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): October 30, 2019

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)	(IRS Employer Identification No.)
	440 Lincoln Street, Worcester, Massachusetts (Address of principal executive offices)	01653 (Zip Code)
	(508) 855-1000 Registrant’s telephone number, including area code:

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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, $.01 par value	THG	New York Stock Exchange
7 5/8% Senior Debentures due 2025	THG	New York Stock Exchange
6.35% Subordinated Debentures due 2053	THGA	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

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

On October 30, 2019, The Hanover Insurance Group, Inc. (the Company) issued a press release announcing its financial results for the quarter ended September 30, 2019. The release is furnished as Exhibit 99.1 hereto. Additionally, on October 30, 2019, the Company made available on its website unaudited financial information contained in its Financial Supplement for the period ended September 30, 2019. 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 October 30, 2019, announcing the Company’s financial results for the quarter ended September 30, 2019.
Exhibit 99.2	The Hanover Insurance Group, Inc. Unaudited Financial Supplement for the period ended September 30, 2019.
Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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Exhibit Index

Exhibit 99.1	Press Release, dated October 30, 2019, announcing the Company’s financial results for the quarter ended September 30, 2019.
Exhibit 99.2	The Hanover Insurance Group, Inc. Unaudited Financial Supplement for the period ended September 30, 2019.
Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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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: October 30, 2019	By:	/s/ Jeffrey M. Farber
		Jeffrey M. Farber
		Executive Vice President and Chief Financial Officer

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EX-99.1

Exhibit 99.1

The Hanover Reports Third Quarter Net Income and

Operating Incomeof $2.96 and $2.31 per Diluted Share, Respectively;  

Combined Ratio of 94.4%; Combined Ratio, Excluding Catastrophes, of 91.3%

WORCESTER, Mass., October 30, 2019 - The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income of $118.9 million, or $2.96 per diluted share, in the third quarter of 2019, compared to $100.4 million, or $2.33 per diluted share, in the prior-year quarter. Operating income ⁽¹⁾ was $93.0 million, or $2.31 per diluted share, for the third quarter of 2019. This compared to operating income of $84.9 million, or $1.97 per diluted share, in the prior-year quarter. The difference between net and operating income in the third quarter of 2019 is primarily due to an after-tax increase in the fair value of equity securities of $11.9 million, or $0.29 per fully diluted share, and $12.8 million, after-tax, of favorable items related to the Chaucer sale, or $0.32 per fully diluted share, which are excluded from operating income.  

Third Quarter Highlights

• Net premiums written increase of 5.6%*, which reflects growth in more profitable segments

• Price increases of 5.5% in Core Commercial Lines ⁽²⁾ and 5.0% in Personal Lines⁽³⁾

• Catastrophe losses of $35.2 million, or 3.1 points, including several wind and hail events in the Upper Midwest, compared to $44.9 million, or 4.2 points, of catastrophe losses in the prior-year quarter  

• Current accident year loss and loss adjustment expense (“LAE”) ratio, excluding catastrophes⁽⁴⁾, of 59.6%, reflecting elevated property loss experience, while liability continues to perform in line with expectations

• Net investment income of $68.8 million, up 3.6% from the prior-year quarter, driven by the continued investment of operational cash flows and investment of remaining proceeds from Chaucer sale

• Completed the previously announced $150 million accelerated share repurchase (“ASR”) agreement on October 28, 2019, repurchasing approximately 1,150,000 shares of common stock

• Book value per share of $78.01, up 4.9% from June 30, 2019, due primarily to net income and unrealized gains on investments

“We are pleased with our performance in the quarter, sustaining the positive momentum we have established across our business and building on the strong results we posted for the first half of the year,” said John C. Roche, president and chief executive officer at The Hanover. “We delivered an adjusted ROE⁽⁵⁾ of 14.3% and increased net written premiums by 5.6%.  We continued to successfully navigate a dynamic market environment, achieving solid price increases of 5.5% in Core Commercial and 5.0% in Personal Lines. Our performance reflects the breadth and relevance of our product mix, deep industry expertise and our unique partnership approach with agents.”  

(1) See information about this and other non-GAAP measures and definitions used throughout this press release on the final pages of this document.

The Hanover Insurance Group, Inc. may also be referred to as “The Hanover” or “the Company” interchangeably throughout this press release.

*Unless otherwise stated, net premiums written growth and other growth comparisons are to the same period of the prior year

“We delivered an ex-cat combined ratio⁽⁶⁾ of 91.3% during the quarter,” said Jeffrey M. Farber, executive vice president and chief financial officer. “Underlying loss ratios were solid, but slightly above our expectations due to increased property loss activity across several areas of the business. At the same time, liability lines performed consistent with our expectations. The company’s market position and strong agency relationships allowed us to implement rate increases, where needed. We remain committed to a diligent capital management framework, as we wrapped up the $150 million ASR announced in June and continue to review additional capital deployment options, all with the interests of our shareholders in mind.”

	Three months ended		Nine months ended
	September 30		September 30
($ in millions, except per share data)	2019	2018	2019	2018
Net premiums written	$1,242.9	$1,177.2	$3,478.7	$3,340.1
Net income	118.9	100.4	315.3	267.4
per diluted share	2.96	2.33	7.71	6.21
Operating income	93.0	84.9	251.4	227.2
per diluted share	2.31	1.97	6.15	5.28
Net investment income	68.8	66.4	208.6	198.0
Book value per share	$78.01	$70.40	$78.01	$70.40
Ending shares outstanding	39.6	42.4	39.6	42.4
Combined ratio	94.4 %	95.1 %	95.4 %	95.8 %
Catastrophe ratio	3.1 %	4.2 %	4.0 %	5.3 %
Combined ratio, excluding catastrophes	91.3 %	90.9 %	91.4 %	90.5 %
Current accident year combined ratio,     excluding catastrophes(6)	91.3 %	90.9 %	91.4 %	90.5 %

Third Quarter Operating Highlights

Commercial Lines

Commercial Lines operating income before taxes was $74.1 million, compared to $65.1 million in the third quarter of 2018. The Commercial Lines combined ratio was 95.2%, compared to 96.6% in the prior-year quarter. Catastrophe losses were $22.0 million, or 3.3 points of the combined ratio. Third quarter 2018 catastrophe losses were $32.5 million, or 5.1 points of the combined ratio.

Third quarter 2019 results included $5.6 million, or 0.8 points, of net favorable prior-year reserve development, driven primarily by continued favorability in workers’ compensation. This compared to net favorable prior-year reserve development of $8.5 million, or 1.3 points, in the third quarter of 2018.

Commercial Lines current accident year combined ratio, excluding catastrophes, was 92.7%, consistent with the prior- year quarter. The current accident year loss and LAE ratio, excluding catastrophes, decreased by 0.2 points to 58.0%, driven primarily by the timing of auto liability loss selections in 2018, partially offset by property losses in other commercial lines (“OCL”), including inland marine in the current quarter.

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Net premiums written were $746.4 million in the quarter, up 5.2% from the prior-year quarter, primarily from Specialty and small commercial. Core Commercialprice increases averaged 5.5% for the third quarter, with retention remaining strongat84.2%.

The following table summarizes premiums and the components of the combined ratio for Commercial Lines:

	Three months ended		Nine months ended
	September 30		September 30
($ in millions)	2019	2018	2019	2018
Net premiums written	$746.4	$709.2	$2,068.5	$2,010.7
Net premiums earned	663.5	640.4	1,974.7	1,904.0
Operating income before taxes	74.1	65.1	227.1	208.3
Loss and LAE ratio	60.5%	62.0%	60.3%	61.0%
Expense ratio(7)	34.7%	34.6%	34.7%	34.9%
Combined ratio	95.2%	96.6%	95.0%	95.9%
Prior-year development ratio	(0.8)%	(1.3)%	(0.9)%	(1.0)%
Catastrophe ratio	3.3 %	5.1 %	2.8 %	5.0 %
Combined ratio, excluding catastrophes	91.9 %	91.5 %	92.2 %	90.9 %
Current accident year combined ratio,     excluding catastrophes	92.7 %	92.8 %	93.1 %	91.9 %

Personal Lines

Personal Lines operating income before taxes was $50.2 million in the quarter, compared to $48.2 million in the third quarter of 2018. The Personal Lines combined ratio was 93.3%, compared to 92.8% in the prior-year quarter. Catastrophe losses were $13.2 million, or 2.9 points of the combined ratio, including favorable development of $0.7 million, or 0.2 points in the quarter. Third quarter 2018 catastrophe losses were $12.4 million, or 2.9 points of the combined ratio.

Third quarter 2019 results included $5.6 million, or 1.2 points, of net unfavorable prior-year reserve development, primarily driven by bodily injury severity in personal auto. This compared to net unfavorable prior-year reserve development of $8.5 million, or 2.0 points, in the third quarter of 2018.

Personal Lines current accident year combined ratio, excluding catastrophe losses, increased by 1.3 points to 89.2%, from 87.9% in the prior-year quarter, driven primarily by the timing of auto liability loss selections in 2018, as well as higher non-catastrophe weather losses in homeowners.

The expense ratio improved by 0.6 points to 27.4% in the third quarter of 2019, attributable to fixed cost leverage from premium growth, the timing of certain expenses, and higher than usual performance-based agency compensation in the prior-year quarter.

Net premiums written were $496.5 million in the quarter, up 6.1% from the prior-year quarter, driven by targeted rate increases, organic new business momentum and healthy retention of 82.8%. Personal Lines average rate increases in the third quarter of 2019 were 5.0%.

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The following table summarizes premiums and components of the combined ratio for Personal Lines:                                                                                                                                                                  

	Three months ended		Nine months ended
	September 30		September 30
($ in millions)	2019	2018	2019	2018
Net premiums written	$496.5	$468.0	$1,410.2	$1,329.4
Net premiums earned	460.6	431.3	1,355.5	1,268.4
Operating income before taxes	50.2	48.2	108.7	109.7
Loss and LAE ratio	65.9%	64.8%	68.7%	67.5%
Expense ratio	27.4%	28.0%	27.4%	27.9%
Combined ratio	93.3%	92.8%	96.1%	95.4%
Prior-year development ratio	1.2 %	2.0 %	1.2 %	1.4 %
Catastrophe ratio	2.9 %	2.9 %	5.8 %	5.8 %
Combined ratio, excluding catastrophes	90.4 %	89.9 %	90.3 %	89.6 %
Current accident year combined ratio,     excluding catastrophes	89.2 %	87.9 %	89.1 %	88.2 %

Investments

Net investment income was $68.8 million for the third quarter of 2019, compared to $66.4 million in the prior-year quarter. The increase was driven by the continued investment of operational cash flows and the investment of the remaining proceeds from the sale of Chaucer, partially offset by lower partnership income and lower new money yields. The average pre-tax earned yield on fixed maturities was 3.55% and 3.60% for the quarters ended September 30, 2019 and 2018, respectively. Total pre-tax earned yield on the investment portfolio for the quarter ended September 30, 2019 was 3.57%, down from 3.68% in the prior-year quarter.

