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): November 2, 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 November 2, 2009, The Hanover Insurance Group, Inc. issued a press release announcing its financial results for the quarter ended September 30, 2009. The release is furnished as Exhibit 99.1 hereto. Additionally, on November 2, 2009, the Company made available on its website financial information contained in its Statistical Supplement for the period ended September 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 November 2, 2009, announcing the Company’s financial results for the quarter ended September 30, 2009.
Exhibit 99.2	The Hanover Insurance Group, Inc. Statistical Supplement for the period ended September 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	November 2, 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 November 2, 2009, announcing the Company’s financial results for the quarter ended September 30, 2009.
Exhibit 99.2	The Hanover Insurance Group, Inc. Statistical Supplement for the period ended September 30, 2009.

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EX-99.1

Exhibit 99.1

WORCESTER, Mass., November 2, 2009 –

The Hanover Insurance Group

Reports Third Quarter Net Income of $49.7 million, or $0.97 Per Share,

Book Value Per Share Up 10% in the Quarter to $48.06

Third Quarter 2009 Financial Highlights

• Net income of $49.7 million, or $0.97 per share, compared to a net loss of $61.8 million, or $1.21 per share in the third quarter of 2008. The third quarter of 2008 reflected substantial catastrophe losses from hurricanes Ike and Gustav, a high level of realized losses on investments, and a loss from the discontinued FAFLIC business

• Segment income after tax⁽¹⁾ of $45.3 million, or $0.89 per share, compared to $3.3 million, or $0.07 per share in the prior-year quarter

• Combined ratio of 97.6%, compared to 107.8% in the prior-year quarter; ex-catastrophe combined ratio⁽²⁾ of 93.7%, compared to 92.0% in the prior-year quarter

• Net premiums written of $688.8 million, 5.7% higher than the prior-year quarter

• Book value per share increased to $48.06, an increase of 10% from June 30, 2009, and a 30% increase from year end 2008

• As previously announced, The Hanover’s Board of Directors approved a 67% increase in the company’s annual shareholder dividend and increased its existing stock repurchase authorization by $100 million

Financial Highlights

$ in millions, except per share amounts	Quarter ended September 30
	2009		2008
Total Segment Income after taxes	$	45.3	$	3.3
Federal income tax settlement		—		6.4
Net realized investment losses		—		(52.8	)
Retirement of corporate debt		0.2		—
Income tax benefit (expense) on non-segment income		3.1		(0.4	)
Income (Loss) from Continuing Operations		48.6		(43.5	)
Discontinued Operations		1.1		(18.3	)
Net Income (Loss)	$	49.7	$	(61.8	)
Net Income (Loss) per share (Diluted)(3)	$	0.97	$	(1.21	)

(1) Segment income (pre-tax), segment income after-tax and segment income after-tax per share are non-GAAP measures. The reconciliation of these measures to the closest GAAP measure, income from continuing operations, is provided on page 12 of this press release. See “Non-GAAP financial measures”, starting on page 9 of this press release.

(2) Ex-catastrophe combined ratio is a non-GAAP measure. The closest GAAP measure is the combined ratio. See “Non-GAAP financial measures”, starting on page 9 of this press release.

(3) Per share data for the quarter ended September 30, 2008 represents basic loss per share due to anti-dilution.

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The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income for the third quarter of 2009 of $49.7 million, or $0.97 per share, compared to a loss of $61.8 million, or $1.21 per share, in the third quarter of the prior year. The third quarter of 2008 included $52.8 million of realized losses on investments, or $1.04 per share, and a loss from discontinued operations of $18.3 million, or $0.36 per share. The third quarter of 2009 included $3.1 million, or $0.06 per share, of federal income tax benefit on non-segment income related to a release of a tax valuation allowance associated with realized investment losses recorded earlier in 2009.

Total Property and Casualty pre-tax segment income was $73.6 million in the third quarter of 2009, compared to $13.8 million in the third quarter of the prior year. The third quarter of 2009 included significantly lower pre-tax catastrophe losses of $24.7 million, compared to $98.2 million in the prior-year quarter. Excluding the pre-tax net impact of catastrophes, Property and Casualty pre-tax segment income would have been $98.3 million in the third quarter of 2009, compared to $112.0 million in the third quarter of 2008.

“Our core business continues to demonstrate strong fundamentals and we are pleased with the momentum we have in all of our strategic initiatives,” said Frederick H. Eppinger, chief executive officer at The Hanover. “Our growth for the quarter of 6%, which was driven by our increasingly specialized commercial business, is ahead of industry averages and is notable given contractions in the economy. We also achieved growth in book value per share of 10% during the quarter.”

“Our company is in excellent financial condition and our balance sheet is extremely strong, as underscored by our board of directors’ decision two weeks ago to increase our common stock dividend by 67% and move to a quarterly dividend schedule next year. Our recent decision to increase our share repurchase authorization by $100 million also highlights the strength of our capital position.”

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

$ in millions, except per share amounts	Quarter ended September 30						Year-to-date September 30
	2009			2008(1)			2009			2008
Personal Lines(2)	$	27.4		$	18.1		$	56.1		$	83.8
Commercial Lines(3)		38.7			(6.6	)		137.2			114.1
Other Property and Casualty		7.5			2.3			6.5			6.8
Total Property & Casualty		73.6			13.8			199.8			204.7
Interest expense on corporate debt		(6.3	)		(10.0	)		(27.2	)		(29.9	)
Total pre-tax segment income		67.3			3.8			172.6			174.8
Federal income tax expense		(22.0	)		(0.5	)		(56.9	)		(58.4	)
Total segment income after taxes (4)	$	45.3		$	3.3		$	115.7		$	116.4
Per share(4)	$	0.89		$	0.07		$	2.25		$	2.25

(1) Per share data for the quarter ended September 30, 2008 represents basic loss per share due to anti-dilution.

(2) Includes Personal Lines pre-tax net impact of catastrophes of $15.4 million and $39.7 million for the third quarters of 2009 and 2008, respectively.

(3) Includes Commercial Lines pre-tax net impact of catastrophes of $9.3 million and $58.5 million for the third quarters of 2009 and 2008, respectively.

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

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

	Quarter ended September 30		Year-to-date September 30
	2009	2008	2009	2008
Personal Lines losses (excluding catastrophes)	56.1%	54.1%	56.8%	54.5%
Personal Lines catastrophe-related losses	4.2%	10.8%	5.9%	6.8%
Total Personal Lines losses	60.3%	64.9%	62.7%	61.3%
Commercial Lines losses (excluding catastrophes)	43.3%	44.1%	41.8%	38.0%
Commercial Lines catastrophe-related losses	3.4%	23.2%	3.5%	10.7%
Total Commercial Lines losses	46.7%	67.3%	45.3%	48.7%
Total P&C Losses	53.0%	65.8%	54.8%	56.2%
Loss adjustment expenses	10.3%	10.5%	9.7%	10.5%
Policy acquisition and other underwriting expenses	34.3%	31.5%	33.9%	32.4%
Combined Ratio	97.6%	107.8%	98.4%	99.1%
Combined Ratio (excluding catastrophes)	93.7%	92.0%	93.5%	90.7%

Personal Lines

Personal Lines pre-tax segment income was $27.4 million in the third quarter of 2009, compared to $18.1 million in the third quarter of 2008. The Personal Lines GAAP combined ratio was 100.2% in the current quarter, compared to 102.8% in the prior-year quarter. The pre-tax net impact of catastrophes was $15.4 million, or 4.2 points of the combined ratio in the third quarter of 2009, compared to $39.7 million, or 10.8

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points in the third quarter of 2008. Excluding the pre-tax net impact of catastrophes, Personal Lines pre-tax segment income would have been $42.8 million in the current quarter, compared to $57.8 million in the prior-year quarter.

The year-over-year decline in ex-catastrophe earnings is primarily the result of higher expenses, lower favorable development of prior-year loss reserves, lower net investment income and an increase in our ex-catastrophe current accident year losses, driven by elevated non-catastrophe weather losses in our homeowners line.

Higher underwriting expenses were driven by continued investments in our Personal Lines business and higher pension expenses. The year-over-year comparison was also affected by a reduction of variable compensation expenses made in the third quarter of 2008.

Favorable development of prior-year loss and LAE reserves in the third quarter of 2009 was $11.0 million, or 3.0 points of the combined ratio, compared to $15.7 million, or 4.3 points in the prior-year quarter.

Net premiums written were $396.7 million in the third quarter of 2009, compared to $397.5 million in the third 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 more desirable account business.

