THG - Earnings call transcript Q3 2024 | The Hanover Insurance Group, Inc.

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Operator

Good day, and welcome to The Hanover Insurance Group's Third Quarter Earnings Conference Call. My name is MJ, and I will be your operator for today's call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Oksana Lukasheva. Please go ahead.

Oksana Lukasheva

operator. you, Thank thank conference and joining for us Good you quarterly call. our morning, for

begin prepared President Specialty Jeff We Roche, call remarks President answer today's will with of our after Markets; and Financial Available prepared Executive and your Chief Salvatore, questions our Dick remarks Chief Officer; Agency our Lines. and Lavey, Farber, are Officer. to of President Jack from Bryan

to and Before press Jack, complete the I over let earnings today's supplement session. call that of our for in release, note presentation After website financial available at answer will the the a questions we section me slide Q&A our are www.hanover.com. turn call presentation, in the Investors

of the as respect weather Private guidance include impacts forward-looking under and economic to, historical as risks from as related defined Our the can such Litigation These our Securities recessionary the to to in statements in outlook press anticipated. deck fact, respect, and well section for social inflation, materially questions our remarks affect prepared you cause actual severe performance responses release, on statements presentation uncertainties and to results forward-looking differ could catastrophes the and Act other our those other caution refer you We the potential to things, SEC. as and with reliance relate your effects, statements company's and with that and/or XXXX, of this filings statements, Forward-looking Statements and Reform among including XXXX. economic and than today, conditions other

year ratio, as of slide a the catastrophes, website, such historical be financial the as posted among mentioned also in measure financial closest others. will on earlier. the or on the financial supplement, operating press our loss to these are I release, basis presentation income measures which found GAAP can non-GAAP non-GAAP discussion reconciliation Today's accident excluding and A certain combined and measures reference

turn the Jack. will I comments, call to those With over

John "Jack" C. Roche

Oksana. the you, improvements are Good in thank morning, The execution you results us. we and past quarter, in you for by including third of significant organization. everyone, and result months, initiatives outstanding joining enhanced exceptional profitability the our discussing Thank driven the insurance-to-value significant direct delivered targeted for quarter We the delivered condition we have across XX with adjustments, underwriting pricing, been and third the actions. changes terms strategic

and Helene tragic we the Before get of the communities destruction. by loss to caused the into recent in Southeast the and life I people Milton acknowledge of and Hurricanes quarter, Mid-Atlantic. the details want Florida, tremendous hurricanes the affected and

While only and a much small business portion to providing support. our with assistance is regions, written those committed are claims insureds of our in we needed

working the as and experienced clock Our as committed around is possible. that to processed efficiently quickly are claims team ensure

diluted our operating results. to XX.X%. turning per Now $X.XX income yielding We an of on share, operating return generated of equity

despite ratio validating in initiatives. combined by results ex-CAT strong quarter, resulting liability Commercial outstanding Lines, prudent in performance to delivered of points X.X We compared year's substantial in loss improved underwriting and industry margin recapture the Personal selections from Specialty Our improvements impact Core trends. our last further

agility inflation CAT improving prior favorable trends. in and positioned the advancements our our major mitigation year notable healthy, to believe we plans, we remain make by across recapture our all evidenced enabling resilience strong demonstrating navigate and our are segments, As X reserves of and to our and social margin profitability continue And and development well we trends.

Personal a Lines. I'll discuss level, high our with segment Next, starting performance at

with pleased making the in are the both on this We lines. progress we're business top bottom very and

rate actions both a increases. we both of and basis. of on now on a Auto and target at and underwriting auto Home significant basis. result as Excluding is we at price is earned the made written returns catastrophe in losses, taken year-over-year have target improvements home a benefits written

Personal very the of areas policies Midwest. force year-over-year Lines policies certain force entirely balance with of our by our Pricing in written continues Lines the net in geographic pricing, continued efforts The X.X% quarter, we PIF in to reductions, of rest exposures Despite decline Personal reflects Personal and premium driven declining over our in robust XX% footprint. carefully be premium in the generated growth and still in growth X.X% sequentially in to approximately in the generated team Our of as states Lines. expected. Midwest

we see on profiles. are accelerating rapidly geographic attractive growth and states we to continue focused improving profitability As in margins, with

more into fourth into storms quarter mitigate the Lines We are benefit now lean portfolio new for expect continuing some we time, year. to The than Personal or the our enhanced half trend the this the At risk convective new in evident our under actions exposures, has the these wake of gradually catastrophe with been of of states deductibles. Midwest in of overall same we as more this continue growth. business to

not franchise. protection but our improved deductibles sharing car on leading helping these have our Our needs replacements more we our counteract meeting roofing for we continue to Personal Also, aggressive will via in on more as policyholders product classic of of terms critical a higher marketing discriminating market. competitive maintain Lines, broaden roof a additional adding capabilities in full storm and partnership to cosmetic This when car tactics. claims, customers evolving the be account the edge collector company have conditions with is be only the and encouraging cost benefit damage

