Statistical Supplement

EX-99.2 3 dex992.htm STATISTICAL SUPPLEMENT Statistical Supplement

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
Investments
Net Investment Income		13
Net Realized Investment Gains (Losses)		14
Unrealized Losses		15
Credit Quality of Fixed Maturities		16
Property and Casualty Statutory Ratios		17-18
Historical Financial Highlights		19
Other Information		20
Corporate Information
Market and Dividend Information
Industry Ratings

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS


	Quarter ended June 30								Six Months ended June 30
(In millions)	2008			2007			% Change		2008			2007			% Change
SEGMENT INCOME
Property and Casualty
Personal Lines	$	38.6		$	55.0		(29.8	)	$	65.7		$	101.6		(35.3	)
Commercial Lines		52.7			38.9		35.5			120.7			87.5		37.9
Other		2.9			2.5		16.0			4.5			6.9		(34.8	)

Total Property and Casualty		94.2			96.4		(2.3	)		190.9			196.0		(2.6	)

Interest expense on corporate debt		(9.9	)		(9.9	)	—			(19.9	)		(19.9	)	—

Total segment income		84.3			86.5		(2.5	)		171.0			176.1		(2.9	)
Federal income tax expense on P&C segment income		(32.3	)		(33.3	)	(3.0	)		(64.9	)		(66.9	)	(3.0	)
Federal income tax benefit on other segment income		3.5			3.5		—			7.0			7.0		—

Total federal income tax expense on segment income		(28.8	)		(29.8	)	(3.4	)		(57.9	)		(59.9	)	(3.3	)

Total segment income after taxes	$	55.5		$	56.7		(2.1	)	$	113.1		$	116.2		(2.7	)


RECONCILIATION FROM SEGMENT INCOME TO NET INCOME

Total segment income after taxes	$	55.5		$	56.7		(2.1	)	$	113.1		$	116.2		(2.7	)
Net realized investment (losses) gains		(7.6	)		0.2		N/M			(7.9	)		0.5		N/M
Federal income tax expense on non-segment income		—			(0.1	)	N/M			—			(0.2	)	N/M

Income from continuing operations		47.9			56.8		(15.7	)		105.2			116.5		(9.7	)
Discontinued operations (net of taxes):
(Loss) income from operations of discontinued FAFLIC business (Including loss on assets held-for-sale of $66.1 in 2008)		(67.7	)		2.7		N/M			(71.2	)		6.8		N/M
Income from operations of AMGRO (Including gain on disposal of $11.1 in 2008)		10.4			—		N/M			10.1			—		N/M
(Loss) gain on disposal of variable business		(0.8	)		0.3		N/M			5.4			0.1		N/M
Other		—			—		—			(1.2	)		—		N/M

Net (loss) income	$	(10.2	)	$	59.8		N/M		$	48.3		$	123.4		(60.9	)

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS


	Quarter ended June 30								Six Months ended June 30
	2008			2007			% Change		2008			2007			% Change
PER SHARE DATA (DILUTED)
Total segment income	$	1.63		$	1.66		(1.8	)	$	3.28		$	3.38		(3.0	)
Federal income tax expense on segment income		(0.56	)		(0.57	)	(1.8	)		(1.11	)		(1.15	)	(3.5	)

Total segment income after taxes		1.07			1.09		(1.8	)		2.17			2.23		(2.7	)
Net realized investment (losses) gains		(0.15	)		—		N/M			(0.15	)		0.01		N/M

Income from continuing operations		0.92			1.09		(15.6	)		2.02			2.24		(9.8	)
Discontinued operations (net of taxes):
(Loss) income from operations of discontinued FAFLIC business (Including loss on assets held-for-sale of $1.27 in 2008)		(1.30	)		0.05		N/M			(1.37	)		0.13		N/M
Income from operations of AMGRO (Including gain on disposal of $0.21 in 2008)		0.20			—		N/M			0.20			—		N/M
(Loss) gain on disposal of variable business		(0.02	)		—		N/M			0.10			—		N/M
Other		—			—		—			(0.02	)		—		N/M

Net (loss) income	$	(0.20	)	$	1.14		N/M		$	0.93		$	2.37		(60.8	)

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS


(In millions, except per share data)	June 30 2008			December 31 2007			% Change
BALANCE SHEET
Shareholders’ equity
The Hanover Insurance Company (consolidated)	$	2,249.8		$	2,188.0		2.8
First Allmerica Financial Life Insurance Company (consolidated)		229.5			328.3		(30.1	)
THG Holding Company debt (1)		(499.5	)		(499.5	)	—
THG Holding Company and other		232.9			282.2		(17.5	)

Total shareholders’ equity	$	2,212.7		$	2,299.0		(3.8	)


Total adjusted statutory capital
The Hanover Insurance Company (consolidated)	$	1,807.3		$	1,666.4		8.5
First Allmerica Financial Life Insurance Company	$	184.8		$	188.9		(2.2	)

The Hanover Insurance Company (consolidated) premium to surplus ratio		1.4:1			1.4:1		—
First Allmerica Financial Life Insurance Company estimated risk based capital ratio		422	%		509	%	(87.0	)

Book value per share
The Hanover Insurance Company (consolidated)	$	44.30		$	42.23		4.9
First Allmerica Financial Life Insurance Company (consolidated)		4.51			6.34		(28.9	)
THG Holding Company debt (1)		(9.83	)		(9.64	)	2.0
THG Holding Company and other		4.59			5.44		(15.6	)

Total book value per share	$	43.57		$	44.37		(1.8	)

THG book value per share, excluding accumulated other comprehensive income	$	45.55		$	44.77		1.7

The Hanover Insurance Company (consolidated) book value per share, excluding accumulated other comprehensive income	$	45.21		$	41.85		8.0

Shares outstanding (2)		50.8			51.8

Stock price	$	42.50		$	45.80		(7.2	)
Price/book value per share		1.0	x		1.0	x	—	x
Debt/equity		23.1	%		22.3	%	0.8	pts
Debt/total capital		18.8	%		18.2	%	0.6	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.