Commercial Lines

Commercial Lines pre-tax segment income was $38.7 million in the third quarter of 2009, compared to a loss of $6.6 million in the third quarter of 2008. The Commercial Lines GAAP combined ratio was 97.8% in the third quarter of 2009, compared to 115.1% in the third quarter of 2008. Catastrophe related losses were $9.3 million or 3.4 points of the third quarter combined ratio in 2009, compared to $58.5 million, or 23.2 points in the prior-year quarter. Excluding the pre-tax net impact of catastrophes, Commercial Lines pre-tax segment income would have been $48.0 million in the third quarter of 2009, compared to $51.9 million in the prior-year quarter, primarily due to higher underwriting expenses, partially offset by lower ex-catastrophe accident year losses.

The higher expenses result from continued investments in our Commercial Lines businesses, including expenses related to recently acquired subsidiaries. As in Personal Lines, higher pension costs in the third quarter of 2009 and a reduction of variable compensation expenses in the third quarter of 2008 also negatively impacted the year-over-year expense comparison.

Accident year losses were lower in the third quarter compared to the prior-year quarter, attributable to lower commercial multi-peril lines large losses, which were partially offset by a moderate increase in the severity of losses in other lines of business, which we believe were driven by economic conditions.

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Favorable development of prior-year loss and LAE reserves in the third quarter of 2009 was $21.3 million, or 7.8 points of the combined ratio, compared to $22.4 million, or 8.9 points in the prior-year quarter.

Net premiums written were $292.1 million in the third quarter of 2009, compared to $254.1 million in the third quarter of 2008. Growth in the company’s specialty businesses, including AIX Holdings, Inc., which was acquired in November 2008, commercial niches, marine and Hanover Professionals accounted for the year-over-year growth in net written premium.

Other Property & Casualty

Other Property & Casualty’s pre-tax segment income was $7.5 million in the third quarter of 2009, compared to $2.3 million in the prior-year quarter. The increase is attributable to favorable reserve development of $10.5 million from our run-off voluntary pools business, primarily as a result of a third party actuarial study. This was partially offset by higher pension expenses and lower net investment income due to a lower level of holding company invested assets.

Investment Results

Net investment income from continuing operations decreased by $3.4 million, to $62.1 million for the third quarter of 2009, compared to $65.5 million in the same period in 2008. This decrease is primarily due to our utilization of fixed maturities to fund the 2009 repurchase of corporate debt, which also resulted in a $3.7 million lower pre-tax interest expense during the quarter, compared to the same period in 2008.

In the third quarter of 2009, the company recognized impairment charges to earnings of $6.1 million on certain fixed maturity and equity securities, which were offset by pre-tax net investment gains of $6.1 million from sales of fixed maturity securities. In the third quarter of 2008, the company recognized impairments of $53.1 million on fixed maturity securities, partially offset by pre-tax net realized gains on sales of securities of $0.3 million.

Realized gains/(losses) related to continuing operations:
($ in millions)	Quarter ended September 30, 2009
Net gains on sales of securities	$	6.1
Impairment charges to earnings:
Investment grade fixed maturities		(1.7	)
Below investment grade fixed maturities		(3.9	)
Equity securities		(0.5	)
Total net realized gains (losses)	$	—

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Investment Portfolio

The Company held $5.3 billion in cash and investment assets at September 30, 2009, including cash and investment assets associated with the discontinued accident and health business.

Fixed maturities and cash with a carrying value of $5.2 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 September 30, 2009:

$ in millions

Investment Type	Weighted Average Quality	Amortized Cost		Carrying Value		Net Unrealized Gain (Loss)
Corporates:(1)
NAIC 1	A	$	902.1	$	936.3	$	34.2
NAIC 2	BBB		1,059.8		1,103.5		43.7
NAIC 3 or below	B+		298.2		294.6		(3.6	)
Total Corporates	BBB+		2,260.1		2,334.4		74.3
MBS/CMBS/ABS:
MBS	AA+		922.1		938.4		16.3
CMBS	AA+		336.7		337.8		1.1
ABS	A-		67.3		70.1		2.8
Municipals:
Taxable	AA-		631.2		635.9		4.7
Tax Exempt	A+		204.8		208.2		3.4
U.S Government	AAA		385.8		388.6		2.8
Total Fixed Maturities	A+		4,808.0		4,913.4		105.4
Perpetual Preferred Securities			32.4		36.3		3.9
Common Equity Securities			77.4		85.7		8.3
Total fixed maturities and equity securities			4,917.8		5,035.4		117.6
Cash and cash equivalents			241.3		241.3		—
Mortgage loans			20.4		20.4		—
Other long-term investments			14.7		16.7		2.0
		$	5,194.2	$	5,313.8	$	119.6

(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 an non-investment grade rating agency designation of “BB” or below.

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Book Value and Capital Management

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

	Quarter Ended September 30, 2009
$ in millions, except per share	$ Amounts			$ Per Share
Beginning of Period Book Value	$	2,221.1		$	43.75
Net Income
Continuing Operations		48.6			0.97
Discontinued Operations		1.1			0.02
Change in AOCI, Net of Tax
Change in Pension and Postretirement Related Benefits		3.2			0.07
Change in Net Unrealized Investment Position		159.0			3.18
Shares Repurchased at Cost (1)		(29.1	)		—
Common Stock Net Activity		3.2			0.07
Ending of Period Book Value	$	2,407.1		$	48.06

(1) Includes the per share effect of repurchases on beginning book value.

At September 30, 2009, book value per share was $48.06, a 10% increase from June 30, 2009.

During the third quarter 2009, the company repurchased approximately 725,000 of its common shares for $29.0 million. At the end of the quarter, the company had $103.7 million of capacity remaining under its recently expanded $200 million stock repurchase program.

As was announced on October 20, 2009, the company’s Board of Directors declared an annual dividend of $0.75 per share, which represents an increase of 30 cents, or 67% from the dividend paid last year. The board also announced its intention to move to a quarterly dividend in 2010.

Additionally, as was announced on September 25, 2009, the company completed the process of refinancing a portion of the $211.6 million senior and subordinated debt that it had previously repurchased and retired, by drawing a loan from the Federal Home Loan Bank in the amount of $125.0 million at a fixed rate of 5.5% over a 20-year term.

Earnings Conference Call

The Hanover will host a conference call to discuss the company’s third quarter results on Tuesday, November 3, at 10:00 a.m. Eastern Time. A PowerPoint slide presentation will accompany prepared remarks and has been posted on the company’s Web site. Interested investors and others can listen to the call and access the presentation through The Hanover’s Web site, located at www.hanover.com. Web-cast participants should go to the Web site 15 minutes early to register, download, and install any necessary audio software. A re-broadcast of the conference call will be available on this Web site approximately two hours after the call.

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Statistical Supplement

The Hanover’s third 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, 2010 and beyond, including with respect to net written premium and policies in force growth, retention, new business growth, the ability to achieve rate increases, net investment income, the potential impact of capital actions and business investments, our financial strength, accident year loss ratios, the impact of product, account-based and geographic mix changes on future profitability, prior-year loss and loss adjustment expense reserve development from our continuing and run-off operations, segment income, expenses and expense ratios, effective tax rates, weighted shares outstanding and returns on equity 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, particularly with respect to current accident year results and loss reserve development; (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 in current circumstances of future rating agency requirements, which could affect the company as well as the company’s investment portfolio; and (v) the impact on our capital and liquidity of the current financial turmoil.

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

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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 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 new lines of business), 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 (such as our Management Liability products) and expansion in geographic areas, the impact of the company’s acquisition of 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 and the performance of the discontinued voluntary pools, including the inherent uncertainty regarding the types of claims in this pool and the uncertainty whether the reserves would be sufficient.

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.

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. Segment income is the sum of the segment income from: 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.

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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 September 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.

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 30 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

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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 September 30
	2009		2008
Net income (loss)	$	49.7	$	(61.8	)
Net income (loss) per share (diluted)(1)	$	0.97	$	(1.21	)
Weighted average shares(2)		51.2		51.0

(1) Per share data for the quarter ended September 30, 2008 represents basic loss per share due to anti-dilution.