Net realized and unrealized investment gains recognized in earnings in the third quarter of 2019 and 2018 were $14.8 million and $23.0 million, respectively, primarily due to appreciation in the fair value of equity securities.

The Company held $8.4 billion in cash and invested assets on September 30, 2019. Fixed maturities and cash represented 85% of the investment portfolio. Approximately 96% of the Company’s fixed maturity portfolio is rated investment grade. Net unrealized gains on the fixed maturity portfolio at the end of the third quarter of 2019 were $253.8 million before taxes, an increase in fair value of $56.9 million since June 30, 2019. This change was due to lower prevailing interest rates at September 30, 2019.

Shareholders’ Equity

On September 30, 2019, book value per share was $78.01, up 4.9% from June 30, 2019. The increase was driven by net income and unrealized gains from investments. This was partially offset by the payment of regular quarterly dividends.

In addition, the $150 million ASR agreement with Scotiabank was completed on October 28, 2019. Under this agreement, the Company repurchased approximately 1,150,000 shares of common stock, including the final delivery of approximately 200,000 shares on October 30, 2019.

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Earnings Conference Call

The Company will host a conference call to discuss its third quarter results on Thursday, October 31, at 10:00 a.m.E.T.  A PowerPoint slide presentation will accompany the prepared remarks and has been posted on The Hanover’s website.  Interested investors and others can listen to the call and access the presentation through The Hanover's website, located at www.hanover.com, in the “Investors” section. Investors may access the conference call by dialing 1-844-413-3975 in the U.S. and 1-412-317-5458 internationally. Web-cast participants should go to the website 15 minutes early to register, download and install any necessary audio software.  A re-broadcast of the conference call will be available on this website approximately two hours after the call.

About The Hanover

The Hanover Insurance Group, Inc. is the holding Company for several property and casualty insurance companies, which together constitute one of the largest insurance businesses in the United States. The Company provides exceptional insurance solutions through a select group of independent agents and brokers. Together with its agents, The Hanover offers standard and specialized insurance protection for small and mid-sized businesses, as well as for homes, automobiles, and other personal items. For more information, please visit hanover.com

Contact Information

Investors:	Media:
Oksana Lukasheva	Michael F. Buckley	Emily P. Trevallion
Email: olukasheva@hanover.com	Email:  mibuckley@hanover.com	Email:  etrevallion@hanover.com
1-508-855-2063	1-508-855-3099	1-508-855-3263

Definition of Reported Segments

Continuing operations include three operating segments: Commercial Lines, Personal Lines and Other. 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 specialty program business, inland marine, management and professional liability and surety. The Personal Lines segment markets automobile, homeowners and ancillary coverages to individuals and families.The “Other” segment includes Opus Investment Management, Inc., which provides investment management services to institutions, pension funds and other organizations, the operations of the holding company, as well as a block of voluntary pools business in which we have not actively participated since 1995.

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Financial Supplement

The Hanover's third quarter earnings news release and financial supplement are available in the “Investors” section of the Company’s website at hanover.com.

Condensed Financial Statements and Reconciliations

The Hanover Insurance Group, Inc.
Condensed Consolidated Income Statements	Three months ended		Nine months ended
	September 30		September 30
($ in millions)	2019	2018	2019	2018
Revenues
Premiums earned	$1,124.1	$1,071.7	$3,330.2	$3,172.4
Net investment income	68.8	66.4	208.6	198.0
Net realized and unrealized investment gains (losses):
Net realized gains (losses) from sales and other	0.6	(0.2)	1.0	(0.1)
Net change in fair value of equity securities	15.0	23.6	75.3	6.7
Net other-than-temporary impairment losses on       investments recognized in earnings	(0.8)	(0.4)	(1.2)	(2.8)
Total net realized and unrealized investment gains	14.8	23.0	75.1	3.8
Fees and other income	7.0	5.5	18.9	17.3
Total revenues	1,214.7	1,166.6	3,632.8	3,391.5
Losses and expenses
Losses and loss adjustment expenses	705.3	676.4	2,122.6	2,018.5
Amortization of deferred acquisition costs	232.8	224.4	692.8	664.7
Interest expense	9.4	11.2	28.1	33.9
Other operating expenses	136.9	131.9	400.6	393.0
Total losses and expenses	1,084.4	1,043.9	3,244.1	3,110.1
Income from continuing operations before income taxes	130.3	122.7	388.7	281.4
Income tax expense	23.5	18.7	68.7	44.5
Effect of new tax regulations on Chaucer gain on sale	(4.4)	-	1.2	-
Income from continuing operations	111.2	104.0	318.8	236.9
Discontinued operations (net of taxes):
Sale of Chaucer business	6.4	-	(2.6)	-
Income (loss) from Chaucer business	2.1	(3.6)	1.6	30.5
Loss from discontinued life businesses	(0.8)	-	(2.5)	-
Net income	$118.9	$100.4	$315.3	$267.4

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The Hanover Insurance Group, Inc.
Condensed Consolidated Balance Sheets
	September 30	December 31
($ in millions)	2019	2018
Assets
Total investments	$8,239.6	$7,287.4
Cash and cash equivalents	157.6	1,020.7
Premiums and accounts receivable, net	1,298.8	1,176.7
Reinsurance recoverable on paid and unpaid losses and unearned premiums	1,734.2	1,648.6
Other assets	1,091.0	1,105.0
Assets held-for-sale	-	57.4
Assets of discontinued businesses	106.0	103.9
Total assets	$12,627.2	$12,399.7
Liabilities
Loss and loss adjustment expense reserves	$5,550.5	$5,304.1
Unearned premiums	2,456.8	2,277.8
Debt (2018 includes the $125.0 FHLB loan retired on January 2, 2019)	667.8	777.9
Other liabilities (2018 includes the special dividend for an aggregate $193.4             million)	748.1	947.1
Liabilities held-for-sale	-	22.2
Liabilities of discontinued businesses	117.2	115.9
Total liabilities	9,540.4	9,445.0
Total shareholders’ equity	3,086.8	2,954.7
Total liabilities and shareholders’ equity	$12,627.2	$12,399.7

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The following is a reconciliation from operating income to net income⁽⁸⁾:

The Hanover Insurance Group, Inc.
	Three months ended September 30					Nine months ended September 30
	2019			2018		2019		2018
($ In millions, except per share data)	$ Amount	Per Share Diluted	$ Amount		Per Share Diluted	$ Amount	Per Share Diluted	$ Amount	Per Share Diluted
Operating income (loss)
Commercial Lines	$74.1			$65.1		$227.1		$208.3
Personal Lines	50.2			48.2		108.7		109.7
Other	2.0			(0.5)		7.3		(4.6)
Total	126.3			112.8		343.1		313.4
Interest expense	(9.4)			(11.2)		(28.1)		(33.9)
Operating income before income taxes	116.9	$2.91		101.6	$2.36	315.0	$7.71	279.5	$6.49
Income tax expense on operating income	(23.9)	(0.60)		(16.7)	(0.39)	(63.6)	(1.56)	(52.3)	(1.21)
Operating income after income taxes	93.0	2.31		84.9	1.97	251.4	6.15	227.2	5.28
Non-operating items:
Net realized gains (losses) from sales    and other	0.6	0.02		(0.2)	-	1.0	0.02	(0.1)	-
Net change in fair value of equity    securities	15.0	0.37		23.6	0.54	75.3	1.84	6.7	0.15
Net other-than-temporary impairment    losses on investments recognized    in earnings	(0.8)	(0.02)		(0.4)	(0.01)	(1.2)	(0.03)	(2.8)	(0.07)
Other	(1.4)	(0.03)		(1.9)	(0.04)	(1.4)	(0.03)	(1.9)	(0.04)
Income tax benefit (expense) on    non-operating items	4.8	0.12		(2.0)	(0.05)	(6.3)	(0.15)	7.8	0.18
Income from continuing operations,    net of taxes	111.2	2.77		104.0	2.41	318.8	7.80	236.9	5.50
Discontinued operations (net of taxes):
Sale of Chaucer business	6.4	0.16		-	-	(2.6)	(0.06)	-	-
Income (loss) from Chaucer business	2.1	0.05		(3.6)	(0.08)	1.6	0.03	30.5	0.71
Loss from discontinued      life businesses	(0.8)	(0.02)		-	-	(2.5)	(0.06)	-	-
Net income	$118.9	$2.96		$100.4	$2.33	$315.3	$7.71	$267.4	$6.21
Weighted average shares outstanding		40.2			43.1		40.9		43.1

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Forward-Looking Statements and Non-GAAP Financial Measures

Forward-Looking Statements

Certain statements in this document and comments made by management may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, may be forward-looking statements. Words such as, but not limited to, “believes,” “anticipates,” “expects,” “projects,” “forecasts,” “potential,” “should,” “could,” “continue,” “outlook,” and other similar expressions are intended to identify forward-looking statements. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. The Company cautions investors that any such forward-looking statements are estimates, beliefs, expectations and/or projections that involve significant judgement, and that historical results, trends and forward-looking statements are not guarantees and are not necessarily indicative of future performance. Actual results could differ materially from those anticipated.

These statements include, but are not limited to, the Company’s statements regarding:

• The Company’s outlook and its ability to achieve components or the sum of the respective period guidance on its future results of operations including: the combined ratio, excluding or including both prior-year reserve development and/or catastrophe losses; catastrophe losses; growth of net investment income, net premiums written and/or net premiums earned; expense ratio; operating return on adjusted or unadjusted average equity; and/or the effective tax rate;

• Uses of capital for share repurchases, special or ordinary cash dividends, business investments, or otherwise, and outstanding shares in future periods as a result of various share repurchase mechanisms;

• Variability of catastrophe losses due to risk concentrations, changes in weather patterns, terrorism or other events, as well as the complexity in estimating losses from large catastrophe events due to delayed 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;

• Current accident year losses and loss selections (“picks”), excluding catastrophes, and prior accident year loss reserve development patterns, particularly in complex “longer tail” liability lines;

• The confidence or concern that the current level of reserves is adequate and/or sufficient for future claim payments, whether due to losses that have been incurred but not reported, circumstances that delay the reporting of losses, business complexity, adverse judgments or developments with respect to case reserves, the difficulties and uncertainties inherent in projecting future losses from historical data, changes in replacement and medical costs, or other factors;

• Efforts to manage expenses, including the Company’s long-term expense savings targets, while allocating capital to business investment, which is at management’s discretion;

• Mix improvement, underwriting initiatives and pricing segmentation actions, among others, to grow businesses believed to be more profitable or reduce premiums attributable to products believed to be less profitable; offset long-term and/or short-term loss trends due to increased frequency; increased “social inflation” from a more litigious environment, increased property replacement costs, and/or social movements;

• The ability to generate growth in targeted segments through new agency appointments; rate increases (as a result of its market position, agency relationships or otherwise), retention improvements or new business; expansion into new geographies; new product introductions; or otherwise; and  

• Investment returns and the affect of macro-economic interest rate trends on new money yields.

