Hanover Insurance Group Inc. reported first-quarter net income of $128.2 mn, up from $115.5 mn a year earlier.
President and CEO Jack Roche attributed the increase to effective catastrophe loss reduction and improved rate and underwriting practices.
Personal lines operating income rose significantly to $94.2 mn from $18.9 mn, driven by lower catastrophe losses, favorable reserve development from prior years, and increased rates.
This gain offset a decline in core commercial operating income, which fell to $26.8 mn from $71.5 mn in the first quarter of 2024, due to an increase in large property losses.
The company wrote $1.51 bn in net premiums in the quarter, a 3.9% increase. The total combined ratio improved to 94.1 from 95.5 in the same quarter last year.
Hanover raised rates in the low double-digits in personal lines and small commercial segments, and in the high single digits for specialty and middle market, reflecting favorable market conditions across most areas.
Roche said Hanover will use its improved profitability to grow policy counts and premiums in selected states within personal lines.
In specialty, he said investments in staff and technology are expected to support further growth. In core commercial, Roche noted that more specific pricing strategies should improve results, particularly in small commercial business.
In core commercial, we expect a more nuanced pricing strategy to enable us to capitalize on even greater opportunities in the marketplace, particularly in small commercial.
President and CEO Jack Roche
Hanover has introduced a self-insurance component for homeowners. Most states now require a minimum perils deductible of $2,500, with wind and hail deductibles ranging from 1% to 1.5% in the Midwest and coastal regions.