THE HANOVER INSURANCE GROUP

CONSOLIDATED INCOME STATEMENTS


	Quarter ended June 30							Six Months ended June 30
(In millions, except per share data)	2008			2007		% Change		2008			2007		% Change
REVENUES
Premiums	$	619.3		$	590.7	4.8		$	1,237.0		$	1,175.1	5.3
Net investment income		63.8			59.9	6.5			128.4			120.9	6.2
Net realized investment (losses) gains		(7.6	)		0.2	N/M			(7.9	)		0.5	N/M
Fees and other income		9.5			14.2	(33.1	)		17.4			27.1	(35.8	)

Total revenues		685.0			665.0	3.0			1,374.9			1,323.6	3.9

BENEFITS, LOSSES AND EXPENSES
Policy benefits, claims, losses and loss adjustment expenses		385.4			363.9	5.9			765.5			717.5	6.7
Policy acquisition expenses		139.0			130.0	6.9			276.4			257.0	7.5
Other operating expenses		83.9			84.4	(0.6	)		169.9			172.5	(1.5	)

Total benefits, losses and expenses		608.3			578.3	5.2			1,211.8			1,147.0	5.6

Income from continuing operations before federal income taxes		76.7			86.7	(11.5	)		163.1			176.6	(7.6	)
Federal income tax expense		28.8			29.9	(3.7	)		57.9			60.1	(3.7	)

Income from continuing operations		47.9			56.8	(15.7	)		105.2			116.5	(9.7	)

Discontinued operations (net of taxes):
(Loss) income from operations of discontinued FAFLIC business (Including loss on assets held-for-sale of $66.1 in 2008)		(67.7	)		2.7	N/M			(71.2	)		6.8	N/M
Income from operations of AMGRO (Including gain on disposal of $11.1 in 2008)		10.4			—	N/M			10.1			—	N/M
(Loss) gain on disposal of variable business		(0.8	)		0.3	N/M			5.4			0.1	N/M
Other		—			—	—			(1.2	)		—	N/M

Net (loss) income	$	(10.2	)	$	59.8	N/M		$	48.3		$	123.4	(60.9	)

THE HANOVER INSURANCE GROUP

CONSOLIDATED INCOME STATEMENTS


	Quarter ended June 30							Six Months ended June 30
	2008			2007		% Change		2008			2007		% Change
PER SHARE DATA (DILUTED)
Income from continuing operations	$	0.92		$	1.09	(15.6	)	$	2.02		$	2.24	(9.8	)

Discontinued operations (net of taxes):
(Loss) income from operations of discontinued FAFLIC business (Including loss on assets held-for-sale of $1.27 in 2008)		(1.30	)		0.05	N/M			(1.37	)		0.13	N/M
Income from operations of AMGRO (Including gain on disposal of $0.21 in 2008)		0.20			—	N/M			0.20			—	N/M
(Loss) gain on disposal of variable business		(0.02	)		—	N/M			0.10			—	N/M
Other		—			—	—			(0.02	)		—	N/M

Net (loss) income (1)	$	(0.20	)	$	1.14	N/M		$	0.93		$	2.37	(60.8	)

Weighted average shares outstanding		51.8			52.3				52.0			52.1

(1)

Basic income per share was $(0.20) and $1.16 for the quarters ended June 30, 2008 and 2007, respectively, and $0.94 and $2.40 for the six months ended June 30, 2008 and 2007, respectively.

THE HANOVER INSURANCE GROUP

CONSOLIDATED BALANCE SHEETS


(In millions, except per share data)	June 30 2008			December 31 2007			% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $4,520.6 and $4,585.7)	$	4,458.4		$	4,584.8		(2.8	)
Equity securities, at fair value (cost of $52.8 and $37.6)		56.0			44.6		25.6
Mortgage loans		37.8			41.2		(8.3	)
Other long-term investments		28.4			30.7		(7.5	)

Total investments		4,580.6			4,701.3		(2.6	)

Cash and cash equivalents		308.7			210.6		46.6
Accrued investment income		53.6			53.3		0.6
Premiums, accounts and notes receivable, net		571.7			626.7		(8.8	)
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		1,016.2			1,067.3		(4.8	)
Deferred policy acquisition costs		258.6			246.8		4.8
Deferred federal income taxes		271.8			300.8		(9.6	)
Goodwill		131.9			126.0		4.7
Other assets		321.2			309.6		3.7
Assets held for sale		1,949.5			2,173.2		(10.3	)

Total assets	$	9,463.8		$	9,815.6		(3.6	)


LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES
Policy liabilities and accruals:
Outstanding claims, losses and loss adjustment expenses		3,077.5			3,165.9		(2.8	)
Unearned premiums		1,179.0			1,155.9		2.0
Contract holder deposit funds and other policy liabilities		2.8			1.9		47.4

Total policy liabilities and accruals		4,259.3			4,323.7		(1.5	)

Expenses and taxes payable		572.8			633.6		(9.6	)
Reinsurance premiums payable		45.5			44.9		1.3
Long-term debt		511.9			511.9		—
Liabilities held for sale		1,861.6			2,002.5		(7.0	)

Total liabilities		7,251.1			7,516.6		(3.5	)


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		1,800.2			1,822.6		(1.2	)
Accumulated other comprehensive loss		(100.4	)		(20.4	)	N/M
Retained earnings		1,001.7			946.9		5.8
Treasury stock at cost (9.7 and 8.7 million shares)		(489.4	)		(450.7	)	8.6

