The Hanover Insurance Group has reported $1.50 billion of net premiums written (NPW) in the third quarter of 2022, a 9.5% increase compared to $1.37 billion of net premiums written in the third quarter of 2021.
Net investment income for the quarter was $73 million, a decrease from $78.8 million from the prior year quarter,
Net realized and unrealized investment losses recognized in earnings were $44.9 million in the quarter, compared to net realized and unrealized investment gains recognized in earnings of $4.0 million in the third quarter of 2021.
The company’s combined ratio for the quarter was 101%, a slight improvement from 102.3% from the same period last year. However, combined ratio, excluding catastrophes was 94.2% for the quarter, compared to 89.4% from the prior year quarter.
The Hanover’s catastrophe losses for the quarter were $90.1 million, with $28 million coming from the impacts of Hurricane Ian.
John C. Roche, president and chief executive officer at The Hanover, commented: “In light of the prevailing inflationary environment and devastating damage from Hurricane Ian for the industry, we delivered solid underwriting results, very strong investment performance and year-to-date operating ROE(5) of 10.5%,
“We are accelerating our robust action plans to recapture target margins in property lines affected by inflation, through a step up in pricing increases and targeted underwriting actions. We have full confidence that, with the support of our talented team and a strong market and agency position, we will bring these lines to target profitability and generate superior performance as a company.
“We continued to successfully advance our differentiated business and customer strategies, delivering strong growth of nearly 10%, driven by pricing and exposure increases, and the execution of our long-term priorities. We are particularly pleased with the exceptional performance of our Specialty business, which continued to make great progress, achieving a second sequential quarter of double-digit top-line growth and sub-90 combined ratio. I look forward to updating our shareholders on our company’s progress in the coming quarters as we address the macro pressures head-on and return to top tier margins.”
Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover, added: “Inflationary impacts and supply chain delays drove the third quarter current accident year loss ratio, excluding catastrophes, to 64.1%, which was approximately three and a half points above our original 2022 outlook, putting aside non-recurring items. It is our top priority, and we are focused on it intently.
“We are leaning on our financial discipline, underwriting expertise and analytics to regain the underwriting margins our business is built to deliver. We are pleased with the 0.5 point improvement in the year-to-date expense ratio from the prior-year period, reflecting a beat to our expense ratio target.
“We are also encouraged by the steady increase in our investment income, which should continue to accumulate as interest rates remain elevated. Our investment portfolio is well positioned, and our capital, liquidity and reserves are strong. As we look ahead, we continue to focus on our long-term target for operating ROE and responsible capital management for the benefit of our valued shareholders.”