8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): July 30, 2009

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))

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 July 30, 2009, The Hanover Insurance Group, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2009. The release is furnished as Exhibit 99.1 hereto. Additionally, on July 30, 2009, the Company made available on its website financial information contained in its Statistical Supplement for the period ended June 30, 2009. The supplement is furnished as Exhibit 99.2 hereto.

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 July 30, 2009, announcing the Company’s financial results for the quarter ended June 30, 2009.
Exhibit 99.2	The Hanover Insurance Group, Inc. Statistical Supplement for the period ended June 30, 2009.

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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 thereunto duly authorized.

	The Hanover Insurance Group, Inc.
	(Registrant)
Date July 30, 2009	By:	/s/ Eugene M. Bullis
		Eugene M. Bullis
		Executive Vice President, Chief Financial Officer and Principal Accounting Officer

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Exhibit Index

Exhibit 99.1	Press Release, dated July 30, 2009, announcing the Company’s financial results for the quarter ended June 30, 2009.
Exhibit 99.2	The Hanover Insurance Group, Inc. Statistical Supplement for the period ended June 30, 2009.

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EX-99.1

Exhibit 99.1

WORCESTER, Mass., July 30, 2009 –

The Hanover Insurance Group

Reports Second Quarter Results

• Net income of $64.4 million, or $1.25 per share, compared to a net loss of $10.2 million, or $0.20 per share in the prior-year quarter

• Segment income after tax of $44.0 million, or $0.86 per share, compared to $55.5 million, or $1.07 per share in the prior-year quarter⁽¹⁾

• Net premiums written of $663.1 million, 3.5% higher than the prior-year quarter

• A Property and Casualty combined ratio of 96.4%

• Book value per share increase of $5.13, or 13%, to $43.75 from $38.62 at March 31, 2009

Selected Financial Highlights

in millions, except per share amounts	Quarter ended June 30
	2009		2008
Total Segment Income after taxes(1)	$	44.0	$	55.5
Net realized investment gains (losses) and other, net of tax		19.1		(7.6	)
Income from Continuing Operations		63.1		47.9
Income (Loss) from Discontinued Operations (including assets held-for-sale)		1.3		(58.1	)
Net Income (Loss)	$	64.4	$	(10.2	)
Net Income (Loss) per share (Diluted)	$	1.25	$	(0.20	)
Book Value Per Share	$	43.75	$	43.57
Book Value Per Share (excluding AOCI)	$	47.15	$	45.55

(1) Segment income after tax and segment income after tax per share are non-GAAP measures. The reconciliation of these measures to the closest GAAP measures, income from continuing operations and income from continuing operations per share, are provided on page 12 of this press release.

The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income for the second quarter of 2009 of $64.4 million, or $1.25 per share, compared to a net loss of $10.2 million, or $0.20 per share, in the second quarter of 2008. Net income in the current quarter included an after-tax gain of $22.3 million, or

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$0.43 per share, from the company’s debt restructuring. Net income in the current quarter also included an after-tax net realized loss on investments of $3.6 million, or $0.07 per share, compared to an after-tax net realized loss of $7.6 million, or $0.15 per share, in the prior-year quarter. The net loss for the second quarter of 2008 also included an estimated after-tax loss of $66.1 million, or $1.27 per share, related to the then-pending sale of the company’s run-off life insurance subsidiary, First Allmerica Life Insurance Company (FAFLIC), partially offset by a gain of $11.1 million, or $0.21 per share, resulting from the sale of the company’s premium finance subsidiary, AMGRO, that closed in June 2008.

“We had solid results for the quarter, despite headwinds from weather losses, the market environment and the economy”, said Frederick H. Eppinger, chief executive officer at The Hanover. “Our written premium grew 3.5% and our mix of business continues to improve. We are seeing benefits from the disruption in the marketplace and believe our momentum is just beginning to reflect our recent A.M. Best upgrade to “A.” Our visibility to profitable growth momentum, including improvements in pricing, gives us confidence to continue to invest in our business in order to capitalize on these opportunities. We also saw a substantial increase in the market value of our investment portfolio as credit markets continued to stabilize and overall we generated book value per share growth of 13% in the quarter.”

Total Property and Casualty pre-tax segment income was $76.3 million in the second quarter of 2009 compared to $94.2 million in the second quarter of the prior year. The second quarter of 2009 included pre-tax catastrophe losses of $27.4 million, compared to $38.1 million pre-tax in the prior-year quarter. The second quarter of 2009 was affected by unusually high non-catastrophe weather losses, which impacted the prior-year quarter comparison by approximately $12 million.

The following table details pre-tax segment income (loss).

$ in millions, except per share amounts	Quarter ended June 30
	2009			2008
Personal Lines	$	25.6		$	38.6
Commercial Lines		50.9			52.7
Other Property and Casualty		(0.2	)		2.9
Total Property & Casualty		76.3			94.2
Interest expense on corporate debt		(10.5	)		(9.9	)
Total pre-tax segment income		65.8			84.3
Federal income tax expense		(21.8	)		(28.8	)
Total segment income after taxes(1)	$	44.0		$	55.5
per share(1)	$	0.86		$	1.07

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

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

	Quarter ended June 30
	2009		2008
Personal Lines losses (excluding catastrophes)	55.6	%	51.5	%
Personal Lines catastrophe-related losses	5.5	%	6.7	%
Total Personal Lines losses	61.1	%	58.2	%
Commercial Lines losses (excluding catastrophes)	39.9	%	37.5	%
Commercial Lines catastrophe-related losses	2.8	%	5.4	%
Total Commercial Lines losses	42.7	%	42.9	%
Total P&C Losses	53.3	%	51.7	%
Loss adjustment expenses	9.2	%	10.5	%
Policy acquisition and other underwriting expenses	33.9	%	32.6	%
Combined Ratio	96.4	%	94.8	%

Personal Lines

Personal Lines pre-tax segment income was $25.6 million in the second quarter of 2009 compared to $38.6 million in the prior-year quarter. The year-over-year decline in earnings is primarily the result of higher non-catastrophe weather-related property losses of approximately $10 million, lower net investment income and increased pension costs.

The Personal Lines GAAP combined ratio was 99.9% in the second quarter of 2009 compared to 97.5% in the second quarter of 2008. Catastrophe related losses of $20.1 million contributed 5.5 points to the current quarter combined ratio. For the second quarter of 2008, catastrophe-related losses were $24.6 million, or 6.7 points. Favorable development of prior-year loss reserves was $18.7 million, or 5.1 points, in the second quarter of 2009 compared to favorable development of $22.0 million, or 5.9 points, in the second quarter of 2008. Favorable development of loss adjustment expenses (LAE) was $2.0 million in the current quarter compared to adverse development of $1.5 million in the prior-year quarter. Current quarter favorable LAE development was primarily driven by the continuing effect of the adjustment in our actuarial methodology for estimating loss adjustment expense reserves first introduced in the first quarter of 2009.

Net premiums written were $371.8 million in the second quarter of 2009 compared to $373.5 million in the second quarter of 2008. A reduction in the average written premium per policy, offset by improved pricing, drove the relatively flat year-over-year results. The lower average written premium per policy is primarily the result of planned changes in business mix toward lower risk drivers.

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Commercial Lines

Commercial Lines pre-tax segment income was $50.9 million in the second quarter of 2009 compared to $52.7 million in the second quarter of 2008. The year-over-year decline in earnings is primarily the result of higher expenses and less favorable current accident year results, partially offset by more favorable prior year loss and LAE reserve development and lower catastrophe losses. The higher expenses result from increased employee-related costs, reflecting investments in both core and specialty businesses, operating expenses related to recently acquired subsidiaries, and higher pension costs. The current accident year loss ratio was affected by a moderate increase in large losses in some of our specialty businesses.

The Commercial Lines GAAP combined ratio was 91.8% in the second quarter of 2009 compared to 91.4% in the prior-year quarter. Catastrophe-related losses were $7.3 million, or 2.8 points, of the second quarter combined ratio in 2009 compared to $13.5 million, or 5.4 points, in the prior-year quarter. Favorable development of prior-year loss reserves was $17.8 million, or 6.7 points, in the second quarter of 2009 compared to favorable development of $15.9 million, or 6.4 points, in the second quarter of 2008. Additionally, favorable development of loss adjustment expenses was $5.8 million in the current quarter compared to $0.4 million in the prior-year quarter. Current quarter favorable LAE development was primarily driven by the continuing effect of the adjustment in our actuarial methodology for estimating loss adjustment expense reserves first introduced in the first quarter of 2009.

Net premiums written were $291.1 million in the second quarter of 2009 compared to $266.9 million in the second quarter of 2008. Growth in the company’s specialty businesses, including AIX which was acquired in November 2008, accounted for the year-over-year growth in net written premium.

Other Property & Casualty

Other Property & Casualty’s pre-tax segment loss was $0.2 million in the second quarter of 2009 compared to income of $2.9 million in the prior-year quarter, primarily driven by increased pension expense.