Total shareholders’ equity		2,212.7			2,299.0		(3.8	)

Total liabilities and shareholders’ equity	$	9,463.8		$	9,815.6		(3.6	)

PROPERTY & CASUALTY

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

CONDENSED INCOME STATEMENTS


	Quarter ended June 30								Six Months ended June 30
(In millions)	2008			2007			% Change		2008			2007			% Change
REVENUES
Net premiums written	$	640.6		$	619.9		3.3		$	1,269.1		$	1,231.9		3.0
Change in unearned premiums, net of prepaid reinsurance premiums		(21.3	)		(29.2	)	(27.1	)		(32.1	)		(56.8	)	(43.5	)

Net premiums earned		619.3			590.7		4.8			1,237.0			1,175.1		5.3
Net investment income		63.6			59.7		6.5			128.0			120.5		6.2
Other income		11.4			16.4		(30.5	)		21.6			31.5		(31.4	)

Total segment revenue		694.3			666.8		4.1			1,386.6			1,327.1		4.5

LOSSES AND OPERATING EXPENSES
Policy benefits, claims, losses and loss adjustment expenses		385.4			363.9		5.9			765.5			717.5		6.7
Policy acquisition expenses		139.0			130.0		6.9			276.4			257.0		7.5
Other operating expenses		75.7			76.5		(1.0	)		153.8			156.6		(1.8	)

Total losses and operating expenses		600.1			570.4		5.2			1,195.7			1,131.1		5.7

Segment income before federal income taxes	$	94.2		$	96.4		(2.3	)	$	190.9		$	196.0		(2.6	)

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

CONSOLIDATED BALANCE SHEETS (1)


(In millions, except per share data)	June 30 2008			December 31 2007		% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $4,343.0 and $4,197.4)	$	4,279.6		$	4,193.5	2.1
Equity securities, at fair value (cost of $44.9 and $29.9)		46.7			35.3	32.3
Mortgage loans		8.3			10.9	(23.9	)
Other long-term investments		4.4			5.8	(24.1	)

Total investments		4,339.0			4,245.5	2.2

Cash and cash equivalents		270.2			180.7	49.5
Accrued investment income		49.3			49.5	(0.4	)
Premiums, accounts, and notes receivable, net		571.7			626.7	(8.8	)
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		1,016.2			1,067.3	(4.8	)
Deferred policy acquisition costs		258.6			246.8	4.8
Deferred federal income tax asset		187.0			195.6	(4.4	)
Goodwill		129.3			126.0	2.6
Other assets		222.8			211.2	5.5

Total assets	$	7,044.1		$	6,949.3	1.4


LIABILITIES AND SHAREHOLDER’S EQUITY

LIABILITIES
Policy liabilities and accruals:
Outstanding claims, losses and loss adjustment expenses	$	3,077.5		$	3,165.8	(2.8	)
Unearned premiums		1,179.0			1,155.9	2.0
Contractholder deposit funds and other policy liabilities		1.9			1.9	—

Total policy liabilities and accruals		4,258.4			4,323.6	(1.5	)

Expenses and taxes payable		487.3			389.6	25.1
Reinsurance premiums payable		45.5			45.0	1.1
Long-term debt		3.1			3.1	—

Total liabilities		4,794.3			4,761.3	0.7


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		179.2			169.2	5.9
Accumulated other comprehensive income		(46.0	)		19.4	N/M
Retained earnings		2,111.6			1,994.4	5.9

Total shareholder’s equity		2,249.8			2,188.0	2.8

Total liabilities and shareholder’s equity	$	7,044.1		$	6,949.3	1.4

(1)

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

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING PROFIT (LOSS) RECONCILED TO SEGMENT INCOME


	Quarter ended June 30, 2008
	Personal Lines												Commercial Lines															Other P&C			Total P&C
(In millions)	Auto			Home			Other			Total			Workers’ Comp			Auto			Multiple Peril			Other			Total			Other P&C			Total P&C
Net premiums written	$	252.3		$	110.4		$	10.8		$	373.5		$	29.4		$	52.8		$	95.2		$	89.5		$	266.9		$	0.2		$	640.6

Net premiums earned	$	252.2		$	107.3		$	10.0		$	369.5		$	29.8		$	49.0		$	89.4		$	81.3		$	249.5		$	0.3		$	619.3
Policy benefits, claims, losses excluding prior year reserve development and catastrophe losses		160.3			48.7			3.2			212.2			20.0			25.9			35.4			27.9			109.2			—			321.4
Prior year loss and LAE reserve development (favorable) unfavorable		(17.1	)		(3.2	)		(0.2	)		(20.5	)		(7.6	)		0.1			(8.1	)		(0.7	)		(16.3	)		(1.5	)		(38.3	)
Pre-tax catastrophe losses		1.8			22.4			0.4			24.6			—			0.5			9.8			3.2			13.5			—			38.1
Pre-tax catastrophe LAE		—			—			—			—			—			—			—			—			—			—			—
Loss adjustment expenses excluding prior year reserve development		30.4			8.6			0.6			39.6			3.8			3.8			11.7			4.9			24.2			0.3			64.1
Policy acquisition expenses and other underwriting expenses											107.7															98.1			0.2			206.0
Policyholders’ dividends											—															0.1			—			0.1

GAAP underwriting profit											5.9															20.7			1.3			27.9
Net investment income											29.3															30.5			3.8			63.6
Other income											4.6															5.2			1.6			11.4
Other operating expenses											(1.2	)														(3.7	)		(3.8	)		(8.7	)

Segment income before federal income taxes										$	38.6														$	52.7		$	2.9		$	94.2


