WORCESTER, Mass. /PRNewswire/ — The Hanover Insurance Group, Inc. (NYSE: THG) today reported a net loss of $9.7 million, or $0.21 per diluted share, for the third quarter of 2011, driven by $64.7 million in catastrophe losses after tax, or $1.43 per diluted share. The company reported net income of $52.3 million, or $1.15 per diluted share, in the third quarter of 2010.
Key Highlights:
- Net loss of $9.7 million, or $0.21 per diluted share; segment loss after tax of $18.5 million, or $0.41 per diluted share(1), driven by $64.7 million in catastrophe losses after tax, or $1.43 per diluted share
- Combined ratio of 106.8%; ex-catastrophe combined ratio of 97.0%
- Chaucer segment income before interest and taxes of $19.9 million
- Net premiums written surpassed $1 billion, 30.8% higher than the prior-year quarter driven by:
- Net premiums written growth of 5.6% in Commercial Lines
- Net premiums written of $222.3 million added with Chaucer acquisition
- Repurchased 574,000 shares for $20.0 million; retired $29.5 million of debt obligations
- Book value per share of $54.98 at September 30, 2011, an increase of 0.4% from December 31, 2010
Segment loss before interest expense and taxes(1) was $7.6 million in the third quarter of 2011, which included $99.6 million in catastrophe losses. In the third quarter 2010, the company reported segment income before interest expense and taxes of $79.2 million, which was impacted by $24.1 million in catastrophes losses.
The third quarter 2011 results include the operations of Chaucer from July 1, 2011, and accordingly, current and prior periods are not directly comparable. Results for nine months ended September 30, 2011, include results of Chaucer for only the period of July 1, 2011, through September 30, 2011.
“While our bottom line in the quarter was largely defined by catastrophes, particularly Hurricane Irene, and unusually bad weather, we have continued to improve and diversify our business. Our strong capital base and the progress we have made on our strategic priorities position us very well to take advantage of future market opportunities,” said Frederick H. Eppinger, chief executive officer at The Hanover.
“We continued to drive forward on our areas of focus: improving our mix of business, achieving rate increases, adding scale in specialty lines and integrating Chaucer,” he said. “We are very pleased with the way our people and organizations are coming together. In particular, we already have begun to realize the benefits of the combination of our companies, as evidenced by Chaucer’s contributions to our mix of business and earnings improvement.
“Perhaps most importantly, we see continued improvement in pricing trends. In Commercial Lines, we put a fourth consecutive quarter of accelerating price increases on the books, and in Personal Lines, we continued to achieve mid-single digit rate increases. We believe we will see the continuation of these trends going forward given the economic forces and weather losses experienced in the industry,” Eppinger said.
“Our overall capital position remains strong. Book value per share was $54.98 at quarter-end, which compares with $54.74 at December 31, 2010.”
The Complete Earnings Release is available here: The Hanover 3Q 2011 Results