Investment Results

Net investment income from continuing operations decreased by $2.5 million to $61.3 million for the second quarter of 2009, compared to $63.8 million in the same period of 2008. This decrease is primarily due to the impact of defaulted bonds, primarily occurring in the second half of 2008, as well as lower partnership income and lower new money yields. These decreases were partially offset by prepayment fees and an increase in investment income related to our recent acquisitions.

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Second quarter 2009 pre-tax net realized investment losses included in continuing operations were $3.6 million compared to $7.6 million in the same period of 2008. In the second quarter of 2009, the company recognized impairment charges to earnings of $6.7 million on certain fixed maturity and equity securities, which were partially offset by pre-tax net investment gains of $3.1 million from sales of fixed maturity securities. In the second quarter of 2008, the company recognized impairments of $8.3 million on fixed maturity and equity securities, partially offset by pre-tax net realized gains on sales of securities of $0.7 million.

During the second quarter of 2009, the company adopted FASB Staff Position No. FAS 115-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP FAS 115-2”), which revises the recognition and reporting requirements for other-than-temporary impairments (“OTTI”) on debt securities. The company reviewed OTTI previously recorded through realized losses on securities held at April 1, 2009 and determined that $33.3 million of these impairments were related to non-credit factors. Accordingly, under FSP FAS 115-2, the company increased the amortized cost basis of these debt securities and recorded a cumulative effect adjustment of $33.3 million within its shareholders’ equity. The cumulative effect adjustment had no effect on total shareholders’ equity as it increased retained earnings and reduced accumulated other comprehensive income.

Under the new accounting guidance, the credit loss portion of OTTI is recorded through earnings while the portion attributable to all other factors is recorded separately as a component of other comprehensive income. During the second quarter, the company recognized $6.7 million of net impairment losses through earnings, while the portion of loss recorded as a component of other comprehensive income was $11.4 million.

Realized gains/(losses) related to continuing operations:
($ in millions)	Quarter ended June 30, 2009
Net gains on sales of securities	$	3.1
Impairment charges to earnings:
Below investment grade fixed maturities		(5.4	)
Equity securities		(1.3	)
Total net realized losses	$	(3.6	)

Investment Portfolio

The company held $4.9 billion in cash and investment assets at June 30, 2009, including cash and investment assets associated with the discontinued accident and health business.

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Fixed maturities and cash with a carrying value of $4.8 billion represented 97% of our investment portfolio. Approximately 93% of our fixed maturity portfolio is rated investment grade. The following table provides information about the company’s fixed maturity and other investments as of June 30, 2009:

$ in millions Investment type	Weighted Average Quality	Amortized Cost		Carrying Value		Net Unrealized Gain (Loss)(2)
Corporates:(1)
NAIC 1	A	$	898.7	$	893.3	$	(5.4	)
NAIC 2	BBB		1,009.8		1,002.1		(7.7	)
NAIC 3 or below	B+		317.0		287.7		(29.3	)
Total Corporates	BBB+		2,225.5		2,183.1		(42.4	)
MBS/CMBS/ABS:
MBS	AAA		972.0		973.5		1.5
CMBS	AA+		276.1		256.2		(19.9	)
ABS	BBB+		55.4		55.0		(0.4	)
Municipals:
Taxable	AA-		567.9		564.5		(3.4	)
Tax Exempt	A+		216.4		211.4		(5.0	)
U.S. Government	AAA		255.7		256.2		0.5
Total Fixed Maturities	A+		4,569.0		4,499.9		(69.1	)
Perpetual Preferred Securities			32.9		32.3		(0.6	)
Common Equity Securities			61.7		59.8		(1.9	)
Total fixed maturity and equity securities			4,663.6		4,592.0		(71.6	)
Cash and cash equivalents			280.7		280.7		—
Mortgage loans			26.2		26.2		—
Other long-term investments			14.9		16.9		2.0
		$	4,985.4	$	4,915.8	$	(69.6	)

(1) NAIC 1 is generally equivalent to an investment grade rating agency designation of “A” or above; NAIC 2 is generally equivalent to an investment grade rating agency designation of “BBB”; and NAIC 3 or below is generally equivalent to a non-investment grade rating agency designation of “BB” or below.

(2) Net unrealized loss at June 30, 2009 includes $33.3 million cumulative effect of adoption of FSP FAS 115-2.

The Hanover continues to have no direct exposure to investments in sub-prime mortgages or sub-prime mortgage-backed securities, nor does it currently own any collateralized debt or loan obligations or invest in credit derivatives. Residential mortgage-backed securities constitute $973.5 million of the company’s invested assets. Approximately 84% of the company’s residential mortgage-backed securities are agency issued prime securities and 76% of the remaining securities are rated AAA. Commercial mortgage-backed securities (CMBS) constitute $256.2 million of the company’s invested assets, of which approximately 20% are fully defeased with US government securities. Approximately 84% of the company’s CMBS holdings

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are pre-2005 vintages, with 9% from the 2007 vintage, 5% from the 2006 vintage and 2% from the 2005 vintage. The entire CMBS portfolio, of which approximately 81% was AAA rated, has a weighted average loan-to-value ratio of approximately 68%. As of June 30, 2009, The Hanover holds $775.9 million of municipal bonds with an overall rating of AA-. Financial guarantor insurance enhanced municipal bonds represent $335.4 million, or approximately 43%, of the municipal portfolio. The overall credit rating of The Hanover’s insured municipal bond portfolio, giving no effect to the insurance enhancement, was A-.

Book Value and Capital Management

The following exhibit provides a roll forward of book value for the quarter ended June 30, 2009:

	$ Amounts			$ per share
$ in millions, except per share	Quarter Ended June 30, 2009			Quarter Ended June 30, 2009
Beginning of Period Book Value	$	1,967.6		$	38.62
Net Income
Continuing Operations		63.1			1.24
Discontinued Operations		1.3			0.03
Change in AOCI, net of tax
Change in Pension and Postretirement Related Benefits		4.0			0.08
Change in Net Unrealized Investment Losses (current)		190.8			3.76
Other items		(1.4	)		(0.03	)
Shares Repurchased at Cost		(7.1	)		—
Common Stock Net Activity		2.8			0.05
End of Period Book Value	$	2,221.1		$	43.75

In the second quarter of 2009, the company repurchased $7.1 million of common equity, or approximately 192 thousand shares. At the end of the quarter, approximately $33 million of the company’s $100 million share repurchase authorization was outstanding.

As previously reported on June 30, 2009, the company completed a tender offer pursuant to which it repurchased a liquidation amount of $69.3 million of Capital Securities issued by AFC Capital Trust and $77.3 million of senior debt. Subsequently, the company liquidated the AFC Capital Trust on July 30, 2009 and exchanged all of the outstanding securities with like debentures issued directly by The Hanover Insurance Group. Upon the liquidation of the trust, the company retired an additional $65.0 million of Capital Securities repurchased previously on the open market. The company realized an after-tax gain of $22.3 million, or $0.43 per share, associated with these transactions. As of July 30, 2009, $165.7 million of the subordinated debentures and $122.7 million of the senior debt remain outstanding. As previously disclosed, the company expects to borrow between $125 million and $150 million from the Federal Home Loan Bank (FHLB), subject to approval of its application for membership in the FHLB.

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Earnings Conference Call

The Hanover will host a conference call to discuss the company’s second quarter results on Friday, July 31 at 9:00 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, 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 approximately two hours after the call.

Statistical Supplement

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

Forward-Looking Statements and Non-GAAP Financial Measures

Forward-looking statements

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,” “could,” “confident,” “plan,” “guidance,” “on track to” and similar expressions is intended to identify forward-looking statements. The company cautions investors that any such forward-looking statements are estimates or projections which involve significant judgment and not guarantees of future performance, and actual results could differ materially. In particular, statements in the above referenced conference call regarding expectations for 2009, including with respect to net written premium and policies in force growth, retention, new business growth, net investment income, accident year loss ratios, prior year reserve development, segment income, expense, and expense ratios and effective tax rate are forward-looking statements. Statements regarding the possible impact of the current disruption in the credit markets and in the property and casualty industry, including the effect of current economic conditions on our business and investment portfolio, and with respect to the anticipated pricing environment, are also forward looking statements. Investors should consider the risks and uncertainties in our business and under current financial market conditions that may affect such estimates and future performance, including (i) the inherent difficulties in arriving at such estimates; (ii) the complexity of estimating losses from large catastrophe events or with respect to emerging issues such as “Chinese drywall” where circumstances may delay reporting of the existence, nature or extent of losses or where “demand surge,” regulatory assessments, litigation, coverage and technical complexities or other factors may significantly impact the ultimate amount of such losses; (iii) the difficulties of estimating the impact of the current financial turmoil on the value of our investment portfolio and future investment income, including the amount of realized losses and impairments which will be recognized in future financial reports and our ability and intent to hold such investments until recovery; (iv) the uncertainties

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in current circumstances of future rating agency requirements, which could affect the company as well as the company’s investment portfolio; (v) the impact on our capital and liquidity of the current financial turmoil; and (vi) the impact of recent federal government intervention into the financial sector.