	Quarter ended June 30, 2007
	Personal Lines												Commercial Lines															Other P&C			Total P&C
	Auto			Home			Other			Total			Workers’ Comp			Auto			Multiple Peril			Other			Total			Other P&C			Total P&C
Net premiums written	$	249.6		$	110.4		$	10.8		$	370.8		$	26.1		$	54.8		$	95.5		$	72.4		$	248.8		$	0.3		$	619.9

Net premiums earned	$	251.6		$	103.0		$	9.8		$	364.4		$	26.5		$	49.1		$	87.8		$	62.6		$	226.0		$	0.3		$	590.7
Policy benefits, claims, losses excluding prior year reserve development and catastrophe losses		161.0			48.9			2.8			212.7			18.9			26.2			45.5			22.7			113.3			—			326.0
Prior year loss and LAE reserve development (favorable) unfavorable		(21.4	)		(0.2	)		(0.9	)		(22.5	)		(2.8	)		(2.8	)		(6.0	)		(1.7	)		(13.3	)		1.0			(34.8	)
Pre-tax catastrophe losses		2.3			6.6			0.3			9.2			—			0.2			3.7			1.4			5.3			—			14.5
Pre-tax catastrophe LAE		—			—			—			—			—			—			—			—			—			—			—
Loss adjustment expenses excluding prior year reserve development		29.3			7.3			0.3			36.9			2.1			3.7			10.9			4.4			21.1			0.1			58.1
Policy acquisition expenses and other underwriting expenses											105.9															87.8			0.1			193.8
Policyholders’ dividends											—															0.1			—			0.1

GAAP underwriting profit (loss)											22.2															11.7			(0.9	)		33.0
Net investment income											28.8															26.6			4.3			59.7
Other income											5.2															3.5			7.7			16.4
Other operating expenses											(1.2	)														(2.9	)		(8.6	)		(12.7	)

Segment income before federal income taxes										$	55.0														$	38.9		$	2.5		$	96.4

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING PROFIT (LOSS) RECONCILED TO SEGMENT INCOME


	Six Months ended June 30, 2008
	Personal Lines											Commercial Lines															Other P&C			Total P&C
(In millions)	Auto			Home		Other			Total			Workers’ Comp			Auto			Multiple Peril			Other			Total			Other P&C			Total P&C
Net premiums written	$	511.6		$	193.7	$	19.9		$	725.2		$	67.6		$	106.3		$	189.5		$	180.3		$	543.7		$	0.2		$	1,269.1

Net premiums earned	$	503.6		$	215.4	$	19.8		$	738.8		$	61.2		$	99.8		$	178.1		$	158.8		$	497.9		$	0.3		$	1,237.0
Policy benefits, claims, losses excluding prior year reserve development and catastrophe losses		326.3			105.8		6.2			438.3			41.6			53.1			78.1			58.7			231.5			—			669.8
Prior year loss and LAE reserve development (favorable) unfavorable		(32.5	)		0.8		(0.8	)		(32.5	)		(17.7	)		(5.8	)		(27.3	)		(10.1	)		(60.9	)		(0.5	)		(93.9	)
Pre-tax catastrophe losses		2.3			32.2		1.1			35.6			—			0.5			16.5			4.8			21.8			—			57.4
Pre-tax catastrophe LAE		—			—		—			—			—			—			—			—			—			—			—
Loss adjustment expenses excluding prior year reserve development		62.7			16.6		1.1			80.4			7.8			8.6			23.0			11.5			50.9			0.6			131.9
Policy acquisition expenses and other underwriting expenses										216.3															197.5			(0.1	)		413.7
Policyholders’ dividends										—															0.3			—			0.3

GAAP underwriting profit										0.7															56.8			0.3			57.8
Net investment income										59.0															61.4			7.6			128.0
Other income										8.8															9.5			3.3			21.6
Other operating expenses										(2.8	)														(7.0	)		(6.7	)		(16.5	)

Segment income before federal income taxes									$	65.7														$	120.7		$	4.5		$	190.9


	Six Months ended June 30, 2007
	Personal Lines											Commercial Lines															Other P&C			Total P&C
	Auto			Home		Other			Total			Workers’ Comp			Auto			Multiple Peril			Other			Total			Other P&C			Total P&C
Net premiums written	$	523.1		$	194.9	$	19.1		$	737.1		$	60.6		$	106.4		$	187.3		$	140.2		$	494.5		$	0.3		$	1,231.9

Net premiums earned	$	499.4		$	205.7	$	19.6		$	724.7		$	53.9		$	97.3		$	175.0		$	123.9		$	450.1		$	0.3		$	1,175.1
Policy benefits, claims, losses excluding prior year reserve development and catastrophe losses		326.5			94.8		5.1			426.4			37.9			51.8			88.2			47.7			225.6			—			652.0
Prior year loss and LAE reserve development (favorable) unfavorable		(45.1	)		1.1		—			(44.0	)		(13.8	)		(7.2	)		(14.5	)		(8.3	)		(43.8	)		1.0			(86.8	)
Pre-tax catastrophe losses		2.6			12.0		0.7			15.3			—			0.2			8.6			2.0			10.8			—			26.1
Pre-tax catastrophe LAE		—			1.1		—			1.1			—			—			0.8			0.8			1.6			—			2.7
Loss adjustment expenses excluding prior year reserve development		60.5			15.3		0.9			76.7			7.1			7.7			22.8			8.8			46.4			0.1			123.2
Policy acquisition expenses and other underwriting expenses										212.9															177.0			(0.2	)		389.7
Policyholders’ dividends										—															0.3			—			0.3