Core to Commercial. Turning

in solid our growth improvement market. and financial Commercial underscores Small performance Our strategy prudent actions in margin effective middle

capitalizing to growth thoughtfully Core be opportunities. while our positioning are Commercial attractive on even portfolio more resilient We

reaching execution our potential about our ongoing full business. this and We pleased the in with very prospects excited are of

momentum were the property guided, and same gaining and on have we business finish premiums time, we new desire to the are middle-market quarter in journey as business. the with the As cautiously in lines. the we lower profitability At with liability we proceed keep retaining improvement third up

fourth growth in steady see ahead. We market moving to expect are quarter will generate we confident in and the improvement starting middle

Commercial X%. growth Small attractive we the our and solid our market in quarter, In of leveraged portfolio approximately position business, product delivering

Small to optimistic be Commercial about our reason every have We prospects.

meaningfully increased growth the made and business we've our effectiveness expanding Sales TAP as sales of distribution platform in submissions reach. investments new force Our reflect as our and well the

of excited are workers' in Sales TAP opportunities. the about particularly which further We our integration compensation enhance will next believe year, we

to Small dedicated profitability, focused ourselves especially and digital advanced Our same and competing in the expertise, strong marketplace given excelling abuse. set continue tools Commercial relative product inflation underwriting and litigation industry the to day offerings. as team capabilities, are on with is we our to intensely every apart At we time, social the environment

and trends pleased price led refining lines appetite in Since continued by average in losses, the monitoring with that more in exposure Core that to are premises in increase low urban been focused pricing. Since We accordingly. on liability Commercial high-risk policies. slip in time, industry fall areas underwriting our have and loss liability and we liability are prone auto centers. umbrella changes we've limits maintaining sectors major our reduced Years we this ago, particularly and such XXXX, as quarter, discontinued stand-alone

today's This measured date in liability equipped result, to compared market our navigate challenges has the been more has foresight to effectively. growth a to industry. us lines As

evident business most, and We portfolio more in limits believe third profile mix, resilient our to and results. industries than our now thanks which the geographies our is quarter is covered,

discipline future. and to us underwriting the positions commitment excellence well Our for

Moving on.

an achieve and line in talent exceptional consistently technology profitability accelerated in excel continued year-to-date, in innovative to investments business insurance sustainable Our Specialty robust skilled this bottom We've delivering the area, market. to and increasingly and results third margins. quarter our adding digital

to platform issue technology are In E&S, strengthened have quote new enhance times Marine, In response operating of field introduced to agents investing team talent and connected customers we enhanced example, surety, in for ensuring and new and In our and use. improve we and market additional have ease and to visibility seize new further are with policy opportunities. underwriting, we to deploying processes a efficiencies. our business and strong and stay an

ability moderated confident in are strong growth rebound quarter, we a very Specialty Although in X.X% to to our the growth.

surety upper the lines, programs, premium in develop our to Specialty led ongoing improvement have top line and continue same or most profitable performance. initiatives and the our segments, At to and liability. impacted higher-than-expected time, our management profitability specific attrition overall in particularly We growth in quarter prior including double-digit E&S, have single

the X.X% programs quarter and and in fourth the and quarters. business, year-to-date. full in growth areas. single-digit in high grew the believe Specialty quarter expect Excluding the of opportunities X.X% our We remains And growth subsequent robust we targeted attractive market Specialty

facilitated top-tier significant in various and business growth portfolio, enthusiastic E&S Marine, sector business carrier. position our In a and the growing as new We we new about across our both geographically are go-to our while platform. by expanding reinforcing enhancing classes, are maintaining

in market. discipline to while show growth the surety steady underwriting continue maintaining in We current

we Conversely, professional increased of in exercised prudence. the in required subsectors particularly witness market, where markets the we competition, lines

business positioned see with have great are wealth growth well of making Our investments confidence in in trajectory. competitively we the is business a We attractive as opportunities. Specialty numerous new as prospects growth its in and

solid providing team's healthy third environment. evidence the first the have of of profound to in alongside drive market our efforts effectiveness built we results The confidence strong a to instill on ability continue momentum future from our Overall, our our profitability. quarter year. half of navigate our as dynamic growth

that deliver strong, to high-quality strong for to and in our growth partners are market insurance sustainable, expertise, environment and innovative, solutions possess we demands diligence continue qualities in and generate We to provide to customers a results determined profitable abundance.

