8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

AMENDMENT NO. 1

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 29, 2007

THE HANOVER INSURANCE GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-13754	04-3263626
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

440 Lincoln Street, Worcester, Massachusetts 01653

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (508) 855-1000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This Amendment No. 1 to Form 8-K amends and restates the Current Report on Form 8-K filed by The Hanover Insurance Group, Inc. on October 30, 2007 in its entirety. This Amendment No. 1 is filed solely to correct typographical errors regarding the dollar amounts contained in Item 9.01 and the Exhibit Index of the original Form 8-K filing.

Item 2.02 Results of Operations and Financial Condition.

The following information is being furnished under Item 2.02 – Results of Operations and Financial Condition. Such information, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.

On October 29, 2007, The Hanover Insurance Group, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2007. The release is furnished as Exhibit 99.1 hereto. Additionally, on October 29, 2007, the Company made available on its website financial information contained in its Statistical Supplement for the period ended September 30, 2007. The supplement is furnished as Exhibit 99.2 hereto.

Item 8.01 Other Events.

On October 29, 2007, the Company issued the following press release: The Hanover Insurance Group Announces

Authorization to Repurchase up to $100 million of its Shares. The release is furnished as Exhibit 99.3 to this Current Report and is hereby incorporated by reference in this Item 8.01.

Item 9.01 Financial Statements and Exhibits.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits.

The following exhibits are furnished herewith.

Exhibit  99.1 Press Release, dated October 29, 2007, announcing the Company’s financial results for the quarter ended September 30, 2007.

Exhibit  99.2 The Hanover Insurance Group, Inc. Statistical Supplement for the period ended September 30, 2007.

Exhibit  99.3 Press Release, dated October 29, 2007, announcing the Company’s authorization to repurchase up to $100 million of its shares.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

The Hanover Insurance Group, Inc.

(Registrant)

Date October 30, 2007

By:  /s/ Warren E. Barnes                                    

        Warren E. Barnes

        Vice President, Corporate

        Controller, and Acting Principal

        Accounting Officer

Exhibit Index

Exhibit  99.1 Press Release, dated October 29, 2007, announcing the Company’s financial results for the quarter ended September 30, 2007.

Exhibit  99.2 The Hanover Insurance Group, Inc. Statistical Supplement for the period ended September 30, 2007.

Exhibit  99.3 Press Release, dated October 29, 2007, announcing the Company’s authorization to repurchase up to $100 million of its shares.

EX-99.1

Exhibit 99.1

THE HANOVER INSURANCE GROUP, INC. REPORTS THIRD QUARTER 2007 EARNINGS:

NET INCOME OF $1.03 PER SHARE COMPARED TO A NET INCOME OF $0.65 PER SHARE LAST YEAR; INCOME FROM CONTINUING OPERATIONS OF $1.01 PER SHARE COMPARED TO $0.56 PER SHARE LAST YEAR

WORCESTER, Mass., October 29, 2007—The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income for the third quarter of $53.9 million, or $1.03 per share, compared to a net income of $33.4 million, or $0.65 per share, in the third quarter of last year. The current quarter’s results include a $17.0 million pre-tax charge, or $0.21 per share of after-tax net losses related to 2005 Hurricane Katrina. Results for the third quarter of last year also include a pre-tax charge of $52.1 million for Hurricane Katrina losses, or $0.66 per share after taxes.

Income from continuing operations was $53.0 million for the third quarter, or $1.01 per share, compared to $28.5 million, or $0.56 per share, in the third quarter of last year. Results for both quarters include the impact of the aforementioned catastrophe losses related to Hurricane Katrina.

Total Property and Casualty pre-tax segment income was $92.8 million in the quarter, compared to $52.8 million in the third quarter of last year. The current quarter’s results include $25.1 million of net pre-tax catastrophe losses and loss adjustment expenses, of which $17.0 million relate to a reserve increase attributable to Hurricane Katrina. Results from the third quarter of last year include pre-tax net catastrophe related losses and loss adjustment expenses of $64.2 million, $52.1 million of which relate to Hurricane Katrina reserve increases. Additionally, the third quarter of 2006 included the benefit of a $7.0 million litigation settlement related to Opus Investment Management, Inc.

The Personal Lines segment reported pre-tax segment earnings of $49.4 million in the third quarter of 2007, compared to $35.0 million in the third quarter of 2006, while the Commercial Lines segment reported pre-tax segment earnings of $39.4 million in the quarter, versus $7.7 million in the third quarter of 2006.

“We achieved very solid results in the quarter, and we continue to strengthen our competitive position with winning agents and in our target markets. We remain on track for another strong year,” said Frederick H. Eppinger, chief executive officer of The Hanover Insurance Group, Inc. “At the same time, our plans to increase our annual dividend and to repurchase as much as $100 million of our common stock demonstrate the confidence we have in our overall financial position and our ability to continue to generate strong profitable growth.”

Segment Results

The Hanover conducts its business in four operating segments. Three of these operating segments, Personal Lines, Commercial Lines, and Other Property and Casualty, are included in our Property and Casualty operations. The Personal Lines segment markets automobile, homeowners and ancillary coverages to individuals and families. The Commercial Lines segment offers a suite of products targeted at the small- to mid-size business markets, which include commercial multiple peril, commercial automobile, workers’ compensation and other commercial coverages, such as fidelity and surety bonds, and inland marine. The Other Property and Casualty segment includes AMGRO, Inc., a premium financing business; Opus Investment Management, Inc., which provides investment management services to institutions, pension funds and other organizations; and earnings on holding company assets, as well as a block of run-off voluntary pools business in which we have not actively participated since 1995. The Life Companies, the company’s fourth operating segment, include the run-off business of First Allmerica Financial Life Insurance Company (FAFLIC), principally consisting of traditional life insurance and retirement businesses.

The following table shows pre-tax segment income (loss). It is presented in a manner consistent with the way management evaluates results and is set forth in accordance with Statement of Financial Accounting Standards No. 131, “Disclosures About Segments of an Enterprise and Related Information.”

	Quarter ended September 30 (In millions)
	2007			2006
Property and Casualty:
Personal Lines(1)	$	49.4		$	35.0
Commercial Lines(2)		39.4			7.7
Other Property and Casualty		4.0			10.1
Total Property & Casualty		92.8			52.8
Life Companies		(4.1	)		(1.1	)
Interest expense on corporate debt		(10.0	)		(10.0	)
Total pre-tax segment income		78.7			41.7
Federal income tax expense		(25.7	)		(14.1	)
Total segment income after taxes (3)	$	53.0		$	27.6

⁽¹⁾ Includes Personal Lines pre-tax net impact of catastrophes of $5.2 million and $20.7 million for the third quarter of 2007 and 2006, respectively.

⁽²⁾ Includes Commercial Lines pre-tax net impact of catastrophes of $19.9 million and $43.5 million for the third quarter of 2007 and 2006, respectively.

⁽³⁾ See reconciliation from segment income to net income at the end of this document.

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Property and Casualty

Property and Casualty pre-tax segment income was $92.8 million in the third quarter of 2007, compared to $52.8 million in the third quarter of 2006, an increase of $40.0 million, which was primarily due to lower catastrophe related losses in the current quarter. The pre-tax net impact of catastrophes, which includes Hurricane Katrina related reserve adjustments, was $25.1 million in the current quarter compared to $64.2 million in the third quarter of 2006. Excluding the pre-tax net impact of catastrophe related losses, property and casualty pre-tax segment income would have been $117.9 million in the current quarter, consistent with $117.0 million in the prior-year quarter. The prior-year quarter benefited from the previously mentioned $7.0 million litigation settlement. Results in the current quarter benefited primarily from lower underwriting and loss adjustment expenses and higher net investment income, partially offset by lower favorable development of prior-year reserves.

Property and Casualty highlights:

• Net premiums written were $621.8 million in the third quarter of 2007, compared to $602.9 million in the third quarter of 2006, up 3.1%.

• Net premiums earned were $595.2 million in the third quarter of 2007, compared to $562.6 million in the third quarter of 2006.

• New business net premiums written were $146.3 million in the third quarter of 2007, representing a decrease of 7% compared to $157.4 million in the third quarter of 2006.

• Favorable development of prior-year loss and LAE reserves, not accounting for the aforementioned additional reserves for Hurricane Katrina, was $34.2 million in the third quarter of 2007, compared to $39.2 million in the third quarter of 2006.

The following table summarizes the components of the GAAP combined ratio for the Property and Casualty segment:

	Quarter ended September 30
	2007		2006
Personal Lines losses (excluding catastrophes)	54.0	%	50.7	%
Personal Lines catastrophe-related losses	1.3	%	4.7	%
Total Personal Lines losses	55.3	%	55.4	%
Commercial Lines losses (excluding catastrophes)	38.7	%	36.1	%
Commercial Lines catastrophe-related losses	6.7	%	18.7	%
Total Commercial Lines losses	45.4	%	54.8	%
Total P&C Losses	51.6	%	55.2	%
Loss adjustment expenses	10.4	%	10.8	%
2005 Hurricane Katrina-related loss adjustment expenses	0.8	%	1.5	%
Policy acquisition and other underwriting expenses	33.0	%	34.9	%
Combined Ratio	95.8	%	102.4	%

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Personal Lines

Personal Lines pre-tax segment income was $49.4 million in the quarter, compared to $35.0 million in the prior-year quarter. The pre-tax net impact of catastrophes, which in each case includes Hurricane Katrina related reserve adjustments, was $5.2 million in the current quarter, compared to $20.7 million in the third quarter of 2006. Excluding the pre-tax net impact of catastrophe-related losses, Personal Lines pre-tax segment income would have been $54.6 million in the current quarter, compared to $55.7 million in the prior-year quarter. This decrease was primarily due to higher losses, partially offset by higher net investment income and lower underwriting and loss adjustment expenses.

Losses were higher in the third quarter of 2007, mostly due to lower favorable development of prior-year losses and loss adjustment reserves, primarily in our personal auto line and, to a lesser extent, from higher current accident year losses. The increase in current accident year losses was driven by higher severity of losses in the homeowners line.

Underwriting and loss adjustment expenses were lower in the quarter, benefiting from lower variable compensation expenses, lower technology costs and lower expenses associated with independent adjusters.

Personal Lines highlights:

• Net premiums written were $392.9 million in the third quarter of 2007, compared to $383.2 million in the third quarter of 2006, which equates to 2.5% current-quarter growth.

• Net premiums earned were $367.7 million in the third quarter of 2007, compared to $353.1 million in the third quarter of 2006.

• New business net premiums written were $67.3 million in the third quarter of 2007, representing a decrease of 12.6% compared to $77.0 million in the third quarter of 2006.

• The Personal Lines GAAP combined ratio was 95.6% in the third quarter of 2007, versus 98.4% in the prior-year quarter. Excluding the Hurricane Katrina adjustments, the combined ratio would have been 95.6% and 94.9% for the third quarter of 2007 and 2006, respectively.

• The pre-tax net impact of catastrophes (including adjustments to reserves related to Hurricane Katrina) was $5.2 million, or 1.4 points of the combined ratio, for the third quarter of 2007, compared to $20.7 million, or 5.9 points of the combined ratio, for the third quarter of 2006.

• Favorable development of prior-year loss and LAE reserves, not accounting for the aforementioned additional reserves for Hurricane Katrina, was $9.6 million in the current quarter, compared to favorable development of $13.6 million in the third quarter of 2006, improving the Personal Lines combined ratio by 2.6 points and 3.9 points, respectively.