GAAP underwriting profit (loss)										36.3															32.2			(0.6	)		67.9
Net investment income										58.3															53.9			8.3			120.5
Other income										9.0															7.6			14.9			31.5
Other operating expenses										(2.0	)														(6.2	)		(15.7	)		(23.9	)

Segment income before federal income taxes									$	101.6														$	87.5		$	6.9		$	196.0

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING RATIOS


	Quarter ended June 30, 2008
	Personal Lines								Commercial Lines										Other P&C	Total P&C
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	63.6	%	45.4	%	32.0	%	57.4	%	67.1	%	52.9	%	39.5	%	34.3	%	43.9	%	N/M	51.9	%
Catastrophe losses	0.7	%	20.9	%	4.0	%	6.7	%	N/M		1.0	%	11.0	%	3.9	%	5.4	%	N/M	6.2	%
Loss development	(7.2	)%	(3.6	)%	(2.0	)%	(5.9	)%	(24.8	)%	(0.4	)%	(7.6	)%	(1.8	)%	(6.4	)%	N/M	(6.4	)%

Total losses	57.1	%	62.7	%	34.0	%	58.2	%	42.3	%	53.5	%	42.9	%	36.4	%	42.9	%	N/M	51.7	%
Loss adjustment expenses	12.4	%	8.6	%	6.0	%	11.1	%	12.1	%	8.4	%	11.6	%	7.0	%	9.5	%	N/M	10.5	%
Pre-tax catastrophe LAE	—		—		—		—		—		—		—		—		—		N/M	—
Policy acquisition and other underwriting expenses							29.1	%									39.3	%	N/M	33.3	%
Policyholders’ dividends							—										—		N/M	—

Combined							98.4	%									91.7	%	N/M	95.5	%

Policies in force	(1.1	)%	(1.9	)%	(5.3	)%	(1.7	)%	1.7	%	4.8	%	(0.7	)%	6.3	%	3.0	%	—	(1.1	)%
Retention (1)	73.0	%	81.6	%	N/M		77.4	%	78.5	%	80.6	%	79.8	%	86.4	%	80.1	%

	Quarter ended June 30, 2007
	Personal Lines								Commercial Lines										Other P&C	Total P&C
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	64.0	%	47.5	%	28.6	%	58.4	%	71.3	%	53.4	%	51.8	%	36.3	%	50.1	%	N/M	55.2	%
Catastrophe losses	0.9	%	6.4	%	3.1	%	2.5	%	—		0.4	%	4.2	%	2.2	%	2.3	%	N/M	2.5	%
Loss development	(8.9	)%	(0.7	)%	(12.3	)%	(6.7	)%	(13.9	)%	(6.1	)%	(5.9	)%	(2.4	)%	(5.9	)%	N/M	(6.2	)%

Total losses	56.0	%	53.2	%	19.4	%	54.2	%	57.4	%	47.7	%	50.1	%	36.1	%	46.5	%	N/M	51.5	%
Loss adjustment expenses	12.0	%	7.6	%	6.1	%	10.6	%	11.3	%	7.9	%	11.5	%	6.7	%	9.4	%	N/M	10.1	%
Pre-tax catastrophe LAE	—		—		—		—		—		—		—		—		—		N/M	—
Policy acquisition and other underwriting expenses							29.1	%									38.9	%	N/M	32.8	%
Policyholders’ dividends							—										—		N/M	—

Combined							93.9	%									94.8	%	N/M	94.4	%

Policies in force	6.5	%	(2.1	)%	(1.2	)%	2.2	%	0.3	%	2.1	%	(1.0	)%	5.9	%	2.1	%	—	2.2	%
Retention (1)	73.8	%	83.2	%	N/M		78.6	%	76.4	%	78.3	%	78.3	%	89.1	%	78.5	%

(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.

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING RATIOS


	Six Months ended June 30, 2008
	Personal Lines								Commercial Lines										Other P&C	Total P&C
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	64.7	%	49.1	%	31.2	%	59.3	%	68.0	%	53.2	%	43.8	%	37.0	%	46.4	%	N/M	54.1	%
Catastrophe losses	0.5	%	14.9	%	5.6	%	4.8	%	N/M		0.5	%	9.3	%	3.0	%	4.4	%	N/M	4.6	%
Loss development	(6.8	)%	0.2	%	(3.5	)%	(4.7	)%	(27.8	)%	(6.1	)%	(13.2	)%	(6.9	)%	(11.6	)%	N/M	(7.4	)%

Total losses	58.4	%	64.2	%	33.3	%	59.4	%	40.2	%	47.6	%	39.9	%	33.1	%	39.2	%	N/M	51.3	%
Loss adjustment expenses	12.8	%	7.9	%	5.1	%	11.2	%	11.6	%	8.9	%	10.8	%	7.8	%	9.6	%	N/M	10.6	%
Pre-tax catastrophe LAE	—		—		—		—		—		—		—		—		—		N/M	—
Policy acquisition and other underwriting expenses							29.3	%									39.7	%	N/M	33.4	%
Policyholders’ dividends							—										0.1	%	N/M	—

Combined							99.9	%									88.6	%	N/M	95.3	%

Policies in force	(1.1	)%	(1.9	)%	(5.3	)%	(1.7	)%	1.7	%	4.8	%	(0.7	)%	6.3	%	3.0	%	—	(1.1	)%
Retention (1)	73.0	%	81.6	%	N/M		77.4	%	80.6	%	80.9	%	81.0	%	81.5	%	80.9	%

