The Hanover Insurance Group Achieves Record Financial Performance in 2024 with Significant Year-End Growth

The Hanover Reports Record Fourth Quarter Results

The Hanover Insurance Group Inc. (NYSE: THG) has declared a remarkable financial accomplishment for the fourth quarter of 2024, marking a substantial increase in both net and operating income. The results reflect a strategic execution that led to improved financial performance, highlighted by a record net income of $167.9 million, or $4.59 per diluted share, representing a notable rise compared to $107.9 million, or $2.98 per diluted share from the prior year.

Fourth Quarter Highlights

The company’s results indicate a net return on equity of 23.5% and an operating return of 24.4%. These figures reflect a strong operational performance amid favorable market conditions. The combined ratio for the quarter stood at 89.2%, a significant improvement from 94.2% in the previous year. If we exclude catastrophic impacts, the combined ratio is further favorable at 87.5%.

Overall, the quarter demonstrated a net premium written growth of 7.4%, totaling $1.445 billion, showcasing the company’s robust pricing power with average renewal price increases of 14.2% in Personal Lines and 11.8% in Core Commercial lines. Notably, the company experienced catastrophic losses of $26 million, which contributed 1.7 points to the combined ratio, yet these losses were substantially reduced in comparison to previous quarters.

Contributing factors to this success include an exceptional improvement in the loss and loss adjustment expense (LAE) ratio, which fell to 56.9%, a drop of 6.7 percentage points year-over-year, signaling operational efficiency and effective risk management.

The company's net investment income for the quarter reached $100.7 million, marking an increase of 23.4% year-over-year, attributable to superior bond reinvestment rates and higher cash flows.

On December 2, 2024, the Board of Directors endorsed a 5.9% increase in the regular quarterly dividend,

Full Year Performance

For the full year 2024, The Hanover reported a net income of $426 million, or $11.70 per diluted share, climbing drastically from $35.3 million, or $0.98 per share, the previous year. The operational income also echoed this success with $485.9 million or $13.34 per diluted share, a significant elevation from $56.2 million, or $1.56 per diluted share of 2023.

With an annual net written premium reaching $6.1 billion, the company enjoyed a growth of 4.7%, backed by a solid performance across all segments including Core Commercial, Specialty, and Personal Lines. The year concluded with a return on equity of 16.1%, emphasizing the effectiveness of the company's strategic initiatives.

The combination of improved underlying performance across segments and effective catastrophe management strategies led to a year-end combined ratio of 94.8%, a massive improvement compared to the previous year's 103.5%. Furthermore, the company reported net favorable prior-year reserve development, indicating accurate reserving practices and supportive casualty trends.

Looking Forward

John C. Roche, the President and CEO, articulated his confidence in the company’s trajectory, emphasizing the strong financial results, a commitment to strategic priorities, and continued investments in innovative solutions and technology. The focus for 2025 includes further enhancing profitability through pricing optimizations across all segments and leveraging emerging marketplace opportunities amidst favorable economic conditions.

Moreover, The Hanover anticipates persistent strong pricing mechanisms, expected to enhance geographic mix and profit margins across all segments of its operations. The insights gained through this success exhibit the effectiveness of The Hanover's strategic vision and the vibrant relevance of its product offerings in today’s competitive landscape.

In conclusion, The Hanover Insurance Group, with its solid fourth quarter and annual performance, stands well-positioned to capitalize on the market’s growth opportunities while fostering value for its shareholders.