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Additional Risks and Uncertainties

Investors are further cautioned and should consider the risks and uncertainties in the Company’s business that may affect such estimates and future performance that are discussed in the Company’s most recently filed reports on Form 10-K and Form 10-Q and other documents filed by The Hanover Insurance Group, Inc. with the Securities and Exchange Commission (“SEC”) and that are also available at www.hanover.com under “Investors.” These risks and uncertainties include, but are not limited to:

• Adverse claims experience, including those driven by large or increased frequency of catastrophe events (including terrorism) and severe weather;

• The uncertainty in estimating weather-related losses, and the limitations and assumptions used to model other property and casualty losses (particularly with respect to products with longer tails [such as casualty and bodily injury claims] or involving emerging issues related to losses incurred as the result of new lines of business, such as cyber or financial institutions coverage, or reinsurance contracts and reinsurance recoverables), leading to potential adverse development of loss and loss adjustment expense reserves;

• Litigation and the possibility of adverse judicial decisions, including those which expand policy coverage beyond its intended scope or award “bad faith” or other non-contractual damages, and the impact of “social inflation” affecting judicial awards and settlements;

• The ability to increase or maintain insurance rates in line with anticipated loss costs as a result of respective state’s department of insurance mandates to either raise or lower rates;

• Investment impairments, which may be affected by, among other things, the Company’s ability and willingness to hold investment assets until they recover in value, as well as credit and interest rate risk and general financial and economic conditions;

• Disruption of the independent agency channel, including the impact of competition and consolidation in the industry and among agents and brokers;

• Competition, particularly from competitors who have resource and capability advantages;

• The global macroeconomic environment, including inflation, global trade wars and interest rate fluctuations, which, among other things, could result in reductions in market values of fixed maturity investments;

• Adverse state and federal regulation, legislative and/or regulatory actions (including recent significant revisions to Michigan’s automobile personal injury protection system and related litigation, and reviver statues and extension of statute of limitations for sexual molestation claims);

• Financial ratings actions, in particular downgrades to our ratings;

• Operational and technology risks and evolving technological and product innovation, including the risk of cyber-security attacks or breaches on the Company’s systems or resulting in claim payments;

• Uncertainties in estimating indemnification liabilities recorded in conjunction with obligations undertaken in connection with the sale of various businesses and discontinued operations; and

• The ability to collect from reinsurers, and the performance of the discontinued voluntary pools business (including those in the Other segment or in Discontinued Operations).

Investors should not place undue reliance on forward-looking statements, which speak only as of the date they are made, and should understand the risks and uncertainties inherent in or particular to the Company’s business. We do not undertake the responsibility to update or revise our forward-looking statements.

10

Non-GAAP Financial Measures

As discussed on pages 40 and 41 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, the Company uses non-GAAP financial measures as important measures of its operating performance, including operating income, operating income before interest expense and taxes, operating income per share, and components of the combined ratio, both excluding and/or including, catastrophe losses, prior-year reserve development and the expense ratio. Management believes these non-GAAP financial measures are important indications of the Company’s operating performance. The definition of other non-GAAP financial measures and terms can be found in the 2018 Annual Report on pages 72-74.

Operating income and operating income per share are non-GAAP measures. They are defined as net income excluding the after-tax impact of net realized investment gains (losses), fair value changes on equity securities, gains and/or losses on the repayment of debt, other non-operating items, and results from discontinued operations. Net realized investment gains and losses, which include changes in the fair value of equity securities still held, are excluded for purposes of presenting operating income as they are, to a certain extent, determined by interest rates, financial markets and the timing of sales. Operating income also excludes net gains and losses from discontinued operations, restructuring costs, the cumulative affect of accounting changes and certain other items. Operating income is the sum of the segment income from: Commercial Lines, Personal Lines, and Other, after interest expenses and taxes. In reference to one of the Company’s three segments, “operating income” is the segment income before both interest expense and taxes. The Company also uses “operating income per share” (which is after both interest expense and taxes) to compare its operating performance to various external audiences. It is calculated by dividing operating income by the weighted average number of diluted shares of common stock. The Company believes that metrics of operating income and operating income in relation to its three segments provide investors with a valuable measure of the performance of the Company’s continuing businesses because they highlight the portion of net income (loss) attributable to the core operations of the business. Income from continuing operations is the most directly comparable GAAP measure for operating income (and operating income before taxes) and measures of operating income that exclude the effects of catastrophe losses and/or reserve development should not be construed as substitutes for income from continuing operations or net income determined in accordance with GAAP. A reconciliation of operating income to income from continuing operations and net income for the relevant periods is included on page 8 of this press release and in the Financial Supplement.

The Company may also provide measures of operating income and combined ratios that exclude the impact of catastrophe losses (which in all respects include prior accident year catastrophe loss development). A catastrophe is a severe loss, resulting from natural or manmade events, including, but is not limited to, hurricanes, tornadoes, windstorms, earthquakes, hail, severe winter weather, fire, explosions and terrorisms. Due to the unique characteristics of each catastrophe loss, there is an inherent inability to reasonably estimate the timing or loss amount in advance. The Company believes that a separate discussion excluding the effects of catastrophe losses is meaningful to understand the underlying trends and variability of earnings, loss and combined ratio results, among others.

11

Prior accident year reserve development, which can be favorable or unfavorable, represents changes in the Company’s estimate of costs related to claims from prior years. Calendar year loss and loss adjusted expense (“LAE”) ratios determined in accordance with GAAP, excluding prior accident year reserve development, are sometimes referred to as “accident year loss ratios”. The Company believes that a discussion of loss and combined ratios, excluding prior accident year reserve development, is helpful since it provides insight into both estimates of current accident year results and the accuracy of prior-year estimates.

The loss and combined ratios in accordance with GAAP are the most directly comparably GAAP measures for the loss and combined ratio calculated excluding the effects of catastrophe losses and/or reserve development. The presentation of loss and combined ratios calculated excluding the effects of catastrophe losses and/or reserve development should not be construed as substitutes for the loss and/or combined ratios determined in accordance with GAAP.

Operating return on equity (“ROE”) and adjusted operating ROE are non-GAAP measures. See end note (5) for a detailed explanation of how these measures are calculated. Operating ROE is based on non-GAAP operating income and adjusted operating ROE is a measure of operating income as a return on only the portion of shareholders’ equity attributable to continuing operations, and therefore, the “un-deployed equity” attributable to Chaucer is excluded from shareholders’ equity and the related net investment income from the reinvestment of the un-deployed equity is excluded from net and operating income. This eliminates the dilutive impact of any excess capital that would have been included in shareholders’ equity and net investment income included in operating income for the corresponding periods presented. In addition, the portion of shareholder equity attributed to unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is also excluded. The Company believes that these measures are helpful in that they provide insight to the capital used by, and results of, the continuing business exclusive of interest, taxes and other non-operating items, and, in this case of “adjusted operating ROE”, undeployed equity attributed to Chaucer. These measures should not be by construed as substitutes for GAAP ROE, which is based on net income and shareholders’ equity of the entire Company and without adjustments.

12

Endnotes

(1) Operating income (loss) and operating income (loss) per diluted share are non-GAAP measures. Operating income before taxes, as referenced in the results of the business segments, is defined as, with respect to such segment, operating income before taxes and interest expense. These measures are used throughout this document. The reconciliation of operating income and operating income per diluted share to the closest GAAP measures, income from continuing operations and income from continuing operations per diluted share, respectively, is provided on the preceding pages of this press release. See the disclosure on the use of this and other non-GAAP measures under the heading “Forward-Looking Statements and Non-GAAP Financial Measures.”

(2) Core Commercial business provides commercial property and casualty coverages to small and mid-sized businesses in the U.S., generally with annual premiums per policy up to $250,000, primarily through the commercial multiple peril, commercial auto and workers’ compensation lines of business, as reported on pages 8 and 9 of the Third Quarter 2019 Financial Supplement. Price increases in Commercial Lines represent the average change in premium on renewed policies caused by the estimated net effect of base rate changes, discretionary pricing, inflation or changes in policy level exposure or insured risks.

	Three months ended			Three months ended
	September 30, 2019			September 30, 2018
($ in millions)	Core Commercial	Other Commercial	Total	Core Commercial	Other Commercial	Total
Net premiums written	$440.3	$306.1	$746.4	$425.8	$283.4	$709.2
Net premiums earned	$385.4	$278.1	$663.5	$375.8	$264.6	$640.4
	Nine months ended			Nine months ended
	September 30, 2019			September 30, 2018
($ in millions)	Core Commercial	Other Commercial	Total	Core Commercial	Other Commercial	Total
Net premiums written	$1,210.3	$858.2	$2,068.5	$1,184.4	$826.3	$2,010.7
Net premiums earned	$1,153.4	$821.3	$1,974.7	$1,115.5	$788.5	$1,904.0

(3) Price increases in Personal Lines is the estimated cumulative premium effect of approved rate actions applied to policies available for renewal, regardless of whether or not policies are actually renewed. Accordingly, pricing changes do not represent actual increases or decreases realized by the Company.

13

(4) Current accident year loss and LAE ratio, excluding catastrophe losses, is a non-GAAP measure, which is equal to the loss and LAE ratio (“loss ratio”), excluding prior-year reserve development and catastrophe losses. The loss ratio (which includes losses, LAE, catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. The following is a reconciliation of the GAAP loss ratio to the current accident year loss ratio, excluding catastrophe losses:

	Three months ended			Three months ended
	September 30, 2019			September 30, 2018
	Commercial Lines	Personal Lines	Total	Commercial Lines	Personal Lines	Total
Total loss ratio (GAAP)	60.5%	65.9%	62.7%	62.0%	64.8%	63.1%
Less: Catastrophe ratio	3.3%	2.9%	3.1%	5.1%	2.9%	4.2%
Prior-year reserve development ratio	(0.8%)	1.2%	-	(1.3%)	2.0%	-
Current accident year loss and LAE ratio,      excluding catastrophe losses (non-GAAP)	58.0%	61.8%	59.6%	58.2%	59.9%	58.9%
	Nine months ended			Nine months ended
	September 30, 2019			September 30, 2018
	Commercial Lines	Personal Lines	Total	Commercial Lines	Personal Lines	Total
Total loss ratio (GAAP)	60.3%	68.7%	63.7%	61.0%	67.5%	63.6%
Less: Catastrophe ratio	2.8%	5.8%	4.0%	5.0%	5.8%	5.3%
Prior-year reserve development ratio	(0.9%)	1.2%	-	(1.0%)	1.4%	-
Current accident year loss and LAE ratio,      excluding catastrophe losses (non-GAAP)	58.4%	61.7%	59.7%	57.0%	60.3%	58.3%

14

(5) Operating Return on Average Equity and Adjusted Operating Return on Average Equity (“Operating ROE” and “Adjusted Operating ROE”) are non-GAAP measures. Operating ROE is calculated by dividing operating income after tax for the applicable period (see under the heading in this press release “Non-GAAP Financial Measures” and end note (1)), annualized, by the average of beginning, ending, and interim quarters’ (if applicable) total shareholders’ equity, excluding unrealized appreciation (depreciation) on fixed maturity investments, net of tax, for the period presented. Total shareholders’ equity, excluding net unrealized appreciation (depreciation) on fixed maturity investments, net of tax, is also a non-GAAP measure.  Total shareholders’ equity is the most directly comparable GAAP measure, and is reconciled below. For Adjusted Operating ROE, shareholders’ equity is further adjusted for “the un-deployed equity” attributable to the sale of Chaucer in 2018, which is also a non-GAAP measure. Additionally, for the calculation of Adjusted Operating ROE, Operating income, net of tax, is adjusted for the net investment income related to un-deployed equity attributable to Chaucer, net of tax. Operating ROE and Adjusted Operating ROE should not be construed as substitutes for GAAP ROE. See calculations in the table below, including the calculation of ROE using net income and average shareholders’ equity without adjustments:

	Period ended
($ in millions)	June 30	September 30
	2019	2019
Total shareholders' equity (GAAP)	$2,941.1	$3,086.8
Less: net unrealized appreciation (depreciation) on fixed      maturity investments, net of tax	192.3	235.3
Total shareholders' equity, excluding net unrealized      appreciation (depreciation) on fixed maturity      investments, net of tax	2,748.8	2,851.5
Less: un-deployed equity related to Chaucer	(256.6)	(256.6)
Adjusted shareholders' equity, excluding both net unrealized      appreciation (depreciation) on fixed maturity investments,      net of tax, and post-close, un-deployed equity      attributable to Chaucer	$2,492.2	$2,594.9
Average shareholders' equity (GAAP)		$3,014.0
Average shareholders' equity, excluding net unrealized      appreciation (depreciation) on fixed maturity      investments, net of tax		$2,800.2
Average adjusted shareholders' equity, excluding both net      unrealized appreciation (depreciation) on fixed maturity      investments, net of tax, and un-deployed equity      attributable to Chaucer		$2,543.6

15

($ in millions)	Three months ended
	September 30
Net Income ROE (non-GAAP due to annualization of net income)	2019
Net income (GAAP)	$118.9
Annualized net income*	$475.6
Average shareholders' equity (GAAP)	$3,014.0
Return on equity	15.8%
Operating Income ROE (non-GAAP)
Operating income after taxes	$93.0
Annualized operating income, net of tax*	$372.0
Average shareholders' equity, excluding net unrealized      appreciation (depreciation) on fixed maturity      investments, net of tax	$2,800.2
Operating return on equity	13.3%
Adjusted Operating Income ROE (non-GAAP)
Annualized operating income, net of tax*	$372.0
Less: Annualized net investment income related to un-deployed      equity attributable to Chaucer, net of tax**	($7.2)
Annualized operating income, including adjustment for NII related      to un-deployed equity attributable to Chaucer, net of tax	$364.8
Average adjusted shareholders' equity, excluding both net      unrealized appreciation (depreciation) on fixed maturity      investments, net of tax, and un-deployed equity attributable      Chaucer	$2,543.6
Adjusted operating return on equity	14.3%

*For the three months ended September 30, 2019, annualized net and operating income is calculated by multiplying three months ended net income and operating income, respectively, by four.

**Annualized net investment income related to un-deployed equity attributable to Chaucer is calculated by multiplying the un-deployable equity attributable to Chaucer held throughout the quarter by the total annual pre-tax yield, net of tax.

16

(6) Combined ratio, excluding catastrophes, and current accident year combined ratio, excluding catastrophes, are non-GAAP measures. These measures are used throughout this document. The combined ratio (which includes catastrophe losses and prior-year loss reserve development) is the most directly comparable GAAP measure. The following is a reconciliation of the GAAP combined ratio to the combined ratio, excluding catastrophes, and to the current accident year combined ratio, excluding catastrophes losses:  

	Three months ended			Three months ended
	September 30, 2019			September 30, 2018
	Commercial Lines	Personal Lines	Total	Commercial Lines	Personal Lines	Total
Total combined ratio (GAAP)	95.2%	93.3%	94.4%	96.6%	92.8%	95.1%
Less: Catastrophe ratio	3.3%	2.9%	3.1%	5.1%	2.9%	4.2%
Combined ratio, excluding catastrophe losses      (non-GAAP)	91.9%	90.4%	91.3%	91.5%	89.9%	90.9%
Less: Prior-year reserve development ratio	(0.8%)	1.2%	-	(1.3%)	2.0%	-
Current accident year combined ratio,      excluding catastrophe losses (non-GAAP)	92.7%	89.2%	91.3%	92.8%	87.9%	90.9%
	Nine months ended			Nine months ended
	September 30, 2019			September 30, 2018
	Commercial Lines	Personal Lines	Total	Commercial Lines	Personal Lines	Total
Total combined ratio (GAAP)	95.0%	96.1%	95.4%	95.9%	95.4%	95.8%
Less: Catastrophe ratio	2.8%	5.8%	4.0%	5.0%	5.8%	5.3%
Combined ratio, excluding catastrophe losses      (non-GAAP)	92.2%	90.3%	91.4%	90.9%	89.6%	90.5%
Less: Prior-year reserve development ratio	(0.9%)	1.2%	-	(1.0%)	1.4%	-
Current accident year combined ratio,      excluding catastrophe losses (non-GAAP)	93.1%	89.1%	91.4%	91.9%	88.2%	90.5%

(7) Here, and later in this document, the expense ratio is reduced by installment and other fee revenues for purposes of the ratio calculation.

(8) The separate financial information of each operating 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 operating segments without consideration of interest expense on debt and on a pre-tax basis.

17

EX-99.2

Exhibit 99.2

FINANCIAL SUPPLEMENT
THIRD QUARTER 2019

THE HANOVER INSURANCE GROUP
FINANCIAL SUPPLEMENT
TABLE OF CONTENTS
Business Descriptions...................................................................................................	1
Financial Highlights........................................................................................................	2
Consolidated Financial Statements
Income Statements....................................................................................................	3
Balance Sheets..........................................................................................................	4
GAAP Underwriting Results
Consolidated..............................................................................................................	5-7
Commercial Lines.....................................................................................................	8-10
Personal Lines...........................................................................................................	11-13
Investments
Net Investment Income and Yields...........................................................................	14
Investment Portfolio...................................................................................................	15
Credit Quality and Duration of Fixed Maturities.....................................................	16
Top 10 Corporate and Municipal Fixed Maturity Holdings....................................	17
Reconciliation of Operating Income to Net Income................................................	18
Other Information
Non-GAAP Financial Measures...............................................................................	19
Corporate Information...............................................................................................	20
Market and Dividend Information.............................................................................	20
Financial Strength and Debt Ratings.......................................................................	20

THE HANOVER INSURANCE GROUP

BASIS OF PRESENTATION

BUSINESS DESCRIPTIONS

COMMERCIAL LINES

Commercial multiple peril coverage insures businesses against third party liability from accidents occurring on their premises or arising out of their operations, such as injuries sustained from products sold. It also insures business property for damage, such as that caused by fire, wind, hail, water damage (except for flooding), theft and vandalism.

Commercial automobile coverage insures businesses against losses incurred from personal bodily injury, bodily injury to third parties, property damage to an insured’s vehicle, and property damage to other vehicles and property.

Workers’ compensation coverage insures employers against employee medical and indemnity claims resulting from injuries related to work. Workers’ compensation policies are often written in conjunction with other commercial policies.

Other Commercial Lines is comprised of inland marine, which insures businesses against physical losses to property, such as contractor’s equipment, builders’ risk and goods in transit. We also offer underwriting and managing of program business, including to under-served markets where there are specialty coverage or risk management needs. Other Commercial Lines also includes bonds, which provides businesses with contract surety coverage in the event of performance or payment claims, and commercial surety coverage related to fiduciary or regulatory obligations. Also included in Other Commercial Lines coverages are umbrella, general liability, fire, specialty property, and professional and management liability.

PERSONAL LINES

Personal automobile coverage insures individuals against losses incurred from personal bodily injury, bodily injury to third parties, property damage to an insured's vehicle, and property damage to other vehicles and other property.

Homeowners coverage insures individuals for losses to their residences and personal property, such as those caused by fire, wind, hail, water damage (except for flooding), theft and vandalism, and against third party liability claims.

Other Personal Lines are comprised of personal inland marine (jewelry, art, etc.), umbrella, fire, personal watercraft, earthquake and other miscellaneous coverages.

OTHER

Included in Other are Opus, which provides investment advisory services to affiliates and also manages assets for unaffiliated institutions such as insurance companies, retirement plans and foundations; earnings on holding company assets; and a discontinued voluntary pools business.

1

THE HANOVER INSURANCE GROUP
FINANCIAL HIGHLIGHTS
		Q3				Q4				Q1				Q2				Q3				Sep-YTD			Sep-YTD
(In millions, except earnings per share)		2018				2018				2019				2019				2019				2018			2019
PREMIUMS
Gross premiums written	$		1,296.7		$		1,161.6		$		1,226.3		$		1,271.5		$		1,385.8		$		3,682.1	$		3,883.6
Net premiums written			1,177.2				1,044.7				1,098.0				1,137.8				1,242.9				3,340.1			3,478.7
Net premiums earned			1,071.7				1,082.0				1,095.1				1,111.0				1,124.1				3,172.4			3,330.2
EARNINGS
Operating income before interest and taxes	$		112.8		$		93.1		$		109.8		$		107.0		$		126.3		$		313.4	$		343.1
Operating income after taxes			84.9				64.9				80.7				77.7				93.0				227.2			251.4
Income from continuing operations			104.0				2.1				122.6				85.0				111.2				236.9			318.8
Net income			100.4				123.6				122.4				74.0				118.9				267.4			315.3
PER SHARE DATA (DILUTED)
Operating income after taxes	$		1.97		$		1.51		$		1.96		$		1.88		$		2.31		$		5.28	$		6.15
Income from continuing operations			2.41				0.05				2.98				2.06				2.77				5.50			7.80
Net income			2.33				2.88				2.97				1.79				2.96				6.21			7.71
Weighted average shares outstanding			43.1				42.9				41.2				41.2				40.2				43.1			40.9
BALANCE SHEET
		September 30				December 31				March 31				June 30				September 30
(In millions, except per share data)		2018				2018				2019				2019				2019
Total assets	$		15,624.3		$		12,399.7		$		11,983.4		$		12,159.9		$		12,627.2
Total loss and loss adjustment expense reserves			5,188.9				5,304.1				5,381.6				5,478.5				5,550.5
Total shareholders' equity			2,982.4				2,954.7				2,927.0				2,941.1				3,086.8
Total shareholders' equity, excluding net unrealized appreciation
depreciation on fixed maturity investments, net of tax			3,056.4				2,981.9				2,836.3				2,748.8				2,851.5
U.S. Property and Casualty Companies
Statutory surplus	$		2,171.2		$		2,172.5		$		2,301.1		$		2,249.7		$		2,347.8
Premium to surplus ratio		1.99:1				2.02:1				1.92:1				1.98:1				1.93:1
Book value per share	$		70.40		$		69.81		$		71.95		$		74.39		$		78.01
Book value per share, excluding net unrealized appreciation
depreciation on fixed maturity investments, net of tax	$		72.14		$		70.46		$		69.72		$		69.52		$		72.06
Tangible book value per share (total book value excluding goodwill
and intangibles)	$		63.90		$		64.71		$		66.67		$		69.30		$		72.94
Shares outstanding			42.4				42.3				40.7				39.6				39.6
Total debt/equity			26.1	%			26.3	%			22.3	%			22.2	%			21.6	%
Total debt/total capital			20.7	%			20.8	%			18.2	%			18.2	%			17.8	%