	Six Months ended June 30, 2007
	Personal Lines								Commercial Lines										Other P&C	Total P&C
	Auto		Home		Other		Total		Workers’ Comp		Auto		Multiple Peril		Other		Total		Other P&C	Total P&C
Losses, excluding catastrophe losses and development	65.4	%	46.1	%	26.0	%	58.8	%	70.3	%	53.2	%	50.4	%	38.5	%	50.1	%	N/M	55.5	%
Catastrophe losses	0.5	%	5.8	%	3.6	%	2.1	%	—		0.2	%	4.9	%	1.6	%	2.4	%	N/M	2.2	%
Loss development	(9.6	)%	0.4	%	N/M		(6.5	)%	(25.4	)%	(7.7	)%	(6.6	)%	(6.9	)%	(9.2	)%	N/M	(7.5	)%

Total losses	56.3	%	52.3	%	29.6	%	54.4	%	44.9	%	45.7	%	48.7	%	33.2	%	43.3	%	N/M	50.2	%
Loss adjustment expenses	12.7	%	7.6	%	4.6	%	11.0	%	13.0	%	8.2	%	11.3	%	7.3	%	9.7	%	N/M	10.6	%
Pre-tax catastrophe LAE	—		0.5	%	—		0.2	%	—		—		0.5	%	0.6	%	0.4	%	N/M	0.2	%
Policy acquisition and other underwriting expenses							29.4	%									39.3	%	N/M	33.2	%
Policyholders’ dividends							—										0.1	%	N/M	—

Combined							95.0	%									92.8	%	N/M	94.2	%

Policies in force	6.5	%	(2.1	)%	(1.2	)%	2.2	%	0.3	%	2.1	%	(1.0	)%	5.9	%	2.1	%	—	2.2	%
Retention (1)	73.8	%	83.2	%	N/M		78.6	%	77.2	%	79.9	%	78.6	%	88.9	%	79.2	%

(1)

INVESTMENTS

THE HANOVER INSURANCE GROUP

NET INVESTMENT INCOME


	Six Months ended June 30
	2008					2007
(In millions, except yields)				Yield					Yield
Fixed maturities (1)	$	126.1		5.60	%	$	119.7		5.64	%
Equity securities		0.6		—			0.4		—
Mortgages (2)		0.4		9.33	%		1.5		15.77	%
All other		3.8		—			2.1		—
Investment expenses		(2.5	)	—			(2.8	)	—

Total (3)	$	128.4		5.45	%	$	120.9		5.46	%

(1)

Includes purchase accounting adjustments of $1.7 million and $1.6 million for the six months ended June 30, 2008 and 2007, respectively.

(2)

Excludes mortgage prepayment fees of $0.1 million and $0.7 million for the six months ended June 30, 2008 and 2007, respectively. Mortgage yields are 8.78% and 8.07% for the six months ended June 30, 2008 and 2007, respectively.

(3)

Excludes discontinued operations of $34.2 million and $39.6 million for the six months ended June 30, 2008 and 2007, respectively.

THE HANOVER INSURANCE GROUP

COMPONENTS OF NET REALIZED INVESTMENT GAINS (LOSSES)


	Quarter ended June 30						Six Months ended June 30
	2008			2007			2008			2007
(In millions)	Net Realized Gains (Losses)						Net Realized Gains (Losses)
Net gains on securities transactions	$	0.6		$	0.4		$	5.4		$	1.2
Other than temporary impairments		(8.3	)		(0.3	)		(13.6	)		(0.8	)
Other		0.1			0.1			0.3			0.1

Net realized investment (losses) gains (1) (2)	$	(7.6	)	$	0.2		$	(7.9	)	$	0.5

(1)

Includes corporate eliminations of $(0.3) million for the quarters ended June 30, 2008 and 2007, respectively, and corporate eliminations of $2.9 million and $0.7 million for the six months ended June 30, 2008 and 2007, respectively.

(2)

Excludes discontinued operations of $(2.7) million and $0.6 million for the quarters ended June 30, 2008 and 2007, respectively, and $(7.4) million and $2.6 million for the six months ended June 30, 2008 and 2007, respectively.

THE HANOVER INSURANCE GROUP

AGING OF GROSS UNREALIZED LOSSES ON SECURITIES AVAILABLE FOR SALE

June 30, 2008

Gross Unrealized Losses

Fair Value

(In millions)

Property and
Casualty

Life
Companies (1)

Total

Property and
Casualty

Life
Companies (1)

Total

INVESTMENT GRADE FIXED MATURITIES:

12 months or less

39.9

15.5

55.4

1,612.6

337.7

1,950.3

Greater than 12 months

45.3

17.0

62.3

515.3

211.1

726.4

Total investment grade fixed maturities

85.2

32.5

117.7

2,127.9

548.8

2,676.7

BELOW INVESTMENT GRADE FIXED MATURITIES:

12 months or less

9.1

1.3

10.4

151.8

24.0

175.8

Greater than 12 months

—

Total below investment grade fixed maturities

9.1

1.3

10.4

151.8

24.0

175.8

Equity securities

3.5

—

3.5

37.8

—

37.8

Total fixed maturities and equity securities

97.8

33.8

131.6

2,317.5

572.8

2,890.3


	December 31, 2007
	Gross Unrealized Losses						Fair Value
	Property and Casualty		Life Companies (1)		Total		Property and Casualty		Life Companies (1)		Total
INVESTMENT GRADE FIXED MATURITIES:
12 months or less	$	18.6	$	8.5	$	27.1	$	557.4	$	182.6	$	740.0
Greater than 12 months		23.0		11.3		34.3		878.1		336.6		1,214.7

Total investment grade fixed maturities		41.6		19.8		61.4		1,435.5		519.2		1,954.7

BELOW INVESTMENT GRADE FIXED MATURITIES:
12 months or less		6.9		1.4		8.3		144.6		26.4		171.0
Greater than 12 months		—		—		—		—		—		—

Total below investment grade fixed maturities		6.9		1.4		8.3		144.6		26.4		171.0
Equity securities		0.5		—		0.5		17.8		—		17.8

Total fixed maturities and equity securities	$	49.0	$	21.2	$	70.2	$	1,597.9	$	545.6	$	2,143.5

(1)

A portion of the investment assets of the Life Companies are classified as held for sale.

