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Sep 30, 2023
Hanover Q3 2023 Earnings Report
Hanover's Q3 2023 results were impacted by severe weather, but underlying performance showed strength, particularly in Core Commercial and Specialty segments. The company is taking actions to address catastrophe losses and enhance profitability.
Key Takeaways
The Hanover reported a net income of $8.6 million, or $0.24 per diluted share, in Q3 2023, compared to $0.5 million, or $0.01 per diluted share, in the prior-year quarter. The combined ratio was 104.4%, impacted by catastrophe losses of $195.8 million. However, the combined ratio excluding catastrophes was 90.7%.
Combined ratio was 104.4%, but 90.7% excluding catastrophes.
Catastrophe losses totaled $195.8 million, driven by severe convective storm activity.
Net premiums written increased by 6.0%, with contributions from each segment.
Net investment income increased by 15.3% to $84.2 million.
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 Hanover is well-positioned in the market with a proven business strategy, broad and innovative capabilities, tremendous distribution partners, strong balance sheet, and exceptional talent, which will enable it to execute on long-term targets while delivering increased value for shareholders.
Positive Outlook
- Achieve additional price increases in the personal lines market.
- Reshape the book of business.
- Reach target profitability objectives.
- Deliver adjustments on renewals in early 2024.
- Drive additional growth in net investment income in the future.
Challenges Ahead
- Severe weather affecting results.
- Elevated catastrophe loss trends.
- Elevated homeowners current accident year loss and LAE ratio, excluding catastrophes.
- Decrease in the fair value of fixed maturity investments.
- Uncertainty around ultimate losses incurred, especially for “longer-tail” liability businesses
Revenue & Expenses
Visualization of income flow from segment revenue to net income