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Jun 30, 2022
Hanover Q2 2022 Earnings Report
Reported second quarter net income and operating income with a combined ratio of 96.2% and combined ratio, excluding catastrophes, of 90.2%.
Key Takeaways
The Hanover Insurance Group, Inc. reported a net income of $22.6 million, or $0.63 per diluted share, in the second quarter of 2022. Operating income was $83.9 million, or $2.32 per diluted share, for the second quarter of 2022. Net premiums written increased by 10.4%.
Net premiums written increase of 10.4%, with strong growth from each segment
Rate increases of 6.9% in Core Commercial, 8.0% in Specialty and 3.2% in Personal Lines
Catastrophe losses of $77.4 million, or 6.0 points of the combined ratio, including favorable development on prior-year catastrophes
Net investment income of $70.5 million, below the prior-year quarter due to the elevated level of partnership income in the second quarter of 2021
Revenue by Segment
Forward Guidance
The company expects the ex-CAT combined ratio to be in the range of 90.5% to 91.5%. In addition, they expect pre-tax net investment income to be in the range of $280 to $285 million.
Positive Outlook
- The company anticipates some continuing near-term pressure within Personal Lines
- The company has full confidence in their ability to achieve their 14% long-term operating ROE target
- The company will leverage their specialized capabilities
- The company will deliver substantial shareholder value
- The current rising interest rate environment to be a long-term positive as robust insurance cashflow and maturing assets are reinvested at higher yields
Challenges Ahead
- Continued elevated inflation
- Supply chain disruption
- Increase of one point from the original 2022 outlook for ex-CAT combined ratio
- The updated range incorporates their year-to-date performance
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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