Investors are directed to consider the risks and uncertainties in the company’s 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 uncertainty in estimating non-catastrophe weather-related losses, the uncertainties in estimating property and casualty losses (particularly with respect to products with longer tails or involving emerging issues and with respect to losses incurred as the result of Hurricanes Gustav, Ike, Katrina and Rita), the possibility of adverse judicial decisions, including those which expand policy coverage beyond its intended scope, the ability to increase or maintain certain property and casualty insurance rates, the impact of new product introductions and expansion in geographic areas, the impact of the company’s acquisitions of Professionals Direct, Inc., Verlan Holdings, Inc. and AIX Holdings, Inc., adverse loss development and adverse trends in mortality and morbidity and medical costs, changes in frequency and loss trends, the ability to improve renewal rates and increase new property and casualty policy counts, investment impairments (which may be affected by, among other things, our ability and willingness to hold investment assets until they recover in value), heightened competition (including increasing rate pressure, particularly in Commercial Lines), the continued deterioration of the economic environment, particularly in the state of Michigan, where the company has a significant portion of its business, adverse state and federal legislation or regulation or regulatory actions (including in the state of Michigan where the Governor announced efforts to freeze automobile rates and to initiate actions to reduce automobile insurance rates and to make them “affordable…fair…and equitable”), financial ratings actions, uncertainties in estimating FIN 45 liabilities recorded in conjunction with indemnity obligations undertaken in connection with the sale of various businesses, including our former life companies, and increased uncertainties in general economic conditions and in investment and financial markets, which, among other things, could result in increased impairments of fixed income investments or the inability to collect from reinsurers, the performance of the discontinued voluntary pools and accident and health business that was transferred to The Hanover Insurance Company from FAFLIC in connection with the sale of FAFLIC, the ability to realize the benefits in connection with tax attributes from our former life companies, and various other factors.

Non-GAAP financial measures

The Hanover uses non-GAAP financial measures as important measures of the Company’s operating performance, including total segment income, segment income after tax, segment income after-tax per share, property and casualty segment income, and measures of segment income and loss ratios excluding catastrophe losses and reserve development.

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Segment income (sometimes referred to as Property and Casualty 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 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 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.

Reserve development, which can be favorable or unfavorable, represents changes in our estimate of the costs to pay claims from prior years. We believe that a discussion of segment income excluding reserve development is helpful to investors since it provides some insight into our estimate of current year accident results.

Income from continuing operations is the most directly comparable GAAP measure for total segment income and measures of segment income that exclude the effects of catastrophe losses or reserve development. Segment income and measures of segment income that exclude the effects of catastrophe losses or reserve development should not be construed as substitutes for net income determined in accordance with GAAP. A reconciliation of income from continuing operations to segment income for the quarters ended June 30, 2009 and 2008 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.

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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: Oksana Lukasheva E-mail: olukasheva@hanover.com 1-508-855-2063 Media: Michael F. Buckley E-mail: mibuckley@hanover.com 1-508-855-3099

Definition of Reported Segments

Our continuing operations include three Property and Casualty operating segments: Personal Lines, Commercial Lines, and Other Property and Casualty. 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 Opus Investment Management, Inc., which provides investment management services to institutions, pension funds and other organizations, as well as a block of run-off voluntary pools business, in which we have not actively participated since 1995.

THE HANOVER INSURANCE GROUP, INC.

in millions, except per share amounts	Quarter ended June 30
	2009		2008
Net income (loss)	$	64.4	$	(10.2	)
Net income (loss) per share (diluted)	$	1.25	$	(0.20	)
Weighted average shares		51.4		51.8

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The following is a reconciliation from segment income to net income (loss)⁽¹⁾:

	Quarter ended June 30												Six months ended June 30
$ in millions except per share	2009						2008						2009						2008
	$			Per Share(2)			$			Per Share(2)			$			Per Share(2)			$			Per Share(2)
Property and Casualty
Personal Lines	$	25.6		$	—		$	38.6		$	—		$	28.7		$	—		$	65.7		$	—
Commercial Lines		50.9			—			52.7			—			98.5			—			120.7			—
Other Property & Casualty		(0.2	)		—			2.9			—			(1.0	)		—			4.5			—
Total Property and Casualty		76.3			—			94.2			—			126.2			—			190.9			—
Interest expense on corporate debt		(10.5	)		—			(9.9	)		—			(20.9	)		—			(19.9	)		—
Total segment income		65.8			1.28			84.3			1.63			105.3			2.05			171.0			3.28
Federal income tax expense on segment income		(21.8	)		(0.42	)		(28.8	)		(0.56	)		(34.9	)		(0.68	)		(57.9	)		(1.11	)
Total segment income after federal income taxes		44.0			0.86			55.5			1.07			70.4			1.37			113.1			2.17
Net realized investment losses and other		(3.5	)		(0.07	)		(7.6	)		(0.15	)		(9.7	)		(0.19	)		(7.9	)		(0.15	)
Gain on tender offer		34.3			0.67			—			—			34.3			0.67			—			—
Federal income tax expense on non-segment income		(11.7	)		(0.23	)		—			—			(11.7	)		(0.23	)		—			—
Income from continuing operations, net of taxes		63.1			1.23			47.9			0.92			83.3			1.62			105.2			2.02
Gain (loss) from discontinued FAFLIC business (includes loss on assets held-for-sale of $66.1 in 2008)		0.9			0.02			(67.7	)		(1.30	)		5.9			0.11			(71.2	)		(1.37	)
Gain (loss) from discontinued accident and health business		0.2			—			—			—			(3.1	)		(0.06	)		—			—
Income from operations of AMGRO (includes gain on disposal of $11.1 in 2008)		—			—			10.4			0.20			—			—			10.1			0.20
Gain (loss) on disposal of variable business, net of taxes		0.2			—			(0.8	)		(0.02	)		4.1			0.08			5.4			0.10
Other		—			—			—			—			—			—			(1.2	)		(0.02	)
Net income (loss)(3)	$	64.4		$	1.25		$	(10.2	)	$	(0.20	)	$	90.2		$	1.75		$	48.3		$	0.93

(1) 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 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.

(2) Per Share data is per diluted share of common stock.

(3) Basic net income per share was $1.26 and $(0.20) for quarters ended June 30, 2009 and 2008, respectively, and $1.77 and $0.94 for the six months ended June 30, 2009 and 2008, respectively.

All figures reported are unaudited

12

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
Investments
Net Investment Income	13
Net Realized Investment Gains (Losses)	14
Unrealized Losses	15
Credit Quality of Fixed Maturities	16
Top 25 Financial Holdings	17
Top 25 Non-Financial Holdings	18
Property and Casualty Statutory Ratios	19-20
Historical Financial Highlights	21-22
Other Information	23
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)	2009			2008			% Change		2009			2008			% Change
SEGMENT INCOME
Property and Casualty
Personal Lines	$	25.6		$	38.6		(33.7	)	$	28.7		$	65.7		(56.3	)
Commercial Lines		50.9			52.7		(3.4	)		98.5			120.7		(18.4	)
Other		(0.2	)		2.9		N/M			(1.0	)		4.5		N/M
Total Property and Casualty		76.3			94.2		(19.0	)		126.2			190.9		(33.9	)
Interest expense on corporate debt		(10.5	)		(9.9	)	6.1			(20.9	)		(19.9	)	5.0
Total segment income		65.8			84.3		(21.9	)		105.3			171.0		(38.4	)
Federal income tax expense on P&C segment income		(25.6	)		(32.3	)	(20.7	)		(42.2	)		(64.9	)	(35.0	)
Federal income tax benefit on other segment income		3.8			3.5		8.6			7.3			7.0		4.3
Total federal income tax expense on segment income		(21.8	)		(28.8	)	(24.3	)		(34.9	)		(57.9	)	(39.7	)
Total segment income after taxes	$	44.0		$	55.5		(20.7	)	$	70.4		$	113.1		(37.8	)
RECONCILIATION FROM SEGMENT
INCOME TO NET INCOME
Total segment income after taxes	$	44.0		$	55.5		(20.7	)	$	70.4		$	113.1		(37.8	)
Net realized investment losses		(3.6	)		(7.6	)	(52.6	)		(9.7	)		(7.9	)	22.8
Gain on tender offer		34.3			—		N/M			34.3			—		N/M
Other non-segment items		0.1			—		N/M			—			—		N/M
Federal income tax expense on non-segment income		(11.7	)		—		N/M			(11.7	)		—		N/M
Income from continuing operations		63.1			47.9		31.7			83.3			105.2		(20.8	)
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business
(Including loss on assets held-for-sale of $66.1 in 2008)		0.9			(67.7	)	N/M			5.9			(71.2	)	N/M
Gain (loss) from discontinued accident and health business		0.2			—		N/M			(3.1	)		—		N/M
Income from operations of AMGRO
(Including gain on disposal of $11.1 in 2008)		—			10.4		N/M			—			10.1		N/M
Gain (loss) on disposal of variable life and annuity business		0.2			(0.8	)	N/M			4.1			5.4		(24.1	)
Other		—			—		—			—			(1.2	)	N/M
Net income (loss)	$	64.4		$	(10.2	)	N/M		$	90.2		$	48.3		86.7