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

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

	Quarter ended September 30												Nine months ended September 30
$ in millions, except per share	2009						2008						2009						2008
	$			Per Share(3)			$			Per Share(2)			$			Per Share(3)			$			Per Share(2)
Property and Casualty
Personal Lines	$	27.4		$	—		$	18.1		$	—		$	56.1		$	—		$	83.8		$	—
Commercial Lines		38.7			—			(6.6	)		—			137.2			—			114.1			—
Other Property & Casualty		7.5			—			2.3			—			6.5			—			6.8			—
Total Property and Casualty		73.6			—			13.8			—			199.8			—			204.7			—
Interest expense on corporate debt		(6.3	)		—			(10.0	)		—			(27.2	)		—			(29.9	)		—
Total segment income		67.3			1.32			3.8			0.08			172.6			3.36			174.8			3.37
Federal income tax expense on segment income		(22.0	)		(0.43	)		(0.5	)		(0.01	)		(56.9	)		(1.11	)		(58.4	)		(1.12	)
Total segment income after federal income taxes		45.3			0.89			3.3			0.07			115.7			2.25			116.4			2.25
Federal income tax settlement		—			—			6.4			0.13			—			—			6.4			0.12
Net realized investment losses		—			—			(52.8	)		(1.04	)		(9.7	)		(0.19	)		(60.7	)		(1.17	)
Gain on retirement of corporate debt		0.2			—			—			—			34.5			0.67			—			—
Federal income tax benefit (expense) on non-segment income		3.1			0.06			(0.4	)		(0.01	)		(8.6	)		(0.16	)		(0.4	)		(0.01	)
Income (loss) from continuing operations, net of taxes		48.6			0.95			(43.5	)		(0.85	)		131.9			2.57			61.7			1.19
Gain (loss) from discontinued FAFLIC businesses (including loss on assets held-for-sale of $6.1 and $72.2 in 2008)		0.4			0.01			(21.7	)		(0.42	)		6.3			0.12			(92.9	)		(1.80	)
Gain (loss) from discontinued accident and health business		0.7			0.01			—			—			(2.4	)		(0.05	)		—			—
Income from operations of AMGRO (including gain on disposal of $11.1 in 2008)		—			—			—			—			—			—			10.1			0.20
Gain on disposal of variable life and annuity business		—			—			2.7			0.05			4.1			0.08			8.1			0.16
Other		—			—			0.7			0.01			—			—			(0.5	)		(0.01	)
Net income (loss)(4)	$	49.7		$	0.97		$	(61.8	)	$	(1.21	)	$	139.9		$	2.72		$	(13.5	)	$	(0.26	)

(1) In accordance with generally accepted accounting principles. 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 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 represents basic loss per share due to anti-dilution.

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

(4) Per share data from the quarter ended September 30, 2008 represents basic loss per share due to anti-dilution. Basic income (loss) per share was $0.98 for quarter ended September 30, 2009, and $2.75 and $(0.26) for the nine months, 2009 and 2008, respectively.

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
Investment Portfolio	15
Unrealized Losses	16
Credit Quality of Fixed Maturities	17
Top 25 Financial Holdings	18
Top 25 Non-Financial Holdings	19
Property and Casualty Statutory Ratios	20-21
Historical Financial Highlights	22-23
Other Information	24
Corporate Information
Market and Dividend Information
Industry Ratings

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

	Quarter ended September 30								Nine Months ended September 30
(In millions)	2009			2008			% Change		2009			2008			% Change
SEGMENT INCOME
Property and Casualty
Personal Lines	$	27.4		$	18.1		51.4		$	56.1		$	83.8		(33.1	)
Commercial Lines		38.7			(6.6	)	N/M			137.2			114.1		20.2
Other		7.5			2.3		N/M			6.5			6.8		(4.4	)
Total Property and Casualty		73.6			13.8		N/M			199.8			204.7		(2.4	)
Interest expense on corporate debt		(6.3	)		(10.0	)	(37.0	)		(27.2	)		(29.9	)	(9.0	)
Total segment income		67.3			3.8		N/M			172.6			174.8		(1.3	)
Federal income tax expense on P&C segment income		(24.2	)		(4.0	)	N/M			(66.4	)		(68.9	)	(3.6	)
Federal income tax benefit on other segment income		2.2			3.5		(37.1	)		9.5			10.5		(9.5	)
Total federal income tax expense on segment income		(22.0	)		(0.5	)	N/M			(56.9	)		(58.4	)	(2.6	)
Total segment income after taxes	$	45.3		$	3.3		N/M		$	115.7		$	116.4		(0.6	)
RECONCILIATION FROM SEGMENT INCOME TO NET INCOME
Total segment income after taxes	$	45.3		$	3.3		N/M		$	115.7		$	116.4		(0.6	)
Federal income tax settlement		-			6.4		N/M			-			6.4		N/M
Net realized investment losses		-			(52.8	)	N/M			(9.7	)		(60.7	)	(84.0	)
Gain from retirement of corporate debt		0.2			-		N/M			34.5			-		N/M
Federal income tax benefit (expense) on non-segment income		3.1			(0.4	)	N/M			(8.6	)		(0.4	)	N/M
Income (loss) from continuing operations		48.6			(43.5	)	N/M			131.9			61.7		N/M
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business (Including loss on assets held-for-sale of $6.1 and $72.2 in 2008)		0.4			(21.7	)	N/M			6.3			(92.9	)	N/M
Gain (loss) from discontinued accident and health business		0.7			-		N/M			(2.4	)		-		N/M
Income from operations of AMGRO (Including gain on disposal of $11.1 in 2008)		-			-		-			-			10.1		N/M
Gain on disposal of variable life and annuity business		-			2.7		N/M			4.1			8.1		(49.4	)
Other		-			0.7		N/M			-			(0.5	)	N/M
Net income (loss)	$	49.7		$	(61.8	)	N/M		$	139.9		$	(13.5	)	N/M

1

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

	Quarter ended September 30							Nine Months ended September 30
		2009			2008		% Change		2009			2008		% Change
PER SHARE DATA (DILUTED) (1)
Total segment income	$	1.32		$	0.08		N/M	$	3.36		$	3.37		(0.3	)
Federal income tax expense on segment income		(0.43	)		(0.01	)	N/M		(1.11	)		(1.12	)	(0.9	)
Total segment income after taxes		0.89			0.07		N/M		2.25			2.25		-
Federal income tax settlement		-			0.13		N/M		-			0.12		N/M
Net realized investment losses		-			(1.04	)	N/M		(0.19	)		(1.17	)	(83.8	)
Gain from retirement of corporate debt		-			-		N/M		0.67			-		N/M
Federal income tax expense on non-segment income		0.06			(0.01	)	N/M		(0.16	)		(0.01	)	N/M
Income (loss) from continuing operations		0.95			(0.85	)	N/M		2.57			1.19		N/M
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business (Including loss on assets held for sale of $0.12 and $1.39 in 2008)		0.01			(0.42	)	N/M		0.12			(1.80	)	N/M
Gain (loss) from discontinued accident and health business		0.01			-		N/M		(0.05	)		-		N/M
Income from operations of AMGRO (Including gain on disposal of $0.21 in 2008)		-			-		-		-			0.20		N/M
Gain on disposal of variable life and annuity business		-			0.05		N/M		0.08			0.16		(50.0	)
Other		-			0.01		N/M		-			(0.01	)	N/M
Net income (loss)	$	0.97		$	(1.21	)	N/M	$	2.72		$	(0.26	)	N/M

(1) Per share data for the quarter ended September 30, 2008 represents basic loss per share due to antidilution.