Commercial Lines

Commercial Lines pre-tax segment income was $39.4 million in the quarter, compared to an income of $7.7 million in the third quarter of 2006. The pre-tax net impact of catastrophes, which includes Hurricane Katrina related reserve adjustments, was $19.9 million in the current quarter, compared to $43.5 million in the third quarter of 2006. Excluding the pre-tax net impact of catastrophe-related losses, Commercial Lines pre-tax segment income would have been $59.3 million in the current quarter, compared to $51.2 million in the prior-year quarter. This increase was driven primarily by earned premium growth, primarily in our specialty lines, as well as lower underwriting expenses.

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Underwriting expenses were lower in the quarter, primarily due to lower variable compensation expenses and lower technology costs.

Commercial Lines highlights:

• Net premiums written were $228.9 million in the third quarter of 2007, compared to $219.7 million in the third quarter of 2006, which equates to 4.2% current-quarter growth.

• Net premiums earned were $227.5 million in the third quarter of 2007, compared to $209.5 million in the third quarter of 2006.

• New business net premiums written were $79.0 million in the third quarter of 2007, representing a decrease of 1.7% compared to $80.4 million in the third quarter of 2006.

• The Commercial Lines GAAP combined ratio was 95.9% in the third quarter of 2007, versus 109.2% in the prior-year quarter. Excluding Hurricane Katrina adjustments, the combined ratio would have been 88.3% and 90.2% for the third quarter of 2007 and 2006, respectively.

• The pre-tax net impact of catastrophes (including adjustments to reserves related to Hurricane Katrina) was $19.9 million, or 8.8 points of the combined ratio, for the third quarter of 2007, compared to $43.5 million, or 20.8 points of the combined ratio, for the third quarter of 2006.

• Favorable development of prior-year loss and LAE reserves, not accounting for the aforementioned additional reserves for Hurricane Katrina, was $24.8 million in the current quarter, compared to favorable development of $25.7 million in the third quarter of 2006, improving the Commercial Lines combined ratio by 10.9 points and 12.3 points, respectively.

Other Property & Casualty

Other Property & Casualty pre-tax segment income was $4.0 million in the quarter, compared to $10.1 million in the prior-year quarter. Excluding the previously mentioned $7.0 million litigation settlement benefit related to Opus Investment Management, Inc., pre-tax segment income in the third quarter of 2006 would have been $3.1 million. Other Property & Casualty includes the company’s premium financing business, investment management operations, earnings on holding company assets, as well as run-off voluntary pools.

Life Companies

Continuing Operations:

The continuing operations of the Life Companies include the FAFLIC retained business. The retained business primarily includes the closed block of traditional life insurance, group retirement business, guaranteed investment contract (GIC) businesses, and the company’s discontinued group life and health business, including group life and health voluntary pools, which are all in run-off.

The Life Companies’ continuing operations reported a segment loss of $4.1 million in the third quarter of 2007, compared to a loss of $1.1 million in the third quarter of 2006. The segment loss in the current quarter was primarily driven by increased pension expenses of $2.8 million resulting from the pension adjustment discussed in Other Items.

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Investment Results

Net investment income was $81.4 million for the third quarter of 2007, compared to $78.3 million in the same period of 2006. Net investment income for the property and casualty segment increased by $6.5 million, to $62.4 million for the third quarter of 2007, compared to the third quarter of 2006. This increase in property and casualty segment net investment income for the quarter was driven primarily by increased operating cash flows that can be attributed to growth in the business. Offsetting the increase in property and casualty net investment income was a decrease in the Life Companies’ net investment income of $3.4 million, to $18.8 million. The decrease in Life Companies’ net investment income was driven by lower limited partnership income and lower average invested assets, resulting from continued cash outflows from the run-off of the life operations.

Third quarter 2007 pre-tax net realized investment losses were $1.2 million, compared to $2.1 million of pre-tax net realized gains in the same period of 2006. In the third quarter 2007, there were pre-tax net realized losses on sales of fixed maturities of $0.8 million and $0.4 million of capital losses resulting from impairments on certain fixed maturity securities. In the third quarter of 2006, pre-tax net realized investment gains of $3.6 million were primarily from sales of investments. These gains were partially offset by $1.5 million of capital losses resulting from impairments on certain fixed maturity securities.

Balance Sheet

Shareholders’ equity was $2.2 billion, or $42.34 per share, at September 30, 2007, compared to $2.0 billion or $39.10 per share at December 31, 2006. Excluding accumulated other comprehensive income, book value was $43.62 per share at the close of the current quarter, compared to $39.88 per share at December 31, 2006.

Other Items

On October 17, 2007, we announced that the Board of Directors of The Hanover Insurance Group, declared an annual dividend of 40 cents ($.40) per share on the issued and outstanding common stock of the company, payable December 12, 2007, to shareholders of record at the close of business November 28, 2007. This represents a 10 cent increase from the dividend paid out last year.

Also, as announced earlier today, the Board of Directors of The Hanover Insurance Group has authorized the company to repurchase up to $100 million of its common stock. Under this new authorization, the company may repurchase up to $100 million of its common stock from time to time, in amounts and prices and at such times as the company deems appropriate, subject to market conditions and other considerations. The repurchase authorization does not require the company to purchase any specific number of shares or to make purchases by a certain date.

The current quarter’s results include the effect of an adjustment to our pension benefit obligation (PBO) liability which reduced current quarter’s pre-tax earnings by $5.0 million or $0.06 per share after-tax, shareholders’ equity by $10.4 million after-tax and book value by $0.20 per share after tax. This adjustment results from an error in the calculation of our PBO for each of 2005 and 2006 relating to census data third-party recordkeeping errors. The impact of this adjustment to the PBO in the quarter represents the cumulative prior-period effect under Statement of Financial Accounting Standards No. 87, “Employers’ Accounting for Pensions.” This adjustment is subject to change in the fourth quarter, pending the completion of our analysis with respect to these census data recordkeeping errors. We do not expect any fourth quarter adjustment to be material to the results of operations or to shareholders’ equity.

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Earnings Conference Call

The Hanover will host a conference call to discuss the company’s third quarter results on Tuesday, October 30th at 10:00 a.m. Eastern Time. A PowerPoint slide presentation will accompany our prepared remarks and has been posted on our web site. Interested investors and others can listen to the call and access the presentation through The Hanover’s web site, located at www.hanover.com. Web-cast participants should go to the web site 15 minutes early to register, download, and install any necessary audio software. A re-broadcast of the conference call will be available on this web site two hours after the call.

Statistical Supplement

The Hanover’s third quarter earnings press release and statistical supplement are also available in the Investors section at www.hanover.com.

Forward-Looking Statements and Non-GAAP Financial Measures

Certain statements in this release or in the above referenced conference call may be forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Use of the words “believes,” “anticipates,” “expects,” “projections,” “outlook,” “should,” “plan,” “guidance” and similar expressions is intended to identify forward-looking statements. The Company cautions investors that any such forward-looking statements are not guarantees of future performance, and actual results could differ materially. Investors are directed to consider the risks and uncertainties in its business that may affect future performance and that are discussed in readily available documents, including the Company’s annual report and other documents filed by The Hanover with the Securities and Exchange Commission and which are also available at www.hanover.com under “Investors”. These uncertainties include the possibility of adverse catastrophe experiences (including terrorism) and severe weather, the uncertainties in estimating property and casualty losses (particularly with respect to products with longer tails and with respect to losses incurred as the result of Hurricanes Katrina and Rita), the possibility of adverse judicial decisions including those which expand policy coverage beyond its intended scope (such as recent decisions in Louisiana involving the so-called “flood” exclusions and so-called “Valued Policy Law”), the ability to increase or maintain certain property and casualty insurance rates, the impact of new product introductions (such as the multivariate personal auto product and the homeowners tiered product), the impact of the company’s acquisition of Professionals Direct, Inc., adverse loss development and adverse trends in mortality and morbidity and medical costs, changes in the frequency and loss trends generally being experienced industry-wide, the ability to improve renewal rates and increase new property and casualty policy counts, investment impairments, heightened competition (including increasing rate pressure, particularly in Commercial Lines), adverse state and federal legislation or regulation or regulatory actions, financial ratings actions, uncertainties in estimating the FIN 45 liability recorded in conjunction with certain indemnity obligations to Goldman Sachs in connection with the sale of the variable life insurance and annuity business (including with respect to existing and potential litigation and regulatory actions and the remediation of certain processing errors in connection with tax reporting), uncertainties in calculating our projected benefit liabilities as a result of prior census data errors, and various other factors.

The Hanover uses non-GAAP financial measures as important measures of the Company’s operating performance, including total segment income, property and casualty segment income, and measures of segment income and loss ratios excluding catastrophe losses, catastrophe losses relating to Hurricane Katrina or reserve development.

Segment income is net income excluding federal income taxes and net realized investment gains and losses, including gains or losses on certain derivative instruments, because fluctuations in these gains

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and losses are determined by interest rates, financial markets and the timing of sales. Segment income also excludes net gains and losses on disposals of businesses, discontinued operations, restructuring costs, extraordinary items, the cumulative effect of accounting changes and certain other items. Property and Casualty segment income is the sum of the segment income of the three operating segments of The Hanover’s property and casualty operations: Personal Lines, Commercial Lines and Other Property and Casualty. The Hanover believes that measures of total segment income and Property and Casualty segment income provide investors with a valuable measure of the performance of the Company’s ongoing businesses because they highlight net income attributable to the core operations of the business.

The Hanover also provides measures of segment income and loss ratios that exclude the effects of catastrophe losses. A catastrophe is a severe loss, resulting from natural or manmade events, including risks such as fire, hurricane, earthquake, windstorm, explosion, terrorism or other similar events. Each catastrophe has unique characteristics. Catastrophes are not predictable as to timing or loss amount in advance. The Hanover believes that a discussion of the effect of catastrophes is meaningful for investors to understand the variability of periodic earnings and loss ratios.

Net income is the most directly comparable GAAP measure for total segment income, Property and Casualty segment income and measures of segment income that exclude the effects of catastrophe losses or reserve development. Segment income, Property and Casualty segment income and measures of segment income that exclude the effects of catastrophe losses or reserve development (including development related to Hurricane Katrina) should not be construed as a substitute for net income determined in accordance with GAAP. A reconciliation of net income to segment income and Property and Casualty segment income for the quarters ended September 30, 2007 and 2006 is set forth in the table at the end of this document and in the statistical supplement. Loss ratios calculated in accordance with GAAP are the most directly comparable GAAP measure for loss ratios calculated excluding the effects of catastrophe losses. The presentation of loss ratios calculated excluding the effects of catastrophe losses should not be construed as a substitute for loss ratios determined in accordance with GAAP.

The Hanover Insurance Group, Inc., based in Worcester, Mass., is the holding company for a group of insurers that includes The Hanover Insurance Company, also based in Worcester, Citizens Insurance Company of America, headquartered in Howell, Michigan, and their affiliates. The Hanover offers a wide range of property and casualty products and services to individuals, families and businesses through an extensive network of independent agents, and has been meeting its obligations to its agent partners and their customers for more than 150 years. Taken as a group, The Hanover ranks among the top 40 property and casualty insurers in the United States.

Contact Information
Investors:	Media:
Sujata Mutalik	Michael F. Buckley
E-mail: smutalik@hanover.com	E-mail: mibuckley@hanover.com
1-508-855-3457	1-508-855-3099

8

THE HANOVER INSURANCE GROUP, INC.

