The Hanover Insurance Group, Inc. has announced robust financial results for the third quarter of 2024, with net income reaching $102.1 million, equivalent to $2.80 per diluted share. This marks a notable increase from the $8.6 million, or $0.24 per diluted share, reported during the same period last year. Operating income also saw a substantial rise, reaching $111.3 million, or $3.05 per diluted share, compared to $6.8 million, or $0.19 per diluted share, in the third quarter of 2023. The company’s net and operating return on equity stood at 15.0% and 14.4%, respectively.
Its combined ratio was reported at 95.5%, with a notable improvement to 88.3% when excluding catastrophe losses, which amounted to $105.9 million, contributing 7.2 points to the overall ratio. In addition, the company reported a 4.2% increase in net premiums written. Notably, the personal lines segment demonstrated significant growth, with renewal price increases averaging 15.4%. Core commercial and specialty lines also experienced renewal price increases of 12.9% and 10.1%, respectively. The overall pricing environment remains strong, with rate increases of 14.4% in personal lines, 10.0% in core commercial, and 7.6% in specialty.
The company also showed strong improvement in its loss and loss adjustment expense (LAE) ratio, which decreased to 64.5%, representing a 9.7-point decline from the prior year. The current accident year loss and LAE ratio, excluding catastrophes, was reported at 58.2%, a 2.4-point improvement year-over-year.
Investment income also contributed positively to the overall performance, with net investment income rising to $91.8 million, up 9.0% from the previous year. This increase was primarily driven by higher bond reinvestment yields and strong cash flows from the investment portfolio, according to a news release. The company’s book value per share rose to $79.90, reflecting a 12.6% increase from June 30, 2024, largely due to unrealized gains on fixed maturity investments and strong earnings performance.
John C. Roche, president and CEO, expressed confidence in the company’s trajectory. “We are pleased to report excellent results for the third quarter, marked by outstanding execution,” he said. “In addition to driving strong underlying results, we continue to prioritize reducing the impact from weather-related volatility, with approximately half of our personal lines portfolio now under new or enhanced deductible levels.” Roche also emphasized the company’s strong position to capitalize on growth opportunities.
Jeffrey M. Farber, executive vice president and CFO, underscored the company’s strong combined ratio performance, which is the best in several years when excluding catastrophes. “Our reserves are strong, and we continue to believe we are well positioned to navigate liability trends, as evidenced by the favorable prior-year development experienced across all three of our segments,” he said. “Looking ahead, we remain committed to improving our superior returns even more and driving enhanced shareholder value.”
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