First Quarter 2025 Earnings Presentation

‌The Hanover Insurance Group, Inc.

First Quarter 2025 Results April 30, 2025

To be read in conjunction with the press release dated

April 30, 2025, and conference call scheduled for May 1, 2025.

Please also see important information regarding forward-looking statements and additional risks and uncertainties at the end of this presentation.

‌Excellent First Quarter 2025 Operating Results

• Net and operating income(1) per diluted share of $3.50 and $3.87, respectively

• Net and operating retuon equity(2) of 17.4% and 17.2%, respectively

• Combined ratio of 94.1%; combined ratio, excluding catastrophes(3), of 87.8%

• Catastrophe losses of $95.6 million, or 6.3 points of the combined ratio

• Net premiums written increase of 3.9%*

• Renewal price increases(4) of 13.1% in Personal Lines, 11.1% in Core Commercial, and 8.4% in Specialty

• Rate increases(4) of 11.8% in Personal Lines, 9.1% in Core Commercial, and 5.9% in Specialty

• Loss and loss adjustment expense (LAE) ratio of 63.3%, 1.3 points below the prior-year quarter

• Current accident year loss and LAE ratio, excluding catastrophes(5), of 58.3%, 1.0 point below the prior-year quarter, led by outstanding improvement in Personal Lines

• Net investment income of $106.1 million, up 18.3% from the prior-year quarter driven primarily by higher earned yields and higher cashflows, partially offset by slightly lower partnership income; net investment income from fixed maturities up 23.2%

• Book value per share of $84.56, up 6.8% from December 31, 2024, driven by strong earnings and a decrease in the unrealized loss position on the fixed maturity portfolio in the quarter

  (1) See information about this and other non-GAAP measures and definitions used throughout this presentation on the final pages of this document. 2

  ‌Consolidated Financial Results

  Three months ended

  ($ in millions, except per share amounts)	March 31, 2024		March 31, 2025
  Net income	$115.5		$128.2
  Per diluted share	$3.18	$3.50
  Operating income before interest expense and income taxes	$149.7	$186.4
  Operating income after income taxes $111.9		$141.8
  Per diluted share	$3.08	$3.87
  Book value per share	$70.22	$84.56
  Book value per share, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax (6)	$84.01	$92.64
  Shareholders' equity	$2,522.7	$3,044.4
  Debt	$783.4	$784.3
  Total capital	$3,306.1	$3,828.7
  Debt/total capital	23.7%	20.5%
  Total assets	$14,594.1	$15,470.3
  Net income retuon average equity	18.5%	17.4%
  Operating income retuon average equity	15.1%	17.2%

  ‌First Quarter 2025 Underwriting Results

  ($ in millions)

  Net premiums written and growth

  ↑ 4.2%

  • Combined ratio (CR) of 94.1%, 1.4 points improved from the prior-year quarter

  • Catastrophe losses of $95.6 million, or 6.3 points, including 0.8 points of favorable CAT prior-year development, relatively in line with expectations,

↑ 2.3% ↑ 5.1%

↑ 7.4% ↑ 3.9%

despite a quarter of elevated losses for the industry

• California wildfires accounted for approximately

$35 million of losses all-in, with the remainder of current quarter CAT losses primarily attributable to severe convective storms in several Midwesteand Southestates

• Combined ratio, ex-CAT, of 87.8%, improved 1.7

  points from the prior-year quarter, primarily driven by improvement in the current accident year loss

  1Q24 2Q24 3Q24 4Q24 1Q25

  CR: 95.5%		99.2%		95.5%		89.2%		94.1%
  90.2%		89.7%		89.2%		89.2%		89.1%
  59.3%		58.9%		58.2%		56.9%		58.3%
  30.9%		30.8%		31.0%		32.3%		30.8%
  1Q24		2Q24		3Q24		4Q24		1Q25

  Current accident year combined ratio, ex-CAT(3)

  Expense ratio(7)

  Current accident year loss and LAE ratio, ex-CAT

  and LAE ratio, ex-CAT, in Personal Lines

  • Prior-year reserve development, ex-CAT, was $20.0 million, or 1.3 points, favorable, with favorability in each segment

  • Expense ratio of 30.8% was a slight improvement from the prior-year quarter and approximated the company's expectations. Continue to expect a full year 2025 expense ratio of 30.5%

  • Net premiums written growth of 3.9%; expect the first quarter to be the low point for growth in the year

  • Net investment income of $106.1 million, up 18.3% from the prior-year quarter, driven by higher earned yields and higher cashflows

    ‌Core Commercial Underwriting Highlights

    Net premiums written	$582.4	$604.6	from the prior-year quarter, driven by an
    Growth	3.0%	3.8%	increase in the loss ratio

    ($ in millions)

