thg-ex992

EX-99.2 3 thg-ex992_6.htm EX-99.2 thg-ex992_6.htm

Exhibit 99.2

FINANCIAL SUPPLEMENT
FIRST QUARTER 2022

THE HANOVER INSURANCE GROUP
FINANCIAL SUPPLEMENT



TABLE OF CONTENTS


Segment Descriptions....................................................................................................	1
Financial Highlights........................................................................................................	2
Consolidated Financial Statements
Income Statements....................................................................................................	3
Balance Sheets..........................................................................................................	4
Pre-tax Operating Results and Related Metrics
Consolidated..............................................................................................................	5-6
Core Commercial.......................................................................................................	7-8
Specialty....................................................................................................................	9-10
Personal Lines...........................................................................................................	11-13
Investments
Net Investment Income and Yields............................................................................	14
Investment Portfolio...................................................................................................	15
Credit Quality and Duration of Fixed Maturities.........................................................	16
Top 25 Corporate and Municipal Fixed Maturity Holdings.........................................	17
Reconciliation of Operating Income to Net Income...................................................	18
Other Information
Non-GAAP Financial Measures...............................................................................	19
Premium Related Metric Definitions.........................................................................	20
Corporate Information...............................................................................................	21
Market and Dividend Information..............................................................................	21
Financial Strength and Debt Ratings........................................................................	21

THE HANOVER INSURANCE GROUP
BASIS OF PRESENTATION

SEGMENT DESCRIPTIONS

CORE COMMERCIAL

Sub-segment	Customer and business type	Primary lines of business
Small Commercial	Coverage to small businesses, with annual premiums of $50,000 or less; Products are tailored to specific industry segments as needed.	● Business owners' policy/commercial multiple peril ● Commercial automobile ● Workers' compensation ● Other (general liability, commercial umbrella, monoline property)
Middle Market	Coverage to mid-sized businesses with annual premiums starting at $50,000, focusing on those between $50,000 and $250,000. Products are tailored to certain specific industry segments, including technology, manufacturing, human services, retail, real estate, among others.	● Commercial multiple peril ● Commercial automobile ● Workers' compensation ● Other (general liability, commercial umbrella, monoline property)
SPECIALTY

Sub-segment	Customer and business type	Primary lines of business
Professional and Executive Lines	Coverage to small to mid-sized non-public companies, including lawyer, engineer, accountant, and various other professional and advisory firms including healthcare; provide protection for directors, officers and employees against actual or alleged errors, negligence or bad faith, employment practices.	● Professional liability ● Management liability ● Fidelity and crime ● Other property and liability lines for healthcare firms
Specialty Property & Casualty	Program business - coverage to markets with specialty or risk management needs related to groups of similar businesses; Hanover Specialty Industrial (HSI) - coverage to small and medium chemical, paint, solvent and other manufacturers and distributors; Excess & Surplus - non-admitted general liability and property coverage to risks outside of the appetite of standard commercial lines; Specialty General Liability - admitted coverage for higher-hazard liability risks	● Commercial multiple peril ● Commercial automobile ● Workers' compensation ● Other (general liability, commercial umbrella, monoline property)
Marine	Includes coverage for inland and ocean marine, and insures against physical losses to property, such as contractor's equipment, builders' risk and goods in transit. Also covers jewelers block, fine art and other valuables.	● Inland/ocean marine ● Ancillary lines of business written through marine agents
Surety and Other	Provides coverage for construction and other firms, as well as sole proprietors in the event of claims for non-performance or non-payment, and commercial surety coverage related to fiduciary or regulatory obligations.	● Bond
PERSONAL LINES
Sub-segment	Customer and business type	Primary lines of business
Personal Automobile	Includes coverage for 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	● Personal automobile
Homeowners and Other	Includes coverage for individuals for losses to their residences and personal property, such as those caused by fire, wind, hail, water damage (excluding flood), theft and vandalism, and against third-party liability claims.	● Homeowners ● Personal umbrella ● Inland Marine (jewelry, art, etc.) ● Other (fire, personal watercraft, other miscellaneous)
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; holding company and other expenses; and our run-off voluntary assumed property and casualty pools and run-off direct asbestos and environmental businesses.

