Property and casualty insurance holding company, The Hanover Insurance Group, Inc., has preliminary estimated pre-tax catastrophe losses of $157.1 million, or 10.7 points of net earned premium for the second quarter of 2024.
The insurer has stated that the losses were primarily driven by severe convective storm activity and mostly impacted the Personal Lines business.
Accounting for the catastrophe loss estimates and other currently available information, the insurer expects to report a Q2 2024 combined ratio of 99.2%, and an ex-CAT combined ratio of 88.5%.
Additionally, after-tax net income of $1.12 per diluted share and operating income of $1.88 per diluted share is expected to be generated for the second quarter.
The difference between net income and operating income per share is due to the sale of some lower coupon fixed-income securities, in consideration of expiring tax gains from 2021, explained the insurer.
John C. Roche, President and Chief Executive Officer, The Hanover, commented, “The property and casualty insurance industry sustained very significant catastrophe losses in the second quarter, including the highest CAT losses for the month of May in over a decade. These losses underscore the vital importance of the catastrophe management plan we initiated last year.
“We continue to diligently execute on this plan in targeted geographies, revising terms and conditions, increasing all-peril deductibles, and adding wind and hail deductibles (applied to renewal policies effective beginning April 1, 2024), while implementing rate increases and applying risk prevention measures, particularly in the Midwest.”
Jeffrey M. Farber, Executive Vice President and Chief Financial Officer, The Hanover, concluded, “We are pleased with our overall bottom-line results, which are close to our second quarter expectations, despite the impact of catastrophe losses.
“Our results reflect outstanding underlying underwriting performance, including massive year-over-year improvement in our ex-CAT Personal Lines loss ratio, driven by enhanced profitability in our auto and homeowners lines. Additionally, our Core and Specialty segments demonstrated continued strength as we further executed our property portfolio initiatives and continued to navigate liability trends very well.”