2

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS

(In millions, except per share data)	September 30 2009			December 31 2008			% Change
BALANCE SHEET
Shareholders’ equity
Property and Casualty Group	$	2,390.7		$	1,995.5		19.8
First Allmerica Financial Life Insurance Company (consolidated) (1)		-			78.1		N/M
THG Holding Company debt		(287.0	)		(499.5	)	(42.5	)
THG Holding Company		303.4			313.1		(3.1	)
Total shareholders’ equity	$	2,407.1		$	1,887.2		27.5
Property and Casualty Companies (2)
Total adjusted statutory capital	$	1,709.8		$	1,600.7		6.8
Premium to surplus ratio		1.5:1			1.6:1		-
Book value per share
Property and Casualty Group	$	47.73		$	39.20		21.8
First Allmerica Financial Life Insurance Company (consolidated)		-			1.53		N/M
THG Holding Company debt		(5.73	)		(9.81	)	(41.6	)
THG Holding Company		6.06			6.16		(1.6	)
Total book value per share	$	48.06		$	37.08		29.6
THG book value per share, excluding accumulated other comprehensive loss	$	48.28		$	44.64		8.2
Shares outstanding (3)		50.1			50.9
Stock price	$	41.33		$	42.97		(3.8	)
Price/book value per share		0.9	x		1.2	x	(0.3	) x
Total Debt/equity		18.0	%		28.1	%	(10.1	) pts
Total Debt/total capital		15.3	%		22.0	%	(6.7	) 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 include 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 September 30								Nine Months ended September 30
(In millions)	2009			2008			% Change		2009			2008			% Change
REVENUES
Premiums	$	637.4		$	621.1		2.6		$	1,899.4		$	1,858.1		2.2
Net investment income		62.1			65.5		(5.2	)		188.3			193.9		(2.9	)
Net realized investment losses:
Total other-than-temporary impairment losses on securities		(4.5	)		(53.1	)	(91.5	)		(39.1	)		(66.7	)	(41.4	)
Portion of loss recognized in other comprehensive income		(1.6	)		-		N/M			9.8			-		N/M
Net other-than-temporary impairment losses on securities recognized in earnings		(6.1	)		(53.1	)	(88.5	)		(29.3	)		(66.7	)	(56.1	)
Realized gains from sales and other		6.1			0.3		N/M			19.6			6.0		N/M
Total net realized investment losses		-			(52.8	)	N/M			(9.7	)		(60.7	)	(84.0	)
Fees and other income		9.0			8.3		8.4			25.8			25.7		0.4
Total revenues		708.5			642.1		10.3			2,103.8			2,017.0		4.3
LOSSES AND EXPENSES
Losses and loss adjustment expenses		403.0			474.2		(15.0	)		1,225.1			1,239.7		(1.2	)
Policy acquisition expenses		146.8			139.7		5.1			434.7			416.1		4.5
Gain from retirement of corporate debt		(0.2	)		-		N/M			(34.5	)		-		N/M
Other operating expenses		91.4			77.2		18.4			281.1			247.1		13.8
Total losses and expenses		641.0			691.1		(7.2	)		1,906.4			1,902.9		0.2
Income (loss) from continuing operations before federal income taxes		67.5			(49.0	)	N/M			197.4			114.1		73.0
Federal income tax expense (benefit)		18.9			(5.5	)	N/M			65.5			52.4		25.0
Income (loss) from continuing operations		48.6			(43.5	)	N/M			131.9			61.7		N/M
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business (Including loss on assets held-for-sale of $6.1 and $72.2 in 2008)		0.4			(21.7	)	N/M			6.3			(92.9	)	N/M
Gain (loss) from discontinued accident and health business		0.7			-		N/M			(2.4	)		-		N/M
Income from operations of AMGRO (Including gain on disposal of $11.1 in 2008)		-			-		-			-			10.1		N/M
Gain on disposal of variable life and annuity business		-			2.7		N/M			4.1			8.1		(49.4	)
Other		-			0.7		N/M			-			(0.5	)	N/M
Net income (loss)	$	49.7		$	(61.8	)	N/M		$	139.9		$	(13.5	)	N/M

4

THE HANOVER INSURANCE GROUP

CONSOLIDATED INCOME STATEMENTS

	Quarter ended September 30						Nine Months ended September 30
	2009		2008			% Change	2009			2008			% Change
PER SHARE DATA (DILUTED)
Income (loss) from continuing operations	$	0.95	$	(0.85	)	N/M	$	2.57		$	1.19		N/M
Discontinued operations (net of taxes):
Gain (loss) from discontinued FAFLIC business (Including loss on assets held for sale of $0.12 and $1.39 in 2008)		0.01		(0.42	)	N/M		0.12			(1.80	)	N/M
Gain (loss) from discontinued accident and health business		0.01		-		N/M		(0.05	)		-		N/M
Income from operations of AMGRO (Including gain on disposal of $0.21 in 2008)		-		-		-		-			0.20		N/M
Gain on disposal of variable life and annuity business		-		0.05		N/M		0.08			0.16		(50.0	)
Other		-		0.01		N/M		-			(0.01	)	N/M
Net income (loss) (1)	$	0.97	$	(1.21	)	N/M	$	2.72		$	(0.26	)	N/M
Weighted average shares outstanding (2)		51.2		51.0				51.4			51.8

(1) Per share data for the quarter ended September 30, 2008 represents basic loss per share due to antidilution. Basic income (loss) per share was $0.98 for the quarter ended September 30, 2009, and $2.75 and $(0.26) for the nine months ended September 30, 2009 and 2008, respectively.

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

5

THE HANOVER INSURANCE GROUP

CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)	September 30 2009			December 31 2008			% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $4,696.3 and $4,382.0)	$	4,805.1		$	4,140.9		16.0
Equity securities, at fair value (cost of $109.8 and $97.6)		122.0			76.2		60.1
Mortgage loans		20.4			31.1		(34.4	)
Other long-term investments		16.7			18.4		(9.2	)
Total investments		4,964.2			4,266.6		16.4
Cash and cash equivalents		233.2			397.7		(41.4	)
Accrued investment income		53.4			52.3		2.1
Premiums, accounts and notes receivable, net		616.7			578.5		6.6
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		1,111.3			1,129.6		(1.6	)
Deferred policy acquisition costs		285.3			264.8		7.7
Deferred federal income taxes		216.4			285.6		(24.2	)
Goodwill		170.0			169.9		0.1
Other assets		309.7			315.7		(1.9	)
Assets of discontinued operations		128.4			1,769.5		(92.7	)
Total assets	$	8,088.6		$	9,230.2		(12.4	)
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Policy liabilities and accruals:
Losses and loss adjustment expenses	$	3,084.8		$	3,201.3		(3.6	)
Unearned premiums		1,322.6			1,246.3		6.1
Contractholder deposit funds and other policy liabilities		1.5			1.8		(16.7	)
Total policy liabilities and accruals		4,408.9			4,449.4		(0.9	)
Expenses and taxes payable		645.1			622.3		3.7
Reinsurance premiums payable		63.4			61.3		3.4
Long-term debt		433.8			531.4		(18.4	)
Liabilities of discontinued operations		130.3			1,678.6		(92.2	)
Total liabilities		5,681.5			7,343.0		(22.6	)
SHAREHOLDERS’ EQUITY
Preferred stock, par value $.01 per share; authorized 20.0 million shares; issued none		-			-		-
Common stock, par value $.01 per share; authorized 300.0 million shares; issued 60.5 million shares		0.6			0.6		-
Additional paid-in capital		1,807.8			1,803.8		0.2
Accumulated other comprehensive loss		(10.8	)		(384.8	)	(97.2	)
Retained earnings		1,121.4			949.8		18.1
Treasury stock at cost (10.4 and 9.6 million shares)		(511.9	)		(482.2	)	6.2
Total shareholders’ equity		2,407.1			1,887.2		27.5
Total liabilities and shareholders’ equity	$	8,088.6		$	9,230.2		(12.4	)

6

PROPERTY & CASUALTY

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

CONDENSED INCOME STATEMENTS

	Quarter ended September 30								Nine Months ended September 30
(In millions)	2009			2008			% Change		2009			2008			% Change
REVENUES
Net premiums written	$	688.8		$	651.6		5.7		$	1,981.8		$	1,920.7		3.2
Change in unearned premiums, net of prepaid reinsurance premiums		(51.4	)		(30.5	)	68.5			(82.4	)		(62.6	)	31.6
Net premiums earned		637.4			621.1		2.6			1,899.4			1,858.1		2.2
Net investment income		62.1			65.3		(4.9	)		187.9			193.3		(2.8	)
Other income		10.0			9.4		6.4			29.1			31.0		(6.1	)
Total segment revenue		709.5			695.8		2.0			2,116.4			2,082.4		1.6
LOSSES AND OPERATING EXPENSES
Losses and loss adjustment expenses		403.0			474.2		(15.0	)		1,225.1			1,239.7		(1.2	)
Policy acquisition expenses		146.8			139.7		5.1			434.7			416.1		4.5
Other operating expenses		86.1			68.1		26.4			256.8			221.9		15.7
Total losses and operating expenses		635.9			682.0		(6.8	)		1,916.6			1,877.7		2.1
Segment income before federal income taxes	$	73.6		$	13.8		N/M		$	199.8		$	204.7		(2.4	)

7

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY GROUP (1)

SELECT BALANCE SHEET INFORMATION

(In millions)	September 30 2009		December 31 2008		% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $4,385.2 and $4,154.9)	$	4,521.9	$	3,912.1	15.6
Equity securities, at fair value (cost of $111.4 and $88.3)		122.0		66.9	82.4
Mortgage loans		21.0		32.7	(35.8	)
Other long-term investments		12.0		13.5	(11.1	)
Total investments		4,676.9		4,025.2	16.2
Cash and cash equivalents		203.7		377.8	(46.1	)
Accrued investment income		51.3		48.6	5.6
Premiums, accounts, and notes receivable, net		616.7		579.2	6.5
Reinsurance receivable on paid and unpaid losses, benefits and unearned premiums		1,111.3		1,129.6	(1.6	)
Deferred policy acquisition costs		285.3		264.8	7.7
Deferred federal income tax asset		183.9		220.8	(16.7	)
Goodwill		170.0		169.9	0.1
Other assets		321.8		309.3	4.0
Assets of discontinued operations		128.4		-	N/M
Total assets	$	7,749.3	$	7,125.2	8.8
LIABILITIES
Policy liabilities and accruals:
Losses and loss adjustment expenses	$	3,084.8	$	3,201.3	(3.6	)
Unearned premiums		1,322.6		1,246.3	6.1
Contractholder deposit funds and other policy liabilities		1.5		1.8	(16.7	)
Total policy liabilities and accruals		4,408.9		4,449.4	(0.9	)
Expenses and taxes payable		609.2		596.4	2.1
Reinsurance premiums payable		63.4		61.3	3.4
Long-term debt		146.8		22.6	N/M
Liabilities of discontinued operations		130.3		-	N/M
Total liabilities	$	5,358.6	$	5,129.7	4.5