(In millions, except per share data)

	Quarter ended September 30
	2007		2006
Net income	$	53.9	$	33.4
Net income per share(1)	$	1.03	$	0.65
Weighted average shares		52.5		51.3

The following is a reconciliation from segment income to net income ⁽²⁾:

PER SHARE DATA (DILUTED) (1)	Quarter ended September 30
	2007						2006
Segment Income	$			Per Share			$			Per Share
Property and Casualty
Personal Lines	$	49.4					$	35.0
Commercial Lines		39.4						7.7
Other Property & Casualty		4.0						10.1
Total Property and Casualty		92.8						52.8
Life Companies		(4.1	)					(1.1	)
Interest expense on corporate debt		(10.0	)					(10.0	)
Total segment income		78.7		$	1.50			41.7		$	0.81
Federal income tax expense on P&C segment income		(31.7	)					(15.2	)
Federal income tax benefit on other segment income		6.0						1.1
Total federal income tax expense on segment income		(25.7	)		(0.49	)		(14.1	)		(0.27	)
Total segment income after federal income taxes		53.0			1.01			27.6			0.54
Net realized investment (losses) gains, net of amortization		(0.9	)		(0.02	)		2.0			0.04
Gain on derivatives								0.1
Restructuring costs								(0.5	)		(0.01	)
Federal income tax benefit (expense) on non-segment income		0.7			0.01			(0.7	)		(0.01	)
Federal income tax settlement		0.2			0.01
Income from continuing operations, net of taxes		53.0			1.01			28.5			0.56
Gain (loss) on disposal of variable life insurance and annuity business, net of taxes		0.1						(2.9	)		(0.06	)
Gain on Sale of Financial Profiles, net of taxes		0.8			0.02			7.8			0.15
Net income	$	53.9		$	1.03		$	33.4		$	0.65

⁽¹⁾ Basic net income per share was $1.04 and $0.66 for the quarters ended September 30, 2007 and 2006, respectively.

⁽²⁾ In accordance with Statement of Financial Accounting Standards No. 131, “Disclosure about Segments of an Enterprise and Related Information,” the separate financial information of each

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segment is presented consistent with the way results are regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

Management evaluates the results of the aforementioned segments on a pre-tax basis. Segment income is determined by adjusting net income for net realized investment gains and losses including certain gains or losses on derivative instruments, because fluctuations in these gains and losses are determined by interest rates, financial markets and the timing of sales. Also, segment income excludes net gains and losses on disposals of businesses, discontinued operations, restructuring costs, extraordinary items, the cumulative effect of accounting changes and certain other items.

Net income includes the following items by segment:

	Personal Lines			Commercial Lines			Other Property & Casualty		Life Companies			Total
Net realized investment losses	$	(0.4	)	$	(0.4	)	$	—	$	(0.1	)	$	(0.9	)
Federal income tax settlement										0.2			0.2
Gain on disposal of variable life insurance and annuity business, net of taxes										0.1			0.1
Gain on Sale of Financial Profiles, net of taxes										0.8			0.8
		Quarter ended September 30, 2007 (In millions)
	Personal Lines			Commercial Lines			Other Property & Casualty		Life Companies			Total
Net realized investment gains	$	0.6		$	1.0		$	—	$	0.4		$	2.0
Gain on derivatives										0.1			0.1
Restructuring costs										(0.5	)		(0.5	)
Loss on disposal of variable life insurance and annuity business, net of taxes										(2.9	)		(2.9	)
Gain on Sale of Financial Profiles, net of taxes										7.8			7.8

All figures reported are unaudited.

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EX-99.2

Exhibit 99.2

THE HANOVER INSURANCE GROUP

STATISTICAL SUPPLEMENT

TABLE OF CONTENTS

Financial Highlights	1-3
Consolidated Financial Statements
Income Statements	4-5
Balance Sheets	6
Property and Casualty
Condensed Income Statements	7
Property and Casualty Consolidated Balance Sheets	8
GAAP Underwriting Results	9-12
Life Companies
Condensed Income Statements	13
Life Companies Consolidated Balance Sheets	14
Future Policy Benefits and Account Balances	15
Investments
Net Investment Income	16
Net Realized Investment Gains (Losses)	17
Unrealized Losses	18
Credit Quality of Fixed Maturities	19
Property and Casualty Statutory Ratios	20-21
Historical Financial Highlights	22-23
Other Information	24
Corporate Information	24
Market and Dividend Information	24
Industry Ratings	24

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

	Quarter ended September 30								Nine Months ended September 30
(In millions)	2007			2006			% Change		2007			2006			% Change
SEGMENT INCOME
Property and Casualty
Personal Lines	$	49.4		$	35.0		41.1		$	152.5		$	137.7		10.7
Commercial Lines		39.4			7.7		N/M			127.7			76.9		66.1
Other		4.0			10.1		(60.4	)		11.6			16.1		(28.0	)
Total Property and Casualty		92.8			52.8		75.8			291.8			230.7		26.5
Life Companies		(4.1	)		(1.1	)	N/M			(4.2	)		(4.0	)	5.0
Interest expense on corporate debt		(10.0	)		(10.0	)	—			(29.9	)		(29.9	)	—
Total segment income		78.7			41.7		88.7			257.7			196.8		30.9
Federal income tax expense on P&C segment income		(31.7	)		(15.2	)	N/M			(99.6	)		(74.4	)	33.9
Federal income tax benefit on other segment income		6.0			1.1		N/M			14.3			13.1		9.2
Total federal income tax expense on segment income		(25.7	)		(14.1	)	82.3			(85.3	)		(61.3	)	39.2
Total segment income after taxes	$	53.0		$	27.6		92.0		$	172.4		$	135.5		27.2
RECONCILIATION FROM SEGMENT INCOME TO NET INCOME
Total segment income after taxes	$	53.0		$	27.6		92.0		$	172.4		$	135.5		27.2
Federal income tax settlement		0.2			—		N/M			2.6			—		N/M
Net realized investment (losses) gains, net of amortization		(0.9	)		2.0		N/M			1.2			11.4		(89.5	)
Gains on derivative instruments		—			0.1		N/M			0.1			0.2		(50.0	)
Restructuring (cost) benefit		—			(0.5	)	N/M			0.2			(1.4	)	N/M
Federal income tax benefit (expense) on non-segment income		0.7			(0.7	)	N/M			(0.2	)		(3.5	)	(94.3	)
Income from continuing operations		53.0			28.5		86.0			176.3			142.2		24.0
Gain (loss) on disposal of variable life insurance and annuity business, net of taxes		0.1			(2.9	)	N/M			0.2			(25.8	)	N/M
Gain on sale of Financial Profiles Inc., net of taxes		0.8			7.8		(89.7	)		0.8			7.8		(89.7	)
Income before cumulative effect of accounting change		53.9			33.4		61.4			177.3			124.2		42.8
Cumulative effect of change in accounting principle, net of taxes		—			—		—			—			0.6		N/M
Net income	$	53.9		$	33.4		61.4		$	177.3		$	124.8		42.1

1

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

	Quarter ended September 30								Nine Months ended September 30
	2007			2006			% Change		2007			2006			% Change
PER SHARE DATA (DILUTED)
Total segment income	$	1.50		$	0.81		85.2		$	4.93		$	3.77		30.8
Federal income tax expense on segment income		(0.49	)		(0.27	)	81.5			(1.63	)		(1.17	)	39.3
Total segment income after taxes		1.01			0.54		87.0			3.30			2.60		26.9
Federal income tax settlement		0.01			—		N/M			0.05			—		N/M
Net realized investment (losses) gains, net of amortization		(0.02	)		0.04		N/M			0.03			0.22		(86.4	)
Restructuring costs		—			(0.01	)	N/M			—			(0.02	)	N/M
Federal income tax benefit (expense) on non-segment income		0.01			(0.01	)	N/M			(0.01	)		(0.07	)	(85.7	)
Income from continuing operations		1.01			0.56		80.4			3.37			2.73		23.4
Loss on disposal of variable life insurance and annuity business, net of taxes		—			(0.06	)	N/M			—			(0.49	)	N/M
Gain on sale of Financial Profiles Inc., net of taxes		0.02			0.15		(86.7	)		0.02			0.14		(85.7	)
Income before cumulative effect of accounting change		1.03			0.65		58.5			3.39			2.38		42.4
Cumulative effect of change in accounting principle, net of taxes		—			—		—			—			0.01		N/M
Net income	$	1.03		$	0.65		58.5		$	3.39		$	2.39		41.8

2

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

(In millions, except per share data)	September 30 2007			December 31 2006			% Change
BALANCE SHEET
Shareholders' equity
The Hanover Insurance Company (consolidated)	$	2,093.2		$	1,929.7		8.5
First Allmerica Financial Life Insurance Company (consolidated)		311.8			318.0		(1.9	)
THG Holding Company debt (1)		(499.5	)		(499.5	)	—
THG Holding Company and other		287.1			251.0		14.4
Total shareholders' equity	$	2,192.6		$	1,999.2		9.7
Total adjusted statutory capital
The Hanover Insurance Company (consolidated)	$	1,601.7		$	1,463.6		9.4
First Allmerica Financial Life Insurance Company	$	191.3		$	179.9		6.3
The Hanover Insurance Company (consolidated) premium to surplus ratio		1.5:1			1.6:1		N/M
First Allmerica Financial Life Insurance Company estimated risk based capital ratio		489	%		431	%	58.0
Book value per share
The Hanover Insurance Company (consolidated)	$	40.42		$	37.74		7.1
First Allmerica Financial Life Insurance Company (consolidated)		6.02			6.22		(3.2	)
THG Holding Company debt (1)		(9.64	)		(9.77	)	(1.3	)
THG Holding Company and other		5.54			4.91		12.8
Total book value per share	$	42.34		$	39.10		8.3
THG book value per share, excluding accumulated other comprehensive income	$	43.62		$	39.88		9.4
The Hanover Insurance Company (consolidated) book value per share, excluding accumulated other comprehensive income	$	40.63		$	37.59		8.1
Shares outstanding (2)		51.8			51.1
Stock price	$	44.19		$	48.80		(9.4	)
Price/book value per share		1.0	x		1.2	x	(0.2	)x
Debt/equity		23.4	%		25.5	%	(2.1	)pts
Debt/total capital		19.0	%		20.3	%	(1.3	)pts

(1) Excludes $9.3 million of holding company debt related to its affiliate, AFC Capital Trust I.

(2) Shares outstanding do not include common stock equivalents.

