Basis Of Presentation And Principles Of Consolidation

9 Months Ended

Sep. 30, 2011

Basis Of Presentation And Principles Of Consolidation [Abstract]

Basis Of Presentation And Principles Of Consolidation

1. Basis of Presentation and Principles of Consolidation

The accompanying unaudited consolidated financial statements of The Hanover Insurance Group, Inc. and subsidiaries ("THG" or the "Company") have been prepared in accordance with generally accepted accounting principles ("GAAP") for interim financial information and with the requirements of Form 10-Q. Certain financial information that is provided in annual financial statements, but is not required in interim reports, has been omitted.

The interim consolidated financial statements of THG include the accounts of The Hanover Insurance Company ("Hanover Insurance") and Citizens Insurance Company of America, THG's principal U.S. domiciled property and casualty companies; and certain other insurance and non-insurance subsidiaries. These legal entities conduct their operations through several business segments discussed in Note 10 – "Segment Information". In addition, effective July 1, 2011, the Company acquired Chaucer Holdings PLC ("Chaucer"), a specialist underwriting group which operates through the Society and Corporation of Lloyd's ("Lloyd's) (See Note 3 – "Acquisitions"). The interim consolidated financial statements include Chaucer's results for the period from July 1, 2011 through September 30, 2011. Additionally, the interim consolidated financial statements include the Company's discontinued operations, consisting of the Company's former life insurance businesses and its accident and health business. All intercompany accounts and transactions have been eliminated.

The preparation of financial statements in conformity with generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates.

In the opinion of the Company's management, the accompanying interim consolidated financial statements reflect all adjustments, consisting of normal recurring items, necessary for a fair presentation of the financial position and results of operations. The results of operations for the nine months ended September 30, 2011 are not necessarily indicative of the results to be expected for the full year. The acquisition of Chaucer on July 1, 2011, which has added meaningful business volumes to THG third quarter results, has affected the comparability of the consolidated financial statements. These financial statements should be read in conjunction with THG's 2010 Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on February 24, 2011 and the unaudited Pro Forma Condensed Combined Financial Statements of THG and Chaucer included as Exhibit 99.2 in Amendment No. 1 to THG's Form 8K/A, which was filed with SEC on September 19, 2011.