,330.2 |
|
| $ |
| 3,172.4 |
|
|
| 5.0 |
|
Net investment income |
|
|
| 68.8 |
|
|
|
| 66.4 |
|
|
| 3.6 |
|
|
|
| 208.6 |
|
|
|
| 198.0 |
|
|
| 5.4 |
|
Net realized and unrealized investment gains (losses): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses) from sales and other |
|
|
| 0.6 |
|
|
|
| (0.2 | ) |
| N/M |
|
|
|
| 1.0 |
|
|
|
| (0.1 | ) |
| N/M |
| ||
Net change in fair value of equity securities |
|
|
| 15.0 |
|
|
|
| 23.6 |
|
|
| (36.4 | ) |
|
|
| 75.3 |
|
|
|
| 6.7 |
|
| N/M |
| |
Net other-than-temporary impairment losses on investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
recognized in earnings |
|
|
| (0.8 | ) |
|
|
| (0.4 | ) |
|
| 100.0 |
|
|
|
| (1.2 | ) |
|
|
| (2.8 | ) |
|
| (57.1 | ) |
Total net realized and unrealized investment gains |
|
|
| 14.8 |
|
|
|
| 23.0 |
|
|
| (35.7 | ) |
|
|
| 75.1 |
|
|
|
| 3.8 |
|
| N/M |
| |
Fees and other income |
|
|
| 7.0 |
|
|
|
| 5.5 |
|
|
| 27.3 |
|
|
|
| 18.9 |
|
|
|
| 17.3 |
|
|
| 9.2 |
|
Total revenues |
|
|
| 1,214.7 |
|
|
|
| 1,166.6 |
|
|
| 4.1 |
|
|
|
| 3,632.8 |
|
|
|
| 3,391.5 |
|
|
| 7.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOSSES AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment expenses |
|
|
| 705.3 |
|
|
|
| 676.4 |
|
|
| 4.3 |
|
|
|
| 2,122.6 |
|
|
|
| 2,018.5 |
|
|
| 5.2 |
|
Amortization of deferred acquisition costs |
|
|
| 232.8 |
|
|
|
| 224.4 |
|
|
| 3.7 |
|
|
|
| 692.8 |
|
|
|
| 664.7 |
|
|
| 4.2 |
|
Interest expense |
|
|
| 9.4 |
|
|
|
| 11.2 |
|
|
| (16.1 | ) |
|
|
| 28.1 |
|
|
|
| 33.9 |
|
|
| (17.1 | ) |
Other operating expenses |
|
|
| 136.9 |
|
|
|
| 131.9 |
|
|
| 3.8 |
|
|
|
| 400.6 |
|
|
|
| 393.0 |
|
|
| 1.9 |
|
Total losses and expenses |
|
|
| 1,084.4 |
|
|
|
| 1,043.9 |
|
|
| 3.9 |
|
|
|
| 3,244.1 |
|
|
|
| 3,110.1 |
|
|
| 4.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes |
|
|
| 130.3 |
|
|
|
| 122.7 |
|
|
| 6.2 |
|
|
|
| 388.7 |
|
|
|
| 281.4 |
|
|
| 38.1 |
|
Income tax expense |
|
|
| 23.5 |
|
|
|
| 18.7 |
|
|
| 25.7 |
|
|
|
| 68.7 |
|
|
|
| 44.5 |
|
|
| 54.4 |
|
Effect of new tax regulations on Chaucer gain on sale |
|
|
| (4.4 | ) |
|
|
| - |
|
| N/M |
|
|
|
| 1.2 |
|
|
|
| - |
|
| N/M |
| ||
|
|
| \ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Income from continuing operations |
|
|
| 111.2 |
|
|
|
| 104.0 |
|
|
| 6.9 |
|
|
|
| 318.8 |
|
|
|
| 236.9 |
|
|
| 34.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (net of taxes): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Sale of Chaucer business |
|
|
| 6.4 |
|
|
|
| - |
|
| N/M |
|
|
|
| (2.6 | ) |
|
|
| - |
|
| N/M |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from Chaucer business |
|
|
| 2.1 |
|
|
|
| (3.6 | ) |
| N/M |
|
|
|
| 1.6 |
|
|
|
| 30.5 |
|
| N/M |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued life businesses |
|
|
| (0.8 | ) |
|
|
| - |
|
| N/M |
|
|
|
| (2.5 | ) |
|
|
| - |
|
| N/M |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
| $ |
| 118.9 |
|
| $ |
| 100.4 |
|
|
| 18.4 |
|
| $ |
| 315.3 |
|
| $ |
| 267.4 |
|
|
| 17.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3
THE HANOVER INSURANCE GROUP |
| |||||||||||||
CONSOLIDATED BALANCE SHEETS |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| September 30 |
|
|
| December 31 |
|
|
|
|
| ||
(In millions, except per share data) |
|
| 2019 |
|
|
| 2018 |
|
| % Change |
| |||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities, at fair value (amortized cost of $6,692.5 and $6,245.9) |
| $ |
| 6,946.3 |
|
| $ |
| 6,161.5 |
|
|
| 12.7 |
|
Equity securities, at fair value |
|
|
| 570.8 |
|
|
|
| 464.4 |
|
|
| 22.9 |
|
Other investments |
|
|
| 722.5 |
|
|
|
| 661.5 |
|
|
| 9.2 |
|
Total investments |
|
|
| 8,239.6 |
|
|
|
| 7,287.4 |
|
|
| 13.1 |
|
Cash and cash equivalents |
|
|
| 157.6 |
|
|
|
| 1,020.7 |
|
|
| (84.6 | ) |
Accrued investment income |
|
|
| 53.0 |
|
|
|
| 53.2 |
|
|
| (0.4 | ) |
Premiums and accounts receivable, net |
|
|
| 1,298.8 |
|
|
|
| 1,176.7 |
|
|
| 10.4 |
|
Reinsurance recoverable on paid and unpaid losses and unearned premiums |
|
|
| 1,734.2 |
|
|
|
| 1,648.6 |
|
|
| 5.2 |
|
Deferred acquisition costs |
|
|
| 474.9 |
|
|
|
| 450.8 |
|
|
| 5.3 |
|
Deferred income tax asset |
|
|
| - |
|
|
|
| 50.6 |
|
| N/M |
| |
Goodwill |
|
|
| 178.8 |
|
|
|
| 178.8 |
|
| - |
| |
Other assets |
|
|
| 384.3 |
|
|
|
| 371.6 |
|
|
| 3.4 |
|
Assets held-for-sale |
|
|
| - |
|
|
|
| 57.4 |
|
| N/M |
| |
Assets of discontinued businesses |
|
|
| 106.0 |
|
|
|
| 103.9 |
|
|
| 2.0 |
|
Total assets |
| $ |
| 12,627.2 |
|
| $ |
| 12,399.7 |
|
|
| 1.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and loss adjustment expense reserves |
| $ |
| 5,550.5 |
|
| $ |
| 5,304.1 |
|
|
| 4.6 |
|
Unearned premiums |
|
|
| 2,456.8 |
|
|
|
| 2,277.8 |
|
|
| 7.9 |
|
Expenses and taxes payable |
|
|
| 649.0 |
|
|
|
| 909.8 |
|
|
| (28.7 | ) |
Deferred income tax liability |
|
|
| 46.3 |
|
|
|
| - |
|
| N/M |
| |
Reinsurance premiums payable |
|
|
| 52.8 |
|
|
|
| 37.3 |
|
|
| 41.6 |
|
Debt |
|
|
| 667.8 |
|
|
|
| 777.9 |
|
|
| (14.2 | ) |
Liabilities held-for-sale |
|
|
| - |
|
|
|
| 22.2 |
|
| N/M |
| |
Liabilities of discontinued businesses |
|
|
| 117.2 |
|
|
|
| 115.9 |
|
|
| 1.1 |
|
Total liabilities |
|
|
| 9,540.4 |
|
|
|
| 9,445.0 |
|
|
| 1.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, par value $0.01 per share; |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20.0 million shares authorized; none issued |
|
|
| - |
|
|
|
| - |
|
| - |
| |
Common stock, par value $0.01 per share; 300.0 million shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
authorized; 60.5 million shares issued |
|
|
| 0.6 |
|
|
|
| 0.6 |
|
| - |
| |
Additional paid-in capital |
|
|
| 1,837.0 |
|
|
|
| 1,871.8 |
|
|
| (1.9 | ) |
Accumulated other comprehensive income (loss) |
|
|
| 153.5 |
|
|
|
| (116.5 | ) |
| N/M |
| |
Retained earnings |
|
|
| 2,423.1 |
|
|
|
| 2,182.3 |
|
|
| 11.0 |
|
Treasury stock at cost (20.9 million and 18.2 million shares) |
|
|
| (1,327.4 | ) |
|
|
| (983.5 | ) |
|
| 35.0 |
|
Total shareholders' equity |
|
|
| 3,086.8 |
|
|
|
| 2,954.7 |
|
|
| 4.5 |
|
Total liabilities and shareholders' equity |
| $ |
| 12,627.2 |
|
| $ |
| 12,399.7 |
|
|
| 1.8 |
|
4
THE HANOVER INSURANCE GROUP |
| |||||||||||||||||||||||||||||||||||||||||
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS |
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED |
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended September 30 |
| |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2019 |
|
|
| 2018 |
| ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial |
|
|
| Personal |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial |
|
|
| Personal |
|
|
|
|
|
|
|
|
|
|
|
| ||||
(In millions, except percentage data) |
|
| Lines |
|
|
| Lines |
|
|
|
| Other |
|
|
| Total |
|
|
| Lines |
|
|
| Lines |
|
|
|
| Other |
|
|
| Total |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written |
| $ |
| 858.2 |
|
| $ |
| 527.6 |
|
|
| $ |
| - |
|
| $ |
| 1,385.8 |
|
| $ |
| 801.6 |
|
| $ |
| 495.1 |
|
|
| $ |
| - |
|
| $ |
| 1,296.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written |
| $ |
| 746.4 |
|
| $ |
| 496.5 |
|
|
| $ |
| - |
|
| $ |
| 1,242.9 |
|
| $ |
| 709.2 |
|
| $ |
| 468.0 |
|
|
| $ |
| - |
|
| $ |
| 1,177.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
| $ |
| 663.5 |
|
| $ |
| 460.6 |
|
|
| $ |
| - |
|
| $ |
| 1,124.1 |
|
| $ |
| 640.4 |
|
| $ |
| 431.3 |
|
|
| $ |
| - |
|
| $ |
| 1,071.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 385.0 |
|
|
|
| 284.7 |
|
|
|
|
| 0.1 |
|
|
|
| 669.8 |
|
|
|
| 372.8 |
|
|
|
| 258.4 |
|
|
|
|
| - |
|
|
|
| 631.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| (5.6 | ) |