3

THE HANOVER INSURANCE GROUP

CONSOLIDATED INCOME STATEMENTS

	Quarter ended September 30								Nine Months ended September 30
(In millions, except per share data)	2007			2006			% Change		2007		2006			% Change
REVENUES
Premiums	$	600.4		$	568.2		5.7		$	1,798.1	$	1,682.4		6.9
Net investment income		81.4			78.3		4.0			241.9		237.8		1.7
Net realized investment (losses) gains		(1.2	)		2.1		N/M			1.9		10.6		(82.1	)
Fees and other income		14.5			22.6		(35.8	)		42.7		58.8		(27.4	)
Total revenues		695.1			671.2		3.6			2,084.6		1,989.6		4.8
BENEFITS, LOSSES AND EXPENSES
Policy benefits, claims, losses and loss adjustment expenses		393.1			399.5		(1.6	)		1,160.8		1,114.8		4.1
Policy acquisition expenses		132.6			121.7		9.0			390.0		352.8		10.5
Other operating expenses		91.6			106.7		(14.2	)		274.6		315.0		(12.8	)
Total benefits, losses and expenses		617.3			627.9		(1.7	)		1,825.4		1,782.6		2.4
Income from continuing operations before federal income taxes		77.8			43.3		79.7			259.2		207.0		25.2
Federal income tax expense		24.8			14.8		67.6			82.9		64.8		27.9
Income from continuing operations		53.0			28.5		86.0			176.3		142.2		24.0
Gain (loss) on disposal of variable life insurance and annuity business, net of taxes		0.1			(2.9	)	N/M			0.2		(25.8	)	N/M
Gain on sale of Financial Profiles Inc., net of taxes		0.8			7.8		(89.7	)		0.8		7.8		(89.7	)
Income before cumulative effect of change in accounting principle		53.9			33.4		61.4			177.3		124.2		42.8
Cumulative effect of change in accounting principle, net of taxes		—			—		—			—		0.6		N/M
Net income	$	53.9		$	33.4		61.4		$	177.3	$	124.8		42.1

4

THE HANOVER INSURANCE GROUP

CONSOLIDATED INCOME STATEMENTS

	Quarter ended September 30							Nine Months ended September 30
	2007		2006			% Change		2007		2006			% Change
PER SHARE DATA (DILUTED)
Income from continuing operations	$	1.01	$	0.56		80.4		$	3.37	$	2.73		23.4
Loss on disposal of variable life insurance and annuity business, net of taxes		—		(0.06	)	N/M			—		(0.49	)	N/M
Gain on sale of Financial Profiles Inc., net of taxes		0.02		0.15		(86.7	)		0.02		0.14		(85.7	)
Income before cumulative effect of change in accounting principle		1.03		0.65		58.5			3.39		2.38		42.4
Cumulative effect of change in accounting principle, net of taxes		—		—		—			—		0.01		N/M
Net income (1)	$	1.03	$	0.65		58.5		$	3.39	$	2.39		41.8
Weighted average shares outstanding		52.5		51.3					52.3		52.2

(1) Basic income per share was $1.04 and $0.66 for the quarters ended September 30, 2007 and 2006, respectively and $3.44 and $2.42 for the nine months ended September 30, 2007 and 2006, respectively.

5

THE HANOVER INSURANCE GROUP

CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)	September 30 2007			December 31 2006			% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $5,746.0 and $5,643.2)	$	5,709.2		$	5,629.0		1.4
Equity securities, at fair value (cost of $27.4 and $11.6)		35.3			17.2		N/M
Mortgage loans		41.8			57.1		(26.8	)
Policy loans		117.7			125.7		(6.4	)
Other long-term investments		32.6			35.4		(7.9	)
Total investments		5,936.6			5,864.4		1.2
Cash and cash equivalents		229.7			372.7		(38.4	)
Accrued investment income		76.7			72.3		6.1
Premiums, accounts and notes receivable, net		660.5			584.7		13.0
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		1,373.8			1,350.5		1.7
Deferred policy acquisition costs		255.2			233.5		9.3
Deferred federal income taxes		356.3			385.0		(7.5	)
Goodwill		126.0			121.4		3.8
Other assets		322.8			328.5		(1.7	)
Separate account assets		507.6			543.6		(6.6	)
Total assets	$	9,845.2		$	9,856.6		(0.1	)
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Policy liabilities and accruals:
Future policy benefits	$	1,177.0		$	1,242.3		(5.3	)
Outstanding claims, losses and loss adjustment expenses		3,239.9			3,247.2		(0.2	)
Unearned premiums		1,203.6			1,101.4		9.3
Contractholder deposit funds and other policy liabilities		174.5			194.9		(10.5	)
Total policy liabilities and accruals		5,795.0			5,785.8		0.2
Expenses and taxes payable		727.1			928.0		(21.6	)
Reinsurance premiums payable		69.9			52.7		32.6
Trust instruments supported by funding obligations		39.0			38.5		1.3
Long-term debt		514.0			508.8		1.0
Separate account liabilities		507.6			543.6		(6.6	)
Total liabilities		7,652.6			7,857.4		(2.6	)
SHAREHOLDERS’ EQUITY
Preferred stock, par value $.01 per share; authorized 20.0 million shares; issued none		—			—		—
Common stock, par value $.01 per share; authorized 300.0 million shares; issued 60.5 million shares		0.6			0.6		—
Additional paid-in capital		1,818.4			1,814.3		0.2
Accumulated other comprehensive loss		(66.7	)		(39.9	)	67.2
Retained earnings		892.8			712.0		25.4
Treasury stock at cost (8.7 and 9.4 million shares)		(452.5	)		(487.8	)	(7.2	)
Total shareholders’ equity		2,192.6			1,999.2		9.7
Total liabilities and shareholders’ equity	$	9,845.2		$	9,856.6		(0.1	)

6

PROPERTY & CASUALTY

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

CONDENSED INCOME STATEMENTS

	Quarter ended September 30								Nine Months ended September 30
(In millions)	2007			2006			% Change		2007			2006			% Change
REVENUES
Net premiums written	$	621.8		$	602.9		3.1		$	1,853.7		$	1,775.3		4.4
Change in unearned premiums, net of prepaid reinsurance premiums		(26.6	)		(40.3	)	(34.0	)		(83.4	)		(122.4	)	(31.9	)
Net premiums earned		595.2			562.6		5.8			1,770.3			1,652.9		7.1
Net investment income		62.4			55.9		11.6			182.7			168.4		8.5
Other income		16.9			20.9		(19.1	)		48.3			48.7		(0.8	)
Total segment revenue		674.5			639.4		5.5			2,001.3			1,870.0		7.0
LOSSES AND OPERATING EXPENSES
Policy benefits, claims, losses and loss adjustment expenses		373.4			380.2		(1.8	)		1,089.8			1,044.6		4.3
Policy acquisition expenses		132.5			121.5		9.1			389.5			352.1		10.6
Other operating expenses		75.8			84.9		(10.7	)		230.2			242.6		(5.1	)
Total losses and operating expenses		581.7			586.6		(0.8	)		1,709.5			1,639.3		4.3
Segment income before federal income taxes	$	92.8		$	52.8		75.8		$	291.8		$	230.7		26.5

7

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

CONSOLIDATED BALANCE SHEETS (1)

(In millions, except per share data)	September 30 2007			December 31 2006		% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $4,173.3 and $3,999.1)	$	4,146.6		$	3,989.0	4.0
Equity securities, at fair value (cost of $19.7 and $3.9)		25.5			7.3	N/M
Mortgage loans		11.1			23.7	(53.2	)
Other long-term investments		8.5			10.2	(16.7	)
Total investments		4,191.7			4,030.2	4.0
Cash and cash equivalents		177.3			230.5	(23.1	)
Accrued investment income		52.7			48.0	9.8
Premiums, accounts, and notes receivable, net		659.5			581.8	13.4
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		1,050.8			1,012.2	3.8
Deferred policy acquisition costs		250.8			228.4	9.8
Deferred federal income tax asset		204.9			206.2	(0.6	)
Goodwill		126.0			121.4	3.8
Other assets		200.7			194.9	3.0
Total assets	$	6,914.4		$	6,653.6	3.9
LIABILITIES AND SHAREHOLDER’S EQUITY
LIABILITIES
Policy liabilities and accruals:
Outstanding claims, losses and loss adjustment expenses	$	3,159.1		$	3,163.9	(0.2	)
Unearned premiums		1,202.0			1,099.9	9.3
Contractholder deposit funds and other policy liabilities		2.0			2.1	(4.8	)
Total policy liabilities and accruals		4,363.1			4,265.9	2.3
Expenses and taxes payable		385.5			408.8	(5.7	)
Reinsurance premiums payable		67.4			49.2	37.0
Long-term debt		5.2			—	—
Total liabilities		4,821.2			4,723.9	2.1
SHAREHOLDER’S EQUITY
Common stock, par value $1.00 per share; authorized 20.9 million shares; issued 5.0 million shares		5.0			5.0	—
Additional paid-in capital		169.2			169.2	—
Accumulated other comprehensive income		(11.1	)		7.3	N/M
Retained earnings		1,930.1			1,748.2	10.4
Total shareholder’s equity		2,093.2			1,929.7	8.5
Total liabilities and shareholder’s equity	$	6,914.4		$	6,653.6	3.9

(1) Property and Casualty Companies includes The Hanover Insurance Company and Citizens Insurance Company of America, and their subsidiaries.

8

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING PROFIT (LOSS) RECONCILED TO SEGMENT INCOME

	Quarter ended September 30, 2007
	Personal Lines												Commercial Lines
(In millions)	Auto			Home			Other			Total			Workers’ Comp			Auto			Multiple Peril			Other			Total			Other P&C			Total P&C
Net premiums written	$	260.3		$	122.0		$	10.6		$	392.9		$	28.1		$	48.7		$	85.9		$	66.2		$	228.9		$	—		$	621.8
Net premiums earned	$	254.8		$	103.2		$	9.7		$	367.7		$	27.4		$	49.0		$	88.2		$	62.9		$	227.5		$	—		$	595.2
Policy benefits, claims, losses excluding prior year reserve development and catastrophe losses		151.9			51.9			4.5			208.3			15.1			25.6			45.0			24.7			110.4			—			318.7
Prior year loss and LAE reserve development (favorable) unfavorable		(8.5	)		(0.7	)		(0.4	)		(9.6	)		(4.7	)		(0.7	)		(11.2	)		(8.2	)		(24.8	)		0.2			(34.2	)
Pre-tax catastrophe losses		(0.1	)		4.6			0.4			4.9			—			(0.3	)		13.0			2.5			15.2			—			20.1
Pre-tax catastrophe LAE		0.1			0.2			—			0.3			—			—			4.3			0.4			4.7			—			5.0
Loss adjustment expenses excluding prior year reserve development		30.0			8.1			0.6			38.7			3.7			4.3			12.5			4.3			24.8			0.2			63.7
Policy acquisition expenses and other underwriting expenses											108.7															87.8			—			196.5
Policyholders’ dividends											—															0.1			—			0.1
GAAP underwriting profit (loss)											16.4															9.3			(0.4	)		25.3
Net investment income											30.2															27.9			4.3			62.4
Other income											4.9															4.2			7.8			16.9
Other operating expenses											(2.1	)														(2.0	)		(7.7	)		(11.8	)
Segment income before federal income taxes										$	49.4														$	39.4		$	4.0		$	92.8
	Quarter ended September 30, 2006
	Personal Lines												Commercial Lines
	Auto			Home			Other			Total			Workers’ Comp			Auto			Multiple Peril			Other			Total			Other P&C			Total P&C
Net premiums written	$	253.7		$	118.8		$	10.7		$	383.2		$	27.2		$	48.7		$	86.2		$	57.6		$	219.7		$	—		$	602.9
Net premiums earned	$	241.6		$	101.6		$	9.9		$	353.1		$	26.8		$	48.6		$	84.7		$	49.4		$	209.5		$	—		$	562.6
Policy benefits, claims, losses excluding prior year reserve development and catastrophe losses		149.5			40.0			3.2			192.7			20.5			27.0			36.7			16.1			100.3			—			293.0
Prior year loss and LAE reserve development (favorable) unfavorable		(16.1	)		2.1			0.4			(13.6	)		(8.2	)		(8.1	)		(8.6	)		(0.8	)		(25.7	)		0.1			(39.2	)
Pre-tax catastrophe losses		1.0			14.4			1.2			16.6			—			0.7			32.8			5.7			39.2			—			55.8
Pre-tax catastrophe LAE		0.6			3.4			0.1			4.1			—			—			4.0			0.3			4.3			—			8.4
Loss adjustment expenses excluding prior year reserve development		30.9			8.9			0.3			40.1			3.4			4.6			11.0			2.9			21.9			0.1			62.1
Policy acquisition expenses and other underwriting expenses											107.2															88.9			—			196.1
Policyholders’ dividends											—															0.1			—			0.1
GAAP underwriting profit (loss)											6.0															(19.5	)		(0.2	)		(13.7	)
Net investment income											26.7															26.0			3.2			55.9
Other income											3.4															4.1			13.4			20.9
Other operating expenses											(1.1	)														(2.9	)		(6.3	)		(10.3	)
Segment income before federal income taxes										$	35.0														$	7.7		$	10.1		$	52.8