execution reinforces our unwavering trajectory. the my conviction confidence and in team date Our to future in my Hanover's

over that, call I'll turn With to the Jeff.

Jeffrey Farber

I'm very pricing and improvements Core These strong quarters. recent of significant disciplined in execution. strong third Lines our underwriting, and Thank sustained gained good seen Specialty with momentum Commercial and which we've morning, Personal you, our our In both in segments. has performance, are in result achievements Jack, margins prudent everyone. the and the pleased notable quarter,

Losses X.X not impacting from Beryl quarter Personal development its the offset approximately and along Catastrophe year with XX.X%, also of in points third X.X from our markets. Midwest a was points the and in These Lines Gulf by losses opting has impact Hurricane from which strategically Hurricane combined were the in catastrophe Helene ratio catastrophes. For included million, favorable the a the $XX Hanover Coast limited in quarter, The events included to Commercial exposure Georgia in and Florida over-participate losses primarily wind Carolinas. few Carolinas, the losses. Core prior lesser all-in were weather of in partially Southeast.

exposure Florida at not in Milton Hurricane our losses writing Personal Due to minimal. be expect October all, from in to we wind, including Lines Florida low to

combined XX.X%, original the stands and well as our one year ex-CAT our catastrophes, of of ratio the combined our for of range quarter. surpassing in points XX%. quarter over Year-to-date, third Excluding ratio improvement an several performances at X.X best best XX% years and XX.X%, the our was prior to year guidance

by favorable widespread favorability points, was quarter the in X.X highlighted development lines. year Prior in property by

While an in to our loss are experience within our loss trends we largely what loss picks expectations, to uncertain against trend and environment. remains liability continue in prudence exercise volatility guard

detail. more umbrella losses in among surety. is in favorability levels. policies segment Specialty X.X within was pressure, multiple Core and at manageable in in well favorability executive but spread experiencing favorable of X.X favorable lower-than-anticipated results Looking each and our points professional Commercial it with from development major was line. points. by Commercial favorable claims-made remains benefited some lines The Core

pricing filing Consequently, plan Lines third for continuing overall, in rates in quarter was the elevated development QX, the trend the achieve umbrella. Personal months. the we have are some in increases year. and in quarter next to additional pricing increased XX% immaterial range with Accordingly, from coming in we we

ratio X.X compensation variable compensation last lower and this quarter, in higher This points the agency consolidated increase last due to of than the especially level the quarter Our year. same third of when quarter higher to of was employee XX% expense is year. compared

ongoing the technology, our investments ratio segment. expense talent particularly increase Additionally, reflects Specialty in in and

and our is our confident we year. below expectations. we our at XX coming expense choices long-term goal the When improving well combined to basis are in the of We made, the points in ratio per look we ratio committed by investment original picture, remain bigger

excluding collision of see ex-CAT quarter segment prior year improvement, to combined with the meaningful points turning Personal our ratio in Lines. loss ratio, Personal posted ratio. by driven from of by exceptional down Now continues a X.X loss to reporting accident business current quarter, results, XX.X%, profitability, This another rebound an an year delivering catastrophes, a Lines last loss starting an the The auto majority somewhat result improvement favorably experience. by The year, picks auto X.X quarter. lower-than-expected impacted the higher quarter developed year of the increases prior points in the earning in to XX.X%, from extent, of comparison third loss however, of and, was of lesser is improvement, very in price QX. substantial the which

normalized, should improvement. Collision severity which has further margin drive

frequency technology cars claims. to behavior, to be of on losses, which discerning factors Additionally, being might and prevention file including we the attributable of whether crash lower-than-expected impact customer like multiple continue more experience to changing small in

Although a higher below continues severity and be bodily involving injury frequency in to driving, well deadly bicycles levels, riskier to resulting motorcycles. crashes pre-COVID and pedestrians, behaviors driving elevated proportion remains due distracted of