|
|
| 5.6 |
|
|
|
|
| 0.3 |
|
|
|
| 0.3 |
|
|
|
| (8.5 | ) |
|
|
| 8.5 |
|
|
|
|
| 0.3 |
|
|
|
| 0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 21.3 |
|
|
|
| 13.9 |
|
|
|
|
| - |
|
|
|
| 35.2 |
|
|
|
| 33.2 |
|
|
|
| 12.4 |
|
|
|
|
| - |
|
|
|
| 45.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
|
| 0.7 |
|
|
|
| (0.7 | ) |
|
|
|
| - |
|
|
|
| - |
|
|
|
| (0.7 | ) |
|
|
| - |
|
|
|
|
| - |
|
|
|
| (0.7 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
|
| 401.4 |
|
|
|
| 303.5 |
|
|
|
|
| 0.4 |
|
|
|
| 705.3 |
|
|
|
| 396.8 |
|
|
|
| 279.3 |
|
|
|
|
| 0.3 |
|
|
|
| 676.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
| 231.7 |
|
|
|
| 128.3 |
|
|
|
|
| - |
|
|
|
| 360.0 |
|
|
|
| 222.8 |
|
|
|
| 123.2 |
|
|
|
|
| 0.7 |
|
|
|
| 346.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit (loss) |
|
|
| 30.4 |
|
|
|
| 28.8 |
|
|
|
|
| (0.4 | ) |
|
|
| 58.8 |
|
|
|
| 20.8 |
|
|
|
| 28.8 |
|
|
|
|
| (1.0 | ) |
|
|
| 48.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
| 44.1 |
|
|
|
| 19.6 |
|
|
|
|
| 5.1 |
|
|
|
| 68.8 |
|
|
|
| 45.0 |
|
|
|
| 18.2 |
|
|
|
|
| 3.2 |
|
|
|
| 66.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
| 2.7 |
|
|
|
| 3.1 |
|
|
|
|
| 1.2 |
|
|
|
| 7.0 |
|
|
|
| 2.0 |
|
|
|
| 2.9 |
|
|
|
|
| 0.6 |
|
|
|
| 5.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses |
|
|
| (3.1 | ) |
|
|
| (1.3 | ) |
|
|
|
| (3.9 | ) |
|
|
| (8.3 | ) |
|
|
| (2.7 | ) |
|
|
| (1.7 | ) |
|
|
|
| (3.3 | ) |
|
|
| (7.7 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) before income taxes |
| $ |
| 74.1 |
|
| $ |
| 50.2 |
|
|
| $ |
| 2.0 |
|
| $ |
| 126.3 |
|
| $ |
| 65.1 |
|
| $ |
| 48.2 |
|
|
| $ |
| (0.5 | ) |
| $ |
| 112.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 58.0 | % |
|
|
| 61.8 | % |
|
|
| N/M |
|
|
|
| 59.6 | % |
|
|
| 58.2 | % |
|
|
| 59.9 | % |
|
|
| N/M |
|
|
|
| 58.9 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| (0.8 | )% |
|
|
| 1.2 | % |
|
|
| N/M |
|
|
|
| - |
|
|
|
| (1.3 | )% |
|
|
| 2.0 | % |
|
|
| N/M |
|
|
|
| - |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 3.2 | % |
|
|
| 3.1 | % |
|
|
| N/M |
|
|
|
| 3.1 | % |
|
|
| 5.2 | % |
|
|
| 2.9 | % |
|
|
| N/M |
|
|
|
| 4.3 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
|
| 0.1 | % |
|
|
| (0.2 | )% |
|
|
| N/M |
|
|
|
| - |
|
|
|
| (0.1 | )% |
|
|
| - |
|
|
|
| N/M |
|
|
|
| (0.1 | )% | ||
Total loss and LAE ratio |
|
|
| 60.5 | % |
|
|
| 65.9 | % |
|
|
| N/M |
|
|
|
| 62.7 | % |
|
|
| 62.0 | % |
|
|
| 64.8 | % |
|
|
| N/M |
|
|
|
| 63.1 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
| 34.7 | % |
|
|
| 27.4 | % |
|
|
| N/M |
|
|
|
| 31.7 | % |
|
|
| 34.6 | % |
|
|
| 28.0 | % |
|
|
| N/M |
|
|
|
| 32.0 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio |
|
|
| 95.2 | % |
|
|
| 93.3 | % |
|
|
| N/M |
|
|
|
| 94.4 | % |
|
|
| 96.6 | % |
|
|
| 92.8 | % |
|
|
| N/M |
|
|
|
| 95.1 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
THE HANOVER INSURANCE GROUP |
| |||||||||||||||||||||||||||||||||||||||
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS |
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED |
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months ended September 30 |
| |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2019 |
|
|
| 2018 |
| ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial |
|
|
| Personal |
|
|
|
|
|
|
|
|
|
|
|
|
| Commercial |
|
|
| Personal |
|
|
|
|
|
|
|
|
|
|
| ||||
(In millions, except percentage data) |
|
| Lines |
|
|
| Lines |
|
|
| Other |
|
|
| Total |
|
|
| Lines |
|
|
| Lines |
|
|
| Other |
|
|
| Total |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written |
| $ |
| 2,387.2 |
|
| $ |
| 1,496.4 |
|
| $ |
| - |
|
| $ |
| 3,883.6 |
|
| $ |
| 2,278.3 |
|
| $ |
| 1,403.8 |
|
| $ |
| - |
|
| $ |
| 3,682.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written |
| $ |
| 2,068.5 |
|
| $ |
| 1,410.2 |
|
| $ |
| - |
|
| $ |
| 3,478.7 |
|
| $ |
| 2,010.7 |
|
| $ |
| 1,329.4 |
|
| $ |
| - |
|
| $ |
| 3,340.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
| $ |
| 1,974.7 |
|
| $ |
| 1,355.5 |
|
| $ |
| - |
|
| $ |
| 3,330.2 |
|
| $ |
| 1,904.0 |
|
| $ |
| 1,268.4 |
|
| $ |
| - |
|
| $ |
| 3,172.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 1,151.7 |
|
|
|
| 836.4 |
|
|
|
| 0.1 |
|
|
|
| 1,988.2 |
|
|
|
| 1,084.2 |
|
|
|
| 764.4 |
|
|
|
| - |
|
|
|
| 1,848.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| (17.1 | ) |
|
|
| 16.4 |
|
|
|
| 0.9 |
|
|
|
| 0.2 |
|
|
|
| (18.1 | ) |
|
|
| 17.9 |
|
|
|
| 0.9 |
|
|
|
| 0.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 73.5 |
|
|
|
| 81.2 |
|
|
|
| - |
|
|
|
| 154.7 |
|
|
|
| 102.9 |
|
|
|
| 74.1 |
|
|
|
| - |
|
|
|
| 177.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable catastrophe loss development |
|
|
| (18.1 | ) |
|
|
| (2.4 | ) |
|
|
| - |
|
|
|
| (20.5 | ) |
|
|
| (7.6 | ) |
|
|
| (0.2 | ) |
|
|
| - |
|
|
|
| (7.8 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
|
| 1,190.0 |
|
|
|
| 931.6 |
|
|
|
| 1.0 |
|
|
|
| 2,122.6 |
|
|
|
| 1,161.4 |
|
|
|
| 856.2 |
|
|
|
| 0.9 |
|
|
|
| 2,018.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
| 688.5 |
|
|
|
| 378.5 |
|
|
|
| - |
|
|
|
| 1,067.0 |
|
|
|
| 668.0 |
|
|
|
| 360.9 |
|
|
|
| 2.2 |
|
|
|
| 1,031.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit (loss) |
|
|
| 96.2 |
|
|
|
| 45.4 |
|
|
|
| (1.0 | ) |
|
|
| 140.6 |
|
|
|
| 74.6 |
|
|
|
| 51.3 |
|
|
|
| (3.1 | ) |
|
|
| 122.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
| 132.8 |
|
|
|
| 59.0 |
|
|
|
| 16.8 |
|
|
|
| 208.6 |
|
|
|
| 135.1 |
|
|
|
| 54.7 |
|
|
|
| 8.2 |
|
|
|
| 198.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
| 6.7 |
|
|
|
| 8.6 |
|
|
|
| 3.6 |
|
|
|
| 18.9 |
|
|
|
| 6.6 |
|
|
|
| 8.7 |
|
|
|
| 2.0 |
|
|
|
| 17.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses |
|
|
| (8.6 | ) |
|
|
| (4.3 | ) |
|
|
| (12.1 | ) |
|
|
| (25.0 | ) |
|
|
| (8.0 | ) |
|
|
| (5.0 | ) |
|
|
| (11.7 | ) |
|
|
| (24.7 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) before income taxes |
| $ |
| 227.1 |
|
| $ |
| 108.7 |
|
| $ |
| 7.3 |
|
| $ |
| 343.1 |
|
| $ |
| 208.3 |
|
| $ |
| 109.7 |
|
| $ |
| (4.6 | ) |
| $ |
| 313.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 58.4 | % |
|
|
| 61.7 | % |
|
| N/M |
|
|
|
| 59.7 | % |
|
|
| 57.0 | % |
|
|
| 60.3 | % |
|
| N/M |
|
|
|
| 58.3 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| (0.9 | )% |
|
|
| 1.2 | % |
|
| N/M |
|
|
|
| - |
|
|
|
| (1.0 | )% |
|
|
| 1.4 | % |
|
| N/M |
|
|
|
| - |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 3.7 | % |
|
|
| 6.0 | % |
|
| N/M |
|
|
|
| 4.6 | % |
|
|
| 5.4 | % |
|
|
| 5.8 | % |
|
| N/M |
|
|
|
| 5.5 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable catastrophe loss development |
|
|
| (0.9 | )% |
|
|
| (0.2 | )% |
|
| N/M |
|
|
|
| (0.6 | )% |
|
|
| (0.4 | )% |
|
|
| - |
|
|
| N/M |
|
|
|
| (0.2 | )% | ||
Total loss and LAE ratio |
|
|
| 60.3 | % |
|
|
| 68.7 | % |
|
| N/M |
|
|
|
| 63.7 | % |
|
|
| 61.0 | % |
|
|
| 67.5 | % |
|
| N/M |
|
|
|
| 63.6 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
| 34.7 | % |
|
|
| 27.4 | % |
|
| N/M |
|
|
|
| 31.7 | % |
|
|
| 34.9 | % |
|
|
| 27.9 | % |
|
| N/M |
|
|
|
| 32.2 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio |
|
|
| 95.0 | % |
|
|
| 96.1 | % |
|
| N/M |
|
|
|
| 95.4 | % |
|
|
| 95.9 | % |
|
|
| 95.4 | % |
|
| N/M |
|
|
|
| 95.8 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
THE HANOVER INSURANCE GROUP |
| ||||||||||||||||||||||||||||
GAAP UNDERWRITING INFORMATION AND RELATED RATIOS |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Q3 |
|
| Q4 |
|
| Q1 |
|
| Q2 |
|
| Q3 |
|
| Sep-YTD |
|
| Sep-YTD |
| |||||||
