The Hanover Reports First Quarter Results

First Quarter Highlights

• Combined ratio of 104.4%; combined ratio, excluding catastrophes⁽¹⁾, of 91.7%
• Catastrophe losses of $175.0 million, or 12.7 points of the combined ratio, driven by severe freeze events in the Northeast and Midwest, as well as widespread wind and tornadic activity across the U.S.
• Net premiums written increase of 8.3%*, with contributions from each segment
• Renewal price change⁽²⁾ of 11.5% in Core Commercial, 12.6% in Specialty, as well as 12.7% in Personal Lines, driven by homeowners renewal price change of 18.9%
• Rate increases⁽²⁾ of 7.8% in Core Commercial, 7.4% in Specialty and 7.6% in Personal Lines
• Current accident year loss and loss adjustment expense (LAE) ratio, excluding catastrophes⁽³⁾, of 61.2%, was generally in line with the company's expectation for the first quarter of 2023
• Net investment income of $78.7 million, up 2.3% from the prior-year quarter, driven by higher bond reinvestment rates and the continued investment of operational cashflows, partially offset by lower partnership income
• Book value per share of $66.89, up 2.0% from December 31, 2022, primarily driven by an increase in the fair value of fixed maturity investments

WORCESTER, Mass., May 2, 2023 /PRNewswire/ -- The Hanover Insurance Group, Inc. (NYSE: THG) today reported a net loss of $12.0 million, or $(0.34) per basic share, in the first quarter of 2023, compared to net income of $104.9 million, or $2.90 per diluted share, in the prior-year quarter. Operating income⁽⁴⁾ was $4.6 million, or $0.13 per diluted share, in the first quarter of 2023, compared to $117.7 million, or $3.26 per diluted share, in the prior-year quarter. The difference between net loss and operating income in the first quarter of 2023 was primarily due to losses on intent to sell fixed income securities and a decrease in the fair value of equity securities during the period.

"The drastic catastrophe losses sustained by the industry in the first quarter reaffirm our efforts to mitigate the impact of very volatile weather," said John C. Roche, president and chief executive officer at The Hanover. "In particular, we are taking steps to address the significant negative impact of winter and severe convective storms through refined underwriting, increased pricing, and enhanced loss prevention actions. We expect these and other measures should enable us to effectively manage our mix and impact of weather on our results, consistent with our success in managing catastrophe exposure over the past decade."

"Our underlying results in the first quarter reflect strong performance across our Specialty, Core Commercial, and Personal Lines segments, with robust price increases across our book helping to drive top-line growth and advance our margin recapture plan," said Roche. "In the quarter, we increased Personal Lines pricing by 12.7%, up 2.6 points over the fourth quarter, with strong retention. We achieved Core Commercial pricing of 11.5%, as we further increased both insured values and rate. We continue to see substantial opportunity to grow and expand our Specialty segment and are again very pleased with the exceptional performance in this business in the quarter, which delivered a combined ratio of 89.9% and printed a renewal price change of 12.6%, including 16.8% in property offerings. With the ongoing support of our deep agency relationships and talented team, we continue to have confidence in our ability to deliver superior returns to our valued shareholders."

"We are pleased to have generated a first quarter combined ratio, excluding catastrophes⁽¹⁾, of 91.7%, in line with our expectations," said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover. "Additionally, we achieved a first quarter expense ratio⁽⁵⁾ of 30.7%, keeping us on track to achieve our target for the full year 2023. Despite recent turbulence in the financial markets, our confidence in the strength of our investment portfolio is bolstered by its high quality and effective diversification. Furthermore, we expect the current high interest rate environment to provide a meaningful, accumulating benefit to investment income, thus enabling us to reinvest at attractive market yields. We are fully committed to being strong stewards of our capital and we remain focused on the ongoing execution of our long-term strategic and business priorities."

		Three months ended
		March 31
($ in millions, except per share data)		2023				2022
Net premiums written	$	1,421.5			$	1,312.3
Growth		8.3	%			9.7	%
Net premiums earned	$	1,380.0			$	1,263.8
Current accident year loss and LAE ratio, excluding catastrophes(3)		61.2	%			59.2	%
Prior-year development ratio		(0.2)	%			(0.5)	%
Catastrophe ratio		12.7	%			3.6	%
Expense ratio		30.7	%			31.1	%
Combined ratio		104.4	%			93.4	%
Combined ratio, excluding catastrophes		91.7	%			89.8	%
Current accident year combined ratio, excluding catastrophes(1)		91.9	%			90.3	%
Net income (loss)	$	(12.0)			$	104.9
per diluted (basic) share		(0.34)				2.90
Operating income		4.6				117.7
per diluted share		0.13				3.26
Book value per share	$	66.89			$	79.53
Ending shares outstanding (in millions)		35.7				35.6

First Quarter Operating Highlights

Core Commercial
Core Commercial operating income before income taxes was $11.2 million in the first quarter of 2023, compared to $67.5 million in the first quarter of 2022. The Core Commercial combined ratio was 104.7%, compared to 93.0% in the prior-year quarter. Catastrophe losses in the first quarter of 2023 were $63.9 million, or 12.6 points of the combined ratio, compared to $19.7 million, or 4.1 points, in the prior-year quarter.

