The Hanover Insurance Group (THG) Q4 2025 earnings summary

Executive summary

• Achieved record net and operating income per share for both Q4 and full-year 2025, with Q4 net income per share at $5.47 and full-year at $18.16, driven by disciplined execution, strategic investments, and strong underwriting.

• Operating ROE reached 23.1% in Q4 and 20.1% for the year, both record highs, with strong growth in net premiums written and robust investment income.

• Profitability and growth were maintained through quality risk selection, targeted expansion in high-margin segments, and operational enhancements.

• Investments in technology, products, and talent, along with agency partnerships, positioned the company for sustainable growth and resilience.

• Management expressed confidence in continued strong performance, citing a robust balance sheet and financial flexibility.

Financial highlights

• Q4 combined ratio was 89.0%, with a full-year combined ratio of 91.6%, both improving over prior periods; ex-CAT combined ratio was 87.1% for the year.

• Net investment income rose 24.9% in Q4 and 22.0% for the year, totaling $454.4 million.

• Book value per share increased 27.4% year-over-year to $100.90; excluding unrealized losses, book value rose 15.3% to $104.21.

• Quarterly dividend raised by 5.6% to $0.95 per share, marking 21 consecutive years of increases.

• Net premiums written grew 3.0% in Q4 and 3.9% for the year, totaling $6.3B.

Outlook and guidance

• Expect mid-single-digit net written premium growth and mid to upper single-digit net investment income growth in 2026.

• 2026 expense ratio expected at 30.3%; combined ratio (ex-CAT) guided to 88%-89%, with a CAT load of 6.5%.

• First quarter 2026 CAT load estimated at 6.1%; no change to guidance after January winter storm.

• Management highlighted a positive outlook, supported by a strong balance sheet and investment portfolio.