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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
Hanover
Hanover
Hanover Revenue by Segment
Revenue by Segment
Specialty Net Premiums Earned Revenue
CapyFin.comPersonal Lines Net Premiums Earned Revenue
CapyFin.com 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
- Assumes no additional prior-year development
Revenue & Expenses
Visualization of income flow from segment revenue to net income