1

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

	Quarter ended June 30								Six Months ended June 30
	2009			2008			% Change		2009			2008			% Change
PER SHARE DATA (DILUTED)
Total segment income	$	1.28		$	1.63		(21.5	)	$	2.05		$	3.28		(37.5	)
Federal income tax expense on segment income		(0.42	)		(0.56	)	(25.0	)		(0.68	)		(1.11	)	(38.7	)
Total segment income after taxes		0.86			1.07		(19.6	)		1.37			2.17		(36.9	)
Net realized investment losses		(0.07	)		(0.15	)	(53.3	)		(0.19	)		(0.15	)	26.7
Gain on tender offer		0.67			—		N/M			0.67			—		N/M
Federal income tax expense on non-segment income		(0.23	)		—		N/M			(0.23	)		—		N/M
Income from continuing operations		1.23			0.92		33.7			1.62			2.02		(19.8	)
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business
(Including loss on assets held for sale of $1.27 in 2008)		0.02			(1.30	)	N/M			0.11			(1.37	)	N/M
Loss from discontinued accident and health business		—			—		—			(0.06	)		—		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 life and annuity business		—			(0.02	)	N/M			0.08			0.10		(20.0	)
Other		—			—		—			—			(0.02	)	N/M
Net income (loss)	$	1.25		$	(0.20	)	N/M		$	1.75		$	0.93		88.2

2

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

(In millions, except per share data)	June 30 2009				December 31 2008				% Change
BALANCE SHEET
Shareholders’ equity
Property and Casualty Group	$	2,329.2			$	1,995.5			16.7
First Allmerica Financial Life Insurance Company (consolidated) (1)		—				78.1			N/M
THG Holding Company debt		(288.1	)			(499.5	)		(42.3	)
THG Holding Company		180.0				313.1			(42.5	)
Total shareholders’ equity	$	2,221.1			$	1,887.2			17.7
Property and Casualty Companies (2)
Total adjusted statutory capital	$	1,698.5			$	1,600.7			6.1
Premium to surplus ratio		1.5:1				1.6:1			—
Book value per share
Property and Casualty Group	$	45.88			$	39.20			17.0
First Allmerica Financial Life Insurance Company (consolidated)		—				1.53			N/M
THG Holding Company debt		(5.68	)			(9.81	)		(42.1	)
THG Holding Company		3.55				6.16			(42.4	)
Total book value per share	$	43.75			$	37.08			18.0
THG book value per share, excluding accumulated other comprehensive loss	$	47.15			$	44.64			5.6
Shares outstanding (3)		50.8				50.9
Stock price	$	38.11			$	42.97			(11.3	)
Price/book value per share		0.9		x		1.2		x	(0.3	)	x
Debt/equity		14.0	%			28.1	%		(14.1	)	pts
Debt/total capital		12.2	%			22.0	%		(9.8	)	pts

(1) FAFLIC was sold to Commonwealth Annuity and Life Insurance Company effective January 2, 2009. December 31, 2008 reflects a dividend to THG Holding Company of $136.3 million.

(2) Property and Casualty Companies includes The Hanover Insurance Company, Citizens Insurance Company of America, and all other insurance subsidiaries.

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

3

THE HANOVER INSURANCE GROUP

CONSOLIDATED INCOME STATEMENTS

	Quarter ended June 30								Six Months ended June 30
(In millions)	2009			2008			% Change		2009			2008			% Change
REVENUES
Premiums	$	630.0		$	619.3		1.7		$	1,262.0		$	1,237.0		2.0
Net investment income		61.3			63.8		(3.9	)		126.2			128.4		(1.7	)
Net realized investment losses:
Total other-than temporary impairment losses on securities		(18.1	)		(8.3	)	N/M			(34.6	)		(13.6	)	N/M
Portion of loss recognized in other comprehensive income		11.4			—		N/M			11.4			—		N/M
Net other-than temporary impairment losses on securities recognized in earnings		(6.7	)		(8.3	)	(19.3	)		(23.2	)		(13.6	)	70.6
Realized gains from sales and other		3.1			0.7		N/M			13.5			5.7		N/M
Total net realized investment losses		(3.6	)		(7.6	)	(52.6	)		(9.7	)		(7.9	)	22.8
Fees and other income		8.7			9.5		(8.4	)		16.8			17.4		(3.4	)
Total revenues		696.4			685.0		1.7			1,395.3			1,374.9		1.5
LOSSES AND EXPENSES
Losses and loss adjustment expenses		393.8			385.4		2.2			822.1			765.5		7.4
Policy acquisition expenses		144.8			139.0		4.2			287.9			276.4		4.2
Gain on tender offer		(34.3	)		—		N/M			(34.3	)		—		N/M
Other operating expenses		95.5			83.9		13.8			189.7			169.9		11.7
Total losses and expenses		599.8			608.3		(1.4	)		1,265.4			1,211.8		4.4
Income from continuing operations before federal income taxes		96.6			76.7		25.9			129.9			163.1		(20.4	)
Federal income tax expense		33.5			28.8		16.3			46.6			57.9		(19.5	)
Income from continuing operations		63.1			47.9		31.7			83.3			105.2		(20.8	)
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business (Including loss on assets held-for-sale of $66.1 in 2008)		0.9			(67.7	)	N/M			5.9			(71.2	)	N/M
Gain (loss) from discontinued accident and health business		0.2			—		N/M			(3.1	)		—		N/M
Income from operations of AMGRO (Including gain on disposal of $11.1 in 2008)		—			10.4		N/M			—			10.1		N/M
Gain (loss) on disposal of variable life and annuity business		0.2			(0.8	)	N/M			4.1			5.4		(24.1	)
Other		—			—		—			—			(1.2	)	N/M
Net income (loss)	$	64.4		$	(10.2	)	N/M		$	90.2		$	48.3		86.7

4

THE HANOVER INSURANCE GROUP

CONSOLIDATED INCOME STATEMENTS

	Quarter ended June 30						Six Months ended June 30
	2009		2008			% Change	2009			2008			% Change
PER SHARE DATA (DILUTED)
Income from continuing operations	$	1.23	$	0.92		33.7	$	1.62		$	2.02		(19.8	)
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business (Including loss on assets held-for-sale of $1.27 in 2008)		0.02		(1.30	)	N/M		0.11			(1.37	)	N/M
Loss from discontinued accident and health business		—		—		—		(0.06	)		—		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 life and annuity business		—		(0.02	)	N/M		0.08			0.10		(20.0	)
Other		—		—		—		—			(0.02	)	N/M
Net income (loss) (1)	$	1.25	$	(0.20	)	N/M	$	1.75		$	0.93		88.2
Weighted average shares outstanding		51.4		51.8				51.4			52.0

(1) Basic income per share was $1.26 and $(0.20) for the quarters ended June 30, 2009 and 2008, respectively, and $1.77 and $0.94 for the six months ended June 30, 2009 and 2008, respectively.

5

THE HANOVER INSURANCE GROUP

CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)	June 30 2009			December 31 2008			% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $4,463.7 and $4,382.0)	$	4,403.6		$	4,140.9		6.3
Equity securities, at fair value (cost of $94.6 and $97.6)		92.1			76.2		20.9
Mortgage loans		26.2			31.1		(15.8	)
Other long-term investments		16.9			18.4		(8.2	)
Total investments		4,538.8			4,266.6		6.4
Cash and cash equivalents		281.0			397.7		(29.3	)
Accrued investment income		50.9			52.3		(2.7	)
Premiums, accounts and notes receivable, net		605.7			578.5		4.7
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		1,126.6			1,129.6		(0.3	)
Deferred policy acquisition costs		272.3			264.8		2.8
Deferred federal income taxes		247.7			285.6		(13.3	)
Goodwill		170.0			169.9		0.1
Other assets		323.4			315.7		2.4
Assets of discontinued operations		131.3			1,769.5		(92.6	)
Total assets	$	7,747.7		$	9,230.2		(16.1	)
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Policy liabilities and accruals:
Losses and loss adjustment expenses	$	3,127.7		$	3,201.3		(2.3	)
Unearned premiums		1,267.1			1,246.3		1.7
Contractholder deposit funds and other policy liabilities		1.6			1.8		(11.1	)
Total policy liabilities and accruals		4,396.4			4,449.4		(1.2	)
Expenses and taxes payable		623.2			622.3		0.1
Reinsurance premiums payable		65.1			61.3		6.2
Long-term debt		309.9			531.4		(41.7	)
Liabilities of discontinued operations		132.0			1,678.6		(92.1	)
Total liabilities		5,526.6			7,343.0		(24.7	)
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		1,805.1			1,803.8		0.1
Accumulated other comprehensive loss		(173.0	)		(384.8	)	(55.0	)
Retained earnings		1,073.3			949.8		13.0
Treasury stock at cost (9.7 and 9.6 million shares)		(484.9	)		(482.2	)	0.6
Total shareholders’ equity		2,221.1			1,887.2		17.7
Total liabilities and shareholders’ equity	$	7,747.7		$	9,230.2		(16.1	)