• Combined ratio, ex-CAT, increased 4.9 points

  2025

  2024

  Three months ended March 31

Combined ratio	93.9%	103.4%	CAT, increased 3.2 points from the prior-year
Catastrophe ratio	3.9%	8.5%	quarter, driven by elevated property large
Combined ratio, ex-CAT	90.0%	94.9%	losses; liability results remained consistent with

Net premiums earned $528.9 $541.0

• Current accident year loss and LAE ratio, ex-

Prior-year development ratio (1.7)% (0.2)% Current accident year combined ratio, ex-CAT 91.7% 95.1%

Current accident year combined ratio, ex-CAT

91.7%		89.1%		91.8%		94.0%		95.1%
	58.5%		55.7%		58.2%		58.9%		61.7%
	33.2%		33.4%		33.6%		35.1%		33.4%
	1Q24		2Q24		3Q24		4Q24		1Q25

Expense ratio

Current accident year loss and LAE ratio, ex-CAT

expectations

• Net favorable prior-year reserve development, ex-CAT, of $1.3 million, or 0.2 points, primarily driven by modest favorability in workers' compensation, largely offset by commercial auto

  ‌Core Commercial Growth Highlights

  ($ in millions)

  Net premiums written and growth

  $582.4

  ↑ 3.8%

  $604.6

  • Net premiums written increased 3.8% in the

    $246.4

    $262.8

    $336.0

    $341.8

    first quarter:

    • Middle market premium growth of 6.7%, reflecting robust new business and improved retention; improved underlying business profile from previous underwriting actions provides opportunity to lean into growth

    • Growth of 1.7% in small commercial was

below expectations, driven by a conservative

85.0%

82.3%

83.2%

83.2%

84.4%

11.5%

11.7%

12.9%

11.8%

11.1%

9.3%

9.3%

10.0%

9.2%

9.1%

Retention*

85%

80%

1Q24 1Q25

Middle market

Small commercial

Rate/RPC

20.0%

15.0%

approach to new business and renewal pricing; expect growth to accelerate to a normal trajectory from more nuanced pricing strategy

• Renewal price increases of 11.1%, driven by strength in both small commercial and middle market

• Retention remained very healthy at 84.4%

  75%

  10.0%

  70%

  1Q24 2Q24 3Q24 4Q24 1Q25

  Premium retention

  Rate

  Renewal price change

  5.0%

  ‌Specialty Underwriting Highlights

  	Three months ended March 31
  ($ in millions)	2024	2025
  Net premiums written	$339.8	$358.3
  Growth	4.8%	5.4%
  Net premiums earned	$320.9	$339.6
  Combined ratio	87.6%	87.7%
  Catastrophe ratio	2.2%	4.3%
  Combined ratio, ex-CAT	85.4%	83.4%
  Prior-year development ratio	(0.3)%	(4.7)%
  Current accident year combined ratio, ex-CAT	85.7%	88.1%

  Current accident year combined ratio, ex-CAT

  85.7%		89.8%		85.7%		87.4%		88.1%
  48.7%		53.1%		48.0%		48.4%		51.1%
  37.0%		36.7%		37.7%		39.0%		37.0%
  1Q24		2Q24		3Q24		4Q24		1Q25

  Expense ratio

  Current accident year loss and LAE ratio, ex-CAT

  • Combined ratio, ex-CAT, of 83.4%, an improvement of 2.0 points from the prior-year quarter, driven by higher favorable prior-year reserve development

  • Net favorable prior-year reserve development, ex-CAT, of $15.9 million, or 4.7 points, with widespread favorability, led by marine as well as professional and executive lines claims-made business

  • Current accident year loss and LAE ratio, ex-CAT, increased 2.4 points from the prior-year quarter driven by a comparison to lower-than-usual property large loss activity in the first quarter of 2024. The first quarter of 2025 result was in line with expectations

    ‌Specialty Growth Highlights

    ($ in millions)

    Net premiums written and growth

    • Net premiums written growth of 5.4% in the first

$339.8

↑ 5.4%

$358.3

quarter:

$23.2

$109.0

$120.4

$112.8

$105.7

$107.9

• Delivered upper-single to double-digit growth across most profitable lines, including surety, E&S, marine, and healthcare

• Growth was impacted by profitability improvement initiatives in programs business; excluding programs, premiums grew 7.3%

• Renewal price increases remained strong at

  Retention*

  83.1%

  83.0%

  81.5%

  81.9%

  80.1%

  11.0%

  11.7%

  10.1%

  9.5%

  8.4%

  85%

  75%

  65%

  1Q24 1Q25

  Professional and executive lines

  Specialty property and casualty

  Marine

  Surety and other

  RPC

  25.0%

  20.0%

  15.0%

  10.0%

  5.0%

  8.4%, including rate increases of 5.9%

• Well-positioned to capture robust, profitable opportunities and accelerate growth in 2025, supported by investments in talent and technology