(In millions, except percentage data) |
|
| 2018 |
|
| 2018 |
|
| 2019 |
|
| 2019 |
|
| 2019 |
|
| 2018 |
|
| 2019 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written |
| $ |
| 1,296.7 |
| $ |
| 1,161.6 |
| $ |
| 1,226.3 |
| $ |
| 1,271.5 |
| $ |
| 1,385.8 |
| $ |
| 3,682.1 |
| $ |
| 3,883.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written |
| $ |
| 1,177.2 |
| $ |
| 1,044.7 |
| $ |
| 1,098.0 |
| $ |
| 1,137.8 |
| $ |
| 1,242.9 |
| $ |
| 3,340.1 |
| $ |
| 3,478.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
| $ |
| 1,071.7 |
| $ |
| 1,082.0 |
| $ |
| 1,095.1 |
| $ |
| 1,111.0 |
| $ |
| 1,124.1 |
| $ |
| 3,172.4 |
| $ |
| 3,330.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 631.2 |
|
|
| 656.4 |
|
|
| 659.9 |
|
|
| 658.5 |
|
|
| 669.8 |
|
|
| 1,848.6 |
|
|
| 1,988.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| 0.3 |
|
|
| (0.3 | ) |
|
| 0.3 |
|
|
| (0.4 | ) |
|
| 0.3 |
|
|
| 0.7 |
|
|
| 0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 45.6 |
|
|
| 51.5 |
|
|
| 52.9 |
|
|
| 66.6 |
|
|
| 35.2 |
|
|
| 177.0 |
|
|
| 154.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable catastrophe loss development |
|
|
| (0.7 | ) |
|
| (1.5 | ) |
|
| (13.5 | ) |
|
| (7.0 | ) |
|
| - |
|
|
| (7.8 | ) |
|
| (20.5 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
|
| 676.4 |
|
|
| 706.1 |
|
|
| 699.6 |
|
|
| 717.7 |
|
|
| 705.3 |
|
|
| 2,018.5 |
|
|
| 2,122.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
| 346.7 |
|
|
| 351.3 |
|
|
| 353.4 |
|
|
| 353.6 |
|
|
| 360.0 |
|
|
| 1,031.1 |
|
|
| 1,067.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit |
| $ |
| 48.6 |
| $ |
| 24.6 |
| $ |
| 42.1 |
| $ |
| 39.7 |
| $ |
| 58.8 |
| $ |
| 122.8 |
| $ |
| 140.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 58.9 | % |
|
| 60.7 | % |
|
| 60.3 | % |
|
| 59.2 | % |
|
| 59.6 | % |
|
| 58.3 | % |
|
| 59.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 4.3 | % |
|
| 4.7 | % |
|
| 4.8 | % |
|
| 6.0 | % |
|
| 3.1 | % |
|
| 5.5 | % |
|
| 4.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable catastrophe loss development |
|
|
| (0.1 | )% |
|
| (0.1 | )% |
|
| (1.2 | )% |
|
| (0.6 | )% |
|
| - |
|
|
| (0.2 | )% |
|
| (0.6 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loss and LAE ratio |
|
|
| 63.1 | % |
|
| 65.3 | % |
|
| 63.9 | % |
|
| 64.6 | % |
|
| 62.7 | % |
|
| 63.6 | % |
|
| 63.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
| 32.0 | % |
|
| 32.1 | % |
|
| 31.9 | % |
|
| 31.5 | % |
|
| 31.7 | % |
|
| 32.2 | % |
|
| 31.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio |
|
|
| 95.1 | % |
|
| 97.4 | % |
|
| 95.8 | % |
|
| 96.1 | % |
|
| 94.4 | % |
|
| 95.8 | % |
|
| 95.4 | % |
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
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|
|
|
|
|
|
|
Combined ratio, excluding catastrophe losses |
|
|
| 90.9 | % |
|
| 92.8 | % |
|
| 92.2 | % |
|
| 90.7 | % |
|
| 91.3 | % |
|
| 90.5 | % |
|
| 91.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year combined ratio, excluding catastrophe losses |
|
|
| 90.9 | % |
|
| 92.8 | % |
|
| 92.2 | % |
|
| 90.7 | % |
|
| 91.3 | % |
|
| 90.5 | % |
|
| 91.4 | % |
|
|
|
|
|
|
|
|
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|
7
THE HANOVER INSURANCE GROUP |
| ||||||||||||||||||||||||||||||||||||||||
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS |
| ||||||||||||||||||||||||||||||||||||||||
|
| ||||||||||||||||||||||||||||||||||||||||
COMMERCIAL LINES |
| ||||||||||||||||||||||||||||||||||||||||
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|
|
Three Months ended September 30 |
| ||||||||||||||||||||||||||||||||||||||||
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| 2019 |
|
| 2018 |
| ||||||||||||||||||||||||||||||||||||
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|
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| Multiple |
|
|
|
|
|
| Workers' |
|
|
|
|
|
|
|
|
|
|
| Multiple |
|
|
|
|
|
| Workers' |
|
|
|
|
|
|
|
|
| ||||
(In millions, except percentage data) |
| Peril |
|
| Auto |
|
| Comp |
|
| Other |
|
| Total |
|
|
| Peril |
|
| Auto |
|
| Comp |
|
| Other |
|
| Total |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
|
|
Net premiums written | $ |
| 265.2 |
| $ |
| 92.4 |
| $ |
| 82.7 |
| $ |
| 306.1 |
| $ |
| 746.4 |
|
| $ |
| 251.8 |
| $ |
| 92.3 |
| $ |
| 81.7 |
| $ |
| 283.4 |
| $ |
| 709.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned | $ |
| 221.7 |
| $ |
| 84.3 |
| $ |
| 79.4 |
| $ |
| 278.1 |
| $ |
| 663.5 |
|
| $ |
| 213.1 |
| $ |
| 84.4 |
| $ |
| 78.3 |
| $ |
| 264.6 |
| $ |
| 640.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
| 125.3 |
|
|
| 57.0 |
|
|
| 48.6 |
|
|
| 154.1 |
|
|
| 385.0 |
|
|
|
| 119.8 |
|
|
| 65.3 |
|
|
| 48.9 |
|
|
| 138.8 |
|
|
| 372.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
| (0.3 | ) |
|
| 1.0 |
|
|
| (5.0 | ) |
|
| (1.3 | ) |
|
| (5.6 | ) |
|
|
| (1.4 | ) |
|
| 5.3 |
|
|
| (8.0 | ) |
|
| (4.4 | ) |
|
| (8.5 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
| 17.2 |
|
|
| 0.4 |
|
|
| - |
|
|
| 3.7 |
|
|
| 21.3 |
|
|
|
| 20.7 |
|
|
| 0.6 |
|
|
| - |
|
|
| 11.9 |
|
|
| 33.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
| (0.9 | ) |
|
| (0.1 | ) |
|
| - |
|
|
| 1.7 |
|
|
| 0.7 |
|
|
|
| 0.7 |
|
|
| - |
|
|
| - |
|
|
| (1.4 | ) |
|
| (0.7 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
| 141.3 |
|
|
| 58.3 |
|
|
| 43.6 |
|
|
| 158.2 |
|
|
| 401.4 |
|
|
|
| 139.8 |
|
|
| 71.2 |
|
|
| 40.9 |
|
|
| 144.9 |
|
|
| 396.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 231.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 222.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 30.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 20.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 44.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 45.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (3.1 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (2.7 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
| 74.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
| 65.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| . |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
| 56.4 | % |
|
| 67.6 | % |
|
| 61.2 | % |
|
| 55.5 | % |
|
| 58.0 | % |
|
|
| 56.3 | % |
|
| 77.4 | % |
|
| 62.4 | % |
|
| 52.5 | % |
|
| 58.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
| (0.1 | )% |
|
| 1.2 | % |
|
| (6.3 | )% |
|
| (0.5 | )% |
|
| (0.8 | )% |
|
|
| (0.7 | )% |
|
| 6.3 | % |
|
| (10.2 | )% |
|
| (1.7 | )% |
|
| (1.3 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
| 7.8 | % |
|
| 0.5 | % |
|
| - |
|
|
| 1.3 | % |
|
| 3.2 | % |
|
|
| 9.7 | % |
|
| 0.7 | % |
|
| - |
|
|
| 4.5 | % |
|
| 5.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
| (0.4 | )% |
|
| (0.1 | )% |
|
| - |
|
|
| 0.6 | % |
|
| 0.1 | % |
|
|
| 0.3 | % |
|
| - |
|
|
| - |
|
|
| (0.5 | )% |
|
| (0.1 | )% |
Total loss and LAE ratio |
|
| 63.7 | % |
|
| 69.2 | % |
|
| 54.9 | % |
|
| 56.9 | % |
|
| 60.5 | % |
|
|
| 65.6 | % |
|
| 84.4 | % |
|
| 52.2 | % |
|
| 54.8 | % |
|
| 62.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
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|
|
|
|
|
|
|
|
Combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 95.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 96.6 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
|
|
Change in policies in force |
|
| 6.7 | % |
|
| (16.3 | )% |
|
| 10.3 | % |
|
| 1.4 | % |
|
| 2.5 | % |
|
|
| 6.5 | % |
|
| 1.4 | % |
|
| 9.6 | % |
|
| 4.9 | % |
|
| 5.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
|
|
|
|
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|
|
|
|
|
|
|
Retention |
|
| 87.2 | % |
|