2

THE HANOVER INSURANCE GROUP
CONSOLIDATED INCOME STATEMENTS
	Three Months ended September 30											Nine Months ended September 30
(In millions)		2019				2018			% Change				2019				2018			% Change
REVENUES
Premiums earned	$		1,124.1		$		1,071.7			4.9		$		3,330.2		$		3,172.4			5.0
Net investment income			68.8				66.4			3.6				208.6				198.0			5.4
Net realized and unrealized investment gains (losses):
Net realized gains (losses) from sales and other			0.6				(0.2	)	N/M					1.0				(0.1	)	N/M
Net change in fair value of equity securities			15.0				23.6			(36.4	)			75.3				6.7		N/M
Net other-than-temporary impairment losses on investments
recognized in earnings			(0.8	)			(0.4	)		100.0				(1.2	)			(2.8	)		(57.1	)
Total net realized and unrealized investment gains			14.8				23.0			(35.7	)			75.1				3.8		N/M
Fees and other income			7.0				5.5			27.3				18.9				17.3			9.2
Total revenues			1,214.7				1,166.6			4.1				3,632.8				3,391.5			7.1
LOSSES AND EXPENSES
Losses and loss adjustment expenses			705.3				676.4			4.3				2,122.6				2,018.5			5.2
Amortization of deferred acquisition costs			232.8				224.4			3.7				692.8				664.7			4.2
Interest expense			9.4				11.2			(16.1	)			28.1				33.9			(17.1	)
Other operating expenses			136.9				131.9			3.8				400.6				393.0			1.9
Total losses and expenses			1,084.4				1,043.9			3.9				3,244.1				3,110.1			4.3
Income from continuing operations before income taxes			130.3				122.7			6.2				388.7				281.4			38.1
Income tax expense			23.5				18.7			25.7				68.7				44.5			54.4
Effect of new tax regulations on Chaucer gain on sale			(4.4	)			-		N/M					1.2				-		N/M
		\
Income from continuing operations			111.2				104.0			6.9				318.8				236.9			34.6
Discontinued operations (net of taxes):
									-
Sale of Chaucer business			6.4				-		N/M					(2.6	)			-		N/M
Income (loss) from Chaucer business			2.1				(3.6	)	N/M					1.6				30.5		N/M
Loss from discontinued life businesses			(0.8	)			-		N/M					(2.5	)			-		N/M
Net income	$		118.9		$		100.4			18.4		$		315.3		$		267.4			17.9

3

THE HANOVER INSURANCE GROUP
CONSOLIDATED BALANCE SHEETS
		September 30				December 31
(In millions, except per share data)		2019				2018			% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $6,692.5 and $6,245.9)	$		6,946.3		$		6,161.5			12.7
Equity securities, at fair value			570.8				464.4			22.9
Other investments			722.5				661.5			9.2
Total investments			8,239.6				7,287.4			13.1
Cash and cash equivalents			157.6				1,020.7			(84.6	)
Accrued investment income			53.0				53.2			(0.4	)
Premiums and accounts receivable, net			1,298.8				1,176.7			10.4
Reinsurance recoverable on paid and unpaid losses and unearned premiums			1,734.2				1,648.6			5.2
Deferred acquisition costs			474.9				450.8			5.3
Deferred income tax asset			-				50.6		N/M
Goodwill			178.8				178.8		-
Other assets			384.3				371.6			3.4
Assets held-for-sale			-				57.4		N/M
Assets of discontinued businesses			106.0				103.9			2.0
Total assets	$		12,627.2		$		12,399.7			1.8
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Loss and loss adjustment expense reserves	$		5,550.5		$		5,304.1			4.6
Unearned premiums			2,456.8				2,277.8			7.9
Expenses and taxes payable			649.0				909.8			(28.7	)
Deferred income tax liability			46.3				-		N/M
Reinsurance premiums payable			52.8				37.3			41.6
Debt			667.8				777.9			(14.2	)
Liabilities held-for-sale			-				22.2		N/M
Liabilities of discontinued businesses			117.2				115.9			1.1
Total liabilities			9,540.4				9,445.0			1.0
SHAREHOLDERS' EQUITY
Preferred stock, par value $0.01 per share;
20.0 million shares authorized; none issued			-				-		-
Common stock, par value $0.01 per share; 300.0 million shares
authorized; 60.5 million shares issued			0.6				0.6		-
Additional paid-in capital			1,837.0				1,871.8			(1.9	)
Accumulated other comprehensive income (loss)			153.5				(116.5	)	N/M
Retained earnings			2,423.1				2,182.3			11.0
Treasury stock at cost (20.9 million and 18.2 million shares)			(1,327.4	)			(983.5	)		35.0
Total shareholders' equity			3,086.8				2,954.7			4.5
Total liabilities and shareholders' equity	$		12,627.2		$		12,399.7			1.8

4

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
CONSOLIDATED
Three Months ended September 30
		2019																2018
		Commercial				Personal												Commercial				Personal
(In millions, except percentage data)		Lines				Lines				Other				Total				Lines				Lines				Other				Total
Gross premiums written	$		858.2		$		527.6		$		-		$		1,385.8		$		801.6		$		495.1		$		-		$		1,296.7
Net premiums written	$		746.4		$		496.5		$		-		$		1,242.9		$		709.2		$		468.0		$		-		$		1,177.2
Net premiums earned	$		663.5		$		460.6		$		-		$		1,124.1		$		640.4		$		431.3		$		-		$		1,071.7
Losses and LAE:
Current accident year, excluding catastrophe losses			385.0				284.7				0.1				669.8				372.8				258.4				-				631.2
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			(5.6	)			5.6				0.3				0.3				(8.5	)			8.5				0.3				0.3
Current accident year catastrophe losses			21.3				13.9				-				35.2				33.2				12.4				-				45.6
Prior accident year unfavorable (favorable) catastrophe loss development			0.7				(0.7	)			-				-				(0.7	)			-				-				(0.7	)
Total losses and LAE			401.4				303.5				0.4				705.3				396.8				279.3				0.3				676.4
Amortization of deferred acquisition costs and other underwriting expenses			231.7				128.3				-				360.0				222.8				123.2				0.7				346.7
											-
GAAP underwriting profit (loss)			30.4				28.8				(0.4	)			58.8				20.8				28.8				(1.0	)			48.6
											-
Net investment income			44.1				19.6				5.1				68.8				45.0				18.2				3.2				66.4
Other income			2.7				3.1				1.2				7.0				2.0				2.9				0.6				5.5
Other operating expenses			(3.1	)			(1.3	)			(3.9	)			(8.3	)			(2.7	)			(1.7	)			(3.3	)			(7.7	)
Operating income (loss) before income taxes	$		74.1		$		50.2		$		2.0		$		126.3		$		65.1		$		48.2		$		(0.5	)	$		112.8
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			58.0	%			61.8	%		N/M					59.6	%			58.2	%			59.9	%		N/M					58.9	%
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			(0.8	)%			1.2	%		N/M					-				(1.3	)%			2.0	%		N/M					-
Current accident year catastrophe losses			3.2	%			3.1	%		N/M					3.1	%			5.2	%			2.9	%		N/M					4.3	%
Prior accident year unfavorable (favorable) catastrophe loss development			0.1	%			(0.2	)%		N/M					-				(0.1	)%			-			N/M					(0.1	)%
Total loss and LAE ratio			60.5	%			65.9	%		N/M					62.7	%			62.0	%			64.8	%		N/M					63.1	%
Expense ratio			34.7	%			27.4	%		N/M					31.7	%			34.6	%			28.0	%		N/M					32.0	%
Combined ratio			95.2	%			93.3	%		N/M					94.4	%			96.6	%			92.8	%		N/M					95.1	%

5

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
CONSOLIDATED
Nine Months ended September 30
		2019																2018
		Commercial				Personal												Commercial				Personal
(In millions, except percentage data)		Lines				Lines				Other				Total				Lines				Lines				Other				Total
Gross premiums written	$		2,387.2		$		1,496.4		$		-		$		3,883.6		$		2,278.3		$		1,403.8		$		-		$		3,682.1
Net premiums written	$		2,068.5		$		1,410.2		$		-		$		3,478.7		$		2,010.7		$		1,329.4		$		-		$		3,340.1
Net premiums earned	$		1,974.7		$		1,355.5		$		-		$		3,330.2		$		1,904.0		$		1,268.4		$		-		$		3,172.4
Losses and LAE:
Current accident year, excluding catastrophe losses			1,151.7				836.4				0.1				1,988.2				1,084.2				764.4				-				1,848.6
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			(17.1	)			16.4				0.9				0.2				(18.1	)			17.9				0.9				0.7
Current accident year catastrophe losses			73.5				81.2				-				154.7				102.9				74.1				-				177.0
Prior accident year favorable catastrophe loss development			(18.1	)			(2.4	)			-				(20.5	)			(7.6	)			(0.2	)			-				(7.8	)
Total losses and LAE			1,190.0				931.6				1.0				2,122.6				1,161.4				856.2				0.9				2,018.5
Amortization of deferred acquisition costs and other underwriting expenses			688.5				378.5				-				1,067.0				668.0				360.9				2.2				1,031.1
											-
GAAP underwriting profit (loss)			96.2				45.4				(1.0	)			140.6				74.6				51.3				(3.1	)			122.8
Net investment income			132.8				59.0				16.8				208.6				135.1				54.7				8.2				198.0
Other income			6.7				8.6				3.6				18.9				6.6				8.7				2.0				17.3
Other operating expenses			(8.6	)			(4.3	)			(12.1	)			(25.0	)			(8.0	)			(5.0	)			(11.7	)			(24.7	)
Operating income (loss) before income taxes	$		227.1		$		108.7		$		7.3		$		343.1		$		208.3		$		109.7		$		(4.6	)	$		313.4
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			58.4	%			61.7	%		N/M					59.7	%			57.0	%			60.3	%		N/M					58.3	%
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			(0.9	)%			1.2	%		N/M					-				(1.0	)%			1.4	%		N/M					-
Current accident year catastrophe losses			3.7	%			6.0	%		N/M					4.6	%			5.4	%			5.8	%		N/M					5.5	%
Prior accident year favorable catastrophe loss development			(0.9	)%			(0.2	)%		N/M					(0.6	)%			(0.4	)%			-			N/M					(0.2	)%
Total loss and LAE ratio			60.3	%			68.7	%		N/M					63.7	%			61.0	%			67.5	%		N/M					63.6	%
Expense ratio			34.7	%			27.4	%		N/M					31.7	%			34.9	%			27.9	%		N/M					32.2	%
Combined ratio			95.0	%			96.1	%		N/M					95.4	%			95.9	%			95.4	%		N/M					95.8	%