While not continue personal vigilantly attributing to we severity to are social BI trends. these we inflation, auto monitor

home Personal segment. to of other our and components the Turning Lines

by Lines helping loss Our ex-CAT other expect frequency current home is by line the actions. loss the X.X continue. Lower property on underwriting reach earned mid-XXXX. We returns basis to from and This ratio our will accident is target Personal prior XX.X% and results. a year our benefit we attritional anticipate and year of large an trend primarily driven points quarter, improved of rate by

line by is remain pricing and across many in nice top XXXX. healthy retention Lines was exiting the acceleration but to growth further strong states. Pricing X.X% quarter, showing Personal improving driven moderate sequential expected

As remain return we a profitability an on Lines on next result, year Personal earned in track to overall. basis target to

Moving ratio, property losses. catastrophes, expectations points excluding quarter, combined X excluding relatively in year a Commercial Core Commercial lines. current X.X prior point year above large We quarter. with accident the line up the delivered XX.X%, ratio, year XX.X%, lower-than-expected from prior on to loss was which reflected catastrophes, but Core of

in position in trends. favorable This in we current Commercial. the the Property for picks increases line. in margins At effectively ratio in to the setting loss time, remained and Core our in commercial an loss ourselves resulted increase liability same higher are line multi-peril loss year each other

GL nearly X are year-over-year In have overall terms umbrella rates of increased directionally. pricing, to up while we point up continuing to pricing and XX.X%, move

earned similar being normal in workers' assumption to premium our demonstrating At our lower by actions in time, loss driven X.X% the line as observed picking long-term Core new rate. a business. compensation and Lines. based by top in ratio higher loss Commercial collision Personal is quarter, property due to frequency a growth slowed the ratio commercial improvement favorability trend market on driven are flat We loss same the well and reduction middle relatively auto

Specialty segment, at strong accident Specialty loss as excluding to combined catastrophes, X.X XX.X% compared period, the the higher ratio expenses, prior loss business excluding across and catastrophes, our noted In for year the the by before. to ratio, increased results year points expectation. The the on driven in favorable XX% current ratio, to quarter XXs came low

especially Property Property expectations, large in again loss Specialty was Marine, segments. our experience E&S Hanover and below Industrial

the premiums We are X.X% compared in growth quarter selections. in the prudent noted, snap maintaining inflationary net current back our written second But fourth monitoring we and quarter. select year expect approach liability Jack loss X.X% a lines indicators grew the with Specialty of accident pace as in in the for quarter. to

Moving to investment on our performance.

earned Income income underperformance the portfolio, was propelled partnerships handful credit private offset on partnership lower year-over-year yields income. by investment X% from million, our real in subdued quarter limited estate to by partially higher by quarter, a net driven income $XX.X Third of increased in funds. and fixed

net third investment partnerships, as approximately of in the income Excluding compared quarter the year up XX% ago was quarter. to XXXX

We've also within our benefited repositioning portfolio. from

from capacity lower-yielding positioned. in environment, consideration third rate in are credit forward, the spreads we divested short-term QX, of we going expiring backdrop expectation of fixed lower tax a interest the in XXXX. quarter, portion our shifting of income tight believe rates and carryback a securities well of As we relatively Against

are money In expiring in and environment, X.X-year gap interest forward. increasing current yields. we basis investment the about new point income seeing still result between XXX rate duration net Our should going

unrealized drove Looking combination equity from position. and of the in QX change XX.X% capital The value up earnings in and at losses share our quarter book per $XX.XX. to

payments increasing pursue was a refrained We we've season. to investors returned shares the buybacks allocation our capital continue regular We from timing wind through right. during to dividend strategy. share when capital Historically, the thoughtful strategic consistently and repurchasing

Our hasn't core changed. approach

to tools value. capital and We create share and allocation continue for shareholder dividends as both see key to further repurchases managing

we X guidance XX.X% update the development, year, ex-CAT which as in ratio incentive more to than ratio slight guidance. for on is accident which combined better-than-expected a compared by XX.X% driven the year. which favorable full to on expense expect Moving is guided. we offset miss guidance. temporary to We feel our ratio are left our year we It an items current as at such or in on the the beat as improvement the in on track original we the expect near our With to ratio related expense quarter year, helping now normalize following to ex-CAT to compensation, largely well be to year to combined

we of we realign range long-term which should to to premium goals. expect guidance ex-CAT a XX% Accordingly, quarter XX% are the expense expecting expense the anticipate growth early basis, a in be established XX.X% be combined in consolidated that XXXX our XXXX, us ratio written with to ratio our X%. On to ratio guide importantly, Most in below year. net we than we to greater fourth the

minimal the our planned from expected guide unchanged CAT at QX Hurricane Given load for impact remains X.X%. Milton,

with pleased To momentum. increasing results are growth QX conclude, we our extremely earnings and

reflects successful strategies past the we've years. over been key implementation the executing X of Our performance

growth We and will superior on continue to focus our returns shareholders. long-term creating for

over are couple stated next We our long-term years. our the of about achieve return optimistic ability objectives to