  55%

  1Q24 2Q24 3Q24 4Q24 1Q25

  Premium retention

  Renewal price change

  0.0%

  8

  *Retention is defined as the ratio of net retained premium for the noted period to the

  ‌Personal Lines Underwriting Highlights

  Current accident year combined ratio, ex-CAT

  91.1% 90.2% 89.2%86.0%

  84.5%

  • Combined ratio, ex-CAT, improved 7.0 points from the prior-year quarter, driven by strong improvement in the underlying loss ratio

    	Three months ended March 31
    ($ in millions)	2024	2025
    Net premiums written	$531.8	$547.9
    Growth	0.0%	3.0%
    Net premiums earned	$598.8	$627.9
    Combined ratio	101.0%	89.7%
    Catastrophe ratio	9.9%	5.6%
    Combined ratio, ex-CAT	91.1%	84.1%
    Prior-year development ratio	0.0%	(0.4)%
    Current accident year combined ratio, ex-CAT	91.1%	84.5%

  • Current accident year loss and LAE ratio, ex-CAT, improved 6.4 points from the prior-year quarter

    • Auto improved 6.7 points compared to the prior-year quarter, benefitting from earned pricing increases and lower loss frequency, particularly in physical damage coverages

      65.6%		64.9%		63.9%		59.8%		59.2%
      25.5%		25.3%		25.3%		26.2%		25.3%
      1Q24		2Q24		3Q24		4Q24		1Q25

    • Homeowners and Other improved 5.8 points compared to the prior-year quarter, driven by the benefit of rate earning in and lower frequency, partially attributable to increased deductibles; continue to monitor umbrella, where we increased pricing 22.8% in the quarter

  • Prior-year reserve development, ex-CAT, was favorable $2.8 million, or 0.4 points, with favorable development in both Auto and Homeowners and Other

Expense ratio

Current accident year loss and LAE ratio, ex-CAT

‌Personal Lines Growth Highlights

($ in millions)

Net premiums written and growth

↑3.0%

1Q24 1Q25

Personal auto

82.8%

81.3%

79.6%

81.2%

81.4%

13.4%

18.2%

11.8%

8.2%

10.0%

13.4%

13.9%

18.0%

11.3%

14.9%

Retention* Rate/RPC

• Net premiums written growth of 3.0% in the first quarter, driven by strong pricing increases and meaningfully higher new business

  • Excluding the Midwest, net premiums written grew 7.1%

• Renewal price increases of 13.1%, including 14.9% in homeowners and 11.8% in auto; expect pricing to remain strong in 2025

  85%

  80%

  75%

  70%

  65%

  1Q24 2Q24 3Q24 4Q24 1Q25

  Policy retention

  Rate

  Renewal price change

  Homeowners

  30.0%

  20.0%

  10.0%

  0.0%

• PIF declined 0.7% sequentially from the fourth quarter of 2024, with a decline of 1.2% in the MidwesteUnited States, while the rest of the country was essentially flat

• Successful execution of margin improvement and CAT mitigation initiatives enables a shift toward accelerating growth in attractive geographies

  • Vast majority of Personal Lines portfolio now

    84.6%

    80.3%

    82.7%

    83.2%

    82.4%

    19.6%

    30.2%

    17.1%

    14.9%

    17.2%

    14.6%

    18.6%

    16.2%

    21.1%

    19.1%

    Retention* Rate/RPC

    90%

    under new or enhanced deductible levels

    80%

    70%

    60%

    50%

    40.0%

    30.0%

    20.0%

    10.0%

    40%

    1Q24 2Q24 3Q24 4Q24 1Q25

    0.0%

    ‌Net Investment Income Trends

    ($ in millions)

    Net investment income*

    $91.8

    $9.5

    $10.8

    $12.8

    $82.3

    $89.9

    $93.3

    $89.7		$90.4
    $14.0		$13.9
    $75.7		$76.5

    $100.7 $106.1

• Net investment income of $106.1 million in the first quarter, up 18.3% from the prior-year quarter, reflecting a 23.2% increase in net investment income from fixed maturities due to higher earned yields, as well as the continued investment of cashflows

• First quarter NII benefitted from strategic portfolio repositioning to higher-yielding fixed income securities, in consideration of expiring tax gains from 2022

  1Q24 2Q24 3Q24 4Q24 1Q25

  Fixed maturities

  Partnerships, equities and other investments

  ($ in millions)