6

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING INFORMATION AND RELATED RATIOS
CONSOLIDATED
		Q3				Q4				Q1				Q2				Q3				Sep-YTD				Sep-YTD
(In millions, except percentage data)		2018				2018				2019				2019				2019				2018				2019
Gross premiums written	$		1,296.7		$		1,161.6		$		1,226.3		$		1,271.5		$		1,385.8		$		3,682.1		$		3,883.6
Net premiums written	$		1,177.2		$		1,044.7		$		1,098.0		$		1,137.8		$		1,242.9		$		3,340.1		$		3,478.7
Net premiums earned	$		1,071.7		$		1,082.0		$		1,095.1		$		1,111.0		$		1,124.1		$		3,172.4		$		3,330.2
Losses and LAE:
Current accident year, excluding catastrophe losses			631.2				656.4				659.9				658.5				669.8				1,848.6				1,988.2
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			0.3				(0.3	)			0.3				(0.4	)			0.3				0.7				0.2
Current accident year catastrophe losses			45.6				51.5				52.9				66.6				35.2				177.0				154.7
Prior accident year favorable catastrophe loss development			(0.7	)			(1.5	)			(13.5	)			(7.0	)			-				(7.8	)			(20.5	)
Total losses and LAE			676.4				706.1				699.6				717.7				705.3				2,018.5				2,122.6
Amortization of deferred acquisition costs and other underwriting expenses			346.7				351.3				353.4				353.6				360.0				1,031.1				1,067.0
GAAP underwriting profit	$		48.6		$		24.6		$		42.1		$		39.7		$		58.8		$		122.8		$		140.6
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			58.9	%			60.7	%			60.3	%			59.2	%			59.6	%			58.3	%			59.7	%
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			-				-				-				-				-				-				-
Current accident year catastrophe losses			4.3	%			4.7	%			4.8	%			6.0	%			3.1	%			5.5	%			4.6	%
Prior accident year favorable catastrophe loss development			(0.1	)%			(0.1	)%			(1.2	)%			(0.6	)%			-				(0.2	)%			(0.6	)%
Total loss and LAE ratio			63.1	%			65.3	%			63.9	%			64.6	%			62.7	%			63.6	%			63.7	%
Expense ratio			32.0	%			32.1	%			31.9	%			31.5	%			31.7	%			32.2	%			31.7	%
Combined ratio			95.1	%			97.4	%			95.8	%			96.1	%			94.4	%			95.8	%			95.4	%
Combined ratio, excluding catastrophe losses			90.9	%			92.8	%			92.2	%			90.7	%			91.3	%			90.5	%			91.4	%
Current accident year combined ratio, excluding catastrophe losses			90.9	%			92.8	%			92.2	%			90.7	%			91.3	%			90.5	%			91.4	%

7

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
COMMERCIAL LINES
Three Months ended September 30
	2019																				2018
		Multiple								Workers'												Multiple								Workers'
(In millions, except percentage data)		Peril				Auto				Comp				Other				Total				Peril				Auto				Comp				Other				Total
Net premiums written	$		265.2		$		92.4		$		82.7		$		306.1		$		746.4		$		251.8		$		92.3		$		81.7		$		283.4		$		709.2
Net premiums earned	$		221.7		$		84.3		$		79.4		$		278.1		$		663.5		$		213.1		$		84.4		$		78.3		$		264.6		$		640.4
Losses and LAE:
Current accident year, excluding catastrophe losses			125.3				57.0				48.6				154.1				385.0				119.8				65.3				48.9				138.8				372.8
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			(0.3	)			1.0				(5.0	)			(1.3	)			(5.6	)			(1.4	)			5.3				(8.0	)			(4.4	)			(8.5	)
Current accident year catastrophe losses			17.2				0.4				-				3.7				21.3				20.7				0.6				-				11.9				33.2
Prior accident year unfavorable (favorable) catastrophe loss development			(0.9	)			(0.1	)			-				1.7				0.7				0.7				-				-				(1.4	)			(0.7	)
Total losses and LAE			141.3				58.3				43.6				158.2				401.4				139.8				71.2				40.9				144.9				396.8
Amortization of deferred acquisition costs and other underwriting expenses																			231.7																				222.8
GAAP underwriting profit																			30.4																				20.8
Net investment income																			44.1																				45.0
Other income																			2.7																				2.0
Other operating expenses																			(3.1	)																			(2.7	)
Operating income before income taxes																	$		74.1																		$		65.1
																														.
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			56.4	%			67.6	%			61.2	%			55.5	%			58.0	%			56.3	%			77.4	%			62.4	%			52.5	%			58.2	%
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			(0.1	)%			1.2	%			(6.3	)%			(0.5	)%			(0.8	)%			(0.7	)%			6.3	%			(10.2	)%			(1.7	)%			(1.3	)%
Current accident year catastrophe losses			7.8	%			0.5	%			-				1.3	%			3.2	%			9.7	%			0.7	%			-				4.5	%			5.2	%
Prior accident year unfavorable (favorable) catastrophe loss development			(0.4	)%			(0.1	)%			-				0.6	%			0.1	%			0.3	%			-				-				(0.5	)%			(0.1	)%
Total loss and LAE ratio			63.7	%			69.2	%			54.9	%			56.9	%			60.5	%			65.6	%			84.4	%			52.2	%			54.8	%			62.0	%
Expense ratio																			34.7	%																			34.6	%
Combined ratio																			95.2	%																			96.6	%
Change in policies in force			6.7	%			(16.3	)%			10.3	%			1.4	%			2.5	%			6.5	%			1.4	%			9.6	%			4.9	%			5.7	%
Retention			87.2	%			75.8	%			82.1	%		N/M					84.2	%			86.0	%			83.6	%			77.6	%		N/M					84.2	%

8

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
COMMERCIAL LINES
Nine Months ended September 30
	2019																				2018
		Multiple								Workers'												Multiple								Workers'
(In millions, except percentage data)		Peril				Auto				Comp				Other				Total				Peril				Auto				Comp				Other				Total
Net premiums written	$		699.5		$		256.1		$		254.7		$		858.2		$		2,068.5		$		669.1		$		265.9		$		249.4		$		826.3		$		2,010.7
Net premiums earned	$		660.0		$		253.8		$		239.6		$		821.3		$		1,974.7		$		628.2		$		249.8		$		237.5		$		788.5		$		1,904.0
Losses and LAE:
Current accident year, excluding catastrophe losses			369.8				175.2				145.3				461.4				1,151.7				350.6				177.0				146.4				410.2				1,084.2
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			(5.3	)			5.0				(15.7	)			(1.1	)			(17.1	)			(3.1	)			13.2				(14.2	)			(14.0	)			(18.1	)
Current accident year catastrophe losses			53.3				1.7				-				18.5				73.5				63.7				2.7				-				36.5				102.9
Prior accident year favorable catastrophe loss development			(11.5	)			(0.4	)			-				(6.2	)			(18.1	)			(4.7	)			-				-				(2.9	)			(7.6	)
Total losses and LAE			406.3				181.5				129.6				472.6				1,190.0				406.5				192.9				132.2				429.8				1,161.4
Amortization of deferred acquisition costs and other underwriting expenses																			688.5																				668.0
GAAP underwriting profit																			96.2																				74.6
Net investment income																			132.8																				135.1
Other income																			6.7																				6.6
Other operating expenses																			(8.6	)																			(8.0	)
Operating income before income taxes																	$		227.1																		$		208.3
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			56.1	%			69.0	%			60.7	%			56.1	%			58.4	%			55.8	%			70.8	%			61.7	%			52.0	%			57.0	%
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			(0.8	)%			2.0	%			(6.6	)%			(0.1	)%			(0.9	)%			(0.5	)%			5.3	%			(6.0	)%			(1.8	)%			(1.0	)%
Current accident year catastrophe losses			8.0	%			0.7	%			-				2.3	%			3.7	%			10.1	%			1.1	%			-				4.7	%			5.4	%
Prior accident year favorable catastrophe loss development			(1.7	)%			(0.2	)%			-				(0.8	)%			(0.9	)%			(0.7	)%			-				-				(0.4	)%			(0.4	)%
Total loss and LAE ratio			61.6	%			71.5	%			54.1	%			57.5	%			60.3	%			64.7	%			77.2	%			55.7	%			54.5	%			61.0	%
Expense ratio																			34.7	%																			34.9	%
Combined ratio																			95.0	%																			95.9	%
Change in policies in force			6.7	%			(16.3	)%			10.3	%			1.4	%			2.5	%			6.5	%			1.4	%			9.6	%			4.9	%			5.7	%
Retention			86.1	%			76.3	%			81.6	%		N/M					83.2	%			86.3	%			84.0	%			79.7	%		N/M					84.6	%

9

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING INFORMATION AND RELATED RATIOS
COMMERCIAL LINES
		Q3				Q4				Q1				Q2				Q3				Sep-YTD				Sep-YTD
(In millions, except percentage data)		2018				2018				2019				2019				2019				2018				2019
Gross premiums written	$		801.6		$		689.8		$		779.5		$		749.5		$		858.2		$		2,278.3		$		2,387.2
Net premiums written	$		709.2		$		600.0		$		677.4		$		644.7		$		746.4		$		2,010.7		$		2,068.5
Net premiums earned	$		640.4		$		644.4		$		652.4		$		658.8		$		663.5		$		1,904.0		$		1,974.7
Losses and LAE:
Current accident year, excluding catastrophe losses			372.8				375.9				384.0				382.7				385.0				1,084.2				1,151.7
Prior accident year favorable reserve development, excluding catastrophe losses			(8.5	)			(16.0	)			(7.5	)			(4.0	)			(5.6	)			(18.1	)			(17.1	)
Current accident year catastrophe losses			33.2				46.2				23.9				28.3				21.3				102.9				73.5
Prior accident year unfavorable (favorable) catastrophe loss development			(0.7	)			0.8				(13.5	)			(5.3	)			0.7				(7.6	)			(18.1	)
Total losses and LAE			396.8				406.9				386.9				401.7				401.4				1,161.4				1,190.0
Amortization of deferred acquisition costs and other underwriting expenses			222.8				227.1				228.8				228.0				231.7				668.0				688.5
			-
GAAP underwriting profit	$		20.8		$		10.4		$		36.7		$		29.1		$		30.4		$		74.6		$		96.2
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			58.2	%			58.3	%			58.8	%			58.1	%			58.0	%			57.0	%			58.4	%
Prior accident year favorable reserve development, excluding catastrophe losses			(1.3	)%			(2.5	)%			(1.1	)%			(0.6	)%			(0.8	)%			(1.0	)%			(0.9	)%
Current accident year catastrophe losses			5.2	%			7.2	%			3.7	%			4.3	%			3.2	%			5.4	%			3.7	%
Prior accident year unfavorable (favorable) catastrophe loss development			(0.1	)%			0.1	%			(2.1	)%			(0.8	)%			0.1	%			(0.4	)%			(0.9	)%
Total loss and LAE ratio			62.0	%			63.1	%			59.3	%			61.0	%			60.5	%			61.0	%			60.3	%
Expense ratio			34.6	%			35.1	%			34.9	%			34.4	%			34.7	%			34.9	%			34.7	%
Combined ratio			96.6	%			98.2	%			94.2	%			95.4	%			95.2	%			95.9	%			95.0	%
Combined ratio, excluding catastrophe losses			91.5	%			90.9	%			92.6	%			91.9	%			91.9	%			90.9	%			92.2	%
Current accident year combined ratio, excluding catastrophe losses			92.8	%			93.4	%			93.7	%			92.5	%			92.7	%			91.9	%			93.1	%