Operator? be your With that, we'll questions. happy to take

Operator

Citizens [Operator comes first JMP. from Today's Carletti question Matt with Instructions]

Matthew Carletti

on a it a the your in you bit had Jack, about Personal opening couple spoke comments. questions just of I segment. Lines

PIF quarters? growth progression can written view a of an basis. little I'm I at we're you give next of and With margins are you the auto that home to at it feels that say think both a an Or of the Maybe heard that returning over how several mind, inflection in point. us kind like on target you I kind getting wrong. bit of idea kind of

John "Jack" C. Roche

definitely where moving with of our are we forward hitting threshold We particularly returns. target the those states additional in well are offense, past

speak let a excited able the we've our about continue margins I'll I So diversification. would line are back our been think bit way and Matt, how But get quickly about we in it, enhance Dick you that. to is simultaneously to to have little to

have move do because going are we more to of offense, to we've Michigan so new that diversification. and, but more Midwest states that production several balance in already try we So business in accelerate towards to And and continue to on ratios a diligent process started to to in back continue moving offense retention and particular, nicely. good be get the our of particularly that profitability come our

So Dick, maybe build on that.

Richard Lavey

a things and said, portfolio we more back the geographic our just I'll of Jack Yes, you of diversification. making but about improving target simultaneously while progress PL returns echo give couple we're this very to feel specifics, strategic some against good objective bringing have I'll

that So towards we're well the on way created. this we've blueprint

As contribute they CAT profile. our segment profitability you'd how on XX based to expect, and states, them we our

already has PIF turned more states earned we feel aggressively. on where the positive engine and where -- So have can be we been handful of a business has new

into But of end as at end look by the PIF the then some year of can or you when states, all PIF -- growth expect XXXX to really a XX and see throughout the very moderate year. you at we full enterprise, quarter modest positive and the next shrinkage

their and So be our of execution. prouder just couldn't team

I'd -- with plans onboard with agent Hanover, that have. here to and think we action collaborate our the get of like them it's say we our partners how super at we one I it's just have powers

Matthew Carletti

And with other, helpful. sticking could, one I Personal very Lines. That's Great. then if

those of of want that. versus will, and but more quarter were feels like rate, coming weather, view peak And some close of it it's spring. of event quarter been changes think SCS kind second a exposure, XXXX And it of actions, kind were to us of thinking non-rate at have quarter, 'XX that you get spring magnitude, order same if the kind the of not look end guys and like 'XX, of changes improvement be to spring through we would very second like if saw And of we'll think quarter give second the CAT or game or the I the you kind things different that portfolio. kind you get middle once as that's deductibles how working you kind end, in those to obviously happen, by if it. the however all this kind to about Can event of you undergoing, ex whether of innings through -- the we when we your the possible, maybe I'm just book? you second

John "Jack" C. Roche

-- of convective have Yes, have of the Matt, next Midwest, been Listen, is particularly are Jack by through we changes, the in again. we this in storms our you're meaningful will that renewal deductible been the severe right where year, April which prevalent. cycle most

So true. that is

deductibles be we've this will the that that include then that had, full a period. improved and all manufactured place value -- in we that some deductibles only PIF and region hail at portfolio with at that wind pricing but we've deductibles to with not We shrinkage achieved, peril X,XXX wind X.X% deductibles and X% during insurance our dramatically enhancements the

ask storms But say we goal. It come much frustrate overall be And the at conditions. really that Modeling we can all aggregation think, you us it The terms the you. how look I that it of about ourselves are we our be benefit meaningful. and management is in are be XXXX. pricing think we try models, that significant in fair to and will only way property across new to from to going thinking getting the will achieve any and will and I thing meaningful. simulated it previous is combination those we it the doesn't, know So I or storms run