6

PROPERTY & CASUALTY

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

CONDENSED INCOME STATEMENTS

	Quarter ended June 30								Six Months ended June 30
(In millions)	2009			2008			% Change		2009			2008			% Change
REVENUES
Net premiums written	$	663.1		$	640.6		3.5		$	1,293.0		$	1,269.1		1.9
Change in unearned premiums, net of prepaid reinsurance premiums		(33.1	)		(21.3	)	55.4			(31.0	)		(32.1	)	(3.4	)
Net premiums earned		630.0			619.3		1.7			1,262.0			1,237.0		2.0
Net investment income		61.1			63.6		(3.9	)		125.8			128.0		(1.7	)
Other income		9.8			11.4		(14.0	)		19.1			21.6		(11.6	)
Total segment revenue		700.9			694.3		1.0			1,406.9			1,386.6		1.5
LOSSES AND OPERATING EXPENSES
Losses and loss adjustment expenses		393.8			385.4		2.2			822.1			765.5		7.4
Policy acquisition expenses		144.8			139.0		4.2			287.9			276.4		4.2
Other operating expenses		86.0			75.7		13.6			170.7			153.8		11.0
Total losses and operating expenses		624.6			600.1		4.1			1,280.7			1,195.7		7.1
Segment income before federal income taxes	$	76.3		$	94.2		(19.0	)	$	126.2		$	190.9		(33.9	)

7

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY GROUP (1)

SELECT BALANCE SHEET INFORMATION

(In millions, except per share data)	June 30 2009		December 31 2008		% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $4,253.7 and $4,154.9)	$	4,224.1	$	3,912.1	8.0
Equity securities, at fair value (cost of $96.1 and $88.3)		92.1		66.9	37.7
Mortgage loans		27.2		32.7	(16.8	)
Other long-term investments		12.0		13.5	(11.1	)
Total investments		4,355.4		4,025.2	8.2
Cash and cash equivalents		264.1		377.8	(30.1	)
Accrued investment income		49.0		48.6	0.8
Premiums, accounts, and notes receivable, net		605.7		579.2	4.6
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		1,126.6		1,129.6	(0.3	)
Deferred policy acquistion costs		272.3		264.8	2.8
Deferred federal income tax asset		242.6		220.8	9.9
Goodwill		170.0		169.9	0.1
Other assets		334.2		309.3	8.1
Assets of discontinued operations		131.3		—	N/M
Total assets	$	7,551.2	$	7,125.2	6.0
LIABILITIES
Policy liabilities and accruals:
Losses and loss adjustment expenses	$	3,127.7	$	3,201.3	(2.3	)
Unearned premiums		1,267.1		1,246.3	1.7
Contractholder deposit funds and other policy liabilities		1.6		1.8	(11.1	)
Total policy liabilities and accruals		4,396.4		4,449.4	(1.2	)
Expenses and taxes payable		606.7		596.4	1.7
Reinsurance premiums payable		65.1		61.3	6.2
Long-term debt		21.8		22.6	(3.5	)
Liabilities of discontinued operations		132.0		—	N/M
Total liabilities	$	5,222.0	$	5,129.7	1.8

(1) Property and Casualty group includes The Hanover Insurance Company, Citizens Insurance Company of America, and AIX Holdings, Inc. and their subsidiaries, Verlan Fire Insurance Company, OPUS Investments, Inc. and other insurance and non-insurance subsidiaries.

8

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING PROFIT (LOSS) RECONCILED TO SEGMENT INCOME

	Quarter ended June 30, 2009
	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	$	242.3		$	118.6		$	10.9		$	371.8		$	27.0		$	52.4		$	97.6		$	114.1		$	291.1		$	0.2		$	663.1
Net premiums earned	$	245.1		$	109.6		$	9.7		$	364.4		$	28.5		$	46.4		$	90.6		$	99.8		$	265.3		$	0.3		$	630.0
Losses excluding prior year loss reserve development and catastrophe losses		158.4			59.4			3.4			221.2			19.3			24.6			36.1			43.6			123.6			(0.1	)		344.7
Prior year loss reserve (favorable) unfavorable development		(20.8	)		3.0			(0.9	)		(18.7	)		(4.3	)		0.3			(7.9	)		(5.9	)		(17.8	)		0.1			(36.4	)
Pre-tax catastrophe losses		1.5			18.4			0.2			20.1			—			0.1			3.9			3.3			7.3			—			27.4
Loss adjustment expenses (1)		28.6			8.8			(0.1	)		37.3			(1.1	)		0.5			12.6			8.5			20.5			0.2			58.0
Policy acquisition expenses and other underwriting expenses											107.3															110.9			(0.2	)		218.0
Policyholders’ dividends											—															0.1			—			0.1
GAAP underwriting (loss) profit											(2.8	)														20.7			0.3			18.2
Net investment income											26.0															29.7			5.4			61.1
Other income											3.6															4.8			1.4			9.8
Other operating expenses											(1.2	)														(4.3	)		(7.3	)		(12.8	)
Segment income (loss) before federal income taxes										$	25.6														$	50.9		$	(0.2	)	$	76.3
	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
Net premiums written	$	252.3		$	110.4		$	10.8		$	373.5		$	29.4		$	52.8		$	97.5		$	87.2		$	266.9		$	0.2		$	640.6
Net premiums earned	$	252.2		$	107.3		$	10.0		$	369.5		$	29.8		$	49.0		$	89.8		$	80.9		$	249.5		$	0.3		$	619.3
Losses excluding prior year loss reserve development and catastrophe losses		160.3			48.7			3.2			212.2			20.0			25.9			35.5			27.8			109.2			—			321.4
Prior year loss reserve favorable development		(18.0	)		(3.8	)		(0.2	)		(22.0	)		(7.4	)		(0.2	)		(6.8	)		(1.5	)		(15.9	)		(1.5	)		(39.4	)
Pre-tax catastrophe losses		1.8			22.4			0.4			24.6			—			0.5			9.8			3.2			13.5			—			38.1
Loss adjustment expenses (1)		31.3			9.2			0.6			41.1			3.6			4.1			10.4			5.7			23.8			0.3			65.2
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

(1) Loss adjustment expenses includes favorable (unfavorable) development of $2.0 million and $(1.5) million in Personal Lines, $5.8 million and $0.4 million in Commercial Lines, and $7.8 million and $(1.1) million in Total P&C for the quarters ended June 30, 2009 and 2008, respectively.

9

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING PROFIT (LOSS) RECONCILED TO SEGMENT INCOME

	Six Months ended June 30, 2009
	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	$	491.5		$	208.3	$	19.2		$	719.0		$	60.5		$	100.4		$	190.7		$	222.2		$	573.8		$	0.2		$	1,293.0
Net premiums earned	$	491.1		$	217.4	$	19.6		$	728.1		$	58.7		$	92.8		$	180.7		$	201.4		$	533.6		$	0.3		$	1,262.0
Losses excluding prior year loss reserve development and catastrophe losses		323.0			116.9		6.6			446.5			39.3			49.5			86.3			84.8			259.9			(0.1	)		706.3
Prior year loss reserve (favorable) unfavorable development		(34.8	)		8.8		(1.1	)		(27.1	)		(11.2	)		(2.6	)		(10.4	)		(16.8	)		(41.0	)		0.1			(68.0	)
Pre-tax catastrophe losses		2.6			43.1		0.4			46.1			—			0.3			14.0			4.4			18.7			—			64.8
Loss adjustment expenses (1)		59.8			19.1		0.3			79.2			(2.5	)		4.5			19.0			18.1			39.1			0.4			118.7
Policy acquisition expenses and other underwriting expenses										212.7															220.5			(0.4	)		432.8
Policyholders’ dividends										—															0.3			—			0.3
GAAP underwriting (loss) profit										(29.3	)														36.1			0.3			7.1
Net investment income										53.6															61.3			10.9			125.8
Other income										7.1															9.2			2.8			19.1
Other operating expenses										(2.7	)														(8.1	)		(15.0	)		(25.8	)
Segment income (loss) before federal income taxes									$	28.7														$	98.5		$	(1.0	)	$	126.2
	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
Net premiums written	$	511.6		$	193.7	$	19.9		$	725.2		$	67.6		$	106.3		$	192.1		$	177.7		$	543.7		$	0.2		$	1,269.1
Net premiums earned	$	503.6		$	215.4	$	19.8		$	738.8		$	61.2		$	99.8		$	178.5		$	158.4		$	497.9		$	0.3		$	1,237.0
Losses excluding prior year loss reserve development and catastrophe losses		326.3			105.8		6.2			438.3			41.6			53.1			78.2			58.6			231.5			—			669.8
Prior year loss reserve (favorable) unfavorable development		(34.2	)		0.3		(0.7	)		(34.6	)		(17.0	)		(6.1	)		(23.5	)		(11.0	)		(57.6	)		(0.5	)		(92.7	)
Pre-tax catastrophe losses		2.3			32.2		1.1			35.6			—			0.5			16.5			4.8			21.8			—			57.4
Loss adjustment expenses (1)		64.4			17.1		1.0			82.5			7.1			8.9			19.2			12.4			47.6			0.6			130.7
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

(1) Loss adjustment expenses includes favorable (unfavorable) development of $1.7 million and $(2.1) million in Personal Lines, $15.7 million and $3.3 million in Commercial Lines, and $17.4 million and $1.2 million in Total P&C for the six months ended June 30, 2009 and 2008, respectively.