10

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
PERSONAL LINES
Three Months ended September 30
	2019																2018
(In millions, except percentage data)		Auto				Home				Other				Total				Auto				Home				Other				Total
Net premiums written	$		308.2		$		174.3		$		14.0		$		496.5		$		291.4		$		165.0		$		11.6		$		468.0
Net premiums earned	$		292.0		$		156.7		$		11.9		$		460.6		$		273.7		$		147.6		$		10.0		$		431.3
Losses and LAE:
Current accident year, excluding catastrophe losses			203.7				75.8				5.2				284.7				185.8				69.5				3.1				258.4
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			4.7				1.7				(0.8	)			5.6				3.0				4.0				1.5				8.5
Current accident year catastrophe losses			1.6				11.7				0.6				13.9				1.2				11.1				0.1				12.4
Prior accident year unfavorable (favorable) catastrophe loss development			(0.1	)			(0.6	)			-				(0.7	)			(0.1	)			0.1				-				-
Total losses and LAE			209.9				88.6				5.0				303.5				189.9				84.7				4.7				279.3
Amortization of deferred acquisition costs and other underwriting expenses															128.3																123.2
GAAP underwriting profit															28.8																28.8
Net investment income															19.6																18.2
Other income															3.1																2.9
Other operating expenses															(1.3	)															(1.7	)
Operating income before income taxes													$		50.2														$		48.2
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			69.8	%			48.3	%			43.7	%			61.8	%			67.9	%			47.1	%			31.0	%			59.9	%
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			1.6	%			1.1	%			(6.7	)%			1.2	%			1.1	%			2.7	%			15.0	%			2.0	%
Current accident year catastrophe losses			0.5	%			7.5	%			5.0	%			3.1	%			0.4	%			7.5	%			1.0	%			2.9	%
Prior accident year unfavorable (favorable) catastrophe loss development			-				(0.4	)%			-				(0.2	)%			-				0.1	%			-				-
Total loss and LAE ratio			71.9	%			56.5	%			42.0	%			65.9	%			69.4	%			57.4	%			47.0	%			64.8	%
Expense ratio															27.4	%															28.0	%
Combined ratio															93.3	%															92.8	%
Change in policies in force			1.9	%			2.4	%			61.9	%			4.1	%			2.8	%			3.3	%			13.3	%			3.3	%
Retention			82.9	%			82.4	%		N/M					82.8	%			84.5	%			83.5	%		N/M					84.0	%

11

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
PERSONAL LINES
Nine Months ended September 30
	2019																2018
(In millions, except percentage data)		Auto				Home				Other				Total				Auto				Home				Other				Total
Net premiums written	$		895.3		$		477.0		$		37.9		$		1,410.2		$		847.1		$		451.0		$		31.3		$		1,329.4
Net premiums earned	$		858.7		$		462.7		$		34.1		$		1,355.5		$		802.0		$		436.8		$		29.6		$		1,268.4
Losses and LAE:
Current accident year, excluding catastrophe losses			599.3				223.3				13.8				836.4				548.4				204.7				11.3				764.4
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			13.9				2.7				(0.2	)			16.4				9.6				6.8				1.5				17.9
Current accident year catastrophe losses			4.5				75.5				1.2				81.2				5.5				68.1				0.5				74.1
Prior accident year unfavorable (favorable) catastrophe loss development			(0.2	)			(2.2	)			-				(2.4	)			(0.4	)			-				0.2				(0.2	)
Total losses and LAE			617.5				299.3				14.8				931.6				563.1				279.6				13.5				856.2
Amortization of deferred acquisition costs and other underwriting expenses															378.5																360.9
GAAP underwriting profit															45.4																51.3
Net investment income															59.0																54.7
Other income															8.6																8.7
Other operating expenses															(4.3	)															(5.0	)
Operating income before income taxes													$		108.7														$		109.7
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			69.8	%			48.3	%			40.5	%			61.7	%			68.4	%			46.8	%			38.1	%			60.3	%
Prior accident year unfavorable (favorable) reserve development, excluding catastrophe losses			1.6	%			0.6	%			(0.6	)%			1.2	%			1.2	%			1.6	%			5.1	%			1.4	%
Current accident year catastrophe losses			0.5	%			16.3	%			3.5	%			6.0	%			0.6	%			15.6	%			1.7	%			5.8	%
Prior accident year unfavorable (favorable) catastrophe loss development			-				(0.5	)%			-				(0.2	)%			-				-				0.7	%			-
Total loss and LAE ratio			71.9	%			64.7	%			43.4	%			68.7	%			70.2	%			64.0	%			45.6	%			67.5	%
Expense ratio															27.4	%															27.9	%
Combined ratio															96.1	%															95.4	%
Change in policies in force			1.9	%			2.4	%			61.9	%			4.1	%			2.8	%			3.3	%			13.3	%			3.3	%
Retention			83.7	%			82.8	%		N/M					83.4	%			85.2	%			84.1	%		N/M					84.6	%

12

THE HANOVER INSURANCE GROUP
GAAP UNDERWRITING INFORMATION AND RELATED RATIOS
PERSONAL LINES
		Q3				Q4				Q1				Q2				Q3				Sep-YTD				Sep-YTD
(In millions, except percentage data)		2018				2018				2019				2019				2019				2018				2019
Gross premiums written	$		495.1		$		471.8		$		446.8		$		522.0		$		527.6		$		1,403.8		$		1,496.4
Net premiums written	$		468.0		$		444.7		$		420.6		$		493.1		$		496.5		$		1,329.4		$		1,410.2
Net premiums earned	$		431.3		$		437.6		$		442.7		$		452.2		$		460.6		$		1,268.4		$		1,355.5
Losses and LAE:
Current accident year, excluding catastrophe losses			258.4				280.4				275.9				275.8				284.7				764.4				836.4
Prior accident year unfavorable reserve development, excluding catastrophe losses			8.5				15.4				7.5				3.3				5.6				17.9				16.4
Current accident year catastrophe losses			12.4				5.3				29.0				38.3				13.9				74.1				81.2
Prior accident year favorable catastrophe loss development			-				(2.3	)			-				(1.7	)			(0.7	)			(0.2	)			(2.4	)
Total losses and LAE			279.3				298.8				312.4				315.7				303.5				856.2				931.6
Amortization of deferred acquisition costs and other underwriting expenses			123.2				123.5				124.6				125.6				128.3				360.9				378.5
GAAP underwriting profit	$		28.8		$		15.3		$		5.7		$		10.9		$		28.8		$		51.3		$		45.4
Loss and LAE ratio:
Current accident year, excluding catastrophe losses			59.9	%			64.1	%			62.3	%			61.0	%			61.8	%			60.3	%			61.7	%
Prior accident year unfavorable reserve development, excluding catastrophe losses			2.0	%			3.5	%			1.7	%			0.7	%			1.2	%			1.4	%			1.2	%
Current accident year catastrophe losses			2.9	%			1.2	%			6.6	%			8.5	%			3.1	%			5.8	%			6.0	%
Prior accident year favorable catastrophe loss development			-				(0.5	)%			-				(0.4	)%			(0.2	)%			-				(0.2	)%
Total loss and LAE ratio			64.8	%			68.3	%			70.6	%			69.8	%			65.9	%			67.5	%			68.7	%
Expense ratio			28.0	%			27.7	%			27.6	%			27.2	%			27.4	%			27.9	%			27.4	%
Combined ratio			92.8	%			96.0	%			98.2	%			97.0	%			93.3	%			95.4	%			96.1	%
Combined ratio, excluding catastrophe losses			89.9	%			95.3	%			91.6	%			88.9	%			90.4	%			89.6	%			90.3	%
Current accident year combined ratio, excluding catastrophe losses			87.9	%			91.8	%			89.9	%			88.2	%			89.2	%			88.2	%			89.1	%

13

THE HANOVER INSURANCE GROUP
NET INVESTMENT INCOME AND YIELDS
	Q3			Q4			Q1			Q2			Q3			YTD			YTD
(In millions, except yields)	2018			2018			2019			2019			2019			2018			2019
Net Investment Income
Fixed maturities	$	55.3		$	56.4		$	58.0		$	57.8		$	58.1		$	161.3		$	173.9
Limited partnerships		4.7			6.3			4.5			4.8			3.8			17.8			13.1
Mortgage loans		3.6			3.7			3.9			4.0			4.1			10.3			12.0
Equity securities		4.3			4.2			3.6			4.0			4.0			12.8			11.6
Other investments		1.1			1.4			2.1			1.1			1.0			3.4			4.2
Investment expenses		(2.6	)		(2.6	)		(1.9	)		(2.1	)		(2.2	)		(7.6	)		(6.2	)
Total	$	66.4		$	69.4		$	70.2		$	69.6		$	68.8		$	198.0		$	208.6
Pre-tax Yields
Fixed maturities		3.60	%		3.62	%		3.61	%		3.57	%		3.55	%		3.61	%		3.57	%
Total		3.68	%		3.71	%		3.65	%		3.67	%		3.57	%		3.76	%		3.62	%
Pre-tax yields represent annualized net investment income for the period divided by the monthly average invested assets, excluding accumulated changes in fair value for fixed maturities and equity securities.