Operator

Zaremski The next with Mike comes from BMO. question

Michael Zaremski

-- in about commentary most Core when being had bit hear Core was on of setting ratio worse, the said year commentary Commercial. believe think liability we question that expected. being the you your that How you but we of a picks just First some was because cited underlying better also it your was about exceptionally about loss higher. do last than Commercial I

So I math do implied XQ guide, could I think probably your on some too.

trying we bit on liability higher should get -- underlying to at order of the expect given to I'm are a environment? conservatism So a in you embed

Jeffrey Farber

super third those So both unusually expectations. quarter, a the The on ago had low on the was and of the in both XX.X% quarter were to we low large for of those was loss in those right those sequential due ratio losses. XXXX compares Mike, higher year-to-date. loss And ratio X.X quarter, points in losses And it XX.X% for lower And that mentioned our -- the quarters. but XX.X% of year XX.X% are we quarter. to X.X large and

a liability relatively picks trends. loss the was for So the amount small

we deck, bottom that in being an X issue the benefit, that is I lot of participate, think good is to of advantaged core But in we we'll at loss think back level versus points improve for as trends, earnings look price be corner liability our year XX-plus right relatively to dramatic. Page on a you'll XX% balance overall, a picks. feel speaking, XXXX. is because if right the overall And That believe which why change really we our information little frequency trend. renewal lot the may you provided which feel about about I lower for XX% we're we generally of getting loss we're seeing awful see our the next we which bit industries of frequency sheet, biggest

Michael Zaremski

Interesting.

bit Can their should GL kind reserve the of with Then of be about the sticking Okay. commercial takes We you umbrella puts and just lines, a thinking maybe commercial, again. has releases? But of Most about? see puts not industry talk takes redundant still Personal any liability any some was on been lines. Lines. we adding to auto and overall

Jeffrey Farber

Nothing really major.

As was major million in with we was X all minimal X.X PL favorability said, lines. favorable. CL

had So million Specialty all in are about lines. have we've areas, shorter-type big was And and of largely dramatic variety They were covering didn't overcome up the policies. as liability lines, helping the comp with workers' issue our executive benefit other those XX on the severity. frequency made to professional then contributor us favorable tail claims you a with

Michael Zaremski

Got it.

since is for pointed And thanks out an slide, you Slide X, that. interesting which adding Okay.

I think and you here. added updated KBW it that at

than we that less can So guess, I liability little -- points others. to see less a your mix

size is like also it up going is you classes. a contractors contractors these any way too, while to for I frequency there's show what other frequency the higher of looks if underweight materially say down -- on up don't on Would contractors. you're frequency Or most a materially, source You being industry continued know on, that classes? only? But anything industry severity, also even industry is in of contractors?

John "Jack" C. Roche

Yes.

think, it of the a the as are we exactly folks. We're last seeing right? particularly the contracting this few think on I to you're trends specifically composition But about similar frequency Mike, let as took well right, in the I'm Jack. severity. actions So percentages. is other lot We share that the I book of as industry. us our to going advantaging years, Dick Core Commercial, including thinking the same comment on our severity profile But in

can I then continues we noncontracting you of construction And the shows that is kind what for took, business showing the but predominantly that improvement classes actions on think, that chart build upon based the the of are Dick business that coming frequency in X like major of levels, we're not the fulsome the it's seeing just reasons, because down since contractors pandemic. And business. most sectors through inventory pretty a, work activity is of the the other of is claims the

So Dick...

Richard Lavey

Yes, little commentary. just a color

environment construction contractors you're then defect equally how low of which tightly very managing construction portfolio, this types important when industry, legal teens environment, and fairly modest really portfolio important the a thinking about over about the built write, the state is subsectors, have of been we portion super our the really mix. percentage, it been is and about thoughtful and years. about state core the So mix, to you talking represents also we thoughtful that CL Today, which our in

of all in about that. And this thoughtful -- of premium we Risk segment. of and those we're role audit very Solutions well. been a course, have And just So critical do both exceptionally play then,

John "Jack" C. Roche

axis others probably chart. of as or you vertical little that axis wanted Matt, no that to Y information. on noticed, we bit have, share have And a I

to think said in to bigger our So industry, declines digits others XXXX have would while industries frequency XX% portfolio relative the the some the relatively are XXXX single frequency contractors portfolios, small, to is since XX% of contractors the of through where XX% XX% in range. other up Dick

we frequency So in when have decline. you substantial think pretty a about all total, that together,

