The Hanover Insurance Group, Inc., a property and casualty insurer, reported a record net income of $198.5 million in the fourth quarter of 2025, an 18.2% increase compared to $167.9 million in the same quarter a year prior.
In the quarter, operating income stood at $210.1 million, an 8% increase compared to $194.6 million in Q4’24.
The company generated net premiums written of $1.49 billion, up 3% from $1.45 billion. Net premiums earned totalled $1.56 billion, marking a 3% increase from $1.51 billion.
The Hanover reported a renewal price increase of 9.4% in Core Commercial, 9.2% in Personal Lines, and 6.4% in Specialty, with rate increases of 7.7% in Core Commercial, 6.3% in Personal Lines, and 4.2% in Specialty.
The combined ratio improved to 89% from 89.2%, on the back of a lower expense ratio of 31.8% versus 32.3%.
Q4’25 also saw a slightly lower current accident year loss and loss adjustment expense (LAE) ratio of 56.8% compared to 56.9%. The quarter saw catastrophe losses of $27 million, or 1.7 points of the combined ratio.
Net investment income rose 24.9% to $125.8 million.
For full year 2025, The Hanover recorded a net income of $662.5 million, a significant 55.5% increase from $426 million in the prior year.
Operating income amounted to $696.2 million, up 43.3% from $485.9 million in full year 2024.
Net premiums written increased 3.9% to $6.32 billion from $6.1 billion, while net premiums earned rose 4.2% to $6.16 billion from $5.91 billion.
For the full year, The Hanover saw an improved combined ratio of 91.6% versus 94.8%, on the back of a loss and LAE ratio of 60.5%, 3.0 points below the prior year. Current accident year loss and LAE ratio, excluding catastrophes, was 57.1%, 1.1 points below the prior year, with catastrophe losses of $276.3 million, or 4.5 points of the combined ratio.
Net investment income increased 22% to $454.4 million in 2025.
“We delivered outstanding results in 2025, with a strong fourth quarter that capped a record year driven by disciplined execution across the company,” said John C. Roche, president and chief executive officer at The Hanover. “We achieved record annual operating return on equity of 20.1%, the highest in our history, and 23.1% in the fourth quarter, while generating $6.3 billion in net written premiums for the year, reflecting solid year-over-year growth of approximately 4%. We are exceptionally well-positioned across our businesses. In Personal Lines, our market position is driven by our strength as an account writer, with approximately 89% of customers having multiple policies, driving strong retention. In Core Commercial, we continue to see attractive, high-quality opportunities in the small-to-middle-market account segment. In Specialty, while competition is more pronounced in the larger-sized property market, our broad offering and our focus on smaller-sized accounts across most of our portfolio position us for accelerated growth. Taken together, our diversified and specialized product set and disciplined approach to managing profitability at the individual account level enable us to identify and capitalize on the most compelling opportunities in a dynamic market environment as conditions continue to evolve.”
“We are very pleased with our results, both in the quarter and the year,” said Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover. “In the quarter, we delivered a sub-90s combined ratio and record operating earnings of $5.79 per share, building on the progress we made throughout the year. For the full year, we generated record operating earnings of $19.09 per share and improved our underwriting results by more than three points, bringing our combined ratio to 91.6%. We also delivered favorable prior-year development across all three business segments and remained disciplined in our reserving approach. We increased net investment income by nearly 25% in the fourth quarter and 22% for the year, supported by growth in our asset base, higher reinvestment yields, improving partnership income, and the success of our portfolio repositioning efforts. During the fourth quarter, we raised our quarterly dividend by 5.6% to $0.95 per share, marking our 21st consecutive annual increase. We also repurchased $130 million of shares over the course of the year, reflecting our balanced, shareholder-focused capital management strategy. With another strong year to our credit, we enter 2026 with a robust balance sheet, significant financial flexibility, and an investment portfolio positioned to enhance earnings going forward.”