THE HANOVER INSURANCE GROUP

CREDIT QUALITY OF FIXED MATURITIES

(In millions)

June 30, 2008

Amortized Cost

Fair Value

NAIC Designation

Rating Agency
Equivalent Designation

Property and
Casualty

Life
Companies (1)

Total

Property and
Casualty

Life
Companies (1)

Total

Aaa/Aa/A

3,332.7

719.0

4,051.7

3,296.8

709.0

4,005.8

Baa

984.9

306.5

1,291.4

966.0

294.1

1,260.1

131.6

16.9

148.5

127.3

16.6

143.9

129.3

22.5

151.8

124.2

21.9

146.1

Caa and lower

28.0

4.8

32.8

27.9

4.8

32.7

In or near default

—

1.0

—

1.1

Total fixed maturities

4,606.5

1,070.7

5,677.2

4,542.2

1,047.5

5,589.7


		December 31, 2007
		Amortized Cost						Fair Value
NAIC Designation	Rating Agency Equivalent Designation	Property and Casualty		Life Companies (1)		Total		Property and Casualty		Life Companies (1)		Total
1	Aaa/Aa/A	$	3,328.3	$	821.2	$	4,149.5	$	3,341.4	$	822.7	$	4,164.1
2	Baa		917.0		340.6		1,257.6		907.7		336.5		1,244.2
3	Ba		101.6		29.1		130.7		100.1		29.5		129.6
4	B		126.5		25.4		151.9		125.6		25.5		151.1
5	Caa and lower		27.7		4.7		32.4		26.2		4.4		30.6
6	In or near default		—		1.0		1.0		—		2.4		2.4

Total fixed maturities		$	4,501.1	$	1,222.0	$	5,723.1	$	4,501.0	$	1,221.0	$	5,722.0

(1)

A portion of the investment assets of the Life Companies are classified as held for sale.

PROPERTY & CASUALTY

STATUTORY RATIOS

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING RATIOS

Quarter ended June 30, 2008

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

63.6

45.4

32.0

57.5

66.7

52.9

39.8

34.1

43.7

N/M

51.9

Catastrophe losses

0.7

20.8

5.0

6.6

—

1.0

11.0

4.1

5.4

N/M

6.2

Loss development

(7.1

(3.5

(2.0

(6.0

(24.7

(0.4

(7.6

(1.8

(6.4

N/M

(6.4

Total losses

57.2

62.7

35.0

58.1

42.0

53.5

43.2

36.4

42.7

N/M

51.7

Loss adjustment expenses

12.4

8.6

5.0

11.1

12.0

8.4

11.6

7.0

9.5

N/M

10.5

Pre-tax catastrophe LAE

—

N/M

—

Policy acquisition and other underwriting expenses

29.2

38.2

N/M

32.9

Policyholders’ dividends

—

0.1

N/M

—

Combined

98.4

90.5

N/M

95.1


	Quarter ended June 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	64.0	%	47.3	%	27.6	%	58.3	%	70.5	%	53.6	%	51.7	%	36.3	%	50.1	%	N/M	55.1	%
Catastrophe losses	0.9	%	7.0	%	4.1	%	2.7	%	—		0.2	%	4.4	%	2.4	%	2.4	%	N/M	2.6	%
Loss development	(8.9	)%	(0.6	)%	(12.3	)%	(6.6	)%	(13.9	)%	(6.0	)%	(5.9	)%	(2.4	)%	(5.9	)%	N/M	(6.1	)%

Total losses	56.0	%	53.7	%	19.4	%	54.4	%	56.6	%	47.8	%	50.2	%	36.3	%	46.6	%	N/M	51.6	%
Loss adjustment expenses	12.0	%	7.6	%	5.1	%	10.5	%	11.2	%	7.9	%	11.5	%	6.7	%	9.4	%	N/M	10.1	%
Pre-tax catastrophe LAE	—		—		—		—		—		—		—		—		—		N/M	—
Policy acquisition and other underwriting expenses							29.1	%									37.7	%	N/M	32.6	%
Policyholders’ dividends							—										0.1	%	N/M	—

Combined							94.0	%									93.8	%	N/M	94.3	%

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING RATIOS

Six Months ended June 30, 2008

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

64.8

49.1

31.7

59.4

67.1

53.2

44.0

37.5

46.6

N/M

54.3

Catastrophe losses

0.4

15.0

5.5

4.8

—

0.5

9.3

3.0

4.4

N/M

4.6

Loss development

(6.8

0.1

(3.5

(4.7

(27.6

(6.1

(13.2

(6.9

(11.6

N/M

(7.5

Total losses

58.4

64.2

33.7

59.5

39.5

47.6

40.1

33.6

39.4

N/M

51.4

Loss adjustment expenses

12.7

7.9

5.0

11.1

11.5

8.8

10.7

7.9

9.5

N/M

10.5

Pre-tax catastrophe LAE

—

N/M

—

Policy acquisition and other underwriting expenses

29.5

38.4

N/M

33.3

Policyholders’ dividends

—

0.1

N/M

—

Combined

100.1

87.4

N/M

95.2


	Six Months ended June 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	65.4	%	46.1	%	26.0	%	58.8	%	69.5	%	53.2	%	50.4	%	38.5	%	50.1	%	N/M	55.4	%
Catastrophe losses	0.5	%	6.6	%	4.1	%	2.3	%	—		0.2	%	5.2	%	1.8	%	2.6	%	N/M	2.4	%
Loss development	(9.6	)%	0.4	%	N/M		(6.5	)%	(25.1	)%	(7.7	)%	(6.6	)%	(6.9	)%	(9.1	)%	N/M	(7.4	)%