Michael Zaremski

maybe sneak Got one on it. just in That's helpful. the last I'll environment. overall competitive And one just

there's some of So that and your some and surveys a reported, as kind like pricing of number But mix decelerating show a been a bit. peers, conflicting -- also companies little of has mix sequentially there's little different But has a it different kind have of pricing bit. little well. accelerating everyone looks -- geographic industry

Or driving a pushing more And -- Hanover little if environment, industry, is you're rate? would so through Commercial what, do increase from you from you're the just specific? you And that? competitive a think, is seeing more what's seeing, they Core are, the curious say on the what bit

John "Jack" C. Roche

Yes.

you is think things a we the are appropriate a there is tell we're environment the this I -- in, there lower you're the a the to which view. would seeing. account but and middle is improving that in property sectoral the view of as seeing And a pricing Mike, in liability business market bit I an as sectors but that across given the an pricing, size area observing, -- of are that of we increase small flattening play

that. reading when lot more you're there's into you And think I get pressure. the larger accounts, about So a

that. seeing And clearly overall. pricing that the marketplace. variances Specialty, want within still Bryan, even we're generating portfolio represent But think that to You're few within we that can and you the I on double-digit Specialty to differences competitive within words that? businesses do a a say X speak Bryan have

Bryan Salvatore

sure. Yes,

profitable. very, years. it think our number So professional some environments, to good we That been the your that pretty you a highly of getting in said, is marketplace. point, business about for of have lines very on rate It's if competitive,

yes, competitive see increased we're right, accomplishing adjusting, for areas, to the rate, that In thoughtfully that continuing so in to rate. And we're other need be space.

about think in example. I E&S the for environment, that

navigate -- there. balance And mix real that there it's mix. mix in our marketplaces. We So we is that a different

Operator

The Oppenheimer. next comes Phillips with Michael from question

Michael Phillips

back of Jeff, go the one on your to questions. core answer commercial. want the I earlier to

You you of could said of XX%. of XXXX price right. one feels But about in parse about could levels or -- strong XX XX, in bit wondering how that both liability. Maybe property I you in north around Can I'm are that improve given the you a talked that possible versus and pricing and out? much be liability. other, the kind property XXXX improvement guess

Jeffrey Farber

what's liability. heavier overall, has happening property. in was couple than the has So strong trend pricing Core of the been been stronger is, last years, for property and loss

of begin cost the little seeing to et materials, we're Now cetera, building, bit. slow a

the across that about view increasing in it so we're or So liability increase. around the slow. believe will price the along our need writer, think for and our And we're property total and we account core profit pricing way. portfolio, will on And maintaining we an

John "Jack" C. Roche

that this, catbird the remind on as value Yes. And seat that good in have that good ours really for nominal us study and the such as I in the the allows that competitive you in to businesses. have be of can really companies a have are Mike, And start equation job that a to we really pricing you, place more would good to part done increases. insurance that

still they told up, are the to were have lot catch the their worse. challenges get Some a reinsurance of or up on and competitors, of companies insurance that value catching regional to

do to kind of they're So going to good we'll those situation the carefully particularly And that where reserve market in but the exactly that for in I perform like continuing of really to is watching Liability, a us we're are property figure out a combination going improving. trends for the in puts that severe they -- continue well. that needed think that how I to be what liability and on loss do didn't side.

Michael Phillips

Okay.

that assume If so, kind to comments next if said growth quarter, Okay. quarters. improve your Core there. to underwriting the premium you of the you've that's kind I the taken case. said CMP because at And of you middle and we make look in you about market then sure that's down Commercial, actions of the I expect this want and over few

to in that improve we quarter from what see could this -- of maybe X.X also specific sort CMP So at that was and and here?

Richard Lavey

Dick. There's earlier it a exactly side, that growth the as But a be kind back This way basis. suggested, will bit Yes. the middle little you that's into prepared on right. remarks make And to -- year. expect, Yes, next of can new mid-single-digit the can quarter-to-quarter we on that is actions market of in some line its lumpiness see about there we've then business taken.