| 75.8 | % |
|
| 82.1 | % |
| N/M |
|
|
| 84.2 | % |
|
|
| 86.0 | % |
|
| 83.6 | % |
|
| 77.6 | % |
| N/M |
|
|
| 84.2 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
8
THE HANOVER INSURANCE GROUP |
| ||||||||||||||||||||||||||||||||||||||||
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS |
| ||||||||||||||||||||||||||||||||||||||||
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|
COMMERCIAL LINES |
| ||||||||||||||||||||||||||||||||||||||||
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|
Nine Months ended September 30 |
| ||||||||||||||||||||||||||||||||||||||||
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| 2019 |
|
| 2018 |
| ||||||||||||||||||||||||||||||||||||
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|
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|
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|
|
| Multiple |
|
|
|
|
|
| Workers' |
|
|
|
|
|
|
|
|
|
|
| Multiple |
|
|
|
|
|
| Workers' |
|
|
|
|
|
|
|
|
| ||||
(In millions, except percentage data) |
| Peril |
|
| Auto |
|
| Comp |
|
| Other |
|
| Total |
|
|
| Peril |
|
| Auto |
|
| Comp |
|
| Other |
|
| Total |
| ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written | $ |
| 699.5 |
| $ |
| 256.1 |
| $ |
| 254.7 |
| $ |
| 858.2 |
| $ |
| 2,068.5 |
|
| $ |
| 669.1 |
| $ |
| 265.9 |
| $ |
| 249.4 |
| $ |
| 826.3 |
| $ |
| 2,010.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned | $ |
| 660.0 |
| $ |
| 253.8 |
| $ |
| 239.6 |
| $ |
| 821.3 |
| $ |
| 1,974.7 |
|
| $ |
| 628.2 |
| $ |
| 249.8 |
| $ |
| 237.5 |
| $ |
| 788.5 |
| $ |
| 1,904.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
| 369.8 |
|
|
| 175.2 |
|
|
| 145.3 |
|
|
| 461.4 |
|
|
| 1,151.7 |
|
|
|
| 350.6 |
|
|
| 177.0 |
|
|
| 146.4 |
|
|
| 410.2 |
|
|
| 1,084.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
| (5.3 | ) |
|
| 5.0 |
|
|
| (15.7 | ) |
|
| (1.1 | ) |
|
| (17.1 | ) |
|
|
| (3.1 | ) |
|
| 13.2 |
|
|
| (14.2 | ) |
|
| (14.0 | ) |
|
| (18.1 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
| 53.3 |
|
|
| 1.7 |
|
|
| - |
|
|
| 18.5 |
|
|
| 73.5 |
|
|
|
| 63.7 |
|
|
| 2.7 |
|
|
| - |
|
|
| 36.5 |
|
|
| 102.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable catastrophe loss development |
|
| (11.5 | ) |
|
| (0.4 | ) |
|
| - |
|
|
| (6.2 | ) |
|
| (18.1 | ) |
|
|
| (4.7 | ) |
|
| - |
|
|
| - |
|
|
| (2.9 | ) |
|
| (7.6 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
| 406.3 |
|
|
| 181.5 |
|
|
| 129.6 |
|
|
| 472.6 |
|
|
| 1,190.0 |
|
|
|
| 406.5 |
|
|
| 192.9 |
|
|
| 132.2 |
|
|
| 429.8 |
|
|
| 1,161.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 688.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 668.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 96.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 74.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 132.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 135.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 6.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (8.6 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (8.0 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
| 227.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
| 208.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
| 56.1 | % |
|
| 69.0 | % |
|
| 60.7 | % |
|
| 56.1 | % |
|
| 58.4 | % |
|
|
| 55.8 | % |
|
| 70.8 | % |
|
| 61.7 | % |
|
| 52.0 | % |
|
| 57.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
| (0.8 | )% |
|
| 2.0 | % |
|
| (6.6 | )% |
|
| (0.1 | )% |
|
| (0.9 | )% |
|
|
| (0.5 | )% |
|
| 5.3 | % |
|
| (6.0 | )% |
|
| (1.8 | )% |
|
| (1.0 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
| 8.0 | % |
|
| 0.7 | % |
|
| - |
|
|
| 2.3 | % |
|
| 3.7 | % |
|
|
| 10.1 | % |
|
| 1.1 | % |
|
| - |
|
|
| 4.7 | % |
|
| 5.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable catastrophe loss development |
|
| (1.7 | )% |
|
| (0.2 | )% |
|
| - |
|
|
| (0.8 | )% |
|
| (0.9 | )% |
|
|
| (0.7 | )% |
|
| - |
|
|
| - |
|
|
| (0.4 | )% |
|
| (0.4 | )% |
Total loss and LAE ratio |
|
| 61.6 | % |
|
| 71.5 | % |
|
| 54.1 | % |
|
| 57.5 | % |
|
| 60.3 | % |
|
|
| 64.7 | % |
|
| 77.2 | % |
|
| 55.7 | % |
|
| 54.5 | % |
|
| 61.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 34.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 95.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 95.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in policies in force |
|
| 6.7 | % |
|
| (16.3 | )% |
|
| 10.3 | % |
|
| 1.4 | % |
|
| 2.5 | % |
|
|
| 6.5 | % |
|
| 1.4 | % |
|
| 9.6 | % |
|
| 4.9 | % |
|
| 5.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retention |
|
| 86.1 | % |
|
| 76.3 | % |
|
| 81.6 | % |
| N/M |
|
|
| 83.2 | % |
|
|
| 86.3 | % |
|
| 84.0 | % |
|
| 79.7 | % |
| N/M |
|
|
| 84.6 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
THE HANOVER INSURANCE GROUP |
| ||||||||||||||||||||||||||||
GAAP UNDERWRITING INFORMATION AND RELATED RATIOS |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMERCIAL LINES |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Q3 |
|
| Q4 |
|
| Q1 |
|
| Q2 |
|
| Q3 |
|
| Sep-YTD |
|
| Sep-YTD |
| |||||||
(In millions, except percentage data) |
|
| 2018 |
|
| 2018 |
|
| 2019 |
|
| 2019 |
|
| 2019 |
|
| 2018 |
|
| 2019 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written |
| $ |
| 801.6 |
| $ |
| 689.8 |
| $ |
| 779.5 |
| $ |
| 749.5 |
| $ |
| 858.2 |
| $ |
| 2,278.3 |
| $ |
| 2,387.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written |
| $ |
| 709.2 |
| $ |
| 600.0 |
| $ |
| 677.4 |
| $ |
| 644.7 |
| $ |
| 746.4 |
| $ |
| 2,010.7 |
| $ |
| 2,068.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
| $ |
| 640.4 |
| $ |
| 644.4 |
| $ |
| 652.4 |
| $ |
| 658.8 |
| $ |
| 663.5 |
| $ |
| 1,904.0 |
| $ |
| 1,974.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 372.8 |
|
|
| 375.9 |
|
|
| 384.0 |
|
|
| 382.7 |
|
|
| 385.0 |
|
|
| 1,084.2 |
|
|
| 1,151.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable reserve development, excluding catastrophe losses |
|
|
| (8.5 | ) |
|
| (16.0 | ) |
|
| (7.5 | ) |
|
| (4.0 | ) |
|
| (5.6 | ) |
|
| (18.1 | ) |
|
| (17.1 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 33.2 |
|
|
| 46.2 |
|
|
| 23.9 |
|
|
| 28.3 |
|
|
| 21.3 |
|
|
| 102.9 |
|
|
| 73.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
|
| (0.7 | ) |
|
| 0.8 |
|
|
| (13.5 | ) |
|
| (5.3 | ) |
|
| 0.7 |
|
|
| (7.6 | ) |
|
| (18.1 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
|
| 396.8 |
|
|
| 406.9 |
|
|
| 386.9 |
|
|
| 401.7 |
|
|
| 401.4 |
|
|
| 1,161.4 |
|
|
| 1,190.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
| 222.8 |
|
|
| 227.1 |
|
|
| 228.8 |
|
|
| 228.0 |
|
|
| 231.7 |
|
|
| 668.0 |
|
|
| 688.5 |
|
|
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit |
| $ |
| 20.8 |
| $ |
| 10.4 |
| $ |
| 36.7 |
| $ |
| 29.1 |
| $ |
| 30.4 |
| $ |
| 74.6 |
| $ |
| 96.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 58.2 | % |
|
| 58.3 | % |
|
| 58.8 | % |
|
| 58.1 | % |
|
| 58.0 | % |
|
| 57.0 | % |
|
| 58.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable reserve development, excluding catastrophe losses |
|
|
| (1.3 | )% |
|
| (2.5 | )% |
|
| (1.1 | )% |
|
| (0.6 | )% |
|
| (0.8 | )% |
|
| (1.0 | )% |
|
| (0.9 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 5.2 | % |
|
| 7.2 | % |
|
| 3.7 | % |
|
| 4.3 | % |
|
| 3.2 | % |
|
| 5.4 | % |
|
| 3.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
|
| (0.1 | )% |
|
| 0.1 | % |
|
| (2.1 | )% |
|
| (0.8 | )% |
|
| 0.1 | % |
|
| (0.4 | )% |
|
| (0.9 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loss and LAE ratio |
|
|
| 62.0 | % |
|
| 63.1 | % |
|
| 59.3 | % |
|
| 61.0 | % |
|
| 60.5 | % |