THE HANOVER INSURANCE GROUP

FINANCIAL HIGHLIGHTS


		Q1				Q2				Q3				Q4				Q1
(In millions, except earnings per share)		2021				2021				2021				2021				2022
PREMIUMS
Gross premiums written	$		1,337.6		$		1,342.8		$		1,493.2		$		1,170.7		$		1,470.1

Net premiums written			1,196.1				1,207.2				1,375.2				1,214.9				1,312.3

Net premiums earned			1,161.8				1,179.8				1,186.0				1,242.6				1,263.8

EARNINGS
Operating income before interest and taxes	$		85.1		$		137.3		$		47.0		$		162.9		$		154.4
Operating income after taxes			61.4				104.0				30.8				122.1				117.7

Income from continuing operations			92.8				129.6				34.8				162.8				105.3

Net income			92.7				128.5				34.0				163.5				104.8

PER SHARE DATA (DILUTED)

Operating income after taxes	$		1.66		$		2.85		$		0.85		$		3.38		$		3.26

Income from continuing operations			2.52				3.55				0.96				4.51				2.91

Net income			2.51				3.52				0.94				4.53				2.90

Dilutive weighted average shares outstanding			36.9				36.5				36.3				36.1				36.1

Basic weighted average shares outstanding			36.4				35.9				35.7				35.5				35.5



BALANCE SHEET
		March 31				June 30				September 30				December 31				March 31
(In millions, except per share data)		2021				2021				2021				2021				2022

Total assets	$		13,448.0		$		13,728.1		$		14,105.3		$		14,254.3		$		13,847.2
Total loss and loss adjustment expense reserves			6,223.7				6,343.4				6,540.1				6,447.6				6,512.2
Total shareholders' equity			3,046.8				3,154.0				3,102.3				3,144.9				2,832.8
Total shareholders' equity, excluding net unrealized appreciation
(depreciation) on fixed maturity investments, net of tax			2,804.2				2,849.3				2,845.5				2,960.0				3,027.8

Property and Casualty Companies
Statutory surplus	$		2,667.7		$		2,547.1		$		2,548.4		$		2,720.0		$		2,809.6
Premium to surplus ratio		1.75:1				1.88:1				1.92:1				1.83:1				1.82:1

Book value per share	$		84.21		$		88.23		$		87.04		$		88.59		$		79.58
Book value per share, excluding net unrealized appreciation
(depreciation) on fixed maturity investments, net of tax	$		77.50		$		79.71		$		79.84		$		83.38		$		85.06
Tangible book value per share (total book value excluding goodwill
and intangibles)	$		78.78		$		82.76		$		81.54		$		83.08		$		74.09

Shares outstanding			36.2				35.8				35.6				35.5				35.6

Total debt/equity			25.6	%			24.8	%			25.2	%			24.8	%			27.6	%

Total debt/total capital			20.4	%			19.9	%			20.1	%			19.9	%			21.6	%

THE HANOVER INSURANCE GROUP

CONSOLIDATED INCOME STATEMENTS

	Three Months ended March 31
(In millions)		2022				2021			% Change

Premiums earned	$		1,263.8		$		1,161.8			8.8
Net investment income			76.9				76.8			0.1
Net realized and unrealized investment gains (losses):
Net realized gains (losses) from sales and other			3.0				(1.6	)	N/M
Net change in fair value of equity securities			(18.0	)			39.1		N/M
Impairment losses on investments			(0.9	)			-		N/M
Total net realized and unrealized investment gains (losses)			(15.9	)			37.5		N/M
Fees and other income			5.9				6.0			(1.7	)
Total revenues			1,330.7				1,282.1			3.8

LOSSES AND EXPENSES

Losses and loss adjustment expenses			787.5				781.3			0.8
Amortization of deferred acquisition costs			262.9				240.3			9.4
Interest expense			8.5				8.5		-
Other operating expenses			141.8				137.9			2.8
Total losses and expenses			1,200.7				1,168.0			2.8

Income from continuing operations before income taxes			130.0				114.1			13.9
Income tax expense			24.7				21.3			16.0
Income from continuing operations			105.3				92.8			13.5
Discontinued operations (net of taxes):
Loss from discontinued life businesses			(0.5	)			(0.1	)	N/M
Net income	$		104.8		$		92.7			13.1

THE HANOVER INSURANCE GROUP

CONSOLIDATED BALANCE SHEETS

		March 31				December 31
(In millions, except per share data)		2022				2021			% Change
ASSETS
Investments:
Fixed maturities, at fair value (amortized cost of $7,644.8 and $7,514.8)	$		7,382.2		$		7,723.9			(4.4	)
Equity securities, at fair value			607.0				661.3			(8.2	)
Other investments			786.1				767.4			2.4
Total investments			8,775.3				9,152.6			(4.1	)
Cash and cash equivalents			272.0				230.9			17.8
Accrued investment income			47.9				49.8			(3.8	)
Premiums and accounts receivable, net			1,483.1				1,469.5			0.9
Reinsurance recoverable on paid and unpaid losses and unearned premiums			1,940.3				1,907.3			1.7
Deferred acquisition costs			552.8				552.0			0.1
Deferred income tax asset			43.4				-		N/M
Goodwill			178.8				178.8		-
Other assets			449.0				606.3			(25.9	)
Assets of discontinued businesses			104.6				107.1			(2.3	)
Total assets	$		13,847.2		$		14,254.3			(2.9	)