10

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING RATIOS

	Quarter ended June 30, 2009
	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	64.6	%	54.2	%	35.0	%	60.7	%	67.7	%	53.0	%	39.8	%	43.7	%	46.6	%	N/M	54.8	%
Catastrophe losses	0.6	%	16.8	%	2.1	%	5.5	%	—		0.2	%	4.3	%	3.3	%	2.8	%	N/M	4.3	%
Loss development	(8.5	)%	2.7	%	(9.3	)%	(5.1	)%	(15.1	)%	0.6	%	(8.7	)%	(5.9	)%	(6.7	)%	N/M	(5.8	)%
Total losses	56.7	%	73.7	%	27.8	%	61.1	%	52.6	%	53.8	%	35.4	%	41.1	%	42.7	%	N/M	53.3	%
Loss adjustment expenses (1)	11.7	%	8.0	%	(1.0	)%	10.2	%	(3.9	)%	1.1	%	13.9	%	8.5	%	7.7	%	N/M	9.2	%
Policy acquisition and other underwriting expenses (2)							28.6	%									41.4	%	N/M	33.9	%
Policyholders’ dividends							—										—		N/M	—
Combined							99.9	%									91.8	%	N/M	96.4	%
Policies in force (3)	(1.0	)%	3.3	%	(4.2	)%	0.7	%	(1.4	)%	(2.4	)%	1.8	%	(1.7	)%	(0.5	)%	—	0.5	%
Retention (3), (4)	74.3	%	81.7	%	N/M		78.1	%	71.2	%	78.1	%	80.0	%	79.6	%	78.3	%
	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	%	57.4	%	67.1	%	52.9	%	39.5	%	34.3	%	43.9	%	N/M	51.9	%
Catastrophe losses	0.7	%	20.9	%	4.0	%	6.7	%	—		1.0	%	10.9	%	4.0	%	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	%	42.8	%	36.5	%	42.9	%	N/M	51.7	%
Loss adjustment expenses (1)	12.4	%	8.6	%	6.0	%	11.1	%	12.1	%	8.4	%	11.6	%	7.0	%	9.5	%	N/M	10.5	%
Policy acquisition and other underwriting expenses (2)							28.2	%									39.0	%	N/M	32.6	%
Policyholders’ dividends							—										—		N/M	—
Combined							97.5	%									91.4	%	N/M	94.8	%
Policies in force (3)	(1.1	)%	(1.9	)%	(5.3	)%	(1.7	)%	1.7	%	4.8	%	(0.1	)%	5.6	%	3.0	%	—	(1.1	)%
Retention (3), (4)	73.0	%	81.6	%	N/M		77.4	%	78.5	%	80.6	%	80.9	%	73.0	%	80.1	%

(1) Loss adjustment expenses includes favorable (unfavorable) development of $2.0 million and $(1.5) million in Personal Lines, $5.8 million and $0.4 million in Commercial Lines, and $7.8 million and $(1.1) million in Total P&C for the quarters ended June 30, 2009 and 2008, respectively.

(2) Policy acquisition and other underwriting expenses are reduced by installment fee revenues for purposes of the ratio calculation.

(3) Policies in force and retention rates do not include recent acquisitions of Professionals Direct, Inc., Verlan Fire Insurance Company, and AIX, Inc.

(4) 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.

11

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING RATIOS

	Six Months ended June 30, 2009
	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	65.8	%	53.9	%	33.7	%	61.3	%	67.1	%	53.4	%	47.9	%	42.0	%	48.7	%	N/M	56.0	%
Catastrophe losses	0.5	%	19.8	%	2.0	%	6.3	%	—		0.3	%	7.7	%	2.2	%	3.5	%	N/M	5.1	%
Loss development	(7.1	)%	4.0	%	(5.6	)%	(3.7	)%	(19.1	)%	(2.8	)%	(5.8	)%	(8.3	)%	(7.7	)%	N/M	(5.4	)%
Total losses	59.2	%	77.7	%	30.1	%	63.9	%	48.0	%	50.9	%	49.8	%	35.9	%	44.5	%	N/M	55.7	%
Loss adjustment expenses (1)	12.2	%	8.8	%	1.5	%	10.9	%	(4.3	)%	4.8	%	10.5	%	9.0	%	7.3	%	N/M	9.4	%
Policy acquisition and other underwriting expenses (2)							28.3	%									41.0	%	N/M	33.7	%
Policyholders’ dividends							—										0.1	%	N/M	—
Combined							103.1	%									92.9	%	N/M	98.8	%
Policies in force (3)	(1.0	)%	3.3	%	(4.2	)%	0.7	%	(1.4	)%	(2.4	)%	1.8	%	(1.7	)%	(0.5	)%	—	0.5	%
Retention (3), (4)	74.3	%	81.7	%	N/M		78.1	%	72.0	%	76.6	%	79.9	%	78.6	%	77.8	%
	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	64.7	%	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	%	—		0.5	%	9.2	%	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	%	39.8	%	33.1	%	39.2	%	N/M	51.3	%
Loss adjustment expenses (1)	12.8	%	7.9	%	5.1	%	11.2	%	11.6	%	8.9	%	10.8	%	7.8	%	9.6	%	N/M	10.6	%
Policy acquisition and other underwriting expenses (2)							28.4	%									39.4	%	N/M	32.8	%
Policyholders’ dividends							—										0.1	%	N/M	—
Combined							99.0	%									88.3	%	N/M	94.7	%
Policies in force (3)	(1.1	)%	(1.9	)%	(5.3	)%	(1.7	)%	1.7	%	4.8	%	(0.1	)%	5.6	%	3.0	%	—	(1.1	)%
Retention (3), (4)	73.0	%	81.6	%	N/M		77.4	%	80.6	%	80.9	%	81.0	%	76.0	%	81.0	%

(1) Loss adjustment expenses includes favorable (unfavorable) development of $1.7 million and $(2.1) million in Personal Lines, $15.7 million and $3.3 million in Commercial Lines, and $17.4 million and $1.2 million in Total P&C for the six months ended June 30, 2009 and 2008, respectively.

(2) Policy acquisition and other underwriting expenses are reduced by installment fee revenues for purposes of the ratio calculation.

(3) Policies in force and retention rates do not include recent acquisitions of Professionals Direct, Inc., Verlan Fire Insurance Company, and AIX, Inc.

(4) 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.

12

INVESTMENTS

THE HANOVER INSURANCE GROUP

NET INVESTMENT INCOME

	Six Months ended June 30
(In millions, except yields)	2009					2008
				Yield					Yield
Fixed maturities (1)	$	124.6		5.61	%	$	124.6		5.60	%
Equity securities		2.1		—			2.1		—
Mortgages (2)		1.3		8.32	%		0.4		9.33	%
All other		1.6		—			3.8		—
Investment expenses		(3.4	)	—			(2.5	)	—
Total (3) (4)	$	126.2		5.19	%	$	128.4		5.45	%

(1) Includes purchase accounting adjustments of $(1.2) million and $(1.7) million for the six months ended June 30, 2009 and 2008, respectively.

(2) There were no mortgage prepayment fees for the six months ended June 30, 2009. Excluding mortgage prepayment fees of $0.1 million for the six months ended June 30, 2008, mortgage yields were 8.78%.

(3) Excludes discontinued operations of $2.6 million and $34.2 million for the six months ended June 30, 2009 and 2008, respectively.

(4) Amortization increased $0.5 million in the second quarter of 2009 due to the adoption of FSP FAS 115-2.