First quarter 2023 results included net unfavorable prior-year reserve development, excluding catastrophes, of $3.5 million, or 0.7 points. This compared to net favorable prior-year reserve development, excluding catastrophes, of $6.4 million, or 1.3 points, in the prior-year quarter.

Core Commercial current accident year combined ratio, excluding catastrophes, increased 1.2 points to 91.4% in the first quarter of 2023, from 90.2% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, of 58.5%, increased 1.1 points from the prior-year quarter, primarily driven by higher property loss severity in commercial auto. However, the Core Commercial underlying loss ratio was in line with the company's expectations for the first quarter of 2023.

Net premiums written were $565.3 million in the quarter, up 7.3% from the prior-year quarter, driven by growth of 9.9% in small commercial and 4.3% in middle market. In the first quarter, Core Commercial renewal price increases averaged 11.5%, while average rate increases were 7.8%.

The following table summarizes premiums and the components of the combined ratio for Core Commercial:

Specialty
Specialty operating income before income taxes was $48.3 million in the first quarter of 2023, compared to $50.0 million in the first quarter of 2022. The Specialty combined ratio was 89.9%, compared to 87.7% in the prior-year quarter. Catastrophe losses in the first quarter of 2023 were $21.5 million, or 6.9 points of the combined ratio, compared to $7.6 million, or 2.7 points, in the prior-year quarter.

First quarter 2023 results included net favorable prior-year reserve development, excluding catastrophes, of $18.1 million, or 5.8 points, driven primarily by lower-than-expected losses in claims-made management liability lines, and to a lesser extent, healthcare and surety. This compared to net favorable prior-year reserve development, excluding catastrophes, of $13.2 million, or 4.7 points, in the prior-year quarter.

Specialty current accident year combined ratio, excluding catastrophes, decreased 0.9 points to 88.8% in the first quarter of 2023, from 89.7% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, decreased by 0.8 points to 53.5%, primarily driven by lower-than-expected losses in marine, as well as the benefit of rate increases earning in.

Net premiums written were $324.3 million in the quarter, up 7.1% from the prior-year quarter, driven primarily by renewal price change. In the first quarter, Specialty renewal price increases averaged 12.6%, while average rate increases were 7.4%.

The following table summarizes premiums and the components of the combined ratio for Specialty:

Personal Lines
Personal Lines operating loss before income taxes was $46.6 million in the first quarter of 2023, compared to operating income before income taxes of $36.3 million in the first quarter of 2022. The Personal Lines combined ratio was 112.2%, compared to 97.1% in the prior-year quarter. Catastrophe losses in the first quarter of 2023 were $89.6 million, or 16.0 points of the combined ratio, compared to $18.2 million, or 3.6 points of the combined ratio, in the prior-year quarter.

First quarter 2023 results included net unfavorable prior-year reserve development of $11.6 million, or 2.1 points, driven primarily by personal auto, which was impacted by higher-than-expected loss activity in property damage coverage, including delayed reporting of third-party claims in the second half of 2022. This compared to net unfavorable prior-year reserve development, excluding catastrophes, of $13.6 million, or 2.7 points, in the first quarter of 2022, primarily driven by the company's homeowners business.

Personal Lines current accident year combined ratio, excluding catastrophe losses, increased 3.3 points to 94.1% in the first quarter of 2023, from 90.8% in the prior-year quarter. The current accident year loss and LAE ratio, excluding catastrophes, increased 4.4 points to 68.0%, driven by inflationary pressure on personal auto and homeowners property lines, as well as higher loss frequency in personal auto as compared to the relatively low level of claims experienced in the first quarter of 2022. Relative to the company's expectations, the underlying loss ratio in Personal Lines was approximately one point higher, primarily reflecting the higher cost of parts and labor in auto, as well as elevated large fire losses in home.

The expense ratio decreased by 1.1 points to 26.1% in the first quarter of 2023, compared to the prior-year quarter, primarily attributable to fixed cost leverage from premium growth and lower performance-based agency compensation.

Net premiums written were $531.9 million in the quarter, up 10.1% from the prior-year quarter, driven primarily by renewal price changes. In the first quarter, Personal Lines renewal price increases averaged 12.7%, while average rate increases were 7.6%.

