The Hanover Insurance Group, the US-based property and casualty insurer headquartered in Worcester, Massachusetts, reported net income of $191.6 million in the second quarter of 2026, up from $157 million a year earlier, as the combined ratio improved to 91.2% from 92.5% in the same period of 2025.
Operating income rose to $189.2 million from $158.7 million, translating to $5.38 and $5.31 per diluted share for net income and operating income respectively, both of which the company described as second-quarter records.
During the quarter, net premiums written increased 4.6% to $1,656.8 million, with growth accelerating across all three of its operating segments compared with the first quarter of 2026.
Core Commercial net premiums written rose 7.2% to $574.8 million, Specialty increased 4.4% to $384.4 million, and Personal Lines grew 2.6% to $697.6 million, according to the company.
Net premiums earned across the group were $1.597.6 billion for the quarter, up from $1.545.3 billion in the prior-year period. The loss and loss adjustment expense ratio was 60.2%, 1.7 points below the prior-year quarter, while the current accident year loss and LAE ratio, excluding catastrophes, improved by 0.3 points to 55.8%.
Catastrophe losses totalled $91.8 million for the group in the second quarter, equivalent to 5.7% of the combined ratio, down from 7.0% a year earlier. Core Commercial catastrophe losses were $26.4 million in the prior-year quarter, while Specialty catastrophe losses fell to $10 million from $14.6 million. Personal Lines catastrophe losses were $55.4 million, down from $70.2 million a year earlier.
Prior-year reserve development, excluding catastrophes, was favourable by $10.1 million, in Personal Lines, compared with $2.6 million a year earlier. Specialty recorded broad-based favourable development of $10.8 million against $12.5 million in the prior-year quarter. Core Commercial saw favourable development of $0.6 million down from $3.0 million a year earlier.
On the investment side, net investment income rose 13.4% to $119.6 million. Total pre-tax earned yield on the investment portfolio was 4.28%, up from 4.11% a year earlier, while the average pre-tax earned yield on fixed maturities rose to 4.45% from 4.24%, the company reported.
Net realised and unrealised investment gains recognised in earnings were $2.8 million, compared with losses of $2.5 million in the prior-year quarter. The Hanover held $11.2 billion in cash and invested assets as at 30 June 2026, with fixed maturities and cash comprising approximately 93% of the portfolio and around 95% of fixed maturities rated investment grade.
John C. Roche, President and Chief Executive Officer at The Hanover, said: “Our very successful second quarter is a testament to the strength of our business model, the durable earnings power we have built across The Hanover and the disciplined execution of our team.
“We posted operating return on equity of approximately 20% and operating earnings of $5.31 per share, both second quarter records, as well as accelerated top-line premium growth. We are effectively navigating evolving market conditions, and achieving healthy pricing, while building growth momentum in the most attractive areas of our portfolio.”
Roche added: “This quarter reflects the talent of our employees, the strength of our leadership team, the depth of our agency relationships and the trust our customers place in us every day.
“As we announced earlier this month, I plan to retire at the end of 2026. It’s been a great honour to serve the last nine years as CEO, and I could not be more optimistic about The Hanover’s future. Dick Lavey has been one of the key architects of our strategy and the transformation of our company. We will continue to work closely together through the remainder of the year to ensure a seamless transition. Dick’s leadership, expertise and strategic vision position him well to successfully lead The Hanover into its next chapter.”
Jeffrey M. Farber, Executive Vice President and Chief Financial Officer at The Hanover, commented: “We are pleased with our excellent performance, including outstanding underwriting profitability as demonstrated by our combined ratio of 91.2%, and 85.5% excluding catastrophes.”
He continued: “Additionally, we delivered robust net investment income, up 13%, driven by higher earned yields and strong operating cash flows, while continued favourable development reinforces our confidence in the strength of our reserve position. The profitably of our business continues to build capital, enabling increased share repurchases while maintaining the balance sheet strength and financial flexibility for future growth opportunities and deployment.
“Following a really strong start to the year, we enter the second half of 2026 with confidence, supported by our varied earnings streams, resilient balance sheet and disciplined focus on capital allocation.”