13

THE HANOVER INSURANCE GROUP

COMPONENTS OF NET REALIZED INVESTMENT GAINS (LOSSES)

	Quarter ended June 30						Six Months ended June 30
(In millions)	2009			2008			2009			2008
Total other-than temporary impairment losses	$	(18.1	)	$	(8.3	)	$	(34.6	)	$	(13.6	)
Portion of loss recognized in other comprehensive income		11.4			—			11.4			—
Net other-than-temporary losses on securities recognized in earnings		(6.7	)		(8.3	)		(23.2	)		(13.6	)
Realized gains from sales and other		3.1			0.7			13.5			5.7
Net realized investment losses (1)	$	(3.6	)	$	(7.6	)	$	(9.7	)	$	(7.9	)

(1) Excludes discontinued operations of $(2.7) million for the quarter ended June 30, 2008, and $(3.2) million and $(7.4) million for the six months ended June 30, 2009 and 2008, respectively. There were no realized gains or losses for discontinued operations for the quarter ended June 30, 2009.

14

THE HANOVER INSURANCE GROUP

AGING OF GROSS UNREALIZED LOSSES ON SECURITIES AVAILABLE FOR SALE

(In millions)	June 30, 2009				December 31, 2008
	Gross Unrealized Losses and OTTI		Fair Value		Gross Unrealized Losses		Fair Value
INVESTMENT GRADE FIXED MATURITIES:
12 months or less	$	40.7	$	760.8	$	150.2	$	1,724.1
Greater than 12 months		89.9		843.3		94.4		469.8
Total investment grade fixed maturities		130.6		1,604.1		244.6		2,193.9
BELOW INVESTMENT GRADE FIXED MATURITIES:
12 months or less		47.5		186.3		64.2		152.5
Greater than 12 months		20.8		71.8		—		—
Total below investment grade fixed maturities		68.3		258.1		64.2		152.5
PERPETUAL PREFERRED SECURITIES:
12 months or less		—		—		—		—
Greater than 12 months		3.8		16.9		13.4		28.5
Total perpetual preferred securities		3.8		16.9		13.4		28.5
EQUITY SECURITIES:
12 months or less		0.1		1.7		11.4		32.3
Greater than 12 months		5.6		51.6		—		—
Total equity securities		5.7		53.3		11.4		32.3
Total (1)	$	208.4	$	1,932.4	$	333.6	$	2,407.2

(1) Includes discontinued accident and health business of $19.5 million in gross unrealized losses with $55.9 million in fair value at June 30, 2009 and $15.7 million in gross unrealized losses with $52.3 million in fair value at December 31, 2008.

15

THE HANOVER INSURANCE GROUP

CREDIT QUALITY OF FIXED MATURITIES

(In millions)		June 30, 2009				December 31, 2008
NAIC Designation	Rating Agency Equivalent Designation	Amortized Cost		Fair Value		Amortized Cost		Fair Value
1	Aaa/Aa/A	$	2,987.4	$	2,981.6	$	3,098.1	$	2,997.8
2	Baa		1,226.3		1,204.8		1,074.8		981.5
3	Ba		170.7		149.4		151.5		133.2
4	B		105.2		94.3		111.0		83.8
5	Caa and lower		69.4		59.0		37.1		24.5
6	In or near default		10.0		10.8		8.8		5.5
Total fixed maturities (1)		$	4,569.0	$	4,499.9	$	4,481.3	$	4,226.3

(1) Includes discontinued accident and health business of $105.3 million in amortized cost and $96.3 million in fair value at June 30, 2009 and $99.3 million in amortized cost and $85.4 million in fair value at December 31, 2008.

16

THE HANOVER INSURANCE GROUP

TOP 25 FINANCIAL FIXED MATURITY HOLDINGS

(In millions, except percentage data)	As of June 30, 2009
Issuer	Amortized Cost		Fair Value		As a percent of Invested Assets		S&P Ratings
Bank of America	$	54.1	$	45.0	0.91	%	A-
Morgan Stanley		23.9		24.2	0.49	%	A
Wells Fargo		21.9		20.7	0.42	%	AA-
PNC Bank		19.8		18.4	0.37	%	A
GE Capital		17.9		17.5	0.36	%	AA+
Capital One		17.5		17.6	0.36	%	BBB
Student Loan Market		16.9		14.1	0.29	%	BBB-
American Express		16.2		15.0	0.30	%	BBB+
CIT Group		16.2		18.2	0.37	%	BB-
Fifth Third Bancorp		15.0		11.8	0.24	%	BBB-
Goldman Sachs		14.4		13.7	0.28	%	A
Manufacturers & Traders Bank		13.1		9.8	0.20	%	A-
Genworth Global Funding		13.0		10.6	0.22	%	BBB
Bank of Scotland		12.9		12.2	0.25	%	A
Charter One		12.1		11.2	0.23	%	BBB+
Union Bank of California		11.5		10.6	0.22	%	A
American General Finance		11.2		6.5	0.13	%	BB+
JP Morgan		11.1		10.6	0.21	%	A+
Aetna		10.6		10.7	0.22	%	A-
Branch Bank & Trust		10.5		9.8	0.20	%	A
Prudential Financial		10.5		10.3	0.21	%	A
Regions Bank		10.2		8.0	0.16	%	BB+
Ameriprise Financial		10.0		10.0	0.20	%	A
Bank of Oklahoma		10.0		8.8	0.18	%	BBB+
Bank of New York Mellon		9.7		9.8	0.20	%	A+
Top 25 Financial		390.2		355.1	7.22	%
Other Financial		149.6		130.3	2.65	%
Total Financial	$	539.8	$	485.4	9.87	%

17

THE HANOVER INSURANCE GROUP

TOP 25 NON-FINANCIAL FIXED MATURITY HOLDINGS

(In millions, except percentage data)	As of June 30, 2009
Issuer	Amortized Cost		Fair Value		As a percent of Invested Assets		S&P Ratings
Valero Energy	$	24.7	$	24.4	0.50	%	BBB
Union Pacific		19.0		20.0	0.41	%	BBB
CVS		18.3		18.3	0.37	%	BBB+
Dominion Resources		18.2		18.5	0.38	%	A-
Conoco Phillips		18.0		18.9	0.38	%	A
AT&T		17.8		18.7	0.38	%	A
Encana		17.5		18.2	0.37	%	A-
Kroger		17.5		18.1	0.37	%	BBB-
Safeway		17.5		18.3	0.37	%	BBB
Vodafone		16.9		17.3	0.35	%	A-
Home Depot		16.9		17.0	0.35	%	BBB+
Miller Brewing		16.5		16.2	0.33	%	BBB+
Canadian National Railways		16.0		17.0	0.35	%	A-
Comcast		15.8		17.0	0.35	%	BBB+
Schering-Plough		15.4		16.0	0.33	%	A-
Pacific Gas & Electric		15.3		16.3	0.33	%	BBB+
Textron		15.0		13.4	0.27	%	BB+
Shell		15.0		15.4	0.31	%	AA+
Atmos Energy		14.9		15.3	0.31	%	BBB+
Plains All-America Pipeline		14.7		14.2	0.29	%	BBB-
Sempra Energy		14.6		14.9	0.30	%	BBB+
BP Capital Markets		14.4		14.5	0.29	%	AA
Enterprise Products		14.2		13.7	0.28	%	BBB-
Deutsche Telecom		13.9		14.1	0.29	%	BBB+
PSEG Energy		13.9		14.0	0.28	%	BBB
Top 25 Non-Financial		411.9		419.7	8.54	%
Other Non-Financial		1,273.8		1,278.0	26.00	%
Total Non-Financial	$	1,685.7	$	1,697.7	34.54	%

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PROPERTY & CASUALTY

STATUTORY RATIOS

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING RATIOS

	Quarter ended June 30, 2009
	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	64.7	%	54.1	%	34.0	%	60.7	%	67.0	%	53.0	%	39.8	%	43.9	%	46.6	%	N/M	54.9	%
Catastrophe losses	0.6	%	16.9	%	2.1	%	5.5	%	—		—		4.3	%	3.3	%	2.7	%	N/M	4.3	%
Loss development	(8.5	)%	2.7	%	(9.3	)%	(5.1	)%	(14.9	)%	0.6	%	(8.7	)%	(5.9	)%	(6.7	)%	N/M	(5.7	)%
Total losses	56.8	%	73.7	%	26.8	%	61.1	%	52.1	%	53.6	%	35.4	%	41.3	%	42.6	%	N/M	53.5	%
Loss adjustment expenses (1)	11.8	%	8.0	%	(1.0	)%	10.3	%	(4.2	)%	1.3	%	13.9	%	8.6	%	7.8	%	N/M	9.2	%
Policy acquisition and other underwriting expenses							29.5	%									40.3	%	N/M	34.3	%
Policyholders’ dividends							—										0.1	%	N/M	—
Combined							100.9	%									90.8	%	N/M	97.0	%
	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 (1)	12.4	%	8.6	%	5.0	%	11.1	%	12.0	%	8.4	%	11.6	%	7.0	%	9.5	%	N/M	10.5	%
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	%

(1) Loss adjustment expenses includes favorable (unfavorable) development of $2.0 million and $(1.5) million in Personal Lines, $5.8 million and $0.4 million in Commercial Lines, and $7.8 million and $(1.1) million in Total P&C for the quarters ended June 30, 2009 and 2008, respectively.