  Cash and invested assets

  Fixed maturity investment portfolio trends

  $8.8B

  $9.0B

  6.0%

  $89.9M

  $9.1B

  $93.3M

  5.0%

  $75.7M

  $76.5M

  $82.3M

  4.08%

  4.0%

  3.52%

  3.53%

  3.73%

  3.99%

  3.0%

  2.0%

  $12.0

  $10.0

  $8.0

  $6.0

  $4.0

  $2.0

  $0.0

  $9,958

  4%

  1Q24

  Fixed maturities

  2Q24

  $10,005 8.0%

  7.0%

  $8.6B

  $8.7B

  Average invested assets

  Fixed maturity investment income

  4Q24 1Q25

  Earned yield

  Equities, mortgages and other

  Cash and cash equivalents

  11

  1Q24 2Q24 3Q24

  87%

  86%

  3Q24

  4Q24

  1Q25

  88%

$9,212

$9,321

4%

10%

3%

9%

86%

$9,882

87%

*Net investment income from partnerships, equities and other investments also includes net investment expenses

‌Investment Portfolio - Total Invested Assets and Cash of $10.0 Billion

As of March 31, 2025

High quality, well-diversified investment portfolio

Fixed maturities: $8.8 billion

Equities, cash and other: $1.2 billion

9%

6%

Industrials

27%

5%

26%

10%

Financials

14%

Utilities

3%

5%

Marketable securities

9%

ETFs

3%2%and other

Preferred

26%

24%

31%

Corporates

Municipals (taxable)

RMBS

CMBS

U.S. government

ABS

Equities

Mortgage loans

Limited partnerships

Cash and cash equivalents

Other

High-quality, well-laddered fixed income portfolio

• 95% of fixed maturity securities are investment grade

• Weighted average quality: A+

• Duration: 4.5 years 12

‌About The Hanover

The Hanover Insurance Group, Inc. is the holding company for several property and casualty insurance companies, which together constitute one of the largest insurance businesses in the United States. The company provides exceptional insurance solutions through a select group of independent agents and brokers. Together with its agent partners, The Hanover offers standard and specialized insurance protection for small and mid-sized businesses, as well as for homes, automobiles, and other personal items. For more information, please visit hanover.com.

‌Forward-Looking Statements

Certain statements in this document and comments made by management may be "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as, but not limited to, "believes," "anticipates," "expects," "intends," "may," "projects," "projections," "plan," "likely," "potential," "targeted," "forecasts," "should," "could," "continue," "outlook," "guidance," "modeling," "target profitability," "target margins," "confident," "optimistic," "committed," "will," "line of sight," "clear visibility to," "designed," "position us," and other similar expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. The company cautions investors that any such forward-looking statements are estimates, beliefs, expectations and/or projections that involve significant judgment, and that historical results, trends and forward-looking statements are not guarantees and are not necessarily indicative of future performance. Actual results could differ materially from those anticipated.

These statements include, but are not limited to, the company's statements regarding:

• The company's outlook and its ability and confidence in achieving components or the sum of the respective period guidance and/or long-term targets for future results of operations including: the combined ratio, excluding catastrophe losses; catastrophe losses; net investment income; growth of net premiums written, net premiums earned and/or pricing increases in total or by line of business; expense ratio; operating retuon equity; interest rate assumptions and investment portfolio management, renewal price change, rate, and/or the effective tax rate;

• The company's ability and timing to deliver on expectations set forth related to target margins, target returns and/or retuto target profitability in total or by line of business;

• The impacts of general economic and socioeconomic conditions on the company's operating and financial results, including, but not limited to, the impact on the company's investment portfolio and capital planning, changes in claims frequency as a result of fluctuations in economic activity, the potential impacts of inflation, and/or claims severity from higher cost of repairs due to, among other things, supply chain disruptions, tariffs and inflation;

• Ability to manage the impact of inflationary pressures, global market disruptions, economic conditions, geopolitical events or otherwise, including, but not limited to, supply chain disruptions,

  tariffs, labor shortages, and increases in cost of goods, services, labor, and materials;

• Uses, including the timing of uses, of capital for share repurchases, special or ordinary cash dividends, business investments or growth, debt maturities, or otherwise, and outstanding shares in future periods as a result of various share repurchase mechanisms, capital management framework, and overall comfort with liquidity and capital levels;

• Catastrophe modeling and variability of catastrophe losses due to risk concentrations, changes in weather patterns, severe weather including hurricanes, tornadoes and other windstorms, hail,

  flood, earthquakes, fire, explosions, severe winter weather and other convective storms, or pandemics, terrorism, civil unrest, riots or other events, as well as the complexity in estimating losses from large catastrophe events due to delayed reporting of the existence, nature or extent of losses or where "demand surge," regulatory assessments, litigation, coverage and technical complexities or other factors may significantly impact the ultimate amount of such losses;

• Current accident year losses and loss selections (picks), excluding catastrophes, and prior accident year loss reserve development patterns, particularly in complex "longer-tail" liability lines, as

  well as the inherent variability in short-tail property and non-catastrophe weather losses;

• Changes in frequency and loss severity trends in Core Commercial, Specialty and/or Personal Lines;