9

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING PROFIT (LOSS) RECONCILED TO SEGMENT INCOME

	Nine Months ended September 30, 2007
	Personal Lines											Commercial Lines
(In millions)	Auto			Home		Other			Total			Workers’ Comp			Auto			Multiple Peril			Other			Total			Other P&C			Total P&C
Net premiums written	$	783.4		$	316.9	$	29.7		$	1,130.0		$	88.7		$	155.1		$	273.2		$	206.4		$	723.4		$	0.3		$	1,853.7
Net premiums earned	$	754.2		$	308.9	$	29.3		$	1,092.4		$	81.3		$	146.3		$	263.2		$	186.8		$	677.6		$	0.3		$	1,770.3
Policy benefits, claims, losses excluding prior year reserve development and catastrophe losses		478.4			146.7		9.6			634.7			53.0			77.4			133.2			72.4			336.0			—			970.7
Prior year loss and LAE reserve development (favorable) unfavorable		(53.6	)		0.4		(0.4	)		(53.6	)		(18.5	)		(7.9	)		(25.7	)		(16.5	)		(68.6	)		1.2			(121.0	)
Pre-tax catastrophe losses		2.5			16.6		1.1			20.2			—			(0.1	)		21.6			4.5			26.0			—			46.2
Pre-tax catastrophe LAE		0.1			1.3		—			1.4			—			—			5.1			1.2			6.3			—			7.7
Loss adjustment expenses excluding prior year reserve development		89.9			23.3		1.4			114.6			10.8			11.9			35.1			13.1			70.9			0.3			185.8
Policy acquisition expenses and other underwriting expenses										320.9															264.3			(0.2	)		585.0
Policyholders’ dividends										—															0.4			—			0.4
GAAP underwriting profit (loss)										54.2															42.3			(1.0	)		95.5
Net investment income										88.5															81.8			12.4			182.7
Other income										13.9															11.8			22.6			48.3
Other operating expenses										(4.1	)														(8.2	)		(22.4	)		(34.7	)
Segment income before federal income taxes									$	152.5														$	127.7		$	11.6		$	291.8
	Nine Months ended September 30, 2006
	Personal Lines											Commercial Lines
	Auto			Home		Other			Total			Workers’ Comp			Auto			Multiple Peril			Other			Total			Other P&C			Total P&C
Net premiums written	$	749.7		$	305.6	$	30.2		$	1,085.5		$	90.5		$	154.3		$	275.4		$	169.3		$	689.5		$	0.3		$	1,775.3
Net premiums earned	$	710.8		$	297.3	$	29.3		$	1,037.4		$	82.5		$	144.5		$	252.0		$	136.3		$	615.3		$	0.2		$	1,652.9
Policy benefits, claims, losses excluding prior year reserve development and catastrophe losses		434.0			125.1		8.8			567.9			62.9			74.7			110.1			44.2			291.9			—			859.8
Prior year loss and LAE reserve development (favorable) unfavorable		(37.2	)		0.1		(1.1	)		(38.2	)		(17.9	)		(11.9	)		(20.8	)		(3.9	)		(54.5	)		1.4			(91.3	)
Pre-tax catastrophe losses		2.4			25.2		1.6			29.2			—			1.9			38.3			13.2			53.4			—			82.6
Pre-tax catastrophe LAE		(0.2	)		2.7		0.1			2.6			—			—			5.5			0.3			5.8			—			8.4
Loss adjustment expenses excluding prior year reserve development		87.4			27.5		1.6			116.5			11.4			12.0			35.4			8.9			67.7			0.5			184.7
Policy acquisition expenses and other underwriting expenses										310.3															255.1			(0.3	)		565.1
Policyholders’ dividends										—															0.4			—			0.4
GAAP underwriting profit (loss)										49.1															(4.5	)		(1.4	)		43.2
Net investment income										80.1															78.3			10.0			168.4
Other income										11.6															12.1			25.0			48.7
Other operating expenses										(3.1	)														(9.0	)		(17.5	)		(29.6	)
Segment income before federal income taxes									$	137.7														$	76.9		$	16.1		$	230.7

10

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING RATIOS

	Quarter ended September 30, 2007
	Personal Lines								Commercial Lines
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	59.6	%	50.3	%	46.4	%	56.6	%	55.1	%	52.2	%	51.0	%	39.3	%	48.5	%	N/M	53.5	%
Catastrophe losses	—		4.5	%	4.1	%	1.3	%	—		(0.6	)%	14.7	%	4.0	%	6.7	%	N/M	3.4	%
Loss development	(3.6	)%	(0.2	)%	(3.1	)%	(2.6	)%	(17.1	)%	(2.2	)%	(9.6	)%	(12.9	)%	(9.8	)%	N/M	(5.3	)%
Total losses	56.0	%	54.6	%	47.4	%	55.3	%	38.0	%	49.4	%	56.1	%	30.4	%	45.4	%	N/M	51.6	%
Loss adjustment expenses	12.1	%	7.4	%	5.2	%	10.6	%	13.5	%	9.6	%	11.1	%	6.7	%	9.8	%	N/M	10.4	%
Pre-tax catastrophe LAE	—		0.2	%	—		0.1	%	—		—		4.9	%	0.6	%	2.1	%	N/M	0.8	%
Policy acquisition and other underwriting expenses							29.6	%									38.6	%	N/M	33.0	%
Policyholders’ dividends							—										—		N/M	—
Combined							95.6	%									95.9	%	N/M	95.8	%
Policies in force	5.0	%	(2.5	)%	(2.6	)%	1.2	%	0.8	%	1.8	%	(2.1	)%	6.1	%	1.8	%	—	1.3	%
Retention (1)	73.6	%	82.9	%	N/M		78.4	%	74.8	%	77.8	%	76.6	%	77.5	%	76.6	%
	Quarter ended September 30, 2006
	Personal Lines								Commercial Lines
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	61.9	%	39.4	%	32.3	%	54.6	%	76.5	%	55.6	%	43.3	%	32.6	%	47.9	%	N/M	52.1	%
Catastrophe losses	0.4	%	14.2	%	12.1	%	4.7	%	—		1.4	%	38.7	%	11.5	%	18.7	%	N/M	9.9	%
Loss development	(6.7	)%	2.5	%	2.0	%	(3.9	)%	(28.0	)%	(16.3	)%	(8.6	)%	(3.8	)%	(11.8	)%	N/M	(6.8	)%
Total losses	55.6	%	56.1	%	46.4	%	55.4	%	48.5	%	40.7	%	73.4	%	40.3	%	54.8	%	N/M	55.2	%
Loss adjustment expenses	12.9	%	8.4	%	5.1	%	11.4	%	10.1	%	9.1	%	11.5	%	8.1	%	9.9	%	N/M	10.8	%
Pre-tax catastrophe LAE	0.2	%	3.3	%	1.0	%	1.2	%	—		—		4.7	%	0.6	%	2.1	%	N/M	1.5	%
Policy acquisition and other underwriting expenses							30.4	%									42.4	%	N/M	34.9	%
Policyholders’ dividends							—										—		N/M	—
Combined							98.4	%									109.2	%	N/M	102.4	%
Policies in force	5.6	%	(2.0	)%	—		1.8	%	(5.3	)%	(1.5	)%	(2.6	)%	4.5	%	(0.1	)%	—	1.5	%
Retention (1)	76.8	%	83.6	%	N/M		80.5	%	84.8	%	78.1	%	82.7	%	85.0	%	82.3	%

(1) The retention rate for personal lines is a twelve month rolling average calculation based on policies in force; the retention rate for commercial lines is based on direct voluntary written premiums, based on processed policies in the current period versus the same period in the prior year. Additionally, the retention rates have been adjusted to exclude the effect of our strategic termination of specialty commercial programs which resulted from an extensive review during the fourth quarter of 2001.

11

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING RATIOS

	Nine Months ended September 30, 2007
	Personal Lines								Commercial Lines
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	63.4	%	47.5	%	32.8	%	58.1	%	65.2	%	52.9	%	50.6	%	38.8	%	49.6	%	N/M	54.8	%
Catastrophe losses	0.3	%	5.4	%	3.8	%	1.8	%	—		(0.1	)%	8.2	%	2.4	%	3.8	%	N/M	2.6	%
Loss development	(7.6	)%	0.2	%	(1.1	)%	(5.2	)%	(22.6	)%	(5.9	)%	(7.6	)%	(8.9	)%	(9.4	)%	N/M	(6.7	)%
Total losses	56.1	%	53.1	%	35.5	%	54.7	%	42.6	%	46.9	%	51.2	%	32.3	%	44.0	%	N/M	50.7	%
Loss adjustment expenses	12.4	%	7.5	%	4.4	%	10.8	%	13.2	%	8.6	%	11.2	%	7.1	%	9.8	%	N/M	10.4	%
Pre-tax catastrophe LAE	—		0.4	%	—		0.1	%	—		—		1.9	%	0.6	%	0.9	%	N/M	0.4	%
Policy acquisition and other underwriting expenses							29.4	%									39.0	%	N/M	33.0	%
Policyholders’ dividends							—										0.1	%	N/M	—
Combined							95.0	%									93.8	%	N/M	94.5	%
Policies in force	5.0	%	(2.5	)%	(2.6	)%	1.2	%	0.8	%	1.8	%	(2.1	)%	6.1	%	1.8	%	—	1.3	%
Retention (1)	73.6	%	82.9	%	N/M		78.4	%	76.5	%	79.2	%	78.0	%	85.2	%	78.3	%
	Nine Months ended September 30, 2006
	Personal Lines								Commercial Lines
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	61.1	%	42.1	%	30.0	%	54.7	%	76.3	%	51.7	%	43.7	%	32.4	%	47.4	%	N/M	52.0	%
Catastrophe losses	0.3	%	8.5	%	5.5	%	2.8	%	—		1.3	%	15.2	%	9.7	%	8.7	%	N/M	5.0	%
Loss development	(5.4	)%	0.9	%	(4.0	)%	(3.6	)%	(18.8	)%	(8.2	)%	(5.9	)%	(4.3	)%	(7.7	)%	N/M	(5.0	)%
Total losses	56.0	%	51.5	%	31.5	%	53.9	%	57.5	%	44.8	%	53.0	%	37.8	%	48.4	%	N/M	52.0	%
Loss adjustment expenses	12.5	%	8.4	%	5.8	%	11.1	%	10.9	%	8.3	%	11.7	%	7.9	%	10.0	%	N/M	10.7	%
Pre-tax catastrophe LAE	—		0.9	%	0.3	%	0.3	%	—		—		2.2	%	0.2	%	0.9	%	N/M	0.5	%
Policy acquisition and other underwriting expenses							29.9	%									41.5	%	N/M	34.2	%
Policyholders’ dividends							—										0.1	%	N/M	—
Combined							95.2	%									100.9	%	N/M	97.4	%
Policies in force	5.6	%	(2.0	)%	—		1.8	%	(5.3	)%	(1.5	)%	(2.6	)%	4.5	%	(0.1	)%	—	1.5	%
Retention (1)	76.8	%	83.6	%	N/M		80.5	%	76.6	%	77.8	%	82.7	%	83.3	%	80.8	%

(1) The retention rate for personal lines is a twelve month rolling average calculation based on policies in force; the retention rate for commercial lines is based on direct voluntary written premiums, based on processed policies in the current period versus the same period in the prior year. Additionally, the retention rates have been adjusted to exclude the effect of our strategic termination of specialty commercial programs which resulted from an extensive review during the fourth quarter of 2001.