The following table summarizes premiums and components of the combined ratio for Personal Lines:

Investments
Net investment income was $78.7 million for the first quarter of 2023, above the prior-year quarter by $1.8 million, primarily due to higher bond reinvestment rates and the continued investment of operational cashflows, partially offset by lower income from partnerships. Total pre-tax earned yield on the investment portfolio for the first quarter 2023 was 3.34%, down from 3.52% in the prior-year quarter, primarily due to lower partnership income. The average pre-tax earned yield on fixed maturities was 3.27% for the first quarter of 2023, up from 2.95% in the first quarter of 2022.

Net realized and unrealized investment losses before income taxes recognized in earnings were $23.0 million in the first quarter of 2023, primarily driven by losses on intent to sell fixed income securities and credit-related impairments of $14.8 million, and a decrease in the fair value of equity securities of $7.1 million. This compared to net realized and unrealized investment losses before taxes recognized in earnings of $15.9 million in the first quarter of 2022.

The company held $8.9 billion in cash and invested assets on March 31, 2023. Fixed maturities and cash represented approximately 88% of the investment portfolio. Approximately 95% of the company's fixed maturity portfolio is rated investment grade. Net unrealized losses on the fixed maturity portfolio as of March 31, 2023, were $695.0 million before income taxes, an increase in fair value of $117.7 million since December 31, 2022.

Shareholders' Equity and Capital Actions                                       
On March 31, 2023, book value per share was $66.89, up 2.0% from December 31, 2022, primarily driven by an increase in the fair value of fixed maturity investments. During the quarter, the company did not repurchase any shares of common stock in the open market. The company has approximately $330 million of remaining capacity under its existing share repurchase program.

On March 31, 2023, statutory capital and surplus was $2.7 billion, in line with December 31, 2022.

Earnings Conference Call
The company will host a conference call to discuss its first quarter results on Wednesday, May 3, at 10:30 a.m. E.T.  A PowerPoint slide presentation will accompany the prepared remarks and has been posted on The Hanover's website.  Interested investors and others can listen to the call and access the presentation through The Hanover's website, located in the "Investors" section at www.hanover.com. Investors may access the conference call by dialing 1-844-413-3975 in the U.S. and 1-412-317-5458 internationally. Webcast participants should go to the website 15 minutes early to register, download and install any necessary audio software. A re-broadcast of the conference call will be available on The Hanover's website approximately two hours after the call.

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 company 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.

Contact Information

Definition of Reported Segments
Continuing operations include four operating segments: Core Commercial, Specialty, Personal Lines and Other. The Core Commercial segment includes commercial multiple peril, commercial automobile, workers' compensation and other commercial lines coverages provided to small and mid-sized businesses. The Specialty segment includes four divisions of business: professional and executive lines, specialty property and casualty, marine, and surety and other. Specialty P&C includes coverages such as program business (provides commercial insurance to markets with specialized coverage or risk management needs related to groups of similar businesses), specialty industrial and commercial property, excess and surplus lines, and specialty general liability coverage. The Personal Lines segment markets automobile, homeowners and ancillary coverages to individuals and families. The "Other" segment includes Opus Investment Management, Inc., which provides investment management services to institutions, pension funds and other organizations, and the operations of the holding company, as well as a block of run-off voluntary assumed property and casualty pools business in which the company has not actively participated since 1995, and run-off direct asbestos and environmental business.

Financial Supplement
The Hanover's first quarter news release and financial supplement are available in the "Investors" section of the company's website at hanover.com.

Condensed Financial Statements and Reconciliations

The following is a reconciliation from operating income to net income (loss)⁽⁶⁾:

Forward-Looking Statements and Non-GAAP Financial Measures

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," "may," "projects," "projections," "plan," "likely," "potential," "targeted," "forecasts," "should," "could," "continue," "outlook," "guidance," "modeling," "target profitability", "target margins", "moving forward", "confident", "will", 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 to achieve components or the sum of the respective period guidance on its future results of operations including: the combined ratio, excluding catastrophe losses; catastrophe losses; net investment income; growth of net premiums written and/or net premiums earned in total or by line of business; expense ratio; operating return on equity; interest rate assumptions, renewal price change, rate, and/or the effective tax rate;
• The company's ability to deliver on expectations set forth related to target margins, target returns and/or return to target profitability in total or by line of business;
• The company's ability to deliver on its long-term targets, including but not limited to, return on equity;
• The lingering impacts of the global pandemic ("Pandemic") and general economic and sociopolitical conditions on the company's operating and financial results, including, but not limited to, the impact on the company's investment portfolio, changes in claims frequency as a result of fluctuations in economic activity, and/or severity from higher cost of repairs due to, among other things, supply chain disruptions and inflation;
• Uses of capital for share repurchases, special or ordinary cash dividends, business investments or growth, or otherwise, and outstanding shares in future periods as a result of various share repurchase mechanisms, capital management framework, especially in the current environment, and overall comfort with liquidity and capital levels;
• Variability of catastrophe losses due to risk concentrations, changes in weather patterns including climate change, and severe weather including wildfires, hurricanes, terrorism, civil unrest, winter storms, tornados, 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;
• Ability to manage the impact of inflationary pressures, as a result of and following the Pandemic, global market disruptions, geopolitical events or otherwise, including, but not limited to, supply chain disruptions, labor shortages, and increases in cost of goods, services, labor, and materials;
• The confidence or concern that 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 related to the Pandemic, 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;
• Risks and uncertainties with respect to our ability to retain profitable policies in force and attract profitable policies and to increase rates commensurate with, or in excess of, loss trends;
• Mix improvement, underwriting initiatives, coverage restrictions, non-renewals, and pricing segmentation, among others, to grow businesses believed to be more profitable or reduce premiums attributable to products or lines of business believed to be less profitable; balance rate actions and retention; offset long-term and/or short-term loss trends due to increased frequency; increased "social inflation" from a more litigious environment and higher average cost of resolution, increased property replacement costs, and/or social movements;
• The ability to generate growth in targeted segments through new agency appointments; rate increases (as a result of its market position, agency relationships or otherwise), retention improvements or new business; expansion into new geographies; new product introductions; or otherwise; and
• Investment returns and the effect of macro-economic interest rate trends and overall security yields, including the macro-economic impact of the Pandemic, inflationary pressures and corresponding governmental and/or central banking initiatives taken in response thereto, and geopolitical circumstances on new money yields 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 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 and artificial intelligence, policy terms and conditions, payment flexibility, and regions where the company has geographical concentrations;
• Heightened 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 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 a malicious cyber security attack on the company or its business partners and service providers, or intrusions into the company's systems, including cloud-based data 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 wildfires, winter storms, hurricanes, terrorism, civil unrest, riots or other severe weather;
• 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, such as cyber or financial institutions coverage, or reinsurance contracts and reinsurance recoverables), leading to potential adverse development of loss and loss adjustment expense reserves;
• Changes in weather patterns and severity, whether as a result of global climate change, or otherwise, causing a higher level of losses from weather events to persist;
• 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" 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 return premium 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, including the impact of competition and consolidation in the industry and among agents and brokers;
• Competition, particularly from competitors who have resource and capability advantages;
• The global macroeconomic environment, including actions taken in response to the Pandemic, inflation, recessionary effects, global trade disputes, war, energy market disruptions, equity price risk, and interest rate fluctuations, which, among other things, could result in reductions in market values of fixed maturities and other investments;
• 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 related to business interruption and workers' compensation coverages, premium grace periods and returns, 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, and the risk of cyber-security attacks on or breaches of the company's systems and/or impacting our outsourcing relationships and third-party operations, or resulting in claim payments (including from products not intended to provide cyber coverage);
• Uncertainties in estimating indemnification liabilities recorded in conjunction with obligations undertaken in connection with the sale of various businesses and discontinued operations;
• The ability to collect from reinsurers, reinsurance 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); and,
• Continuing risks and uncertainties associated with the impact of the Pandemic and related general economic conditions

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
As discussed on page 38 of the company's Annual Report on Form 10-K for the year ended December 31, 2022, the company uses non-GAAP financial measures as important measures of its operating performance, including operating income (loss), operating income (loss) before interest expense and income taxes, operating income (loss) per 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 2022 Annual Report on pages 63-66.

Operating income (loss) and operating income (loss) per share are non-GAAP measures. They are defined as net income (loss) 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 segments, "operating income (loss)" is the segment income (loss) before both interest expense and income taxes. The company also uses "operating income per 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 (loss) and operating income (loss) in relation to its four segments provide investors with a valuable measure of the performance of the company's continuing businesses because they highlight the portion of net income (loss) attributable to the core operations of the business. Income (loss) from continuing operations is the most directly comparable GAAP measure for operating income (loss) (and operating income before income taxes) and measures of operating income that exclude the effects of catastrophe losses and/or prior-year reserve development should not be misconstrued as substitutes for income (loss) from continuing operations or net income (loss) determined in accordance with GAAP. A reconciliation of operating income (loss) to income (loss) from continuing operations and net income (loss) for the relevant periods is included on page 10 of this news release and in the Financial Supplement.

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, tornados, windstorms, earthquakes, hail, severe winter weather, freeze events, fire, explosions, civil unrest 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.

Endnotes

View original content to download multimedia:https://www.prnewswire.com/news-releases/the-hanover-reports-first-quarter-results-301813775.html

SOURCE The Hanover Insurance Group, Inc.