(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 September 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	$	249.1		$	136.5		$	11.1		$	396.7		$	27.8		$	47.4		$	98.7		$	118.2		$	292.1		$	-		$	688.8
Net premiums earned	$	243.8		$	112.2		$	9.7		$	365.7		$	26.9		$	46.8		$	90.6		$	107.4		$	271.7		$	-		$	637.4
Losses excluding prior year loss reserve development and catastrophe losses		155.2			57.2			3.9			216.3			18.8			25.1			42.7			47.9			134.5			0.1			350.9
Prior year loss reserve favorable development		(9.7	)		(1.0	)		(0.5	)		(11.2	)		(5.9	)		(2.1	)		(5.7	)		(3.2	)		(16.9	)		(10.5	)		(38.6	)
Pre-tax catastrophe losses		0.8			14.3			0.3			15.4			-			0.8			8.1			0.4			9.3			-			24.7
Loss adjustment expenses (1)		29.7			9.6			0.3			39.6			3.0			3.1			12.0			8.0			26.1			0.2			65.9
Policy acquisition expenses and other underwriting expenses											109.7															113.4			(0.1	)		223.0
Policyholders’ dividends											-															0.1			-			0.1
GAAP underwriting (loss) profit											(4.1	)														5.2			10.3			11.4
Net investment income											27.8															31.9			2.4			62.1
Other income											3.7															4.8			1.5			10.0
Other operating expenses											-															(3.2	)		(6.7	)		(9.9	)
Segment income before federal income taxes										$	27.4														$	38.7		$	7.5		$	73.6
	Quarter ended September 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	$	260.8		$	125.8		$	10.9		$	397.5		$	30.8		$	46.3		$	93.6		$	83.4		$	254.1		$	-		$	651.6
Net premiums earned	$	252.0		$	106.9		$	9.7		$	368.6		$	30.3		$	48.8		$	92.9		$	80.5		$	252.5		$	-		$	621.1
Losses excluding prior year loss reserve development and catastrophe losses		160.8			50.6			3.9			215.3			18.5			25.1			55.2			32.1			130.9			-			346.2
Prior year loss reserve favorable development		(13.3	)		(1.3	)		(1.2	)		(15.8	)		(5.3	)		(4.7	)		(5.5	)		(4.0	)		(19.5	)		(0.2	)		(35.5	)
Pre-tax catastrophe losses		1.2			37.2			1.3			39.7			-			0.1			48.3			10.1			58.5			-			98.2
Loss adjustment expenses (1)		30.9			9.0			0.3			40.2			3.2			3.9			10.5			7.0			24.6			0.4			65.2
Policy acquisition expenses and other underwriting expenses											102.9															96.6			(0.2	)		199.3
Policyholders’ dividends											-															0.1			-			0.1
GAAP underwriting loss											(13.7	)														(38.7	)		-			(52.4	)
Net investment income											30.1															31.5			3.7			65.3
Other income											3.4															4.3			1.7			9.4
Other operating expenses											(1.7	)														(3.7	)		(3.1	)		(8.5	)
Segment income (loss) before federal income taxes										$	18.1														$	(6.6	)	$	2.3		$	13.8

(1) Loss adjustment expenses includes (unfavorable) favorable development of $(0.2) million and $(0.1) million in Personal Lines, $4.4 million and $2.9 million in Commercial Lines, and $4.2 million and $2.8 million in Total P&C for the quarters ended September 30, 2009 and 2008, respectively.

9

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING PROFIT (LOSS) RECONCILED TO SEGMENT INCOME

	Nine Months ended September 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	$	740.6		$	344.8		$	30.3		$	1,115.7		$	88.3		$	147.8		$	289.4		$	340.4		$	865.9		$	0.2		$	1,981.8
Net premiums earned	$	734.9		$	329.6		$	29.3		$	1,093.8		$	85.6		$	139.6		$	271.3		$	308.8		$	805.3		$	0.3		$	1,899.4
Losses excluding prior year loss reserve development and catastrophe losses		477.5			172.2			10.5			660.2			58.1			74.6			128.8			132.7			394.2			-			1,054.4
Prior year loss reserve (favorable) unfavorable development		(44.5	)		7.8			(1.6	)		(38.3	)		(17.1	)		(4.7	)		(16.1	)		(20.0	)		(57.9	)		(10.4	)		(106.6	)
Pre-tax catastrophe losses		4.1			59.3			0.7			64.1			-			1.1			22.3			4.8			28.2			-			92.3
Loss adjustment expenses (1)		89.5			28.7			0.6			118.8			0.5			7.6			31.0			26.1			65.2			0.6			184.6
Policy acquisition expenses and other underwriting expenses											322.4															333.9			(0.5	)		655.8
Policyholders’ dividends											-															0.4			-			0.4
GAAP underwriting (loss) profit											(33.4	)														41.3			10.6			18.5
Net investment income											81.4															93.2			13.3			187.9
Other income											10.8															14.0			4.3			29.1
Other operating expenses											(2.7	)														(11.3	)		(21.7	)		(35.7	)
Segment income before federal income taxes										$	56.1														$	137.2		$	6.5		$	199.8
	Nine Months ended September 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	$	772.4		$	319.5		$	30.8		$	1,122.7		$	98.4		$	152.6		$	285.7		$	261.1		$	797.8		$	0.2		$	1,920.7
Net premiums earned	$	755.6		$	322.3		$	29.5		$	1,107.4		$	91.5		$	148.6		$	271.4		$	238.9		$	750.4		$	0.3		$	1,858.1
Losses excluding prior year loss reserve development and catastrophe losses		487.1			156.4			10.1			653.6			60.1			78.2			133.4			90.7			362.4			-			1,016.0
Prior year loss reserve favorable development		(47.5	)		(1.0	)		(1.9	)		(50.4	)		(22.3	)		(10.8	)		(29.0	)		(15.0	)		(77.1	)		(0.7	)		(128.2	)
Pre-tax catastrophe losses		3.5			69.4			2.4			75.3			-			0.6			64.8			14.9			80.3			-			155.6
Loss adjustment expenses (1)		95.3			26.1			1.3			122.7			10.3			12.8			29.7			19.4			72.2			1.0			195.9
Policy acquisition expenses and other underwriting expenses											319.2															294.1			(0.3	)		613.0
Policyholders’ dividends											-															0.4			-			0.4
GAAP underwriting (loss) profit											(13.0	)														18.1			0.3			5.4
Net investment income											89.1															92.9			11.3			193.3
Other income											12.2															13.8			5.0			31.0
Other operating expenses											(4.5	)														(10.7	)		(9.8	)		(25.0	)
Segment income before federal income taxes										$	83.8														$	114.1		$	6.8		$	204.7

(1) Loss adjustment expenses includes favorable (unfavorable) development of $1.5 million and $(2.2) million in Personal Lines, $20.1 million and $6.2 million in Commercial Lines, and $21.6 million and $4.0 million in Total P&C for the nine months ended September 30, 2009 and 2008, respectively.