|
| 61.0 | % |
|
| 60.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
| 34.6 | % |
|
| 35.1 | % |
|
| 34.9 | % |
|
| 34.4 | % |
|
| 34.7 | % |
|
| 34.9 | % |
|
| 34.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio |
|
|
| 96.6 | % |
|
| 98.2 | % |
|
| 94.2 | % |
|
| 95.4 | % |
|
| 95.2 | % |
|
| 95.9 | % |
|
| 95.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio, excluding catastrophe losses |
|
|
| 91.5 | % |
|
| 90.9 | % |
|
| 92.6 | % |
|
| 91.9 | % |
|
| 91.9 | % |
|
| 90.9 | % |
|
| 92.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year combined ratio, excluding catastrophe losses |
|
|
| 92.8 | % |
|
| 93.4 | % |
|
| 93.7 | % |
|
| 92.5 | % |
|
| 92.7 | % |
|
| 91.9 | % |
|
| 93.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
THE HANOVER INSURANCE GROUP |
| |||||||||||||||||||||||||||||||||
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERSONAL LINES |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended September 30 |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2019 |
|
| 2018 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except percentage data) |
|
| Auto |
|
| Home |
|
| Other |
|
| Total |
|
|
| Auto |
|
| Home |
|
| Other |
|
| Total |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written |
| $ |
| 308.2 |
| $ |
| 174.3 |
| $ |
| 14.0 |
| $ |
| 496.5 |
|
| $ |
| 291.4 |
| $ |
| 165.0 |
| $ |
| 11.6 |
| $ |
| 468.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
| $ |
| 292.0 |
| $ |
| 156.7 |
| $ |
| 11.9 |
| $ |
| 460.6 |
|
| $ |
| 273.7 |
| $ |
| 147.6 |
| $ |
| 10.0 |
| $ |
| 431.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 203.7 |
|
|
| 75.8 |
|
|
| 5.2 |
|
|
| 284.7 |
|
|
|
| 185.8 |
|
|
| 69.5 |
|
|
| 3.1 |
|
|
| 258.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| 4.7 |
|
|
| 1.7 |
|
|
| (0.8 | ) |
|
| 5.6 |
|
|
|
| 3.0 |
|
|
| 4.0 |
|
|
| 1.5 |
|
|
| 8.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 1.6 |
|
|
| 11.7 |
|
|
| 0.6 |
|
|
| 13.9 |
|
|
|
| 1.2 |
|
|
| 11.1 |
|
|
| 0.1 |
|
|
| 12.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
|
| (0.1 | ) |
|
| (0.6 | ) |
|
| - |
|
|
| (0.7 | ) |
|
|
| (0.1 | ) |
|
| 0.1 |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
|
| 209.9 |
|
|
| 88.6 |
|
|
| 5.0 |
|
|
| 303.5 |
|
|
|
| 189.9 |
|
|
| 84.7 |
|
|
| 4.7 |
|
|
| 279.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 128.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 123.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 28.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 28.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 19.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 18.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 3.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1.3 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1.7 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
| 50.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
| 48.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
�� |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 69.8 | % |
|
| 48.3 | % |
|
| 43.7 | % |
|
| 61.8 | % |
|
|
| 67.9 | % |
|
| 47.1 | % |
|
| 31.0 | % |
|
| 59.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| 1.6 | % |
|
| 1.1 | % |
|
| (6.7 | )% |
|
| 1.2 | % |
|
|
| 1.1 | % |
|
| 2.7 | % |
|
| 15.0 | % |
|
| 2.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 0.5 | % |
|
| 7.5 | % |
|
| 5.0 | % |
|
| 3.1 | % |
|
|
| 0.4 | % |
|
| 7.5 | % |
|
| 1.0 | % |
|
| 2.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
|
| - |
|
|
| (0.4 | )% |
|
| - |
|
|
| (0.2 | )% |
|
|
| - |
|
|
| 0.1 | % |
|
| - |
|
|
| - |
|
Total loss and LAE ratio |
|
|
| 71.9 | % |
|
| 56.5 | % |
|
| 42.0 | % |
|
| 65.9 | % |
|
|
| 69.4 | % |
|
| 57.4 | % |
|
| 47.0 | % |
|
| 64.8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 27.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 28.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 93.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 92.8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in policies in force |
|
|
| 1.9 | % |
|
| 2.4 | % |
|
| 61.9 | % |
|
| 4.1 | % |
|
|
| 2.8 | % |
|
| 3.3 | % |
|
| 13.3 | % |
|
| 3.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retention |
|
|
| 82.9 | % |
|
| 82.4 | % |
| N/M |
|
|
| 82.8 | % |
|
|
| 84.5 | % |
|
| 83.5 | % |
| N/M |
|
|
| 84.0 | % |
11
THE HANOVER INSURANCE GROUP |
| |||||||||||||||||||||||||||||||||
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERSONAL LINES |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months ended September 30 |
| |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2019 |
|
| 2018 |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except percentage data) |
|
| Auto |
|
| Home |
|
| Other |
|
| Total |
|
|
| Auto |
|
| Home |
|
| Other |
|
| Total |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written |
| $ |
| 895.3 |
| $ |
| 477.0 |
| $ |
| 37.9 |
| $ |
| 1,410.2 |
|
| $ |
| 847.1 |
| $ |
| 451.0 |
| $ |
| 31.3 |
| $ |
| 1,329.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
| $ |
| 858.7 |
| $ |
| 462.7 |
| $ |
| 34.1 |
| $ |
| 1,355.5 |
|
| $ |
| 802.0 |
| $ |
| 436.8 |
| $ |
| 29.6 |
| $ |
| 1,268.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 599.3 |
|
|
| 223.3 |
|
|
| 13.8 |
|
|
| 836.4 |
|
|
|
| 548.4 |
|
|
| 204.7 |
|
|
| 11.3 |
|
|
| 764.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| 13.9 |
|
|
| 2.7 |
|
|
| (0.2 | ) |
|
| 16.4 |
|
|
|
| 9.6 |
|
|
| 6.8 |
|
|
| 1.5 |
|
|
| 17.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 4.5 |
|
|
| 75.5 |
|
|
| 1.2 |
|
|
| 81.2 |
|
|
|
| 5.5 |
|
|
| 68.1 |
|
|
| 0.5 |
|
|
| 74.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
|
| (0.2 | ) |
|
| (2.2 | ) |
|
| - |
|
|
| (2.4 | ) |
|
|
| (0.4 | ) |
|
| - |
|
|
| 0.2 |
|
|
| (0.2 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
|
| 617.5 |
|
|
| 299.3 |
|
|
| 14.8 |
|
|
| 931.6 |
|
|
|
| 563.1 |
|
|
| 279.6 |
|
|
| 13.5 |
|
|
| 856.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 378.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 360.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 45.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 51.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 59.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 54.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 8.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (4.3 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (5.0 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
| 108.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| $ |
| 109.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 69.8 | % |
|
| 48.3 | % |
|
| 40.5 | % |
|
| 61.7 | % |
|
|
| 68.4 | % |
|
| 46.8 | % |
|
| 38.1 | % |
|
| 60.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses |
|
|
| 1.6 | % |
|
| 0.6 | % |
|
| (0.6 | )% |
|
| 1.2 | % |
|
|
| 1.2 | % |
|
| 1.6 | % |
|
| 5.1 | % |
|
| 1.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 0.5 | % |
|
| 16.3 | % |
|
| 3.5 | % |
|
| 6.0 | % |
|
|
| 0.6 | % |
|
| 15.6 | % |
|
| 1.7 | % |
|
| 5.8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable (favorable) catastrophe loss development |
|
|
| - |
|
|
| (0.5 | )% |
|
| - |
|
|
| (0.2 | )% |
|
|
| - |
|
|
| - |
|
|
| 0.7 | % |
|
| - |
|
Total loss and LAE ratio |
|
|
| 71.9 | % |
|
| 64.7 | % |
|
| 43.4 | % |
|
| 68.7 | % |
|
|
| 70.2 | % |
|
| 64.0 | % |
|
| 45.6 | % |
|
| 67.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 27.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 27.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 96.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 95.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in policies in force |