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THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING RATIOS

	Six Months ended June 30, 2009
	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	65.8	%	53.8	%	33.7	%	61.3	%	66.4	%	53.3	%	47.8	%	42.6	%	48.8	%	N/M	56.3	%
Catastrophe losses	0.5	%	19.8	%	2.0	%	6.3	%	—		0.2	%	7.7	%	2.2	%	3.5	%	N/M	5.1	%
Loss development	(7.1	)%	4.0	%	(5.6	)%	(3.7	)%	(18.9	)%	(2.8	)%	(5.8	)%	(8.3	)%	(7.7	)%	N/M	(5.4	)%
Total losses	59.2	%	77.6	%	30.1	%	63.9	%	47.5	%	50.7	%	49.7	%	36.5	%	44.6	%	N/M	56.0	%
Loss adjustment expenses (1)	12.3	%	8.8	%	1.0	%	10.9	%	(4.2	)%	4.8	%	10.5	%	8.9	%	7.3	%	N/M	9.4	%
Policy acquisition and other underwriting expenses							29.4	%									40.1	%	N/M	34.2	%
Policyholders’ dividends							—										0.1	%	N/M	—
Combined							104.2	%									92.1	%	N/M	99.6	%
	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 (1)	12.7	%	7.9	%	5.0	%	11.1	%	11.5	%	8.8	%	10.7	%	7.9	%	9.5	%	N/M	10.5	%
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	%

(1) Loss adjustment expenses includes favorable (unfavorable) development of $1.7 million and $(2.1) million in Personal Lines, $15.7 million and $3.3 million in Commercial Lines, and $17.4 million and $1.2 million in Total P&C for the six months ended June 30, 2009 and 2008, respectively.

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Historical Highlights

THE HANOVER INSURANCE GROUP

HISTORICAL FINANCIAL HIGHLIGHTS

(In millions, except per share data)	Q2 09			Q1 09			2008			Q4 08			Q3 08			Q2 08			Q1 08
SEGMENT INCOME (1)
Property and Casualty
Personal Lines	$	25.6		$	3.1		$	123.5		$	39.7		$	18.1		$	38.6		$	27.1
Commercial Lines		50.9			47.6			169.7			55.6			(6.6	)		52.7			68.0
Other Property and Casualty		(0.2	)		(0.8	)		9.0			2.2			2.3			2.9			1.3
Total Property and Casualty		76.3			49.9			302.2			97.5			13.8			94.2			96.4
Interest expense on corporate debt		(10.5	)		(10.4	)		(39.9	)		(10.0	)		(10.0	)		(9.9	)		(10.0	)
Total segment income before federal income taxes	$	65.8		$	39.5		$	262.3		$	87.5		$	3.8		$	84.3		$	86.4
Federal income tax expense on segment income		(21.8	)		(13.1	)		(86.3	)		(27.9	)		(0.5	)		(28.8	)		(29.1	)
Total segment income after federal income taxes	$	44.0		$	26.4		$	176.0		$	59.6		$	3.3		$	55.5		$	57.3
Federal income tax settlement		—			—			6.4			—			6.4			—			—
Net realized investment losses		(3.6	)		(6.1	)		(97.8	)		(37.1	)		(52.8	)		(7.6	)		(0.3	)
Gain on tender offer		34.3			—			—			—			—			—			—
Other non-segment items		0.1			(0.1	)		(0.1	)		(0.1	)		—			—			—
Federal income tax (expense) benefit on non-segment income		(11.7	)		—			—			0.4			(0.4	)		—			—
Income (loss) from continuing operations		63.1			20.2			84.5			22.8			(43.5	)		47.9			57.0
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business		0.9			5.0			(84.8	)		8.1			(21.7	)		(67.7	)		(3.5	)
Gain (loss) from discontinued accident and health business		0.2			(3.3	)		—			—			—			—			—
Gain from operations of AMGRO		—			—			10.1			—			—			10.4			—
Gain (loss) on disposal of discontinued variable life and annuity business		0.2			3.9			11.3			3.2			2.7			(0.8	)		6.2
Other		—			—			(0.5	)		—			0.7			—			(1.2	)
NET INCOME (LOSS)	$	64.4		$	25.8		$	20.6		$	34.1		$	(61.8	)	$	(10.2	)	$	58.5
PER SHARE DATA (DILUTED)
INCOME (LOSS) FROM CONTINUING OPERATIONS	$	1.23		$	0.39		$	1.63		$	0.44		$	(0.85	)	$	0.92		$	1.09
INCOME (LOSS) FROM DISCONTINUED OPERATIONS	$	0.02		$	0.11		$	(1.23	)	$	0.22		$	(0.36	)	$	(1.12	)	$	0.03
NET INCOME (LOSS)	$	1.25		$	0.50		$	0.40		$	0.66		$	(1.21	)	$	(0.20	)	$	1.12
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED) (2)		51.4			51.4			51.7			51.4			51.0			51.8			52.3
BALANCE SHEET
Total assets	$	7,747.7		$	7,698.1					$	9,230.2		$	9,254.8		$	9,463.8		$	9,700.6
Total shareholders’ equity	$	2,221.1		$	1,967.6					$	1,887.2		$	2,040.1		$	2,212.7		$	2,320.7
Book value per share	$	43.75		$	38.62					$	37.08		$	40.09		$	43.57		$	45.23
Book value per share, excluding accumulated other comprehensive (loss) income	$	47.15		$	45.16					$	44.64		$	44.37		$	45.55		$	45.70

(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.

(2) Weighted average shares outstanding for the quarter ended September 30, 2008 represents basic shares outstanding due to antidilution.

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THE HANOVER INSURANCE GROUP

HISTORICAL FINANCIAL HIGHLIGHTS

(In millions, except per share data)	2007			Q4 07			Q3 07			Q2 07			Q1 07
SEGMENT INCOME (1)
Property and Casualty
Personal Lines	$	208.2		$	57.8		$	48.8		$	55.0		$	46.6
Commercial Lines		169.3			42.6			39.2			38.9			48.6
Other Property and Casualty		4.8			(2.4	)		0.3			2.5			4.4
Total Property and Casualty		382.3			98.0			88.3			96.4			99.6
Interest expense on corporate debt		(39.9	)		(10.0	)		(10.0	)		(9.9	)		(10.0	)
Total segment income before federal income taxes	$	342.4		$	88.0		$	78.3		$	86.5		$	89.6
Federal income tax expense on segment income		(113.7	)		(27.2	)		(26.6	)		(29.8	)		(30.1	)
Total segment income after federal income taxes	$	228.7		$	60.8		$	51.7		$	56.7		$	59.5
Net realized investment (losses) gains		(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		228.3			60.3			51.5			56.8			59.7
Discontinued operations (net of taxes):
Income from discontinued FAFLIC business		10.9			2.6			1.5			2.7			4.1
Gain (loss) on disposal of discontinued variable life and annuity business		13.1			12.9			0.1			0.3			(0.2	)
Other		0.8			—			0.8			—			—
NET INCOME	$	253.1		$	75.8		$	53.9		$	59.8		$	63.6
PER SHARE DATA (DILUTED)
INCOME FROM CONTINUING OPERATIONS	$	4.36		$	1.15		$	0.98		$	1.09		$	1.15
INCOME FROM DISCONTINUED OPERATIONS	$	0.47		$	0.29		$	0.05		$	0.05		$	0.07
NET INCOME	$	4.83		$	1.44		$	1.03		$	1.14		$	1.22
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED)		52.4			52.6			52.5			52.3			51.9
BALANCE SHEET
Total assets				$	9,815.6		$	9,845.2		$	9,805.7		$	9,776.2
Total shareholders’ equity				$	2,299.0		$	2,192.6		$	2,099.4		$	2,100.7
Book value per share				$	44.37		$	42.34		$	40.55		$	40.92
Book value per share, excluding accumulated other comprehensive (loss) income				$	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.

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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	2009
	Price Range				Dividends
	High		Low		Per Share
March 31	$	43.37	$	28.49		—
June 30	$	38.11	$	29.19		—
September 30
December 31
Quarter Ended	2008
	Price Range				Dividends
	High		Low		Per Share
March 31	$	47.17	$	40.14		—
June 30	$	46.83	$	41.71		—
September 30	$	51.00	$	38.01		—
December 31	$	45.00	$	31.92	$	0.45

INDUSTRY RATINGS AS OF JULY 30, 2009

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

Oksana Lukasheva

Director, Investor Relations

(508) 855-2063

olukasheva@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

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