• The confidence or concethat the current level of reserves is adequate and/or sufficient for future claim payments, whether due to losses that have been incurred but not reported, circumstances that delay the reporting of losses, business complexity, adverse judgments or developments with respect to case reserves, the difficulties and uncertainties inherent in projecting future losses from historical data, changes in replacement and medical costs, as well as complexities including legislative, regulatory or judicial actions that expand the intended scope of coverages, or other factors;

• Characterization of some business as being "more profitable" in light of inherent uncertainty of ultimate losses incurred, especially for "longer-tail" liability businesses;

• Efforts to manage expenses, including the company's long-term expense savings targets, while allocating capital to business investment, which is at management's discretion;

• Our ability to retain profitable policies in force and attract profitable policies and to increase rates commensurate with, or in excess of, loss trends;

• The positive impact of mix improvement, underwriting initiatives, coverage restrictions, non-renewals, changes in terms and conditions, and pricing segmentation, among others, on the company's results;

• The ability to generate growth in targeted businesses, segments, and/or geographies through new agency appointments, rate increases, retention improvements, new business, expansion into

  geographies, new product introductions, or otherwise, the ability to balance rate actions and retention, as well as the ability to reduce premiums attributable to products, lines of business, or geographies believed to be less profitable;

• The ability to offset long-term and/or short-term loss trends due to increased frequency; increased "social inflation" from a more litigious environment, lawsuit abuse and higher average cost of

  resolution; increased property replacement or repair costs; and/or social movements; and

• Investment returns and the effect of macro-economic interest rate trends and overall security yields, including the macro-economic impact of governmental and/or central banking initiatives taken in response to inflationary pressures, and geopolitical circumstances, on new money yields, as well as individual investment and overall investment returns.

  ‌Additional Risks and Uncertainties

  Investors are further cautioned and should consider the risks and uncertainties in the company's business that may affect such estimates and future performance that are discussed in the company's most recently filed reports on Form 10-K and Form 10-Q and other documents filed by The Hanover Insurance Group, Inc. with the Securities and Exchange Commission (SEC) and that are also available at https://www.hanover.com under "Investors." These risks and uncertainties include, but are not limited to:

  • Changes in regulatory, legislative, economic, market and political conditions, particularly with respect to rates, the use of data, technology, artificial intelligence (AI), cybersecurity, policy terms and conditions, restrictions on cancellations and/or non-renewals, payment flexibility, and regions where the company has geographical concentrations;

  • Heightened financial market volatility, fluctuations in interest rates (which have a significant impact on the market value of our investment portfolio and thus our book value), inflationary

    pressures, default rates, tariffs, difficult economic, market and political conditions and other factors that affect investment returns from the investment portfolio;

  • Recessionary economic periods that may inhibit the company's ability to increase pricing or renew business, or otherwise impact the company's results, and which may be accompanied by higher claims activity in certain lines;

  • Data security and privacy incidents, including, but not limited to, those resulting from malicious cybersecurity attacks on the company or its business partners and service providers, or intrusions into the company's information network systems, including cloud-based data information storage, or data sources;

  • Adverse claims experience, including those driven by large or increased frequency and/or severity of catastrophe events, including those related to hurricanes, tornadoes and other windstorms, hail, flood, earthquakes, fire, explosions, severe winter weather and other convective storms, or due to terrorism, civil unrest, riots, or cybersecurity events (including from products not intended to provide cyber coverage);

  • The limitations and assumptions used to model non-catastrophe property and casualty losses (particularly with respect to products with longer-tail liability lines, such as casualty and bodily injury claims, or involving emerging issues related to losses incurred as the result of new lines of business or reinsurance contracts and reinsurance recoverables), leading to potential adverse development of loss and loss adjustment expense reserves;

  • Impacts of changing climate conditions and weather patterns causing higher levels of losses from weather events to persist and leading to new or enhanced regulations;

  • Litigation and the possibility of adverse judicial decisions, including those which expand policy coverage beyond its intended scope and/or award "bad faith" or other non-contractual

    damages, and the impact of "social inflation" and third-party litigation funding affecting judicial awards and settlements;

  • The ability to increase or maintain insurance rates in line with anticipated loss costs and/or governmental action, including mandates by state departments of insurance to either raise or lower rates, or provide credits or retupremium to insureds;

  • Investment impairments, which may be affected by, among other things, the company's ability and willingness to hold investment assets until they recover in value, as well as credit and interest rate risk, and general financial and economic conditions;

  • Disruption of the independent agency channel or its operating model, including the impact of competition and consolidation in the industry and among agents and brokers, and the impact of AI tools;

  • Competition, particularly from competitors who have resource and capability advantages, including the advancing use of AI technology;

  • The global macroeconomic environment, including inflation, recessionary effects, global trade disputes, war, energy market disruptions, equity price risk, tariffs, and interest rate fluctuations, which, among other things, could result in reductions in market values of fixed maturities and other investments, and/or increases in loss costs;