|
|
| 1.9 | % |
|
| 2.4 | % |
|
| 61.9 | % |
|
| 4.1 | % |
|
|
| 2.8 | % |
|
| 3.3 | % |
|
| 13.3 | % |
|
| 3.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retention |
|
|
| 83.7 | % |
|
| 82.8 | % |
| N/M |
|
|
| 83.4 | % |
|
|
| 85.2 | % |
|
| 84.1 | % |
| N/M |
|
|
| 84.6 | % | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
THE HANOVER INSURANCE GROUP |
| ||||||||||||||||||||||||||||
GAAP UNDERWRITING INFORMATION AND RELATED RATIOS |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERSONAL LINES |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Q3 |
|
| Q4 |
|
| Q1 |
|
| Q2 |
|
| Q3 |
|
| Sep-YTD |
|
| Sep-YTD |
| |||||||
(In millions, except percentage data) |
|
| 2018 |
|
| 2018 |
|
| 2019 |
|
| 2019 |
|
| 2019 |
|
| 2018 |
|
| 2019 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross premiums written |
| $ |
| 495.1 |
| $ |
| 471.8 |
| $ |
| 446.8 |
| $ |
| 522.0 |
| $ |
| 527.6 |
| $ |
| 1,403.8 |
| $ |
| 1,496.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums written |
| $ |
| 468.0 |
| $ |
| 444.7 |
| $ |
| 420.6 |
| $ |
| 493.1 |
| $ |
| 496.5 |
| $ |
| 1,329.4 |
| $ |
| 1,410.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
| $ |
| 431.3 |
| $ |
| 437.6 |
| $ |
| 442.7 |
| $ |
| 452.2 |
| $ |
| 460.6 |
| $ |
| 1,268.4 |
| $ |
| 1,355.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and LAE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 258.4 |
|
|
| 280.4 |
|
|
| 275.9 |
|
|
| 275.8 |
|
|
| 284.7 |
|
|
| 764.4 |
|
|
| 836.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable reserve development, excluding catastrophe losses |
|
|
| 8.5 |
|
|
| 15.4 |
|
|
| 7.5 |
|
|
| 3.3 |
|
|
| 5.6 |
|
|
| 17.9 |
|
|
| 16.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 12.4 |
|
|
| 5.3 |
|
|
| 29.0 |
|
|
| 38.3 |
|
|
| 13.9 |
|
|
| 74.1 |
|
|
| 81.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable catastrophe loss development |
|
|
| - |
|
|
| (2.3 | ) |
|
| - |
|
|
| (1.7 | ) |
|
| (0.7 | ) |
|
| (0.2 | ) |
|
| (2.4 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total losses and LAE |
|
|
| 279.3 |
|
|
| 298.8 |
|
|
| 312.4 |
|
|
| 315.7 |
|
|
| 303.5 |
|
|
| 856.2 |
|
|
| 931.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of deferred acquisition costs and other underwriting expenses |
|
|
| 123.2 |
|
|
| 123.5 |
|
|
| 124.6 |
|
|
| 125.6 |
|
|
| 128.3 |
|
|
| 360.9 |
|
|
| 378.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP underwriting profit |
| $ |
| 28.8 |
| $ |
| 15.3 |
| $ |
| 5.7 |
| $ |
| 10.9 |
| $ |
| 28.8 |
| $ |
| 51.3 |
| $ |
| 45.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss and LAE ratio: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year, excluding catastrophe losses |
|
|
| 59.9 | % |
|
| 64.1 | % |
|
| 62.3 | % |
|
| 61.0 | % |
|
| 61.8 | % |
|
| 60.3 | % |
|
| 61.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year unfavorable reserve development, excluding catastrophe losses |
|
|
| 2.0 | % |
|
| 3.5 | % |
|
| 1.7 | % |
|
| 0.7 | % |
|
| 1.2 | % |
|
| 1.4 | % |
|
| 1.2 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year catastrophe losses |
|
|
| 2.9 | % |
|
| 1.2 | % |
|
| 6.6 | % |
|
| 8.5 | % |
|
| 3.1 | % |
|
| 5.8 | % |
|
| 6.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior accident year favorable catastrophe loss development |
|
|
| - |
|
|
| (0.5 | )% |
|
| - |
|
|
| (0.4 | )% |
|
| (0.2 | )% |
|
| - |
|
|
| (0.2 | )% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loss and LAE ratio |
|
|
| 64.8 | % |
|
| 68.3 | % |
|
| 70.6 | % |
|
| 69.8 | % |
|
| 65.9 | % |
|
| 67.5 | % |
|
| 68.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense ratio |
|
|
| 28.0 | % |
|
| 27.7 | % |
|
| 27.6 | % |
|
| 27.2 | % |
|
| 27.4 | % |
|
| 27.9 | % |
|
| 27.4 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio |
|
|
| 92.8 | % |
|
| 96.0 | % |
|
| 98.2 | % |
|
| 97.0 | % |
|
| 93.3 | % |
|
| 95.4 | % |
|
| 96.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined ratio, excluding catastrophe losses |
|
|
| 89.9 | % |
|
| 95.3 | % |
|
| 91.6 | % |
|
| 88.9 | % |
|
| 90.4 | % |
|
| 89.6 | % |
|
| 90.3 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current accident year combined ratio, excluding catastrophe losses |
|
|
| 87.9 | % |
|
| 91.8 | % |
|
| 89.9 | % |
|
| 88.2 | % |
|
| 89.2 | % |
|
| 88.2 | % |
|
| 89.1 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13
THE HANOVER INSURANCE GROUP |
| ||||||||||||||||||||||||||||
NET INVESTMENT INCOME AND YIELDS |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Q3 |
|
| Q4 |
|
| Q1 |
|
| Q2 |
|
| Q3 |
|
| YTD |
|
| YTD |
| |||||||
(In millions, except yields) |
|
| 2018 |
|
| 2018 |
|
| 2019 |
|
| 2019 |
|
| 2019 |
|
| 2018 |
|
| 2019 |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities |
|
| $ | 55.3 |
|
| $ | 56.4 |
|
| $ | 58.0 |
|
| $ | 57.8 |
|
| $ | 58.1 |
|
| $ | 161.3 |
|
| $ | 173.9 |
|
Limited partnerships |
|
|
| 4.7 |
|
|
| 6.3 |
|
|
| 4.5 |
|
|
| 4.8 |
|
|
| 3.8 |
|
|
| 17.8 |
|
|
| 13.1 |
|
Mortgage loans |
|
|
| 3.6 |
|
|
| 3.7 |
|
|
| 3.9 |
|
|
| 4.0 |
|
|
| 4.1 |
|
|
| 10.3 |
|
|
| 12.0 |
|
Equity securities |
|
|
| 4.3 |
|
|
| 4.2 |
|
|
| 3.6 |
|
|
| 4.0 |
|
|
| 4.0 |
|
|
| 12.8 |
|
|
| 11.6 |
|
Other investments |
|
|
| 1.1 |
|
|
| 1.4 |
|
|
| 2.1 |
|
|
| 1.1 |
|
|
| 1.0 |
|
|
| 3.4 |
|
|
| 4.2 |
|
Investment expenses |
|
|
| (2.6 | ) |
|
| (2.6 | ) |
|
| (1.9 | ) |
|
| (2.1 | ) |
|
| (2.2 | ) |
|
| (7.6 | ) |
|
| (6.2 | ) |
Total |
|
| $ | 66.4 |
|
| $ | 69.4 |
|
| $ | 70.2 |
|
| $ | 69.6 |
|
| $ | 68.8 |
|
| $ | 198.0 |
|
| $ | 208.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax Yields |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed maturities |
|
|
| 3.60 | % |
|
| 3.62 | % |
|
| 3.61 | % |
|
| 3.57 | % |
|
| 3.55 | % |
|
| 3.61 | % |
|
| 3.57 | % |
Total |
|
|
| 3.68 | % |
|
| 3.71 | % |
|
| 3.65 | % |
|
| 3.67 | % |
|
| 3.57 | % |
|
| 3.76 | % |
|
| 3.62 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax yields represent annualized net investment income for the period divided by the monthly average invested assets, excluding accumulated changes in fair value for fixed maturities and equity securities. |
| ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14
| THE HANOVER INSURANCE GROUP |
| |||||||||||||||||||
| INVESTMENT PORTFOLIO |
| |||||||||||||||||||
| September 30, 2019 |
| |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (In millions) |
|
|
|
|
|
|
|
|
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Change in |
| Change in |
| ||
|
|
| Weighted |
|
|
|
|
|
|
|
|
| Net |
| Net |
| Net |
| |||
|
|
| Average | Amortized |
| Fair Value / |
| % of |
| Unrealized |
| Unrealized |
| Unrealized |
| ||||||
| Investment Type | Quality | Cost or Cost |
| Carry Value |
| Total |
| Gain |
| During Q3 |
| YTD |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fixed maturities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| U.S. Treasury and government agencies |
| AAA | $ | 350.2 |
| $ | 361.8 |
|
| 4.3 | % | $ | 11.6 |
| $ | 2.7 |
| $ | 16.4 |
|
| Foreign government |
| AA+ |
| 5.0 |
|
| 5.1 |
|
| 0.1 | % |
| 0.1 |
|
| - |
|
| - |
|
| Municipals: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Taxable |
| AA |
| 799.6 |
|
| 832.6 |
|
| 9.9 | % |
| 33.0 |
|
| 5.5 |
|
| 25.6 |
|
| Tax-exempt |
| AA |
| 48.7 |
|
| 49.7 |
|
| 0.6 | % |
| 1.0 |
|
| 0.1 |
|
| 1.6 |
|
| Corporate: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NAIC 1 |
| A |
| 1,640.4 |
|
| 1,714.0 |
|
| 20.4 | % |
| 73.6 |
|
| 15.8 |
|
| 94.8 |
|
| NAIC 2 |
| BBB |
| 1,829.1 |
|
| 1,899.8 |
|
| 22.6 | % |
| 70.7 |
|
| 17.7 |