12

LIFE COMPANIES

THE HANOVER INSURANCE GROUP

LIFE COMPANIES

CONDENSED INCOME STATEMENTS

	Quarter ended September 30								Nine Months ended September 30
(In millions)	2007			2006			% Change		2007			2006			% Change
REVENUES
Premiums	$	5.2		$	5.6		(7.1	)	$	27.8		$	29.5		(5.8	)
Fees and other income		0.2			3.4		(94.1	)		1.0			15.1		(93.4	)
Net investment income		18.8			22.2		(15.3	)		58.6			68.9		(14.9	)
Total segment revenue		24.2			31.2		(22.4	)		87.4			113.5		(23.0	)
POLICY BENEFITS, CLAIMS AND OPERATING EXPENSES
Policy benefits, claims and losses		20.0			19.2		4.2			70.2			71.0		(1.1	)
Policy acquisition expenses		0.1			0.2		(50.0	)		0.5			0.7		(28.6	)
Other operating expenses		8.2			12.9		(36.4	)		20.9			45.8		(54.4	)
Total policy benefits, claims and operating expenses		28.3			32.3		(12.4	)		91.6			117.5		(22.0	)
Segment (loss) before federal income taxes	$	(4.1	)	$	(1.1	)	N/M		$	(4.2	)	$	(4.0	)	5.0

13

THE HANOVER INSURANCE GROUP

LIFE COMPANIES

CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)	September 30 2007			December 31 2006			% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $1,244.2 and $1,381.7)	$	1,232.8		$	1,377.8		(10.5	)
Equity securities, at fair value (cost of $0.1)		0.5			0.6		(16.7	)
Mortgage loans		30.4			33.4		(9.0	)
Policy loans		117.7			125.7		(6.4	)
Other long-term investments		24.1			25.2		(4.4	)
Total investments		1,405.5			1,562.7		(10.1	)
Cash and cash equivalents		29.9			104.2		(71.3	)
Accrued investment income		19.6			21.5		(8.8	)
Premiums, accounts, and notes receivable, net		1.0			2.9		(65.5	)
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		323.0			338.3		(4.5	)
Deferred policy acquisition costs		4.4			5.1		(13.7	)
Deferred federal income tax asset		145.8			174.3		(16.4	)
Other assets		85.5			98.7		(13.4	)
Separate account assets		507.6			543.6		(6.6	)
Total assets	$	2,522.3		$	2,851.3		(11.5	)
LIABILITIES AND SHAREHOLDER’S EQUITY
LIABILITIES
Policy liabilities and accruals:
Future policy benefits	$	1,177.0		$	1,242.3		(5.3	)
Outstanding claims, losses and loss adjustment expenses		80.8			83.3		(3.0	)
Unearned premiums		1.6			1.5		6.7
Contractholder deposit funds and other policy liabilities		172.5			192.8		(10.5	)
Total policy liabilities and accruals		1,431.9			1,519.9		(5.8	)
Expenses and taxes payable		229.5			427.8		(46.4	)
Reinsurance premiums payable		2.5			3.5		(28.6	)
Trust instruments supported by funding obligations		39.0			38.5		1.3
Separate account liabilities		507.6			543.6		(6.6	)
Total liabilities		2,210.5			2,533.3		(12.7	)
SHAREHOLDER’S EQUITY
Common stock, par value $10 per share; authorized 1 million shares; issued 500,000 shares		5.0			5.0		—
Additional paid-in capital		684.9			684.9		—
Accumulated other comprehensive loss		(35.1	)		(25.7	)	36.6
Retained deficit		(343.0	)		(346.2	)	(0.9	)
Total shareholder’s equity		311.8			318.0		(1.9	)
Total liabilities and shareholder’s equity	$	2,522.3		$	2,851.3		(11.5	)

14

THE HANOVER INSURANCE GROUP

LIFE COMPANIES

FUTURE POLICY BENEFITS AND ACCOUNT BALANCES

	Gross						Net of Reinsurance Recoverables
(In millions)	September 30 2007		December 31 2006		% Change		September 30 2007		December 31 2006		% Change
Insurance
Traditional life	$	704.3	$	723.8	(2.7	)	$	703.9	$	723.7	(2.7	)
Group life and health		269.4		287.3	(6.2	)		63.3		77.5	(18.3	)
Other life and health		31.3		34.1	(8.2	)		1.1		1.2	(8.3	)
Total insurance		1,005.0		1,045.2	(3.8	)		768.3		802.4	(4.2	)
Annuities
Individual annuities		85.6		97.6	(12.3	)		4.5		7.2	(37.5	)
Group annuities		339.0		374.7	(9.5	)		333.8		369.5	(9.7	)
Total annuities		424.6		472.3	(10.1	)		338.3		376.7	(10.2	)
Total general account reserves	$	1,429.6	$	1,517.5	(5.8	)	$	1,106.6	$	1,179.1	(6.1	)
Trust instruments supported by funding obligations	$	39.0	$	38.5	1.3		$	39.0	$	38.5	1.3
SEPARATE ACCOUNT LIABILITIES
Insurance - Variable universal life	$	87.0	$	85.3	2.0		$	87.0	$	85.3	2.0
Annuities
Variable individual annuities		326.0		362.0	(9.9	)		326.0		362.0	(9.9	)
Group annuities		94.6		96.3	(1.8	)		94.6		96.3	(1.8	)
Total annuities		420.6		458.3	(8.2	)		420.6		458.3	(8.2	)
Total separate account liabilities (1)	$	507.6	$	543.6	(6.6	)	$	507.6	$	543.6	(6.6	)

(1) Includes separate account liabilities subject to a modified coinsurance agreement with a former subsidiary, AFLIAC, of $409.1 million and $437.3 million as of September 30, 2007 and December 31, 2006, respectively.

15

INVESTMENTS

THE HANOVER INSURANCE GROUP

NET INVESTMENT INCOME

(In millions, except yields)	Nine Months ended September 30, 2007
	Property and Casualty (1)			Yield		Life Companies			Yield		Total			Yield
Fixed maturities	$	180.5		5.62	%	$	49.7		5.59	%	$	230.2		5.61	%
Equity securities		0.7		—			—		—			0.7		—
Mortgages (2)		1.8		14.27	%		2.2		8.99	%		4.0		10.85	%
All other		4.3		—			8.0		—			12.3		—
Investment expenses		(4.0	)	—			(1.3	)	—			(5.3	)	—
Total	$	183.3		5.48	%	$	58.6		5.57	%	$	241.9		5.50	%
	Nine Months ended September 30, 2006
	Property and Casualty (1)			Yield		Life Companies			Yield		Total			Yield
Fixed maturities	$	162.2		5.54	%	$	60.3		5.65	%	$	222.5		5.57	%
Equity securities		1.0		—			—		—			1.0		—
Mortgages (2)		2.5		9.58	%		3.0		8.83	%		5.5		9.16	%
All other		7.6		—			7.5		—			15.1		—
Investment expenses		(4.4	)	—			(1.9	)	—			(6.3	)	—
Total	$	168.9		5.34	%	$	68.9		5.35	%	$	237.8		5.34	%

(1) Includes purchase accounting adjustments of $2.4 million for the nine months ended September 30, 2007 and 2006. Also includes corporate eliminations of $0.1 million for the nine months ended September 30, 2006. There were no corporate eliminations for the nine months ended September 30, 2007.

(2) Excluding Property and Casualty mortgage prepayment fees totaling $0.8 million and $0.4 million for the nine months ended September 30, 2007 and 2006, respectively, mortgage yields are 8.05% for Property and Casualty and 8.66% in Total for the nine months ended September 30, 2007 and 8.23% for Property and Casualty and 8.56% in Total for the nine months ended September 30, 2006.

16

THE HANOVER INSURANCE GROUP

COMPONENTS OF NET REALIZED INVESTMENT GAINS (LOSSES)

	Quarter ended September 30
(In millions)	2007									2006
	Net Realized Gains (Losses)									Net Realized Gains (Losses)
	Property and Casualty (1)			Life Companies			Total			Property and Casualty (1)			Life Companies			Total
Net (losses) gains on securities transactions	$	(0.6	)	$	(0.3	)	$	(0.9	)	$	2.8		$	0.7		$	3.5
Other than temporary impairments		(0.3	)		(0.1	)		(0.4	)		(1.2	)		(0.3	)		(1.5	)
Other		0.1			—			0.1			—			0.1			0.1
Net realized investment (losses) gains	$	(0.8	)	$	(0.4	)	$	(1.2	)	$	1.6		$	0.5		$	2.1
	Nine Months ended September 30
	2007									2006
	Net Realized Gains (Losses)									Net Realized Gains (Losses)
	Property and Casualty (1)			Life Companies			Total			Property and Casualty (1)			Life Companies			Total
Net gains on securities transactions	$	0.6		$	2.4		$	3.0		$	18.6		$	0.3		$	18.9
Other than temporary impairments		(1.1	)		(0.1	)		(1.2	)		(3.8	)		(4.4	)		(8.2	)
Other		0.2			(0.1	)		0.1			(0.1	)		—			(0.1	)
Net realized investment (losses) gains	$	(0.3	)	$	2.2		$	1.9		$	14.7		$	(4.1	)	$	10.6

(1) Includes corporate eliminations of $0.1 million for the quarter ended September 30, 2006. There were no corporate eliminations for the quarter ended September 30, 2007. Includes corporate eliminations of $0.7 and $3.7 million for the nine months ended September 30, 2007 and 2006, respectively.