10

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

GAAP UNDERWRITING RATIOS

	Quarter ended September 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	63.6	%	51.0	%	40.2	%	59.2	%	69.8	%	53.7	%	47.2	%	44.7	%	49.5	%	N/M	55.2	%
Catastrophe losses	0.3	%	12.7	%	3.1	%	4.2	%	-		1.7	%	8.9	%	0.4	%	3.4	%	N/M	3.9	%
Loss development	(4.0	)%	(0.9	)%	(5.2	)%	(3.1	)%	(21.9	)%	(4.5	)%	(6.3	)%	(3.0	)%	(6.2	)%	N/M	(6.1	)%
Total losses	59.9	%	62.8	%	38.1	%	60.3	%	47.9	%	50.9	%	49.8	%	42.1	%	46.7	%	N/M	53.0	%
Loss adjustment expenses (1)	12.2	%	8.6	%	3.1	%	10.8	%	11.2	%	6.6	%	13.2	%	7.4	%	9.6	%	N/M	10.3	%
Policy acquisition and other underwriting expenses (2)							29.1	%									41.5	%	N/M	34.3	%
Policyholders’ dividends							-										-		N/M	-
Combined							100.2	%									97.8	%	N/M	97.6	%
Policies in force (3)	(1.2	)%	4.7	%	(4.8	)%	1.2	%	(2.1	)%	(3.0	)%	2.7	%	(3.3	)%	(0.9	)%	-	0.9	%
Retention (3), (4)	74.3	%	82.0	%	N/M		78.2	%	77.8	%	79.7	%	80.0	%	78.4	%	79.4	%
	Quarter ended September 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	63.7	%	47.4	%	40.2	%	58.4	%	61.1	%	51.4	%	59.4	%	39.9	%	51.8	%	N/M	55.7	%
Catastrophe losses	0.5	%	34.8	%	13.4	%	10.8	%	-		0.2	%	52.0	%	12.5	%	23.2	%	N/M	15.8	%
Loss development	(5.3	)%	(1.2	)%	(12.4	)%	(4.3	)%	(17.5	)%	(9.6	)%	(5.9	)%	(5.0	)%	(7.7	)%	N/M	(5.7	)%
Total losses	58.9	%	81.0	%	41.2	%	64.9	%	43.6	%	42.0	%	105.5	%	47.4	%	67.3	%	N/M	65.8	%
Loss adjustment expenses (1)	12.3	%	8.4	%	3.1	%	10.9	%	10.6	%	8.0	%	11.3	%	8.7	%	9.7	%	N/M	10.5	%
Policy acquisition and other underwriting expenses (2)							27.0	%									38.1	%	N/M	31.5	%
Policyholders’ dividends							-										-		N/M	-
Combined							102.8	%									115.1	%	N/M	107.8	%
Policies in force (3)	(2.0	)%	(1.2	)%	(5.7	)%	(1.8	)%	2.9	%	5.3	%	0.9	%	4.8	%	3.2	%	-	(1.2	)%
Retention (3), (4)	73.2	%	81.3	%	N/M		77.4	%	76.3	%	78.5	%	82.9	%	72.8	%	80.5	%

(1) Loss adjustment expenses includes (unfavorable) favorable development of $(0.2) million and $(0.1) million in Personal Lines, $4.4 million and $2.9 million in Commercial Lines, and $4.2 million and $2.8 million in Total P&C for the quarters ended September 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

	Nine Months ended September 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	65.0	%	52.2	%	35.9	%	60.3	%	67.8	%	53.5	%	47.5	%	42.9	%	49.0	%	N/M	55.5	%
Catastrophe losses	0.6	%	18.0	%	2.4	%	5.9	%	-		0.8	%	8.2	%	1.6	%	3.5	%	N/M	4.9	%
Loss development	(6.1	)%	2.4	%	(5.5	)%	(3.5	)%	(20.0	)%	(3.4	)%	(5.9	)%	(6.5	)%	(7.2	)%	N/M	(5.6	)%
Total losses	59.5	%	72.6	%	32.8	%	62.7	%	47.8	%	50.9	%	49.8	%	38.0	%	45.3	%	N/M	54.8	%
Loss adjustment expenses (1)	12.2	%	8.7	%	2.0	%	10.9	%	0.6	%	5.4	%	11.4	%	8.5	%	8.1	%	N/M	9.7	%
Policy acquisition and other underwriting expenses (2)							28.5	%									41.2	%	N/M	33.9	%
Policyholders’ dividends							-										-		N/M	-
Combined							102.1	%									94.6	%	N/M	98.4	%
Policies in force (3)	(1.2	)%	4.7	%	(4.8	)%	1.2	%	(2.1	)%	(3.0	)%	2.7	%	(3.3	)%	(0.9	)%	-	0.9	%
Retention (3), (4)	74.3	%	82.0	%	N/M		78.2	%	73.8	%	77.7	%	79.9	%	78.3	%	78.3	%
	Nine Months ended September 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	64.5	%	48.5	%	34.2	%	59.0	%	65.7	%	52.6	%	49.2	%	38.0	%	48.3	%	N/M	54.7	%
Catastrophe losses	0.5	%	21.5	%	8.1	%	6.8	%	-		0.4	%	23.9	%	6.2	%	10.7	%	N/M	8.4	%
Loss development	(6.3	)%	(0.3	)%	(6.4	)%	(4.5	)%	(24.4	)%	(7.2	)%	(10.7	)%	(6.3	)%	(10.3	)%	N/M	(6.9	)%
Total losses	58.7	%	69.7	%	35.9	%	61.3	%	41.3	%	45.8	%	62.4	%	37.9	%	48.7	%	N/M	56.2	%
Loss adjustment expenses (1)	12.6	%	8.1	%	4.4	%	11.1	%	11.3	%	8.6	%	10.9	%	8.1	%	9.6	%	N/M	10.5	%
Policy acquisition and other underwriting expenses (2)							27.9	%									38.9	%	N/M	32.4	%
Policyholders’ dividends							-										0.1	%	N/M	-
Combined							100.3	%									97.3	%	N/M	99.1	%
Policies in force (3)	(2.0	)%	(1.2	)%	(5.7	)%	(1.8	)%	2.9	%	5.3	%	0.9	%	4.8	%	3.2	%	-	(1.2	)%
Retention (3), (4)	73.2	%	81.3	%	N/M		77.4	%	79.2	%	80.2	%	80.9	%	75.0	%	80.8	%

(1) Loss adjustment expenses includes favorable (unfavorable) development of $1.5 million and $(2.2) million in Personal Lines, $20.1 million and $6.2 million in Commercial Lines, and $21.6 million and $4.0 million in Total P&C for the nine months ended September 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

	Nine Months ended September 30
(In millions, except yields)	2009					2008
				Yield					Yield
Fixed maturities (1)	$	186.4		5.56	%	$	188.1		5.60	%
Equity securities		3.3		-			3.1		-
Mortgages (2)		1.8		8.63	%		0.7		10.32	%
All other		1.8		-			5.7		-
Investment expenses		(5.0	)	-			(3.7	)	-
Total (3)	$	188.3		5.18	%	$	193.9		5.45	%

(1) Includes purchase accounting adjustments of $(1.6) million and $(2.5) million for the nine months ended September 30, 2009 and 2008, respectively.

(2) Excluding mortgage prepayment fees of $0.1 and $0.2 million for the nine months ended September 30, 2009 and 2008, mortgage yields were 8.37% and 8.86%, respectively.

(3) Excludes discontinued operations of $1.3 million and $49.8 million for the nine months ended September 30, 2009 and 2008, respectively.

13

THE HANOVER INSURANCE GROUP

COMPONENTS OF NET REALIZED INVESTMENT GAINS (LOSSES)

	Quarter ended September 30						Nine Months ended September 30
(In millions)	2009			2008			2009			2008
Total other-than-temporary impairment losses	$	(4.5	)	$	(53.1	)	$	(39.1	)	$	(66.7	)
Portion of loss recognized in other comprehensive income		(1.6	)		-			9.8			-
Net other-than-temporary losses on securities recognized in earnings		(6.1	)		(53.1	)		(29.3	)		(66.7	)
Realized gains from sales and other		6.1			0.3			19.6			6.0
Net realized investment losses (1)	$	-		$	(52.8	)	$	(9.7	)	$	(60.7	)

(1) Excludes discontinued operations of $(15.6) million for the quarter ended September 30, 2008, and $(3.2) million and $(23.0) million for the nine months ended September 30, 2009 and 2008, respectively. There were no realized gains or losses for discontinued operations for the quarter ended September 30, 2009.

14

THE HANOVER INSURANCE GROUP

INVESTMENT PORTFOLIO

($ in millions)	September 30, 2009
Investment Type	Weighted Average Quality	Amortized Cost		Fair Value		Net Unrealized Gain (Loss)			Change in Net Unrealized Q3		Change in Net Unrealized YTD
Fixed Maturities:
Corporate:
NAIC 1	A	$	902.1	$	936.3	$	34.2		$	39.6	$	94.0
NAIC 2	BBB		1,059.8		1,103.5		43.7			51.4		115.9
NAIC 3 and below	B+		298.2		294.6		(3.6	)		25.7		52.9
Total corporate	BBB+		2,260.1		2,334.4		74.3			116.7		262.8
Asset backed:
Residential mortgage backed securities	AA+		922.1		938.4		16.3			14.8		17.6
Commercial mortgage backed securities	AA+		336.7		337.8		1.1			21.0		32.0
Asset backed securities	A-		67.3		70.1		2.8			3.2		10.1
Municipals:
Taxable	AA-		631.2		635.9		4.7			4.4		19.8
Tax exempt	A+		204.8		208.2		3.4			12.1		19.9
U.S. government	AAA		385.8		388.6		2.8			2.3		(1.8	)
Total fixed maturities (1)	A+		4,808.0		4,913.4		105.4			174.5		360.4
Equity securities:
Perpetual preferred securities			32.4		36.3		3.9			4.5		17.3
Common equity securities			77.4		85.7		8.3			10.2		16.3
Total fixed maturities and equity securities			4,917.8		5,035.4		117.6			189.2		394.0
Cash and cash equivalents (2)			241.3		241.3		-			-		-
Mortgage loans and other long-term investments			35.1		37.1		2.0			-		(0.1	)
Total		$	5,194.2	$	5,313.8	$	119.6		$	189.2	$	393.9

(1) Includes discontinued accident and health business of $111.7 million in amortized cost and $108.3 million in fair value at September 30, 2009. Net unrealized losses associated with the discontinued accident and health business improved $5.6 million during the third quarter of 2009 and $10.5 million since year end 2008.

