Worcester, MA – The Hanover Insurance Group, Inc. (NYSE: THG) recently reported a net loss of $11.6 million, or $0.33 per basic share**, in the fourth quarter of 2022, compared to net income of $163.5 million, or $4.53 per diluted share, in the prior-year quarter. Operating loss(4) was $37.4 million, or $1.05 per basic share, for the fourth quarter of 2022. This compared to operating income of $122.1 million, or $3.38 per diluted share, in the prior-year quarter.
Net income was $116.0 million, or $3.21 per diluted share, in the full year 2022. This compared to net income of $418.7 million, or $11.49 per diluted share, in the prior year. Operating income was $199.9 million, or $5.53 per diluted share, in 2022. This compared to operating income of $318.3 million, or $8.73 per diluted share, in the prior year.
“Despite the disappointing impact of Winter Storm Elliott, we are pleased with the progress we made in the fourth quarter toward recapturing margins in property lines and we are proud of the advancements we made in 2022 on our long-term strategic and business priorities,” said John C. Roche, president and chief executive officer at The Hanover. “In the quarter, we increased Personal Lines pricing by 10.1%, up 2.8 points over the third quarter, while sustaining excellent retention, which is a testament to the effectiveness of our agency distribution approach and distinctive product offering. Furthermore, pricing in Core Commercial remained relatively stable as we continued to increase insured values and implement selected property underwriting actions. We are once again delighted with the exceptional performance and progress of our Specialty business, which delivered double-digit net premiums written growth and a sub-90s combined ratio for the year. As we move forward, we remain focused on addressing the challenges at hand in this dynamic and rapidly changing environment. I have every confidence we have the team, the strategy, and the capabilities to effectively navigate what lies ahead. We remain committed to generating superior value for our shareholders and all of our stakeholders.”
“Considering the magnitude of recent catastrophe activity and the current economic environment, we delivered solid results, with operating income per share of $5.53 and operating return on equity(5) of 6.7% in 2022,” said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover. “We generated net premiums written growth of 9.7%, with strong contributions across all segments, and a combined ratio, excluding catastrophes, of 92.1%, in line with the guidance we provided on our third quarter call in November. A confluence of factors made Winter Storm Elliott a unique and very destructive storm, from its timing to its widespread impact. We have an established track record of effectively addressing hurricanes and other catastrophe perils in the past, and we are confident in our ability to do so again. We continued to demonstrate our expense rigor, as we achieved a 50-basis point improvement in the full-year expense ratio(6) over the prior-year period due to continued expense discipline, growth leverage, and some one-time favorability. Our diversified investment portfolio is well positioned, and we are pleased with the substantial improvement in the investment income from our fixed assets portfolio. We believe the current interest rate environment will continue to provide an accumulating benefit. We have entered 2023 in a robust financial position and have strong visibility into improved margins and investment income, as we deliver comprehensive and innovative insurance solutions to our agent partners and customers, which should drive sustainable, profitable growth in the year ahead.”
The complete results release is available here: The Hanover Fourth Quarter 2022 and Full Year Results
Source: The Hanover