Hanover Insurance Group Inc
NYSE:THG
Hanover Insurance Group Inc
Hanover Insurance Group Inc., rooted in a rich history dating back to 1852, has evolved into a dynamic player within the insurance industry. With a strong focus on property and casualty insurance, the company employs a strategy that weaves together a robust portfolio of products tailored for both individuals and small to medium-sized businesses. At its core, Hanover operates by assessing risk and utilizing comprehensive underwriting processes to ensure pricing is adequate, keeping its feet firmly grounded in risk management and actuarial science. The company distributes its array of products through a vast network of independent agents, allowing it to extend its reach across various regions, cultivating close connections with policyholders and maintaining a personalized approach.
Underneath this operational framework, Hanover generates its revenue primarily through the collection of premiums from policyholders. The business model stands on two revenue legs: underwriting profit and investment income. Underwriting profit is achieved when the premiums received surpass the claims and expenses paid out, highlighting the importance of precise risk evaluation. Additionally, the company invests the premium funds until claims need to be settled. By strategically managing this pool of capital in investments, Hanover bolsters its financial strength and enhances profitability. This dual-income approach not only stabilizes the company during turbulent economic conditions but also positions it for sustainable growth in the competitive insurance landscape.
Hanover Insurance Group Inc., rooted in a rich history dating back to 1852, has evolved into a dynamic player within the insurance industry. With a strong focus on property and casualty insurance, the company employs a strategy that weaves together a robust portfolio of products tailored for both individuals and small to medium-sized businesses. At its core, Hanover operates by assessing risk and utilizing comprehensive underwriting processes to ensure pricing is adequate, keeping its feet firmly grounded in risk management and actuarial science. The company distributes its array of products through a vast network of independent agents, allowing it to extend its reach across various regions, cultivating close connections with policyholders and maintaining a personalized approach.
Underneath this operational framework, Hanover generates its revenue primarily through the collection of premiums from policyholders. The business model stands on two revenue legs: underwriting profit and investment income. Underwriting profit is achieved when the premiums received surpass the claims and expenses paid out, highlighting the importance of precise risk evaluation. Additionally, the company invests the premium funds until claims need to be settled. By strategically managing this pool of capital in investments, Hanover bolsters its financial strength and enhances profitability. This dual-income approach not only stabilizes the company during turbulent economic conditions but also positions it for sustainable growth in the competitive insurance landscape.
Record Earnings: Hanover delivered its best fourth quarter operating EPS ever, ending 2025 with an all-time high annual operating EPS and a record operating return on equity of 20%.
Strong Profitability: The company reported a fourth quarter combined ratio of 89% and a full-year combined ratio of 91.6%, both showing significant improvement, with CAT losses well below expectations.
Margin Expansion: Underlying loss ratios improved across all segments, particularly in Personal Lines and Specialty, driven by disciplined pricing, portfolio management, and favorable weather.
Premium Growth: Net written premium growth accelerated in Personal Lines to 4.4% for Q4, with mid-single-digit growth targeted for 2026 across the company.
Expense & Capital Management: The expense ratio improved to 31.1% for the year, and Hanover raised its quarterly dividend by 5.6% while executing significant share buybacks.
2026 Outlook: Guidance calls for mid-single-digit net written premium growth, mid- to upper single-digit NII growth, and a combined ratio ex-CAT of 88–89%. CAT load guidance was maintained at 6.5%.
Specialty & E&S Momentum: Specialty segment continued strong profitability, with double-digit growth in management liability and E&S lines, and robust demand for submission flows.