17

THE HANOVER INSURANCE GROUP

AGING OF GROSS UNREALIZED LOSSES ON SECURITIES AVAILABLE FOR SALE

(In millions)	September 30, 2007
	Gross Unrealized Losses						Fair Value
	Property and Casualty		Life Companies		Total		Property and Casualty		Life Companies		Total
INVESTMENT GRADE FIXED MATURITIES:
12 months or less	$	19.5	$	6.4	$	25.9	$	1,046.7	$	196.4	$	1,243.1
Greater than 12 months		30.0		18.9		48.9		1,278.7		602.5		1,881.2
Total investment grade fixed maturities		49.5		25.3		74.8		2,325.4		798.9		3,124.3
BELOW INVESTMENT GRADE FIXED MATURITIES:
12 months or less		4.6		0.9		5.5		147.7		23.9		171.6
Greater than 12 months		—		—		—		—		—		—
Total below investment grade fixed maturities		4.6		0.9		5.5		147.7		23.9		171.6
Equity securities		0.1		—		0.1		0.3		—		0.3
Total fixed maturities and equity securities	$	54.2	$	26.2	$	80.4	$	2,473.4	$	822.8	$	3,296.2
	December 31, 2006
	Gross Unrealized Losses						Fair Value
	Property and Casualty		Life Companies		Total		Property and Casualty		Life Companies		Total
INVESTMENT GRADE FIXED MATURITIES:
12 months or less	$	11.1	$	2.1	$	13.2	$	1,163.2	$	158.9	$	1,322.1
Greater than 12 months		32.2		23.2		55.4		1,342.4		747.1		2,089.5
Total investment grade fixed maturities		43.3		25.3		68.6		2,505.6		906.0		3,411.6
BELOW INVESTMENT GRADE FIXED MATURITIES:
12 months or less		1.1		0.2		1.3		60.8		7.5		68.3
Greater than 12 months		—		—		—		—		—		—
Total below investment grade fixed maturities		1.1		0.2		1.3		60.8		7.5		68.3
Equity securities		—		—		—		—		—		—
Total fixed maturities and equity securities	$	44.4	$	25.5	$	69.9	$	2,566.4	$	913.5	$	3,479.9

18

THE HANOVER INSURANCE GROUP

CREDIT QUALITY OF FIXED MATURITIES

(In millions)		September 30, 2007
		Amortized Cost						Fair Value
NAIC Designation	Rating Agency Equivalent Designation	Property and Casualty		Life Companies		Total		Property and Casualty		Life Companies		Total
1	Aaa/Aa/A	$	3,282.1	$	831.4	$	4,113.5	$	3,265.2	$	822.6	$	4,087.8
2	Baa		927.7		346.1		1,273.8		918.7		341.0		1,259.7
3	Ba		124.4		28.7		153.1		122.8		28.8		151.6
4	B		136.5		31.5		168.0		138.3		32.2		170.5
5	Caa and lower		31.1		5.3		36.4		31.4		5.3		36.7
6	In or near default		—		1.2		1.2		—		2.9		2.9
Total fixed maturities		$	4,501.8	$	1,244.2	$	5,746.0	$	4,476.4	$	1,232.8	$	5,709.2
		December 31, 2006
		Amortized Cost						Fair Value
NAIC Designation	Rating Agency Equivalent Designation	Property and Casualty		Life Companies		Total		Property and Casualty		Life Companies		Total
1	Aaa/Aa/A	$	3,165.6	$	930.1	$	4,095.7	$	3,153.6	$	920.0	$	4,073.6
2	Baa		839.5		381.5		1,221.0		833.6		382.4		1,216.0
3	Ba		101.1		25.9		127.0		102.5		27.1		129.6
4	B		118.0		36.6		154.6		122.9		39.0		161.9
5	Caa and lower		37.3		6.4		43.7		38.5		6.5		45.0
6	In or near default		—		1.2		1.2		—		2.9		2.9
Total fixed maturities		$	4,261.5	$	1,381.7	$	5,643.2	$	4,251.1	$	1,377.9	$	5,629.0

19

PROPERTY & CASUALTY STATUTORY RATIOS

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING RATIOS

	Quarter ended September 30, 2007
	Personal Lines								Commercial Lines
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	59.6	%	50.4	%	47.4	%	56.7	%	55.1	%	52.0	%	51.1	%	39.3	%	48.5	%	N/M	53.6	%
Catastrophe losses	(0.1	)%	4.5	%	3.1	%	1.3	%	—		(0.4	)%	14.7	%	3.8	%	6.7	%	N/M	3.3	%
Loss development	(3.7	)%	(0.2	)%	(3.1	)%	(2.7	)%	(17.2	)%	(2.2	)%	(9.6	)%	(12.9	)%	(9.8	)%	N/M	(5.3	)%
Total losses	55.8	%	54.7	%	47.4	%	55.3	%	37.9	%	49.4	%	56.2	%	30.2	%	45.4	%	N/M	51.6	%
Loss adjustment expenses	12.3	%	7.6	%	5.2	%	10.8	%	13.5	%	9.8	%	11.2	%	6.7	%	9.9	%	N/M	10.5	%
Pre-tax catastrophe LAE	—		0.2	%	—		0.1	%	—		—		4.9	%	0.6	%	2.1	%	N/M	0.8	%
Policy acquisition and other underwriting expenses							29.0	%									38.8	%	N/M	32.5	%
Policyholders’ dividends							—										—		N/M	—
Combined							95.2	%									96.2	%	N/M	95.4	%
	Quarter ended September 30, 2006
	Personal Lines								Commercial Lines
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	61.9	%	39.3	%	32.7	%	54.6	%	74.7	%	55.6	%	43.4	%	33.0	%	47.9	%	N/M	52.1	%
Catastrophe losses	0.4	%	14.8	%	12.2	%	4.9	%	—		1.4	%	39.1	%	11.7	%	18.9	%	N/M	10.1	%
Loss development	(6.7	)%	2.5	%	2.0	%	(3.9	)%	(27.4	)%	(16.3	)%	(8.6	)%	(3.8	)%	(11.7	)%	N/M	(6.8	)%
Total losses	55.6	%	56.6	%	46.9	%	55.6	%	47.3	%	40.7	%	73.9	%	40.9	%	55.1	%	N/M	55.4	%
Loss adjustment expenses	12.9	%	8.4	%	5.1	%	11.4	%	9.9	%	9.1	%	11.3	%	8.3	%	9.9	%	N/M	10.9	%
Pre-tax catastrophe LAE	0.2	%	3.3	%	1.0	%	1.2	%	—		—		4.7	%	0.6	%	2.0	%	N/M	1.5	%
Policy acquisition and other underwriting expenses							29.4	%									41.5	%	N/M	33.8	%
Policyholders’ dividends							—										—		N/M	—
Combined							97.6	%									108.5	%	N/M	101.6	%

20

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING RATIOS

	Nine Months ended September 30, 2007
	Personal Lines								Commercial Lines
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	63.4	%	47.5	%	32.8	%	58.1	%	64.6	%	52.9	%	50.6	%	38.8	%	49.6	%	N/M	54.8	%
Catastrophe losses	0.3	%	5.9	%	4.1	%	2.0	%	—		—		8.4	%	2.5	%	3.9	%	N/M	2.7	%
Loss development	(7.6	)%	0.2	%	(1.0	)%	(5.2	)%	(22.4	)%	(5.9	)%	(7.6	)%	(8.9	)%	(9.4	)%	N/M	(6.7	)%
Total losses	56.1	%	53.6	%	35.9	%	54.9	%	42.2	%	47.0	%	51.4	%	32.4	%	44.1	%	N/M	50.8	%
Loss adjustment expenses	12.5	%	7.5	%	4.4	%	10.9	%	13.2	%	8.7	%	11.3	%	7.1	%	9.8	%	N/M	10.5	%
Pre-tax catastrophe LAE	—		0.4	%	—		0.1	%	—		—		1.9	%	0.6	%	0.9	%	N/M	0.4	%
Policy acquisition and other underwriting expenses							29.1	%									38.1	%	N/M	32.6	%
Policyholders’ dividends							—										0.1	%	N/M	—
Combined							95.0	%									93.0	%	N/M	94.3	%

	Nine Months ended September 30, 2006
	Personal Lines								Commercial Lines
									Workers’				Multiple						Other	Total
	Auto		Home		Other		Total		Comp		Auto		Peril		Other		Total		P&C	P&C
Losses, excluding catastrophe losses and development	61.1	%	42.1	%	30.0	%	54.7	%	76.9	%	51.7	%	43.7	%	32.7	%	47.5	%	N/M	52.1	%
Catastrophe losses	0.3	%	8.8	%	5.5	%	2.9	%	—		1.3	%	15.4	%	9.8	%	8.8	%	N/M	5.1	%
Loss development	(5.4	)%	0.9	%	(4.0	)%	(3.6	)%	(19.0	)%	(8.2	)%	(5.9	)%	(4.3	)%	(7.7	)%	N/M	(5.1	)%
Total losses	56.0	%	51.8	%	31.5	%	54.0	%	57.9	%	44.8	%	53.2	%	38.2	%	48.6	%	N/M	52.1	%
Loss adjustment expenses	12.5	%	8.4	%	5.8	%	11.1	%	11.0	%	8.3	%	11.7	%	7.9	%	10.0	%	N/M	10.7	%
Pre-tax catastrophe LAE	—		0.9	%	0.3	%	0.3	%	—		—		2.2	%	0.2	%	0.9	%	N/M	0.5	%
Policy acquisition and other underwriting expenses							29.6	%									39.1	%	N/M	33.2	%
Policyholders’ dividends							—										0.2	%	N/M	0.1	%
Combined							95.0	%									98.8	%	N/M	96.6	%

21

Historical Highlights

THE HANOVER INSURANCE GROUP

HISTORICAL FINANCIAL HIGHLIGHTS

(In millions, except per share data)	Q3 07			Q2 07			Q1 07			2006			Q4 06			Q3 06			Q2 06			Q1 06
SEGMENT INCOME (1)
Property and Casualty
Personal Lines	$	49.4		$	55.7		$	47.4		$	186.7		$	49.0		$	35.0		$	53.7		$	49.0
Commercial Lines		39.4			39.3			49.0			120.3			43.4			7.7			30.2			39.0
Other Property and Casualty		4.0			3.1			4.5			21.1			5.0			10.1			2.3			3.7
Total Property and Casualty		92.8			98.1			100.9			328.1			97.4			52.8			86.2			91.7
Life Companies		(4.1	)		0.8			(0.9	)		(3.9	)		0.1			(1.1	)		(1.0	)		(1.9	)
Interest expense on corporate debt		(10.0	)		(9.9	)		(10.0	)		(39.9	)		(10.0	)		(10.0	)		(9.9	)		(10.0	)
Total segment income before federal income taxes	$	78.7		$	89.0		$	90.0		$	284.3		$	87.5		$	41.7		$	75.3		$	79.8
Federal income tax expense on segment income		(25.7	)		(29.8	)		(29.8	)		(88.2	)		(26.9	)		(14.1	)		(23.6	)		(23.6	)
Total segment income after federal income taxes	$	53.0		$	59.2		$	60.2		$	196.1		$	60.6		$	27.6		$	51.7		$	56.2
Change in prior years tax reserves		—			—			—			3.3			3.3			—			—			—
Federal income tax settlement		0.2			—			2.4			—			—			—			—			—
Net realized investment (losses) gains, net of amortization		(0.9	)		0.2			1.9			(3.5	)		(14.9	)		2.0			3.6			5.8
Gains on derivative instruments		—			0.1			—			0.2			—			0.1			0.1			—
Restructuring costs (benefit)		—			0.2			—			(1.6	)		(0.2	)		(0.5	)		(0.6	)		(0.3	)
Federal income tax benefit (expense) on non-segment income		0.7			(0.2	)		(0.7	)		(2.8	)		0.7			(0.7	)		(1.1	)		(1.7	)
Income from continuing operations		53.0			59.5			63.8			191.7			49.5			28.5			53.7			60.0
Gain (loss) on disposal of variable life insurance and annuity business, net of taxes		0.1			0.3			(0.2	)		(29.8	)		(4.0	)		(2.9	)		(2.8	)		(20.1	)
Gain on sale of Financial Profiles Inc., net of taxes		0.8			—			—			7.8			—			7.8			—			—
Income before cumulative effect of accounting change		53.9			59.8			63.6			169.7			45.5			33.4			50.9			39.9
Cumulative effect of change in accounting principle, net of taxes		—			—			—			0.6			—			—			—			0.6
NET INCOME	$	53.9		$	59.8		$	63.6		$	170.3		$	45.5		$	33.4		$	50.9		$	40.5
PER SHARE DATA (DILUTED)
INCOME FROM CONTINUING OPERATIONS	$	1.01		$	1.14		$	1.23		$	3.68		$	0.96		$	0.56		$	1.04		$	1.12
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES	$	0.02		$	—		$	(0.01	)	$	(0.42	)	$	(0.08	)	$	0.09		$	(0.05	)	$	(0.38	)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE, NET OF TAXES	$	—		$	—		$	—		$	0.01		$	—		$	—		$	—		$	0.01
NET INCOME	$	1.03		$	1.14		$	1.22		$	3.27		$	0.88		$	0.65		$	0.99		$	0.75
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED)		52.5			52.3			51.9			52.2			51.7			51.3			51.6			53.6
BALANCE SHEET
Total investments	$	5,936.6		$	5,827.1		$	5,901.6					$	5,864.4		$	5,719.3		$	5,601.4		$	5,841.8
Separate account assets	$	507.6		$	519.0		$	517.4					$	543.6		$	524.2		$	528.4		$	564.0
Total assets	$	9,845.2		$	9,805.7		$	9,776.2					$	9,856.6		$	9,844.0		$	9,689.1		$	10,156.8
Total shareholders’ equity	$	2,192.6		$	2,099.4		$	2,100.7					$	1,999.2		$	1,909.3		$	1,770.0		$	1,843.0
Book value per share	$	42.34		$	40.55		$	40.92					$	39.10		$	37.49		$	34.77		$	35.35
Book value per share, excluding accumulated other comprehensive income	$	43.62		$	42.51		$	41.33					$	39.88		$	39.20		$	38.46		$	37.77