  • Adverse state and federal regulation, legislative and/or regulatory actions (including significant revisions to Michigan's automobile personal injury protection system and related litigation, and various regulations, orders and proposed legislation regarding bad faith, premium grace periods and returns, changes to policy terms and conditions, and rate actions);

  • Financial ratings actions, in particular, downgrades to the company's ratings;

  • Operational and technology risks and evolving technological and product innovation, including risks created by remote work environments, the evolving use of AI, and cybersecurity threats;

  • Uncertainties in estimating indemnification liabilities recorded in conjunction with obligations undertaken in connection with the sale of various businesses and discontinued operations; and

  • The ability to collect from reinsurers, reinsurance availability and pricing, reinsurance terms and conditions, and the performance of the run-off voluntary property and casualty pools business (including those in the Other segment or in discontinued operations).

Investors should not place undue reliance on forward-looking statements, which speak only as of the date they are made and should understand the risks and uncertainties inherent in or particular to the company's business. The company does not undertake the responsibility to update or revise such forward-looking statements, except as required by law.

‌Non-GAAP Financial Measures

Non-GAAP Financial Measures

As discussed on page 39 of the company's Annual Report on Form 10-K for the year ended December 31, 2024, the company uses non-GAAP financial measures as important measures of its operating performance, including operating income, operating income before interest expense and income taxes, operating income per diluted share, and components of the combined ratio, both excluding and/or including catastrophe losses, prior-year reserve development and the expense ratio. Management believes these non-GAAP financial measures are important indications of the company's operating performance. The definition of other non-GAAP financial measures and terms can be found in the 2024 Annual Report on pages 62-65.

Operating income and operating income per diluted share are non-GAAP measures. They are defined as net income excluding the after-tax impact of net realized and unrealized investment gains (losses), gains and/or losses on the repayment of debt, other non-operating items, and results from discontinued operations. Net realized and unrealized investment gains (losses), which include changes in the fair value of equity securities still held, are excluded for purposes of presenting operating income, as they are, to a certain extent, determined by interest rates, financial markets and the timing of sales. Operating income also excludes net gains and losses from disposals of businesses, gains and losses related to the repayment of debt, costs to acquire businesses, restructuring costs, the cumulative effect of accounting changes, and certain other items. Operating income is the sum of the segment income from: Core Commercial, Specialty, Personal Lines, and Other, after interest expense and income taxes. In reference to one of the company's four reporting segments, "operating income" is the segment income before both interest expense and income taxes. The company also uses "operating income per diluted share" (which is after both interest expense and income taxes). Operating income per share is calculated by dividing operating income by the weighted average number of diluted shares of common stock. Operating loss per share is calculated by dividing operating loss by the weighted average number of basic shares of common stock due to antidilution. The company believes that metrics of operating income in relation to its four reporting segments provide investors with a valuable measure of the performance of the company's continuing businesses because they highlight the portion of net income attributable to the core operations of the business. Net income is the most directly comparable GAAP measure for operating income (and operating income before income taxes) and measures of operating income that exclude the effects of catastrophe losses and/or prior-year reserve development. These non-GAAP measures should not be misconstrued as substitutes for income before income taxes or net income determined in accordance with GAAP. A reconciliation of operating income to net income for the relevant periods is included on page 17 of this presentation and in the Financial Supplement.

Operating retuon average equity (ROE) is a non-GAAP measure. See end note (2) for a detailed explanation of how this measure is calculated. Operating ROE is based on non-GAAP operating income. In addition, the portion of shareholder equity attributed to unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is excluded. The company believes this measure is helpful in that it provides insight to the capital used by, and results of, the continuing business exclusive of interest expense, income taxes, and other non-operating items. These measures should not be misconstrued as substitutes for GAAP ROE, which is based on net income and shareholders' equity of the entire company and without adjustments.

Book value per share is total shareholders' equity divided by the number of common shares outstanding. Book value per share excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is a non-GAAP measure and is total shareholders' equity excluding the after-tax effect of unrealized appreciation (depreciation) on fixed maturities and market risk divided by the number of common shares outstanding.

The company may provide measures of operating income and combined ratios that exclude the impact of catastrophe losses (which in all respects include prior accident year catastrophe loss development). A catastrophe is a severe loss, resulting from natural or manmade events including, but is not limited to, hurricanes, tornadoes and other windstorms, hail, flood, earthquakes, fire, explosions, severe winter weather and other convective storms, riots, and terrorism. Due to the unique characteristics of each catastrophe loss, there is an inherent inability to reasonably estimate the timing or loss amount in advance. The company believes a separate discussion excluding the effects of catastrophe losses is meaningful to understand the underlying trends and variability of earnings, loss and combined ratio results, among others.

