Worcester, MA – The Hanover Insurance Group, Inc. (NYSE: THG) recently reported a net loss of $12.0 million, or $(0.34) per basic share, in the first quarter of 2023, compared to net income of $104.9 million, or $2.90 per diluted share, in the prior-year quarter. Operating income(4) was $4.6 million, or $0.13 per diluted share, in the first quarter of 2023, compared to $117.7 million, or $3.26 per diluted share, in the prior-year quarter. The difference between net loss and operating income in the first quarter of 2023 was primarily due to losses on intent to sell fixed income securities and a decrease in the fair value of equity securities during the period.
“The drastic catastrophe losses sustained by the industry in the first quarter reaffirm our efforts to mitigate the impact of very volatile weather,” said John C. Roche, president and chief executive officer at The Hanover. “In particular, we are taking steps to address the significant negative impact of winter and severe convective storms through refined underwriting, increased pricing, and enhanced loss prevention actions. We expect these and other measures should enable us to effectively manage our mix and impact of weather on our results, consistent with our success in managing catastrophe exposure over the past decade.”
“Our underlying results in the first quarter reflect strong performance across our Specialty, Core Commercial, and Personal Lines segments, with robust price increases across our book helping to drive top-line growth and advance our margin recapture plan,” said Roche. “In the quarter, we increased Personal Lines pricing by 12.7%, up 2.6 points over the fourth quarter, with strong retention. We achieved Core Commercial pricing of 11.5%, as we further increased both insured values and rate. We continue to see substantial opportunity to grow and expand our Specialty segment and are again very pleased with the exceptional performance in this business in the quarter, which delivered a combined ratio of 89.9% and printed a renewal price change of 12.6%, including 16.8% in property offerings. With the ongoing support of our deep agency relationships and talented team, we continue to have confidence in our ability to deliver superior returns to our valued shareholders.”
“We are pleased to have generated a first quarter combined ratio, excluding catastrophes(1), of 91.7%, in line with our expectations,” said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover. “Additionally, we achieved a first quarter expense ratio(5) of 30.7%, keeping us on track to achieve our target for the full year 2023. Despite recent turbulence in the financial markets, our confidence in the strength of our investment portfolio is bolstered by its high quality and effective diversification. Furthermore, we expect the current high interest rate environment to provide a meaningful, accumulating benefit to investment income, thus enabling us to reinvest at attractive market yields. We are fully committed to being strong stewards of our capital and we remain focused on the ongoing execution of our long-term strategic and business priorities.”
The complete results release is available here: The Hanover First Quarter 2023 Results
Source: The Hanover