Worcester, MA – The Hanover Insurance Group, Inc. (NYSE: THG) recently reported net income of $104.8 million, or $2.90 per diluted share, in the first quarter of 2022, compared to $92.7 million, or $2.51 per diluted share, in the prior-year quarter. Operating income was $117.7 million, or $3.26 per diluted share, for the first quarter of 2022. This compared to operating income of $61.4 million, or $1.66 per diluted share, in the prior-year quarter.
“Our strong first quarter results are compelling evidence that our strategic initiatives are delivering across our business,” said John C. Roche, president and chief executive officer at The Hanover. “We continued to build on our positive momentum, achieving operating return on equity(6) of 15.7% and record first quarter operating income per diluted share of $3.26. Our distinctive and winning agency strategy demonstrated its effectiveness, leading to profitable growth of 9.7%, with contributions from each of our business segments. We are laser focused on ensuring pricing adequacy across our business in light of heightened inflationary trends. This discipline is reflected in expanded renewal price increases in each of our business segments, with Core Commercial up 9.7%, Specialty up 12.6%, and Personal Lines up 4.3%, and we believe the market continues to react rationally. The Personal Lines market is firming rapidly and favoring carriers that have shown more pricing discipline in the recent past. As we look ahead, we remain on track with our long-term targets for underwriting returns and operating ROE, which will likely be augmented by stronger net investment income. We are focused on driving profitable growth across our portfolio, enabling us to continue to innovate and modernize our business, and create increased value for our shareholders, agents, customers, and other stakeholders.”
“We delivered an ex-CAT combined ratio of 89.8%, the eighth sequential quarter of a sub-90s ratio, with broad-based profitability and contributions from all segments,” said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover. “Our focus on driving additional operational efficiencies resulted in a 31.1% expense ratio(7), a 50-basis-point decrease compared to last year’s first quarter and solidly in-line with our full year target. Our high-quality diversified investment portfolio generated significant pre-tax net investment income of $77 million, and we look forward to increased fixed income portfolio contributions in a rising interest rate environment. We’re confident that our team’s talent and commitment to excellence will further propel our robust, profitable growth and earnings improvement, as we execute on our differentiated agency- and customer-focused strategy.”
The complete results release is available here: The Hanover Q1 2022 Results
Source: The Hanover