14

THE HANOVER INSURANCE GROUP
INVESTMENT PORTFOLIO
September 30,  2019
(In millions)
											Change in		Change in
	Weighted								Net		Net		Net
	Average	Amortized		Fair Value /		% of			Unrealized		Unrealized		Unrealized
Investment Type	Quality	Cost or Cost		Carry Value		Total			Gain		During Q3		YTD
Fixed maturities:
U.S. Treasury and government agencies	AAA	$	350.2	$	361.8		4.3	%	$	11.6	$	2.7	$	16.4
Foreign government	AA+		5.0		5.1		0.1	%		0.1		-		-
Municipals:
Taxable	AA		799.6		832.6		9.9	%		33.0		5.5		25.6
Tax-exempt	AA		48.7		49.7		0.6	%		1.0		0.1		1.6
Corporate:
NAIC 1	A		1,640.4		1,714.0		20.4	%		73.6		15.8		94.8
NAIC 2	BBB		1,829.1		1,899.8		22.6	%		70.7		17.7		105.6
NAIC 3 and below	B+		288.9		298.4		3.6	%		9.5		1.2		19.3
Total corporate	BBB+		3,758.4		3,912.2		46.6	%		153.8		34.7		219.7
Asset-backed:
Residential mortgage-backed	AAA		959.8		979.2		11.7	%		19.4		5.6		31.4
Commercial mortgage-backed	AAA		685.2		718.6		8.5	%		33.4		8.2		41.5
Asset-backed	AA+		85.6		87.1		1.0	%		1.5		0.1		2.0
Total fixed maturities	A+		6,692.5		6,946.3		82.7	%		253.8		56.9		338.2
Equity securities			570.8		570.8		6.8	%		-		-		-
Mortgage and other loans			446.7		446.7		5.3	%		-		-		-
Other investments			275.8		275.8		3.3	%		-		-		-
Total investments			7,985.8		8,239.6		98.1	%		253.8		56.9		338.2
Cash and cash equivalents			157.6		157.6		1.9	%		-		-		-
Total		$	8,143.4	$	8,397.2		100.0	%	$	253.8	$	56.9	$	338.2

15

THE HANOVER INSURANCE GROUP
CREDIT QUALITY AND DURATION OF FIXED MATURITIES
September 30,  2019
(In millions)
CREDIT QUALITY OF FIXED MATURITIES
		Rating Agency	Amortized		Fair		% of Total
	NAIC Designation	Equivalent Designation	Cost		Value		Fair Value
	1	Aaa/Aa/A	$	4,549.8	$	4,722.4		68.0	%
	2	Baa		1,852.0		1,923.6		27.7	%
	3	Ba		164.1		169.7		2.5	%
	4	B		122.7		126.2		1.8	%
	5	Caa and lower		2.2		2.4		-
	6	In or near default		1.7		2.0		-
	Total fixed maturities		$	6,692.5	$	6,946.3		100.0	%
DURATION OF FIXED MATURITIES
			Amortized		Fair		% of Total
			Cost		Value		Fair Value
		0-2 Years	$	1,434.8	$	1,459.4		21.0	%
		2-4 Years		1,945.8		2,006.6		28.9	%
		4-6 Years		1,643.1		1,718.7		24.7	%
		6-8 Years		1,263.5		1,337.6		19.3	%
		8-10 Years		306.6		316.9		4.6	%
		10+ Years		98.7		107.1		1.5	%
	Total fixed maturities		$	6,692.5	$	6,946.3		100.0	%
	Weighted Average Duration			4.2

16

THE HANOVER INSURANCE GROUP
TOP 10 CORPORATE AND MUNICIPAL FIXED MATURITY HOLDINGS
September 30,  2019
(In millions, except percentage data)
Issuer	Amortized Cost		Fair Value		As a Percent of  Invested Assets	Ratings (1)
Bank of America	$	26.3	$	28.0	0.33%	A-
US Bancorp		24.7		26.1	0.31%	A
PNC Bank		24.1		25.2	0.30%	A
Virginia Electric & Power		24.0		24.9	0.30%	BBB+
Bank of New York Mellon		23.6		24.6	0.29%	A
Branch Bank & Trust		22.3		23.5	0.28%	A-
National Grid		22.2		23.2	0.28%	A-
AvalonBay Communities		22.0		22.8	0.27%	A-
MassMutual Global Funding II		21.9		23.1	0.27%	AA+
National Australia Bank		21.9		22.5	0.27%	AA-
Top 10 Corporate and Municipal Fixed	$	233.0	$	243.9	2.90%
(1) Represents nationally recognized rating agency sources.

17

THE HANOVER INSURANCE GROUP
RECONCILIATION OF OPERATING INCOME TO NET INCOME
	Three Months ended September 30														Nine Months ended September 30
	2019							2018							2019							2018
(In millions, except per share data)		$			Per Share (Diluted)				$			Per Share (Diluted)				$			Per Share (Diluted)				$			Per Share (Diluted)
OPERATING INCOME (LOSS)
Commercial Lines	$		74.1					$		65.1					$		227.1					$		208.3
Personal Lines			50.2							48.2							108.7							109.7
Other			2.0							(0.5	)						7.3							(4.6	)
Total			126.3							112.8							343.1							313.4
Interest expense			(9.4	)						(11.2	)						(28.1	)						(33.9	)
Operating income before income taxes			116.9		$	2.91				101.6		$	2.36				315.0		$	7.71				279.5		$	6.49
Income tax expense on operating income			(23.9	)		(0.60	)			(16.7	)		(0.39	)			(63.6	)		(1.56	)			(52.3	)		(1.21	)
Operating income after income taxes			93.0			2.31				84.9			1.97				251.4			6.15				227.2			5.28
Non-operating items:
Net realized gains (losses) from sales and other			0.6			0.02				(0.2	)		-				1.0			0.02				(0.1	)		-
Net change in fair value of equity securities			15.0			0.37				23.6			0.54				75.3			1.84				6.7			0.15
Net other-than-temporary impairment losses on    investments recognized in earnings			(0.8	)		(0.02	)			(0.4	)		(0.01	)			(1.2	)		(0.03	)			(2.8	)		(0.07	)
Other			(1.4	)		(0.03	)			(1.9	)		(0.04	)			(1.4	)		(0.03	)			(1.9	)		(0.04	)
Income tax benefit (expense) on non-operating items			4.8			0.12				(2.0	)		(0.05	)			(6.3	)		(0.15	)			7.8			0.18
Income from continuing operations, net of taxes			111.2			2.77				104.0			2.41				318.8			7.80				236.9			5.50
Discontinued operations (net of taxes):
Sale of Chaucer business			6.4			0.16				-			-				(2.6	)		(0.06	)			-			-
Income (loss) from Chaucer business			2.1			0.05				(3.6	)		(0.08	)			1.6			0.03				30.5			0.71
Loss from discontinued life businesses			(0.8	)		(0.02	)			-			-				(2.5	)		(0.06	)			-			-
NET INCOME	$		118.9		$	2.96		$		100.4		$	2.33		$		315.3		$	7.71		$		267.4		$	6.21

18

Non-GAAP Financial Measures

The Hanover uses non-GAAP financial measures as important measures of the Company’s operating performance, which we believe provide investors with additional information regarding management’s evaluation of our results of operations and financial performance. The Company's non-GAAP measures include operating income before interest expense and taxes, total operating income after taxes, total operating income after taxes per share, total book value per share, total book value per share excluding net unrealized gains and losses related to investments, net of tax, tangible book value per share and measures of operating income and loss and combined ratios excluding catastrophe losses (catastrophe losses as discussed here and in all other measures include catastrophe loss development) and reserve development. After-tax operating income EPS (sometimes referred to as “after-tax operating income per share”) is a non-GAAP measure. It is defined as net income (loss) excluding the after-tax impact of net realized and unrealized investment gains (losses), as well as results from discontinued operations for a period divided by the average number of diluted shares of common stock.

Operating income before interest expense and taxes is net income, excluding interest expense on debt, income taxes and net realized and unrealized investment gains and losses, which includes changes in the fair value of equity securities still held because fluctuations in these gains and losses are determined by interest rates, financial markets and the timing of sales. Operating income before interest expense and taxes also excludes net gains and losses on disposals of businesses, discontinued operations, restructuring costs, the cumulative effect of accounting changes and certain other items. Operating income before interest expense and taxes is the sum of the operating income from: Commercial Lines, Personal Lines, and Other.  The Hanover believes that measures of operating income before interest expense and taxes 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. 

Book value per share is total shareholders’ equity divided by the number of common shares outstanding. Book value per share excluding net unrealized gains and losses related to fixed maturity investments, net of tax is total shareholders’ equity excluding the after-tax effect of unrealized investment gains and losses on fixed maturities divided by the number of common shares outstanding.  Tangible book value per share is total shareholders' equity, excluding goodwill and intangible assets, divided by the number of common shares outstanding.

The Hanover also provides measures of operating 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 providing certain financial metrics and trends excluding the effects of catastrophes is meaningful for investors to understand the variability of periodic earnings and loss ratios.                                               

Prior year 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 operating income excluding prior year reserve development is helpful to investors since it provides insight into both our estimate of current year accident results and changes to prior-year reserve estimates.

Operating income before and after interest expense and taxes and measures of operating 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 operating income before interest expense and taxes and income from continuing operations per share to operating income after taxes per share for the three and nine months ended September 30, 2019 and 2018 is set forth on page 18 of this document. The presentation of loss ratios calculated excluding the effects of reserve development and/or catastrophe losses should not be construed as a substitute for loss ratios determined in accordance with GAAP.

19

CORPORATE OFFICES AND							INDUSTRY RATINGS AS OF October 30, 2019				TRANSFER AGENT
PRINCIPAL SUBSIDIARIES
THE HANOVER INSURANCE GROUP, INC.								A.M.	Standard		Computershare Investor Services
440 Lincoln Street							Financial Strength Ratings	Best	& Poor's	Moody's	PO Box 505000
Worcester, MA 01653							The Hanover Insurance				Louisville, KY 40233-5000
							Company	A	A	A2	1-800-317-4454
The Hanover Insurance Company							Citizens Insurance Company
440 Lincoln Street							of America	A	A	-
Worcester, MA 01653
											COMMON STOCK
Citizens Insurance Company of America								A.M.	Standard
808 North Highlander Way							Debt Ratings	Best	& Poor's	Moody's	Common stock of The Hanover Insurance Group is traded
Howell, MI 48843							The Hanover Insurance Group, Inc.				on the New York Stock Exchange under the symbol "THG".
							Senior Debt	bbb	BBB	Baa2
							Subordinated Debentures	bb+	BB+	Baa3
MARKET AND DIVIDEND INFORMATION											INQUIRIES
The following tables set forth the high and low closing											Oksana Lukasheva
sales prices of our common stock and cash dividends											Vice President
for the periods indicated:											Investor Relations and Financial Planning
											(508) 855-2063
Quarter Ended	2019										olukasheva@hanover.com
	Price Range				Dividends
	High		Low		Per Share
March 31	$	120.17	$	108.54	$	0.600
June 30	$	128.90	$	114.11	$	0.600
September 30	$	135.71	$	127.20	$	0.600
Quarter Ended	2018
	Price Range				Dividends
	High		Low		Per Share
March 31	$	120.84	$	106.61	$	0.540
June 30	$	123.22	$	112.61	$	0.540
September 30	$	130.49	$	115.28	$	0.540
December 31	$	120.25	$	105.29	$	0.600

20

XML

Document And Entity Information	Oct. 30, 2019
Document Information [Line Items]
Entity Registrant Name	HANOVER INSURANCE GROUP, INC.
Document Type	8-K
Amendment Flag	false
Entity Central Index Key	0000944695
Document Period End Date	Oct. 30, 2019
Entity Emerging Growth Company	false
Entity File Number	1-13754
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-3263626
Entity Address, Address Line One	440 Lincoln Street
Entity Address, City or Town	Worcester
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01653
City Area Code	(508)
Local Phone Number	855-1000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Common Stock [Member]
Document Information [Line Items]
Title of each class	Common Stock, $.01 par value
Trading Symbol	THG
Name of each exchange on which registered	NYSE
7 5/8% Senior Debentures Due 2025 [Member]
Document Information [Line Items]
Title of each class	7 5/8% Senior Debentures due 2025
Trading Symbol	THG
Name of each exchange on which registered	NYSE
6.35% Subordinated Debentures Due 2053 [Member]
Document Information [Line Items]
Title of each class	6.35% Subordinated Debentures due 2053
Trading Symbol	THGA
Name of each exchange on which registered	NYSE