Prior accident year reserve development, which can either be favorable or unfavorable, represents changes in the company's estimate of costs related to claims from prior years. Calendar year loss and loss adjustment expense (LAE) ratios determined in accordance with GAAP, excluding prior accident year reserve development, are sometimes referred to as "current accident year loss ratios." The company believes a discussion of loss and combined ratios, excluding prior accident year reserve development, is helpful since it provides insight into both estimates of current accident year results and the accuracy of prior-year estimates.

The loss and combined ratios in accordance with GAAP are the most directly comparable GAAP measures for the loss and combined ratios calculated excluding the effects of catastrophe losses and/or prior-year reserve development. The presentation of loss and combined ratios calculated excluding the effects of catastrophe losses and/or prior-year reserve development should not be misconstrued as substitutes for the loss and/or combined ratios determined in accordance with GAAP.

‌End notes

1. Operating income and operating income per diluted share are non-GAAP measures. This and other non-GAAP measures are used throughout this document. See the disclosure on the use of this and other non-GAAP measures under the headings "Forward-Looking Statements" and "Non-GAAP Financial Measures." The following table provides the reconciliation of operating income and operating income per diluted share to the most directly comparable GAAP measures, net income and net income per diluted share, respectively.

   The Hanover Insurance Group, Inc. Three months ended March 31 2025 2024 $ Per Share $ Per Share ($ in millions, except per share data) Amount (Diluted) Amount (Diluted)
   Operating income
   Core Commercial	$ 26.8		$ 71.5
   Specialty	64.6		58.8
   Personal Lines	94.2		18.9
   Other	0.8		0.5
   Total	186.4		149.7
   Interest expense	(8.5)		(8.5)
   Operating income before income taxes	177.9	$ 4.86	141.2	$ 3.89
   Income tax expense on operating income	(36.1)	(0.99)	(29.3)	(0.81)
   Operating income after income taxes	141.8	3.87	111.9	3.08
   Non-operating items:
   Net realized losses from sales and other	(18.8)	(0.51)	(1.3)	(0.04)
   Net change in fair value of equity securities and other	1.0	0.03	6.5	0.18
   Credit-related recoveries on investments	-	-	0.3	0.01
   Other non-operating items	-	-	(1.4)	(0.04)
   Income tax benefit (expense) on non-operating items	4.2	0.11	(0.5)	(0.01)
   Net income	$ 128.2	$ 3.50	$ 115.5	$ 3.18
   Dilutive weighted average shares outstanding		36.6		36.3
   Basic weighted average shares outstanding		36.0		35.8

   ‌End notes continued

2. Operating retuon average equity (operating ROE) is a non-GAAP measure. Operating ROE is calculated by dividing annualized operating income after tax for the applicable period (see end note (1)), by average shareholders' equity, excluding unrealized appreciation (depreciation) on fixed maturity investments, net of tax, for the period presented. Total shareholders' equity, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is also a non-GAAP measure. Total shareholders' equity is the most directly comparable GAAP measure and is reconciled below. For the calculation of operating ROE, the average of beginning and ending shareholders' equity, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is used for the period as shown in the table below.

   reholders' equity (GAAP) $ 2,465.6	$ 2,522.7	$ 2,841.8	$ 3,044.4
   unrealized appreciation (depreciation) ed maturity investments, net of tax (462.4)(495.5)(401.1)(290.9) reholders' equity, excluding net
   ized appreciation (depreciation) ed maturity investments, net of tax $ 2,928.0 $ 3,018.2 $ 3,242.9 $ 3,335.3
   o-date Averages hareholders' equity (GAAP) hareholders' equity, excluding net	$ 2,494.2		$ 2,943.1
   ized appreciation (depreciation) on maturity investments, net of tax $ 2,973.1 $ 3,289.1

   Net Income ROE 2024 2025

   Three months ended

   March 31

   ($ in millions)

   Total sha

   Less: net

   on fix Total sha

   unreal on fix

   Quarter-tAverage s Average s

   unreal fixed

   2023202420242025

   December 31 March 31

   March 31

   December 31

   ($ in millions)

   Period Ended

   Net income (GAAP)		$ 115.5		$ 128.2
   Annualized net income*		462.0		512.8
   Average shareholders' equity		2,494.2		2,943.1
   Net retuon equity		18.5 %		17.4 %
   Operating Income ROE
   Operating income after income taxes		$ 111.9		$ 141.8
   Annualized operating income, net of tax* (end note (1)) Average shareholders' equity, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax		447.6 2,973.1		567.2 3,289.1
   Operating retuon equity		15.1 %		17.2 %

   18

   *For three months ended March 31, 2025, and 2024, annualized net income and operating income after taxes is calculated by multiplying three months ended net income and operating income after taxes, respectively, by 4.

   ‌End notes continued

3. Combined ratio, excluding catastrophes, and current accident year combined ratio, excluding catastrophes, are non-GAAP measures. The combined ratio (which includes catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. A reconciliation of the GAAP combined ratio to the combined ratio, excluding catastrophes, and to the current accident year combined ratio, excluding catastrophes, is shown below.

