Hanover Insurance Posts Record Third-Quarter Operating EPS Despite Higher Catastrophe Losses

The Hanover Insurance Group posted record third-quarter operating earnings per share on Wednesday, as sharply better underlying loss trends in personal auto and home insurance offset a jump in catastrophe losses.

The Worcester, Massachusetts-based property and casualty insurer reported operating income of $183.1 million, or $5.15 per diluted share, compared with $185.6 million, or $5.09 a share, a year earlier, according to the earnings release it filed with an 8-K on Wednesday. Net income was $172.6 million, or $4.86 a share, versus $178.7 million, or $4.90 a share.

Operating return on equity was 18.7%, and net return on equity was 19.4%.

Catastrophes up, core underwriting better

Catastrophe losses rose to $109.7 million, or 6.8 points of the combined ratio, from 3.0 points a year earlier. That lifted the overall combined ratio to 92.3% from 91.1%.

Underneath, the picture improved. The current accident year loss and loss adjustment expense ratio, excluding catastrophes, fell 1.9 points to 55.7%, and the combined ratio excluding catastrophes dropped to 85.5% from 88.1%.

"With operating return on equity of 18.7% and record third quarter operating earnings per share of $5.15, our results reflect excellent underwriting execution and the benefits of our past portfolio actions," President and CEO John C. Roche said in the release.

Segment snapshot

Personal Lines delivered the biggest underlying gain. Its current accident year combined ratio, excluding catastrophes, fell 3.9 points to 81.9%, which the company credited to earned pricing outpacing loss trends and benign property claims frequency. Renewal price increases averaged 8.7%. Pre-tax operating income rose to $103.6 million from $101.1 million.

Specialty pre-tax operating income climbed to $88.1 million from $78.2 million, with a combined ratio of 84.0% helped by $14.8 million of favorable prior-year reserve development.

Core Commercial was the soft spot. Its combined ratio rose to 100.5% from 97.3% as catastrophe losses climbed to $45.3 million, and pre-tax operating income fell to $55.5 million from $65.1 million. Net premiums written in the segment grew 4.6%.

Across the company, net premiums written rose 3.1% to $1.79 billion.

Investment income and buybacks

Net investment income rose 12.7% to $131.9 million on higher earned yields, strong cash flows and partnership income, CFO Jeffrey M. Farber said.

The company repurchased about 386,000 shares for about $86 million in the quarter and roughly $263 million year to date through Oct. 26, with about $546 million of buyback capacity remaining.

Book value per share fell 5.4% from June 30 to $99.69, as earnings were more than offset by a larger unrealized loss on the bond portfolio, buybacks and dividends. Excluding net unrealized depreciation on fixed maturities, book value per share rose 2.7% to $114.26.

For the first nine months, operating EPS was $15.70, up from $13.31 a year earlier. The company will discuss results on a call Thursday morning.

Sources

1. The Hanover Insurance Group Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0000944695-26-000019)

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