|
| 105.6 |
|
| NAIC 3 and below |
| B+ |
| 288.9 |
|
| 298.4 |
|
| 3.6 | % |
| 9.5 |
|
| 1.2 |
|
| 19.3 |
|
| Total corporate |
| BBB+ |
| 3,758.4 |
|
| 3,912.2 |
|
| 46.6 | % |
| 153.8 |
|
| 34.7 |
|
| 219.7 |
|
| Asset-backed: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Residential mortgage-backed |
| AAA |
| 959.8 |
|
| 979.2 |
|
| 11.7 | % |
| 19.4 |
|
| 5.6 |
|
| 31.4 |
|
| Commercial mortgage-backed |
| AAA |
| 685.2 |
|
| 718.6 |
|
| 8.5 | % |
| 33.4 |
|
| 8.2 |
|
| 41.5 |
|
| Asset-backed |
| AA+ |
| 85.6 |
|
| 87.1 |
|
| 1.0 | % |
| 1.5 |
|
| 0.1 |
|
| 2.0 |
|
| Total fixed maturities |
| A+ |
| 6,692.5 |
|
| 6,946.3 |
|
| 82.7 | % |
| 253.8 |
|
| 56.9 |
|
| 338.2 |
|
| Equity securities |
|
|
| 570.8 |
|
| 570.8 |
|
| 6.8 | % |
| - |
|
| - |
|
| - |
|
| Mortgage and other loans |
|
|
| 446.7 |
|
| 446.7 |
|
| 5.3 | % |
| - |
|
| - |
|
| - |
|
| Other investments |
|
|
| 275.8 |
|
| 275.8 |
|
| 3.3 | % |
| - |
|
| - |
|
| - |
|
| Total investments |
|
|
| 7,985.8 |
|
| 8,239.6 |
|
| 98.1 | % |
| 253.8 |
|
| 56.9 |
|
| 338.2 |
|
| Cash and cash equivalents |
|
|
| 157.6 |
|
| 157.6 |
|
| 1.9 | % |
| - |
|
| - |
|
| - |
|
| Total |
|
| $ | 8,143.4 |
| $ | 8,397.2 |
|
| 100.0 | % | $ | 253.8 |
| $ | 56.9 |
| $ | 338.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15
THE HANOVER INSURANCE GROUP |
| |||||||||||||
CREDIT QUALITY AND DURATION OF FIXED MATURITIES |
| |||||||||||||
September 30, 2019 |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CREDIT QUALITY OF FIXED MATURITIES |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Rating Agency |
| Amortized |
|
| Fair |
|
| % of Total |
| |||
| NAIC Designation | Equivalent Designation |
| Cost |
|
| Value |
|
| Fair Value |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 1 | Aaa/Aa/A |
| $ | 4,549.8 |
|
| $ | 4,722.4 |
|
|
| 68.0 | % |
| 2 | Baa |
|
| 1,852.0 |
|
|
| 1,923.6 |
|
|
| 27.7 | % |
| 3 | Ba |
|
| 164.1 |
|
|
| 169.7 |
|
|
| 2.5 | % |
| 4 | B |
|
| 122.7 |
|
|
| 126.2 |
|
|
| 1.8 | % |
| 5 | Caa and lower |
|
| 2.2 |
|
|
| 2.4 |
|
|
| - |
|
| 6 | In or near default |
|
| 1.7 |
|
|
| 2.0 |
|
|
| - |
|
| Total fixed maturities |
|
| $ | 6,692.5 |
|
| $ | 6,946.3 |
|
|
| 100.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DURATION OF FIXED MATURITIES |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortized |
|
| Fair |
|
| % of Total |
| |||
|
|
|
| Cost |
|
| Value |
|
| Fair Value |
| |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 0-2 Years |
| $ | 1,434.8 |
|
| $ | 1,459.4 |
|
|
| 21.0 | % |
|
| 2-4 Years |
|
| 1,945.8 |
|
|
| 2,006.6 |
|
|
| 28.9 | % |
|
| 4-6 Years |
|
| 1,643.1 |
|
|
| 1,718.7 |
|
|
| 24.7 | % |
|
| 6-8 Years |
|
| 1,263.5 |
|
|
| 1,337.6 |
|
|
| 19.3 | % |
|
| 8-10 Years |
|
| 306.6 |
|
|
| 316.9 |
|
|
| 4.6 | % |
|
| 10+ Years |
|
| 98.7 |
|
|
| 107.1 |
|
|
| 1.5 | % |
| Total fixed maturities |
|
| $ | 6,692.5 |
|
| $ | 6,946.3 |
|
|
| 100.0 | % |
| Weighted Average Duration |
|
|
| 4.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
| THE HANOVER INSURANCE GROUP | ||||||||||
| TOP 10 CORPORATE AND MUNICIPAL FIXED MATURITY HOLDINGS | ||||||||||
| September 30, 2019 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (In millions, except percentage data) |
|
|
|
|
|
|
|
|
|
|
| Issuer | Amortized Cost |
| Fair Value |
| As a Percent of Invested Assets |
| Ratings (1) | |||
| Bank of America | $ | 26.3 |
| $ | 28.0 |
| 0.33% |
| A- | |
| US Bancorp |
| 24.7 |
|
| 26.1 |
| 0.31% |
| A | |
| PNC Bank |
| 24.1 |
|
| 25.2 |
| 0.30% |
| A | |
| Virginia Electric & Power |
| 24.0 |
|
| 24.9 |
| 0.30% |
| BBB+ | |
| Bank of New York Mellon |
| 23.6 |
|
| 24.6 |
| 0.29% |
| A | |
| Branch Bank & Trust |
| 22.3 |
|
| 23.5 |
| 0.28% |
| A- | |
| National Grid |
| 22.2 |
|
| 23.2 |
| 0.28% |
| A- | |
| AvalonBay Communities |
| 22.0 |
|
| 22.8 |
| 0.27% |
| A- | |
| MassMutual Global Funding II |
| 21.9 |
|
| 23.1 |
| 0.27% |
| AA+ | |
| National Australia Bank |
| 21.9 |
|
| 22.5 |
| 0.27% |
| AA- | |
| Top 10 Corporate and Municipal Fixed | $ | 233.0 |
| $ | 243.9 |
| 2.90% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| (1) Represents nationally recognized rating agency sources. |
|
|
|
|
|
|
|
|
|
|
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
THE HANOVER INSURANCE GROUP |
| |||||||||||||||||||||||||||||||||||
RECONCILIATION OF OPERATING INCOME TO NET INCOME |
| |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months ended September 30 |
|
| Nine Months ended September 30 |
| ||||||||||||||||||||||||||||||
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
| ||||||||||||||||||||||||
(In millions, except per share data) |
|
| $ |
| Per Share (Diluted) |
|
|
| $ |
| Per Share (Diluted) |
|
|
| $ |
| Per Share (Diluted) |
|
|
| $ |
| Per Share (Diluted) |
| ||||||||||||
OPERATING INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
Commercial Lines |
| $ |
| 74.1 |
|
|
|
|
|
| $ |
| 65.1 |
|
|
|
|
|
| $ |
| 227.1 |
|
|
|
|
|
| $ |
| 208.3 |
|
|
|
|
|
Personal Lines |
|
|
| 50.2 |
|
|
|
|
|
|
|
| 48.2 |
|
|
|
|
|
|
|
| 108.7 |
|
|
|
|
|
|
|
| 109.7 |
|
|
|
|
|
Other |
|
|
| 2.0 |
|
|
|
|
|
|
|
| (0.5 | ) |
|
|
|
|
|
|
| 7.3 |
|
|
|
|
|
|
|
| (4.6 | ) |
|
|
|
|
Total |
|
|
| 126.3 |
|
|
|
|
|
|
|
| 112.8 |
|
|
|
|
|
|
|
| 343.1 |
|
|
|
|
|
|
|
| 313.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
| (9.4 | ) |
|
|
|
|
|
|
| (11.2 | ) |
|
|
|
|
|
|
| (28.1 | ) |
|
|
|
|
|
|
| (33.9 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income before income taxes |
|
|
| 116.9 |
| $ |
| 2.91 |
|
|
|
| 101.6 |
| $ |
| 2.36 |
|
|
|
| 315.0 |
| $ |
| 7.71 |
|
|
|
| 279.5 |
| $ |
| 6.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense on operating income |
|
|
| (23.9 | ) |
|
| (0.60 | ) |
|
|
| (16.7 | ) |
|
| (0.39 | ) |
|
|
| (63.6 | ) |
|
| (1.56 | ) |
|
|
| (52.3 | ) |
|
| (1.21 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income after income taxes |
|
|
| 93.0 |
|
|
| 2.31 |
|
|
|
| 84.9 |
|
|
| 1.97 |
|
|
|
| 251.4 |
|
|
| 6.15 |
|
|
|
| 227.2 |
|
|
| 5.28 |
|
Non-operating items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gains (losses) from sales and other |
|
|
| 0.6 |
|
|
| 0.02 |
|
|
|
| (0.2 | ) |
|
| - |
|
|
|
| 1.0 |
|
|
| 0.02 |
|
|
|
| (0.1 | ) |
|
| - |
|
Net change in fair value of equity securities |
|
|
| 15.0 |
|
|
| 0.37 |
|
|
|
| 23.6 |
|
|
| 0.54 |
|
|
|
| 75.3 |
|
|
| 1.84 |
|
|
|
| 6.7 |
|
|
| 0.15 |
|
Net other-than-temporary impairment losses on investments recognized in earnings |
|
|
| (0.8 | ) |
|
| (0.02 | ) |
|
|
| (0.4 | ) |
|
| (0.01 | ) |
|
|
| (1.2 | ) |
|
| (0.03 | ) |
|
|
| (2.8 | ) |
|
| (0.07 | ) |
Other |
|
|
| (1.4 | ) |
|
| (0.03 | ) |
|
|
| (1.9 | ) |
|
| (0.04 | ) |
|
|
| (1.4 | ) |
|
| (0.03 | ) |
|
|
| (1.9 | ) |
|
| (0.04 | ) |
Income tax benefit (expense) on non-operating items |
|
|
| 4.8 |
|
|
| 0.12 |
|
|
|
| (2.0 | ) |
|
| (0.05 | ) |
|
|
| (6.3 | ) |
|
| (0.15 | ) |
|
|
| 7.8 |
|
|
| 0.18 |
|
Income from continuing operations, net of taxes |
|
|
| 111.2 |
|
|
| 2.77 |
|
|
|
| 104.0 |
|
|
| 2.41 |
|
|
|
| 318.8 |
|
|
| 7.80 |
|
|
|
| 236.9 |
|
|
| 5.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (net of taxes): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of Chaucer business |
|
|
| 6.4 |
|
|
| 0.16 |
|
|
|
| - |
|
|
| - |
|
|
|
| (2.6 | ) |
|
| (0.06 | ) |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from Chaucer business |
|
|
| 2.1 |
|
|
| 0.05 |
|
|
|
| (3.6 | ) |
|
| (0.08 | ) |
|
|
| 1.6 |
|
|
| 0.03 |
|
|
|
| 30.5 |
|
|
| 0.71 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued life businesses |
|
|
| (0.8 | ) |
|
| (0.02 | ) |
|
|
| - |
|
|
| - |
|
|
|
| (2.5 | ) |
|
| (0.06 | ) |