   Three months ended March 31, 2025

   Total combined ratio (GAAP) Less: Catastrophe ratio Combined ratio, excluding catastrophe losses (non-GAAP) Less: Prior-year reserve development ratio Current accident year combined ratio, excluding catastrophe losses (non-GAAP) Total combined ratio (GAAP) Less: Catastrophe ratio Combined ratio, excluding catastrophe losses (non-GAAP) Less: Prior-year reserve development ratio Current accident year combined ratio, excluding catastrophe losses (non-GAAP)

   Core Specialty Personal Total CommercialLines 103.4 % 87.7 % 89.7 % 94.1 % 8.5 %4.3 %5.6 %6.3 % 94.9 % 83.4 % 84.1 % 87.8 % (0.2) %(4.7) %(0.4) %(1.3) % 95.1 % 88.1 % 84.5 % 89.1 % March 31, 2024 93.9 % 87.6 % 101.0 % 95.5 % 3.9 %2.2 %9.9 %6.0 % 90.0 % 85.4 % 91.1 % 89.5 % (1.7) %(0.3) %-(0.7) % 91.7 % 85.7 % 91.1 % 90.2 %

   ‌End notes continued

4. Renewal price changes in Core Commercial and Specialty represent the average change in premium on renewed policies caused by the estimated net effect of base rate changes, discretionary pricing, specific inflationary changes or changes in policy level exposure or insured risks. Rate increases in Core Commercial and Specialty represent the average change in premium on renewed policies caused by the base rate changes, discretionary pricing, and inflation, excluding the impact of changes in policy level exposure or insured risks. Renewal price change in Personal Lines represents the average change in premium on policies charged at renewal caused by the net effects of filed rate, inflation adjustments or other changes in policy level exposure or insured risks, regardless of whether or not the policies are retained for the duration of their contractual terms. Rate change in Personal Lines is the estimated cumulative premium effect of approved rate actions applied to policies at renewal, regardless of whether or not policies are actually renewed. Accordingly, rate changes do not represent actual increases or decreases realized by the company. Personal Lines rate changes do not include inflation or changes in policy level exposure or insured risks.

5. Current accident year loss and LAE ratio, excluding catastrophe losses, is a non-GAAP measure, which is equal to the loss and LAE ratio (loss ratio), excluding prior-year reserve development and catastrophe losses. The loss ratio (which includes losses, LAE, catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. A reconciliation of the GAAP loss ratio to the current accident year loss and LAE ratio, excluding catastrophe losses is shown below.

   Three months ended March 31, 2025
   	Core Specialty Personal Home & Personal Total
   	CommercialAutoOtherLines
   Total loss and LAE ratio (GAAP)	70.0 % 50.7 % 66.9 % 60.9 % 64.4 % 63.3 %
   Less:
   Prior-year reserve development ratio	(0.2)% (4.7)% (0.5)% (0.3)% (0.4)% (1.3)%
   Catastrophe ratio	8.5 % 4.3 % 0.5 % 12.5 % 5.6 % 6.3 %
   Current accident year loss and LAE ratio, excluding catastrophes (non-GAAP)	61.7 % 51.1 % 66.9 % 48.7 % 59.2 % 58.3 %
   	March 31, 2024
   Total loss and LAE ratio (GAAP)	60.7 % 50.6 % 73.2 % 78.6 % 75.5 % 64.6 %
   Less:
   Prior-year reserve development ratio	(1.7)% (0.3)% (1.7)% 2.3 % - (0.7)%
   Catastrophe ratio	3.9 % 2.2 % 1.3 % 21.8 % 9.9 % 6.0 %
   Current accident year loss and LAE ratio, excluding catastrophes (non-GAAP)	58.5 % 48.7 % 73.6 % 54.5 % 65.6 % 59.3 %

   ‌End notes continued

   Versus prior quarter

   Change in book value per share

   Change in book value per share, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax

   6.8 %

   2.5 %

   Versus prior year

   Change in book value per share

   Change in book value per share, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax

   20.4 %

   10.3 %

6. Book value per share, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is a non-GAAP measure. Book value per share is the most directly comparable GAAP measure and is reconciled in the table below.

   				Period ended
   	March 31 2024			December 31 2024		March 31 2025
   Book value per share	$ 70.22			$ 79.18		$ 84.56
   Less: Net unrealized appreciation (depreciation) on fixed
   maturity investments, net of tax, per share	(13.79)			(11.17)		(8.08)
   Book value per share, excluding net unrealized appreciation
   (depreciation) on fixed maturity investments, net of tax	$	84.01	$	90.35	$	92.64

7. Here, and throughout this document, the expense ratio is reduced by installment and other fee revenues for purposes of the ratio calculation.

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The Hanover Insurance Group Inc. published this content on April 30, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 30, 2025 at 20:13 UTC.