(2) Includes discontinued accident and health business of $8.1 million in amortized cost and in fair value at September 30, 2009.

15

THE HANOVER INSURANCE GROUP

AGING OF GROSS UNREALIZED LOSSES ON SECURITIES AVAILABLE FOR SALE

(In millions)	September 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	$	14.3	$	325.7	$	150.2	$	1,724.1
Greater than 12 months		57.2		438.1		94.4		469.8
Total investment grade fixed maturities		71.5		763.8		244.6		2,193.9
BELOW INVESTMENT GRADE FIXED MATURITIES:
12 months or less		24.4		99.3		64.2		152.5
Greater than 12 months		22.0		160.3		-		-
Total below investment grade fixed maturities		46.4		259.6		64.2		152.5
PERPETUAL PREFERRED SECURITIES:
12 months or less		-		-		-		-
Greater than 12 months		-		-		13.4		28.5
Total perpetual preferred securities		-		-		13.4		28.5
EQUITY SECURITIES:
12 months or less		0.1		0.1		11.4		32.3
Greater than 12 months		-		-		-		-
Total equity securities		0.1		0.1		11.4		32.3
Total (1)	$	118.0	$	1,023.5	$	333.6	$	2,407.2

(1) Includes discontinued accident and health business of $11.1 million in gross unrealized losses with $36.3 million in fair value at September 30, 2009 and $15.7 million in gross unrealized losses with $52.3 million in fair value at December 31, 2008.

16

THE HANOVER INSURANCE GROUP

CREDIT QUALITY OF FIXED MATURITIES

(In millions)		September 30, 2009				December 31, 2008
NAIC Designation	Rating Agency Equivalent Designation	Amortized Cost		Fair Value		Amortized Cost		Fair Value
1	Aaa/Aa/A	$	3,208.0	$	3,287.8	$	3,098.1	$	2,997.8
2	Baa		1,253.9		1,293.1		1,074.8		981.5
3	Ba		159.1		147.0		151.5		133.2
4	B		101.8		99.8		111.0		83.8
5	Caa and lower		69.1		70.4		37.1		24.5
6	In or near default		16.1		15.3		8.8		5.5
Total fixed maturities (1)		$	4,808.0	$	4,913.4	$	4,481.3	$	4,226.3

(1) Includes discontinued accident and health business of $111.7 million in amortized cost and $108.3 million in fair value at September 30, 2009 and $99.3 million in amortized cost and $85.4 million in fair value at December 31, 2008.

17

THE HANOVER INSURANCE GROUP

TOP 25 FINANCIAL FIXED MATURITY HOLDINGS

(In millions, except percentage data)	As of September 30, 2009
Issuer	Amortized Cost		Fair Value		As a percent of      Invested Assets	S&P Ratings
Bank of America	$	34.2	$	30.4	0.57%	A-
Wells Fargo		21.9		21.9	0.41%	AA-
PNC Bank		19.9		19.3	0.36%	A
GE Capital		19.3		19.6	0.37%	AA+
American Express		18.3		18.0	0.34%	BBB+
Capital One		17.4		17.9	0.34%	BBB
Manufacturers & Traders Bank		15.1		12.6	0.24%	A-
Morgan Stanley		15.0		16.2	0.31%	A
Fifth Third Bancorp		15.0		13.1	0.25%	BBB-
Student Loan Market		14.5		14.2	0.27%	BBB-
Bank of Scotland		13.0		12.8	0.24%	BBB
Genworth Global Funding		12.9		12.7	0.24%	BBB
Branch Bank & Trust		12.5		12.7	0.24%	A
Prudential Financial		12.5		12.9	0.24%	A
Charter One		12.1		12.2	0.23%	BBB+
Goldman Sachs		12.0		12.1	0.23%	A
Union Bank of California		11.5		11.4	0.21%	A
American General Finance		10.8		8.5	0.16%	BB+
Aetna		10.6		11.0	0.21%	A-
FMR		10.5		10.7	0.20%	A+
Simon Property Group		10.1		10.3	0.19%	A-
Regions Bank		10.1		8.2	0.15%	BB+
Bank of Oklahoma		10.0		9.0	0.17%	BBB+
Bank of New York Mellon		9.6		9.8	0.18%	A+
Lincoln National		9.5		7.1	0.13%	BBB
Top 25 Financial		358.3		344.6	6.48%
Other Financial		143.9		137.5	2.59%
Total Financial	$	502.2	$	482.1	9.07%

18

THE HANOVER INSURANCE GROUP

TOP 25 NON-FINANCIAL FIXED MATURITY HOLDINGS

(In millions, except percentage data)	As of September 30, 2009
Issuer	Amortized Cost		Fair Value		As a percent of     Invested Assets	S&P Ratings
Valero Energy	$	19.7	$	19.4	0.37%	BBB
Union Pacific		19.3		20.1	0.38%	BBB
Dominion Resources		18.2		19.1	0.36%	A-
Conoco Phillips		18.0		19.2	0.36%	A
AT&T		17.8		19.0	0.36%	A
Safeway		17.4		18.5	0.35%	BBB
Kroger		17.4		18.4	0.35%	BBB
CVS		17.3		18.3	0.34%	BBB+
Home Depot		16.9		17.8	0.34%	BBB+
Miller Brewing		16.4		17.6	0.33%	BBB+
Comcast		15.8		17.6	0.33%	BBB+
Schering-Plough		15.4		16.7	0.31%	A-
Pacific Gas & Electric		15.3		16.8	0.32%	BBB+
Canadian National Railways		15.0		16.2	0.30%	A-
Shell		15.0		15.8	0.30%	AA
Vodafone		14.9		15.9	0.30%	A-
Atmos Energy		14.9		16.1	0.30%	BBB+
Plains All-America Pipeline		14.6		15.1	0.28%	BBB-
Sempra Energy		14.6		15.3	0.29%	BBB+
BP Capital Markets		14.4		14.9	0.28%	AA
Duke Energy		14.4		15.3	0.29%	A-
Enterprise Products		14.2		14.5	0.27%	BBB-
Exelon		14.1		14.4	0.27%	BBB-
Deutsche Telecom		13.9		14.9	0.28%	BBB+
Lowe’s		13.6		14.8	0.28%	A+
Top 25 Non-Financial		398.5		421.7	7.94%
Other Non-Financial		1,359.4		1,430.6	26.92%
Total Non-Financial	$	1,757.9	$	1,852.3	34.86%

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PROPERTY & CASUALTY

STATUTORY RATIOS

THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING RATIOS

	Quarter ended September 30, 2009
	Personal Lines								Commercial Lines
									Workers’				Multiple						Other	Total
	Auto		Home		Other		Total		Comp		Auto		Peril		Other		Total		P&C	P&C
Losses, excluding catastrophe losses and development	63.6	%	51.0	%	40.2	%	59.1	%	66.7	%	53.3	%	46.8	%	44.7	%	49.2	%	N/M	55.1	%
Catastrophe losses	0.3	%	12.8	%	3.1	%	4.2	%	-		1.9	%	9.2	%	0.8	%	3.7	%	N/M	4.0	%
Loss development	(4.0	)%	(0.9	)%	(5.2	)%	(3.1	)%	(20.9	)%	(4.5	)%	(6.2	)%	(3.0	)%	(6.2	)%	N/M	(6.0	)%
Total losses	59.9	%	62.9	%	38.1	%	60.2	%	45.8	%	50.7	%	49.8	%	42.5	%	46.7	%	N/M	53.1	%
Loss adjustment expenses (1)	12.2	%	8.6	%	4.1	%	10.9	%	11.0	%	6.6	%	13.0	%	7.3	%	9.5	%	N/M	10.3	%
Policy acquisition and other underwriting expenses							29.3	%									40.7	%	N/M	34.2	%
Policyholders’ dividends							-										0.1	%	N/M	-
Combined							100.4	%									97.0	%	N/M	97.6	%
	Quarter ended September 30, 2008
	Personal Lines								Commercial Lines
									Workers’				Multiple						Other	Total
	Auto		Home		Other		Total		Comp		Auto		Peril		Other		Total		P&C	P&C
Losses, excluding catastrophe losses and development	63.8	%	47.3	%	40.2	%	58.4	%	61.3	%	51.3	%	59.3	%	40.0	%	51.8	%	N/M	55.7	%
Catastrophe losses	0.5	%	34.9	%	12.4	%	10.8	%	-		0.2	%	51.3	%	11.3	%	22.5	%	N/M	15.6	%
Loss development	(5.3	)%	(1.2	)%	(12.4	)%	(4.3	)%	(17.5	)%	(9.6	)%	(5.9	)%	(5.0	)%	(7.7	)%	N/M	(5.7	)%
Total losses	59.0	%	81.0	%	40.2	%	64.9	%	43.8	%	41.9	%	104.7	%	46.3	%	66.6	%	N/M	65.6	%
Loss adjustment expenses (1)	12.2	%	8.4	%	4.1	%	10.9	%	10.3	%	8.0	%	11.3	%	8.6	%	9.7	%	N/M	10.5	%
Policy acquisition and other underwriting expenses							26.5	%									38.4	%	N/M	31.1	%
Policyholders’ dividends							-										0.1	%	N/M	-
Combined							102.3	%									114.8	%	N/M	107.2	%