Total losses	56.3	%	53.1	%	30.1	%	54.6	%	44.4	%	45.7	%	49.0	%	33.4	%	43.6	%	N/M	50.4	%
Loss adjustment expenses	12.6	%	7.6	%	4.1	%	10.9	%	12.8	%	8.1	%	11.3	%	7.3	%	9.6	%	N/M	10.5	%
Pre-tax catastrophe LAE	—		0.5	%	—		0.2	%	—		—		0.5	%	0.6	%	0.4	%	N/M	0.2	%
Policy acquisition and other underwriting expenses							29.1	%									37.8	%	N/M	32.6	%
Policyholders’ dividends							—										0.1	%	N/M	—

Combined							94.8	%									91.5	%	N/M	93.7	%

Historical Highlights

THE HANOVER INSURANCE GROUP

HISTORICAL FINANCIAL HIGHLIGHTS


(In millions, except per share data)	Q2 08			Q1 08			2007			Q4 07			Q3 07			Q2 07			Q1 07
SEGMENT INCOME (1)
Property and Casualty
Personal Lines	$	38.6		$	27.1		$	208.2		$	57.8		$	48.8		$	55.0		$	46.6
Commercial Lines		52.7			68.0			169.3			42.6			39.2			38.9			48.6
Other Property and Casualty		2.9			1.3			4.8			(2.4	)		0.3			2.5			4.4

Total Property and Casualty		94.2			96.4			382.3			98.0			88.3			96.4			99.6
Interest expense on corporate debt		(9.9	)		(10.0	)		(39.9	)		(10.0	)		(10.0	)		(9.9	)		(10.0	)

Total segment income before federal income taxes	$	84.3		$	86.4		$	342.4		$	88.0		$	78.3		$	86.5		$	89.6

Federal income tax expense on segment income		(28.8	)		(29.1	)		(117.2	)		(30.7	)		(26.6	)		(29.8	)		(30.1	)

Total segment income after federal income taxes	$	55.5		$	57.3		$	225.2		$	57.3		$	51.7		$	56.7		$	59.5

Net realized investment (losses) gains		(7.6	)		(0.3	)		(0.9	)		(0.6	)		(0.8	)		0.2			0.3
Federal income tax benefit (expense) on non-segment income		—			—			0.5			0.1			0.6			(0.1	)		(0.1	)

Income from continuing operations		47.9			57.0			224.8			56.8			51.5			56.8			59.7

Discontinued operations (net of taxes):
(Loss) income from operations of discontinued FAFLIC business (Including loss on assets held-for-sale of $66.1 in 2008)		(67.7	)		(3.5	)		14.4			6.1			1.5			2.7			4.1
Income from discontinued variable business		—			—			5.2			5.2			—			—			—
Gain from operations of AMGRO (Including gain on disposal of $11.1 in 2008)		10.4			—			—			—			—			—			—
(Loss) gain on disposal of variable business		(0.8	)		6.2			7.9			7.7			0.1			0.3			(0.2	)
Other		—			(1.2	)		0.8			—			0.8			—			—

NET (LOSS) INCOME	$	(10.2	)	$	58.5		$	253.1		$	75.8		$	53.9		$	59.8		$	63.6

PER SHARE DATA (DILUTED)

INCOME FROM CONTINUING OPERATIONS	$	0.92		$	1.09		$	4.29		$	1.08		$	0.98		$	1.09		$	1.15
(LOSS) INCOME FROM DISCONTINUED OPERATIONS, NET OF TAXES	$	(1.12	)	$	0.03		$	0.54		$	0.36		$	0.05		$	0.05		$	0.07
NET (LOSS) INCOME	$	(0.20	)	$	1.12		$	4.83		$	1.44		$	1.03		$	1.14		$	1.22

WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED)		51.8			52.3			52.4			52.6			52.5			52.3			51.9

BALANCE SHEET
Total assets	$	9,463.8		$	9,700.6					$	9,815.6		$	9,845.2		$	9,805.7		$	9,776.2
Total shareholders’ equity	$	2,212.7		$	2,320.7					$	2,299.0		$	2,192.6		$	2,099.4		$	2,100.7
Book value per share	$	43.57		$	45.23					$	44.37		$	42.34		$	40.55		$	40.92
Book value per share, excluding accumulated other comprehensive income	$	45.55		$	45.70					$	44.77		$	43.62		$	42.51		$	41.33

(1)

Represents income or loss of the Company’s operating segments: Personal Lines, Commercial Lines, Other Property and Casualty 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.

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:


	2008
	Price Range				Dividends Per Share
Quarter Ended	High		Low		Dividends Per Share
March 31	$	47.17	$	40.14	—
June 30	$	46.83	$	41.71	—
September 30
December 31


	2007
	Price Range				Dividends Per Share
Quarter Ended	High		Low		Dividends Per Share
March 31	$	49.11	$	44.70		—
June 30	$	49.73	$	44.46		—
September 30	$	49.76	$	41.14		—
December 31	$	46.21	$	42.23	$	0.40

INDUSTRY RATINGS AS OF July 30, 2008


Financial Strength Ratings	A.M. Best	Standard & Poor’s	Moody’s
Property and Casualty Insurance Companies:
The Hanover Insurance Company	A-	A-	A3
Citizens Insurance Company of America	A-	A-	A3
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-	BBB-	Baa3
The Hanover Insurance Group, Inc. Capital Securities	bb	BB-	Ba1
The Hanover Insurance Company Short Term Debt	—	—	Prime-3

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