|
|
| - |
|
|
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME |
| $ |
| 118.9 |
| $ |
| 2.96 |
|
| $ |
| 100.4 |
| $ |
| 2.33 |
|
| $ |
| 315.3 |
| $ |
| 7.71 |
|
| $ |
| 267.4 |
| $ |
| 6.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
Non-GAAP Financial Measures |
|
The Hanover uses non-GAAP financial measures as important measures of the Company’s operating performance, which we believe provide investors with additional information regarding management’s evaluation of our results of operations and financial performance. The Company's non-GAAP measures include operating income before interest expense and taxes, total operating income after taxes, total operating income after taxes per share, total book value per share, total book value per share excluding net unrealized gains and losses related to investments, net of tax, tangible book value per share and measures of operating income and loss and combined ratios excluding catastrophe losses (catastrophe losses as discussed here and in all other measures include catastrophe loss development) and reserve development. After-tax operating income EPS (sometimes referred to as “after-tax operating income per share”) is a non-GAAP measure. It is defined as net income (loss) excluding the after-tax impact of net realized and unrealized investment gains (losses), as well as results from discontinued operations for a period divided by the average number of diluted shares of common stock. |
|
Operating income before interest expense and taxes is net income, excluding interest expense on debt, income taxes and net realized and unrealized investment gains and losses, which includes changes in the fair value of equity securities still held because fluctuations in these gains and losses are determined by interest rates, financial markets and the timing of sales. Operating income before interest expense and taxes also excludes net gains and losses on disposals of businesses, discontinued operations, restructuring costs, the cumulative effect of accounting changes and certain other items. Operating income before interest expense and taxes is the sum of the operating income from: Commercial Lines, Personal Lines, and Other. The Hanover believes that measures of operating income before interest expense and taxes provide investors with a valuable measure of the performance of the Company’s ongoing businesses because they highlight net income attributable to the core operations of the business. |
|
Book value per share is total shareholders’ equity divided by the number of common shares outstanding. Book value per share excluding net unrealized gains and losses related to fixed maturity investments, net of tax is total shareholders’ equity excluding the after-tax effect of unrealized investment gains and losses on fixed maturities divided by the number of common shares outstanding. Tangible book value per share is total shareholders' equity, excluding goodwill and intangible assets, divided by the number of common shares outstanding. |
|
The Hanover also provides measures of operating income and loss ratios that exclude the effects of catastrophe losses. A catastrophe is a severe loss, resulting from natural or manmade events, including risks such as fire, hurricane, earthquake, windstorm, explosion, terrorism or other similar events. Each catastrophe has unique characteristics. Catastrophes are not predictable as to timing or loss amount in advance. The Hanover believes that providing certain financial metrics and trends excluding the effects of catastrophes is meaningful for investors to understand the variability of periodic earnings and loss ratios. |
|
Prior year reserve development, which can be favorable or unfavorable, represents changes in our estimate of the costs to pay claims from prior years. We believe that a discussion of operating income excluding prior year reserve development is helpful to investors since it provides insight into both our estimate of current year accident results and changes to prior-year reserve estimates. |
|
Operating income before and after interest expense and taxes and measures of operating income that exclude the effects of catastrophe losses or reserve development should not be construed as substitutes for net income determined in accordance with GAAP. A reconciliation of income from continuing operations to operating income before interest expense and taxes and income from continuing operations per share to operating income after taxes per share for the three and nine months ended September 30, 2019 and 2018 is set forth on page 18 of this document. The presentation of loss ratios calculated excluding the effects of reserve development and/or catastrophe losses should not be construed as a substitute for loss ratios determined in accordance with GAAP. |
|
19
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|
|
CORPORATE OFFICES AND |
|
|
| INDUSTRY RATINGS AS OF October 30, 2019 |
|
| TRANSFER AGENT | |||||||||||
PRINCIPAL SUBSIDIARIES |
|
|
|
|
|
|
|
|
|
| ||||||||
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|
|
| ||||||||
THE HANOVER INSURANCE GROUP, INC. |
|
|
|
| A.M. | Standard |
|
|
| Computershare Investor Services | ||||||||
440 Lincoln Street |
|
|
| Financial Strength Ratings | Best | & Poor's | Moody's |
|
| PO Box 505000 | ||||||||
Worcester, MA 01653 |
|
|
| The Hanover Insurance |
|
|
|
|
| Louisville, KY 40233-5000 | ||||||||
|
|
|
| Company | A | A | A2 |
|
| 1-800-317-4454 | ||||||||
The Hanover Insurance Company |
|
|
| Citizens Insurance Company |
|
|
|
|
|
| ||||||||
440 Lincoln Street |
|
|
| of America | A | A | - |
|
|
| ||||||||
Worcester, MA 01653 |
|
|
|
|
|
|
|
|
|
| ||||||||
|
|
|
|
|
|
|
|
|
| COMMON STOCK | ||||||||
Citizens Insurance Company of America |
|
|
|
| A.M. | Standard |
|
|
|
| ||||||||
808 North Highlander Way |
|
|
| Debt Ratings | Best | & Poor's | Moody's |
|
| Common stock of The Hanover Insurance Group is traded | ||||||||
Howell, MI 48843 |
|
|
| The Hanover Insurance Group, Inc. |
|
|
|
| on the New York Stock Exchange under the symbol "THG". | |||||||||
|
|
|
| Senior Debt | bbb | BBB | Baa2 |
|
|
| ||||||||
|
|
|
| Subordinated Debentures | bb+ | BB+ | Baa3 |
|
|
| ||||||||
MARKET AND DIVIDEND INFORMATION |
|
|
|
|
|
|
|
|
| INQUIRIES | ||||||||
|
|
|
|
|
|
|
|
|
|
| ||||||||
The following tables set forth the high and low closing |
|
|
|
|
|
|
|
|
| Oksana Lukasheva | ||||||||
sales prices of our common stock and cash dividends |
|
|
|
|
|
|
|
|
| Vice President | ||||||||
for the periods indicated: |
|
|
|
|
|
|
|
|
| Investor Relations and Financial Planning | ||||||||
|
|
|
|
|
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|
|
|
|
|
|
| (508) 855-2063 |
Quarter Ended | 2019 |
|
|
|
|
|
|
|
|
| olukasheva@hanover.com | |||||||
| Price Range |
| Dividends |
|
|
|
|
|
|
|
|
|
| |||||
| High |
| Low |
| Per Share |
|
|
|
|
|
|
|
|
|
| |||
March 31 | $ | 120.17 |
| $ | 108.54 |
| $ | 0.600 |
|
|
|
|
|
|
|
|
|
|
June 30 | $ | 128.90 |
| $ | 114.11 |
| $ | 0.600 |
|
|
|
|
|
|
|
|
|
|
September 30 | $ | 135.71 |
| $ | 127.20 |
| $ | 0.600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended | 2018 |
|
|
|
|
|
|
|
|
|
| |||||||
| Price Range |
| Dividends |
|
|
|
|
|
|
|
|
|
| |||||
| High |
| Low |
| Per Share |
|
|
|
|
|
|
|
|
|
| |||
March 31 | $ | 120.84 |
| $ | 106.61 |
| $ | 0.540 |
|
|
|
|
|
|
|
|
|
|
June 30 | $ | 123.22 |
| $ | 112.61 |
| $ | 0.540 |
|
|
|
|
|
|
|
|
|
|
September 30 | $ | 130.49 |
| $ | 115.28 |
| $ | 0.540 |
|
|
|
|
|
|
|
|
|
|
December 31 | $ | 120.25 |
| $ | 105.29 |
| $ | 0.600 |
|
|
|
|
|
|
|
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20