Michael Phillips

stuff you've homeowners is well, you and Good. Okay. about XXXX. personal, there on more you're about that it along Core your and lastly, maybe talked And A coming improve could level. Commercial that And your earned an even in next talking is just improved said been for high it's you lot just quite of then and basis year. strong,

lots So of improvements.

and management, guess So capital put and hats off together at share look to you all to some that. time together think think repurchase as how it's next that do put maybe maybe I all that year? for you

Jeffrey Farber

regular We're with we've and will about. along bullish XXXX. and in very along our reasons buybacks even lines, of for talked growth, quarter fourth which supportive in improvement, the definitely NII the opportunities on up growth CAT the are that for We routine ramp dividend particularly and way, Yes. personal in organic

wind back stock of the bought haven't season. for We while. typically We wait a in end

management I sooner think than later. rather capital likely to to we're be back

Operator

The next from question Meyer comes KBW. with Shields

Meyer Shields

Sorry. Is that better?

John "Jack" C. Roche

Yes.

Meyer Shields

Yes.

I Yes. was muted. Okay.

Sorry that. about

little there unit and drive guess because insurance gap rate in a anything the would gap exposure case that more companies. was at Okay. to just most been I means hasn't Is I exposure Hanover expand, unit growth going that the see growth? Core pricing When look at for Commercial, that which surprised on between we unique that

John "Jack" C. Roche

]. X.X [

Richard Lavey

the Yes. the what witnessing, work of been growth we robust. side may exposure in comp has Meyer, things be

versus what And with like. rate exposure distance looks what see you like looks so the

know, you As down, the rate state. in to depending work the flat comp on is

John "Jack" C. Roche

we at delta a to been back there. over X consistent The story has can there's deck, price certainly Page earnings quarters, renewal our But get you deeper the rate if and you time. X if of over pretty between look

Meyer Shields

there's really That's they're small No, differences. I significant. Yes. don't if I asking. was know what

on auto. questions of couple a Second,

First, talked home actually Or is higher that on deductibles you've Lines. should -- auto, that Is I is about the side? know that probably this, in but Personal relevant personal too? more to

John "Jack" C. Roche

if most deductibles sorry. inch to near auto. improved, will, auto I'm as PL continue but up deductibles, in nowhere Personal for part, the we you it's

Richard Lavey

thorough we've by we ourselves a Yes, do. review state it's like state and We where given been modest. feel

You a of sitting the a might at $XXX lot for have time, on long deductible. business a they been be books that's and

to and -- to push our side. But and supportive fully them this. with bigger the on we've upwards those So has over We inch the work $X,XXX of are agents home been whatnot. time

Meyer Shields

I auto Okay. finally, growth always That's in then about on helpful. talked And business the the new penalty side. we this Perfect. again and when ramps up, know is past, personal

near pressure imply As is term? loss ratio pricing Does some ramp-up to that growth, becomes the more in relevant equal, in concerns? as a else all significant,

John "Jack" C. Roche

that's period pushing we were above But trying Lines in We're do renewal where growth our levels. actually in was we through. the business hard changes you renewal states in by new some pricing an pricing our the create was business time to our where given in were know, a certain state. that And Personal to unusual as there patterns

looking the system results pushing our until in we kept that we point-of-sale pricing got we for. So were

what And a the writing Personal tell the renewal anticipating would mean, that The I don't near we're I quality coming future. is we're anytime today, -- seeing business best -- based through of in you, at penalty it's new it's the we the because significant business not on Lines, in we're new So in pricing. been. business nozzle, we narrowed ever

we little bit the forward start And and with thereof. loss competitive, that bit get and the nozzle be a to widen it's going to I think little and so improvements a as move commensurate trends more

I So foreseeable Lines. the in Personal for like our future trajectory

Operator

Zaremski follow-up next question with Mike a The is from BMO.

Michael Zaremski

XX, is don't or you updated said guidance the this Real was -- to below earnings -- to for XX, said think XX deck. quick. the in the Jeff, think I combined I'm XX. not trying the think I release ex-CAT I you ratio, the year

Just wanted to clarify that.

Jeffrey Farber

That's correct.

high range XX% we year-to-date. think are I in the

would it to difficult a strong deterioration. we quarter us, So believe to be see quarter have is very for no and not. Fourth reason always

we se, we XX haven't to guidance we to, be to So that but expect originally below guided per clearly, updated XX Mike. the

Operator

call turn for to session. to remarks. concludes closing over This I the Oksana you. Thank back our question-and-answer now would like Lukasheva any

Oksana Lukasheva

and much for in very listening participating you Thank today.

forward looking are you next talking We to quarter. to

Operator

for has attending presentation. conference now Thank you The concluded. today's

your You may disconnect now lines.

The Hanover Insurance Group, Inc. (THG) 31 Oct 242024 Q3 Earnings call transcript