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Sep 30
Hanover Q3 2025 Earnings Report
Hanover reported record third quarter net income and operating income, with strong performance across all segments driven by disciplined underwriting and favorable market dynamics.
Key Takeaways
The Hanover Insurance Group, Inc. achieved record third-quarter net income of $178.7 million and operating income of $185.6 million, translating to $4.90 and $5.09 per diluted share, respectively. The company's combined ratio improved to 91.1%, or 88.1% excluding catastrophes, reflecting strong underwriting and lower catastrophe losses. Net premiums written increased by 4.5%, and net investment income surged by 27.5% due to higher earned yields.
Record third-quarter net income of $178.7 million and operating income of $185.6 million, with EPS of $4.90 and non-GAAP EPS of $5.09.
Combined ratio improved to 91.1%, and 88.1% excluding catastrophes, indicating strong underwriting performance.
Net premiums written grew by 4.5%, driven by consistent pricing gains across all segments.
Net investment income increased by 27.5% to $117.0 million, primarily due to higher earned yields and cashflows.
Hanover
Hanover
Hanover Revenue by Segment
Revenue by Segment
Core Commercial Net Premiums Earned Revenue
CapyFin.comSpecialty Net Premiums Earned Revenue
CapyFin.comPersonal Lines Net Premiums Earned Revenue
CapyFin.com Forward Guidance
The Hanover anticipates continued strong performance, driven by effective strategy, disciplined underwriting, and constructive market dynamics. The company expects sustained pricing gains in Core Commercial and Specialty, and benefits from its whole-account strategy in Personal Lines. Capital management will remain prudent, with ongoing investments in innovative capabilities for long-term success.
Positive Outlook
- Continued effectiveness of strategy and positive momentum across the company.
- Sustained pricing gains in Core Commercial and Specialty segments due to focus on less cyclical sectors.
- Personal Lines whole-account strategy provides insulation from competitive auto market.
- Underlying performance is expected to remain strong, benefiting from prior pricing and underwriting actions.
- Ongoing investments in innovative capabilities to position the franchise for long-term success.
Challenges Ahead
- Potential impacts of general economic and socioeconomic conditions on operating and financial results, including investment portfolio and capital planning.
- Inflationary pressures and global market disruptions could affect cost of repairs, supply chains, and labor.
- Variability of catastrophe losses due to risk concentrations and changes in weather patterns.
- Uncertainty in estimating losses, particularly for 'longer-tail' liability lines and from large catastrophe events.
- Changes in regulatory, legislative, economic, market, and political conditions, especially concerning rates and competition.