Q1 2025 Earnings Presentation (04/30/2025 00:00:00)

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

    $1,663.4

$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

($ in millions)

• Combined ratio, ex-CAT, increased 4.9 points

  2025

  2024

  Three months ended March 31

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

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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 20:12 UTC.