The Hanover Insurance Group (THG) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 was $102.1M, a significant increase year-over-year, with operating income at $111.3M and operating ROE of 14.4%.

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

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

• All major segments—personal lines, specialty, and core commercial—showed strong performance, premium growth, and healthy reserves.

• Net premiums written grew 4.2% year-over-year, with strong renewal price increases across all segments.

Financial highlights

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

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

• Debt/total capital improved to 21.4% from 27.0% year-over-year.

• Personal lines premium growth was 6.8% in the quarter, with Core Commercial at 1.7% and Specialty at 3.4%.

• Net income return on equity was 15.0% for Q3 2024.

Outlook and guidance

• Expects to beat original 2024 ex-CAT combined ratio guidance (below 90%-91%), with full-year expense ratio now expected at or near 30.9%.

• Anticipates consolidated net written premium growth above 6% in Q4 and high single-digit growth in Specialty.

• Plans to guide to a 30.5% expense ratio in 2025, realigning with long-term goals.

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

• Focus remains on disciplined underwriting, rate actions, and targeted growth across all segments.