(1) Represents income or loss of the Company’s operating segments: Personal Lines, Commercial Lines, Other Property and Casualty, Life Companies and interest expense on corporate debt. In accordance with Statement of Financial Accounting Standards No.131, the separate financial information of each segment is presented consistent with the manner in which results are regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

22

THE HANOVER INSURANCE GROUP

HISTORICAL FINANCIAL HIGHLIGHTS

(In millions, except per share data)	2005			Q4 05			Q3 05			Q2 05			Q1 05
SEGMENT INCOME (1)
Property and Casualty
Personal Lines	$	143.2		$	74.4		$	(27.8	)	$	57.4		$	39.2
Commercial Lines		(35.0	)		14.5			(101.0	)		31.0			20.5
Other Property and Casualty		5.5			0.6			1.1			1.7			2.1
Total Property and Casualty		113.7			89.5			(127.7	)		90.1			61.8
Life Companies		(18.7	)		(1.0	)		(0.9	)		(7.5	)		(9.3	)
Interest expense on corporate debt		(39.9	)		(10.0	)		(10.0	)		(9.9	)		(10.0	)
Total segment income (loss) before federal income taxes	$	55.1		$	78.5		$	(138.6	)	$	72.7		$	42.5
Federal income tax (expense) benefit on segment income		(1.0	)		(1.3	)		29.6			(19.5	)		(9.8	)
Total segment income (loss) after federal income taxes	$	54.1		$	77.2		$	(109.0	)	$	53.2		$	32.7
Change in prior years tax reserves		2.3			—			—			2.3			—
Federal income tax settlement		9.5			9.5			—			—			—
Net realized investment gains (losses), net of amortization		18.6			5.7			(2.0	)		3.6			11.3
(Losses) gains on derivative instruments		(0.3	)		—			0.2			(0.3	)		(0.2	)
Restructuring costs		(2.1	)		(0.8	)		(0.4	)		(0.2	)		(0.7	)
Federal income tax (expense) benefit on non-segment income		(5.6	)		(7.2	)		5.8			(1.5	)		(2.7	)
Income (loss) from continuing operations		76.5			84.4			(105.4	)		57.1			40.4
Income from discontinued variable life insurance and annuity business, net of taxes		42.7			4.1			17.6			14.9			6.1
(Loss) income on disposal of variable life insurance and annuity business, net of taxes		(444.4	)		30.2			(474.6	)		—			—
NET (LOSS) INCOME	$	(325.2	)	$	118.7		$	(562.4	)	$	72.0		$	46.5
PER SHARE DATA (DILUTED)
INCOME (LOSS) FROM CONTINUING OPERATIONS	$	1.42		$	1.56		$	(1.97	)	$	1.06		$	0.75
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES	$	(7.44	)	$	0.63		$	(8.54	)	$	0.28		$	0.11
NET (LOSS) INCOME	$	(6.02	)	$	2.19		$	(10.51	)	$	1.34		$	0.86
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED) (2)		54.0			54.2			53.5			53.9			53.8
BALANCE SHEET
Total investments				$	6,008.3		$	7,535.0		$	7,678.4		$	7,663.9
Separate account assets				$	571.9		$	9,385.9		$	9,444.6		$	9,726.0
Total assets				$	10,634.0		$	21,647.1		$	21,846.6		$	22,167.8
Total shareholders’ equity				$	1,951.3		$	1,867.7		$	2,490.5		$	2,325.2
Book value per share				$	36.30		$	34.81		$	46.60		$	43.53
Book value per share, excluding accumulated other comprehensive income				$	37.33		$	35.47		$	46.01		$	44.67

(1) Represents income or loss of the Company’s operating segments: Personal Lines, Commercial Lines, Other Property and Casualty, Life Companies and interest expense on corporate debt. In accordance with Statement of Financial Accounting Standards No.131, the separate financial information of each segment is presented consistent with the manner in which results are regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

(2) Weighted average shares outstanding for the quarter ending September 30, 2005 represents basic shares outstanding due to antidilution.

23

Other Information

CORPORATE OFFICES AND

PRINCIPAL SUBSIDIARIES

THE HANOVER INSURANCE GROUP, INC.

440 Lincoln Street

Worcester, MA 01653

The Hanover Insurance Company

440 Lincoln Street

Worcester, MA 01653

Citizens Insurance Company of America

645 West Grand River

Howell, MI 48843

MARKET AND DIVIDEND INFORMATION

The following information shows trading activity for the Company for the periods indicated:

Quarter Ended	2007
	Price Range				Dividends Per Share
	High		Low
March 31	$	49.11	$	44.70		—
June 30	$	49.73	$	44.46		—
September 30	$	49.76	$	41.14		—
December 31
Quarter Ended	2006
	Price Range				Dividends Per Share
	High		Low
March 31	$	53.12	$	42.98		—
June 30	$	54.11	$	43.17		—
September 30	$	48.49	$	41.17		—
December 31	$	50.25	$	43.95	$	0.30

INDUSTRY RATINGS AS OF October 29, 2007

Financial Strength Ratings	A.M. Best	Standard & Poor’s	Moody’s
Property and Casualty Insurance Companies:
The Hanover Insurance Company	A-	BBB+	Baa1
Citizens Insurance Company of America	A-	BBB+	Baa1
Life Insurance Companies:
First Allmerica Financial Life Insurance Company	B+	BBB-	Ba1

Debt Ratings	A.M. Best	Standard & Poor’s	Moody’s
The Hanover Insurance Group, Inc. Senior Debt	bbb-	BB+	Ba1
The Hanover Insurance Group, Inc. Capital Securities	bb	B+	Ba2
The Hanover Insurance Company Short Term Debt	—	—	NP

TRANSFER AGENT

Computershare Limited

PO Box 43076

Providence, RI 02940-3076

1-800-317-4454

COMMON STOCK

Common stock of The Hanover Insurance Group is traded on the New York Stock Exchange under the symbol "THG".

INQUIRIES

Sujata Mutalik

Vice President, Investor Relations

(508) 855-3457

smutalik@Hanover.com

INVESTOR INFORMATION LINE

Dial 1-800-407-5222 to receive additional printed information, fax-on-demand services or other prerecorded messages.

Please visit our internet site at http:// www.Hanover.com

24

EX-99.3

Exhibit 99.3

THE HANOVER INSURANCE GROUP ANNOUNCES

AUTHORIZATION TO REPURCHASE UP TO $100 MILLION OF ITS SHARES

WORCESTER, Mass., October 29, 2007 – The Hanover Insurance Group, Inc. (NYSE: THG) announced today that its board of directors has authorized the company to repurchase up to $100 million of its common stock.

Under the new authorization, the company may repurchase up to $100 million of its common stock from time to time, in amounts, at prices and at such times as the company deems appropriate, subject to market conditions and other considerations. The repurchase authorization does not require the company to purchase any specific number of shares or to make purchases by a certain date.

Additionally, the company expects to establish 10b5-1 trading plans which will allow it flexibility in the repurchase of its shares.

“The recent decision to increase our annual dividend and this share repurchase authorization reflect our confidence in the company’s financial condition and also recognize the long-term potential of the company for future profitable growth,” said Frederick H. Eppinger, chief executive officer of The Hanover Insurance Group. “At the same time, these actions are consistent with our goal of delivering shareholder value.”

Forward-Looking Statements and Non-GAAP Financial Measures

This news release and the previously announced conference call scheduled for Tuesday, October 30^th at 10:00 a.m. Eastern Time, contains or may include statements about the company that are not statements of historical fact, including the following: statements regarding the sufficiency of future earnings and cash flows to satisfy the company’s future plans for capital investments and maintaining its balance sheet; statements regarding the company’s commitment to enhance shareholder value and potential for future profitable growth; dividends payable to the company’s shareholders, which may be

subject to future increases or decreases; and the repurchase by the company of shares of its common stock from shareholders, including the timing and the duration of prospective share purchases and the amount of capital that may be expended for such share repurchases, which may be subject to change in the future. These statements are, or will be, forward-looking statements as defined by the Securities Act of 1933 and the Securities Exchange Act of 1934. Forward-looking statements also include, without limitation, expectations, projections, estimates, and similar statements regarding economic conditions and the company and its operations, financial performance, customer demand, and other similar expressions concerning matters that are not historical facts.

The Company cautions investors that any such forward-looking statements are not guarantees of future performance, and actual results could differ materially. Investors are directed to consider the risks and uncertainties in its business that may affect future performance and that are discussed in readily available documents, including the Company’s annual report and other documents filed by The Hanover with the Securities and Exchange Commission and which are also available at www.hanover.com under “Investors”.

About The Hanover

The Hanover Insurance Group, Inc. (NYSE: THG), based in Worcester, Mass., is the holding company for a group of insurers that includes The Hanover Insurance Company, also based in Worcester; Citizens Insurance Company of America, headquartered in Howell, Mich., and their affiliates. The Hanover offers a wide range of property and casualty products and services to individuals, families and businesses through an extensive network of independent agents, and has been meeting its obligations to its agent partners and their customers for more than 150 years. Taken as a group, The Hanover ranks among the top 40 property and casualty insurers in the United States. For more information, please visit www.hanover.com.

CONTACTS:	Investors:	Media:
	Sujata Mutalik	Michael F. Buckley
	(508) 855-3457	(508) 855-3099
	smutalik@hanover.com	mibuckley@hanover.com