(1) Loss adjustment expenses includes (unfavorable) favorable development of $(0.2) million and $(0.1) million in Personal Lines, $4.4 million and $2.9 million in Commercial Lines, and $4.2 million and $2.8 million in Total P&C for the quarters ended September 30, 2009 and 2008, respectively.

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THE HANOVER INSURANCE GROUP

PROPERTY AND CASUALTY

STATUTORY UNDERWRITING RATIOS

	Nine Months ended September 30, 2009
	Personal Lines								Commercial Lines
									Workers’				Multiple						Other	Total
	Auto		Home		Other		Total		Comp		Auto		Peril		Other		Total		P&C	P&C
Losses, excluding catastrophe losses and development	65.0	%	52.3	%	35.7	%	60.4	%	66.5	%	53.4	%	47.4	%	43.3	%	49.0	%	N/M	55.7	%
Catastrophe losses	0.5	%	18.0	%	2.4	%	5.9	%	-		0.8	%	8.3	%	1.7	%	3.6	%	N/M	4.9	%
Loss development	(6.1	)%	2.4	%	(5.4	)%	(3.5	)%	(19.6	)%	(3.4	)%	(5.9	)%	(6.5	)%	(7.2	)%	N/M	(5.6	)%
Total losses	59.4	%	72.7	%	32.7	%	62.8	%	46.9	%	50.8	%	49.8	%	38.5	%	45.4	%	N/M	55.0	%
Loss adjustment expenses (1)	12.2	%	8.7	%	2.0	%	10.9	%	0.6	%	5.4	%	11.4	%	8.4	%	8.0	%	N/M	9.7	%
Policy acquisition and other underwriting expenses							29.4	%									40.3	%	N/M	34.2	%
Policyholders’ dividends							-										0.1	%	N/M	-
Combined							103.1	%									93.8	%	N/M	98.9	%
	Nine Months ended September 30, 2008
	Personal Lines								Commercial Lines
									Workers’				Multiple						Other	Total
	Auto		Home		Other		Total		Comp		Auto		Peril		Other		Total		P&C	P&C
Losses, excluding catastrophe losses and development	64.5	%	48.5	%	34.2	%	59.0	%	65.4	%	52.6	%	49.2	%	38.3	%	48.4	%	N/M	54.7	%
Catastrophe losses	0.5	%	21.6	%	8.1	%	6.8	%	-		0.4	%	23.7	%	5.8	%	10.5	%	N/M	8.3	%
Loss development	(6.3	)%	(0.3	)%	(6.4	)%	(4.6	)%	(24.3	)%	(7.3	)%	(10.7	)%	(6.3	)%	(10.3	)%	N/M	(6.9	)%
Total losses	58.7	%	69.8	%	35.9	%	61.2	%	41.1	%	45.7	%	62.2	%	37.8	%	48.6	%	N/M	56.1	%
Loss adjustment expenses (1)	12.6	%	8.1	%	4.7	%	11.0	%	11.2	%	8.6	%	10.9	%	8.1	%	9.6	%	N/M	10.5	%
Policy acquisition and other underwriting expenses							28.4	%									38.4	%	N/M	32.6	%
Policyholders’ dividends							-										0.1	%	N/M	-
Combined							100.6	%									96.7	%	N/M	99.2	%

(1) Loss adjustment expenses includes favorable (unfavorable) development of $1.5 million and $(2.2) million in Personal Lines, $20.1 million and $6.2 million in Commercial Lines, and $21.6 million and $4.0 million in Total P&C for the nine months ended September 30, 2009 and 2008, respectively.

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Historical Highlights

THE HANOVER INSURANCE GROUP

HISTORICAL FINANCIAL HIGHLIGHTS

(In millions, except per share data)	Q3 09			Q2 09			Q1 09			2008			Q4 08			Q3 08			Q2 08			Q1 08
SEGMENT INCOME (1)
Property and Casualty
Personal Lines	$	27.4		$	25.6		$	3.1		$	123.5		$	39.7		$	18.1		$	38.6		$	27.1
Commercial Lines		38.7			50.9			47.6			169.7			55.6			(6.6	)		52.7			68.0
Other Property and Casualty		7.5			(0.2	)		(0.8	)		9.0			2.2			2.3			2.9			1.3
Total Property and Casualty		73.6			76.3			49.9			302.2			97.5			13.8			94.2			96.4
Interest expense on corporate debt		(6.3	)		(10.5	)		(10.4	)		(39.9	)		(10.0	)		(10.0	)		(9.9	)		(10.0	)
Total segment income before federal income taxes	$	67.3		$	65.8		$	39.5		$	262.3		$	87.5		$	3.8		$	84.3		$	86.4
Federal income tax expense on segment income		(22.0	)		(21.8	)		(13.1	)		(86.3	)		(27.9	)		(0.5	)		(28.8	)		(29.1	)
Total segment income after federal income taxes	$	45.3		$	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 from retirement of corporate debt		0.2			34.3			-			-			-			-			-			-
Other non-segment items		-			0.1			(0.1	)		(0.1	)		(0.1	)		-			-			-
Federal income tax benefit (expense) on non-segment income		3.1			(11.7	)		-			-			0.4			(0.4	)		-			-
Income (loss) from continuing operations		48.6			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		0.4			0.9			5.0			(84.8	)		8.1			(21.7	)		(67.7	)		(3.5	)
Gain (loss) from discontinued accident and health business		0.7			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)	$	49.7		$	64.4		$	25.8		$	20.6		$	34.1		$	(61.8	)	$	(10.2	)	$	58.5
PER SHARE DATA (DILUTED)
INCOME (LOSS) FROM CONTINUING OPERATIONS	$	0.95		$	1.23		$	0.39		$	1.63		$	0.44		$	(0.85	)	$	0.92		$	1.09
INCOME (LOSS) FROM DISCONTINUED OPERATIONS	$	0.02		$	0.02		$	0.11		$	(1.23	)	$	0.22		$	(0.36	)	$	(1.12	)	$	0.03
NET INCOME (LOSS)	$	0.97		$	1.25		$	0.50		$	0.40		$	0.66		$	(1.21	)	$	(0.20	)	$	1.12
WEIGHTED AVERAGE SHARES OUTSTANDING (DILUTED) (2)		51.2			51.4			51.4			51.7			51.4			51.0			51.8			52.3
BALANCE SHEET
Total assets	$	8,088.6		$	7,747.7		$	7,698.1					$	9,230.2		$	9,254.8		$	9,463.8		$	9,700.6
Total shareholders’ equity	$	2,407.1		$	2,221.1		$	1,967.6					$	1,887.2		$	2,040.1		$	2,212.7		$	2,320.7
Book value per share	$	48.06		$	43.75		$	38.62					$	37.08		$	40.09		$	43.57		$	45.23
Book value per share, excluding accumulated other comprehensive (loss) income	$	48.28		$	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 generally accepted accounting principles, 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 generally accepted accounting principles, 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 Per Share
	High		Low
March 31	$	43.37	$	28.49		-
June 30	$	38.11	$	29.19		-
September 30	$	42.82	$	37.23		-
December 31
Quarter Ended	2008
	Price Range				Dividends Per Share
	High		Low
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 NOVEMBER 2, 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-	-	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. Junior Subordinated Debentures	bb+	BB-	Ba1	BB+

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

Assistant Vice President

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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