The Hanover Insurance Group (THG) Q2 2024 earnings summary

Executive summary

• Net income of $40.5M for Q2 2024 ($1.12/diluted share), reversing a $69.2M loss in Q2 2023; operating income after tax was $68.1M, up from a $68.3M loss year-over-year.

• Net premiums written grew 5.1% year-over-year, with strong renewal price increases across all segments.

• Combined ratio improved to 99.2% from 111.3% in Q2 2023, with catastrophe losses of $157.1M (10.7 points of combined ratio); ex-CAT combined ratio was 88.5%.

• Book value per share rose 1.1% sequentially to $70.96.

• Technology and digital/AI investments, along with underwriting discipline, are driving operational efficiencies and portfolio diversification.

Financial highlights

• Net investment income rose 3.2% to $90.4M, driven by higher interest rates; up 19.5% excluding partnership income.

• Net income per diluted share was $1.12 for Q2 2024, compared to a loss of $1.94 per share in Q2 2023.

• Operating income before interest and taxes was $95.4M, up from a $79.4M loss year-over-year.

• Expense ratio for Q2 was 30.8%, in line with expectations, with a full-year target of 30.7%.

• Book value per share, excluding net unrealized appreciation on fixed maturities, was $84.56.

Outlook and guidance

• Sequential premium growth expected in H2, with continued focus on profitable lines and diversification.

• Underwriting margins projected to improve as rate increases earn in and catastrophe initiatives take effect.

• NII expected to grow at least 10% in 2024 versus 2023.

• Management expects growth to accelerate in Personal Lines and upper-single digit growth in Specialty for 2024.

• Focus remains on sustainable, profitable growth and top-tier performance over the next 12–18 months.