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Loss and loss adjustment expense reserves	$		6,512.2		$		6,447.6			1.0
Unearned premiums			2,760.4				2,734.9			0.9
Expenses and taxes payable			769.7				907.7			(15.2	)
Deferred income tax liability			-				60.8		N/M
Reinsurance premiums payable			70.1				55.1			27.2
Debt			781.8				781.6			-
Liabilities of discontinued businesses			120.2				121.7			(1.2	)
Total liabilities			11,014.4				11,109.4			(0.9	)

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			1,887.8				1,887.2			-
Accumulated other comprehensive income (loss)			(256.6	)			122.2		N/M
Retained earnings			3,061.0				2,983.2			2.6
Treasury stock at cost (24.9 million and 25.0 million shares)			(1,860.0	)			(1,848.3	)		0.6
Total shareholders' equity			2,832.8				3,144.9			(9.9	)
Total liabilities and shareholders' equity	$		13,847.2		$		14,254.3			(2.9	)

THE HANOVER INSURANCE GROUP

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
CONSOLIDATED

Three Months ended March 31

		2022																				2021

		Core								Personal												Core								Personal
(In millions, except percentage data)		Commercial				Specialty				Lines				Other				Total				Commercial				Specialty				Lines				Other				Total
Gross premiums written	$		591.9		$		379.1		$		499.1		$		-		$		1,470.1		$		539.9		$		344.1		$		453.6		$		-		$		1,337.6
							-								-												-
Net premiums written	$		526.6		$		302.8		$		482.9		$		-		$		1,312.3		$		480.6		$		276.8		$		438.7		$		-		$		1,196.1
							-								-												-
Net premiums earned	$		474.7		$		283.8		$		505.3		$		-		$		1,263.8		$		435.2		$		257.7		$		468.9		$		-		$		1,161.8
							-								-												-
Losses and LAE:
							-								-												-
Current year, excluding catastrophe losses			272.6				154.0				321.4				-				748.0				250.6				138.3				267.3				-				656.2
							-								-												-
Prior year unfavorable (favorable) development, excluding catastrophe losses			(6.4	)			(13.2	)			13.6				-				(6.0	)			(2.7	)			(0.6	)			(5.2	)			0.3				(8.2	)
							-								-								-				-
Current year catastrophe losses			19.7				7.6				18.2				-				45.5				94.5				24.3				14.5				-				133.3
							-								-												-
Prior year unfavorable (favorable) catastrophe development			-				-				-				-				-				(0.1	)			0.1				-				-				-
							-								-								-				-
Total losses and LAE			285.9				148.4				353.2				-				787.5				342.3				162.1				276.6				0.3				781.3
							-								-								-				-
Amortization of deferred acquisition costs and other underwriting expenses			156.6				101.5				139.8				-				397.9				144.2				93.6				133.4				-				371.2
							-								-								-				-
GAAP underwriting profit (loss)			32.2				33.9				12.3				-				78.4				(51.3	)			2.0				58.9				(0.3	)			9.3
							-								-								-				-
Net investment income			35.4				16.2				22.6				2.7				76.9				36.9				14.9				22.1				2.9				76.8
							-								-								-				-
Other income			1.0				1.3				2.8				0.8				5.9				0.8				1.6				2.3				1.3				6.0
															-								-				-
Other operating expenses			(1.1	)			(1.4	)			(1.4	)			(2.9	)			(6.8	)			(1.2	)			(1.5	)			(1.5	)			(2.8	)			(7.0	)
							-								-												-
Operating income (loss) before income taxes	$		67.5		$		50.0		$		36.3		$		0.6		$		154.4		$		(14.8	)	$		17.0		$		81.8		$		1.1		$		85.1

Loss and LAE ratio:

Current year, excluding catastrophe losses			57.4	%			54.3	%			63.6	%		N/M					59.2	%			57.6	%			53.6	%			57.0	%		N/M					56.4	%
																											-
Prior year unfavorable (favorable) development, excluding catastrophe losses			(1.3	)%			(4.7	)%			2.7	%		N/M					(0.5	)%			(0.6	)%			(0.2	)%			(1.1	)%		N/M					(0.7	)%
																											-
Current year catastrophe losses			4.1	%			2.7	%			3.6	%		N/M					3.6	%			21.7	%			9.5	%			3.1	%		N/M					11.5	%
																											-
Prior year catastrophe development			-				-				-			N/M					-				-				-				-			N/M					-

Total loss and LAE ratio			60.2	%			52.3	%			69.9	%		N/M					62.3	%			78.7	%			62.9	%			59.0	%		N/M					67.2	%
																											-
Expense ratio			32.8	%			35.4	%			27.2	%		N/M					31.1	%			33.0	%			35.9	%			28.0	%		N/M					31.6	%
																											-
Combined ratio			93.0	%			87.7	%			97.1	%		N/M					93.4	%			111.7	%			98.8	%			87.0	%		N/M					98.8	%

THE HANOVER INSURANCE GROUP

GAAP UNDERWRITING INFORMATION AND RELATED RATIOS
CONSOLIDATED


		Q1				Q2				Q3				Q4				Q1
(In millions, except percentage data)		2021				2021				2021				2021				2022

Gross premiums written	$		1,337.6		$		1,342.8		$		1,493.2		$		1,170.7		$		1,470.1

Net premiums written	$		1,196.1		$		1,207.2		$		1,375.2		$		1,214.9		$		1,312.3

Net premiums earned	$		1,161.8		$		1,179.8		$		1,186.0		$		1,242.6		$		1,263.8

Losses and LAE:

Current year, excluding catastrophe losses			656.2				680.9				711.4				739.2				748.0

Prior year favorable development, excluding catastrophe losses			(8.2	)			(12.6	)			(20.9	)			(14.4	)			(6.0	)

Current year catastrophe losses			133.3				91.8				153.5				39.0				45.5

Prior year favorable catastrophe development			-				(15.0	)			-				-				-

Total losses and LAE			781.3				745.1				844.0				763.8				787.5

Amortization of deferred acquisition costs and other underwriting expenses			371.2				371.7				372.9				394.2				397.9

GAAP underwriting profit (loss)			9.3				63.0				(30.9	)			84.6				78.4

Net investment income			76.8				75.6				78.8				79.5				76.9
			-				-				-				-
Other income			6.0				5.8				6.1				6.0				5.9
			-				-				-				-
Other operating expenses			(7.0	)			(7.1	)			(7.0	)			(7.2	)			(6.8	)

Operating income before income taxes	$		85.1		$		137.3		$		47.0		$		162.9		$		154.4

Loss and LAE ratio:

Current year, excluding catastrophe losses			56.4	%			57.8	%			60.1	%			59.6	%			59.2	%

Prior year favorable development, excluding catastrophe losses			(0.7	)%			(1.1	)%			(1.8	)%			(1.2	)%			(0.5	)%

Current year catastrophe losses			11.5	%			7.8	%			12.9	%			3.1	%			3.6	%

Prior year favorable catastrophe development			-				(1.3	)%			-				-				-

Total loss and LAE ratio			67.2	%			63.2	%			71.2	%			61.5	%			62.3	%

Expense ratio			31.6	%			31.2	%			31.1	%			31.4	%			31.1	%

Combined ratio			98.8	%			94.4	%			102.3	%			92.9	%			93.4	%

Combined ratio, excluding catastrophe losses			87.3	%			87.9	%			89.4	%			89.8	%			89.8	%

Current accident year combined ratio, excluding catastrophe losses			88.0	%			89.0	%			91.2	%			91.0	%			90.3	%

THE HANOVER INSURANCE GROUP

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
CORE COMMERCIAL


		Q1				Q2				Q3				Q4				Q1
(In millions, except percentage data)		2021				2021				2021				2021				2022

Gross premiums written	$		539.9		$		473.6		$		601.1		$		484.9		$		591.9

Net premiums written	$		480.6		$		421.7		$		534.6		$		427.9		$		526.6

Net premiums earned	$		435.2		$		447.6		$		459.7		$		468.4		$		474.7

Losses and LAE:

Current year, excluding catastrophe losses			250.6				258.2				281.7				271.9				272.6

Prior year favorable development, excluding catastrophe losses			(2.7	)			(4.6	)			(3.3	)			(7.2	)			(6.4	)

Current year catastrophe losses			94.5				22.5				57.3				10.9				19.7

Prior year favorable catastrophe development			(0.1	)			(8.7	)			(0.9	)			-				-

Total losses and LAE			342.3				267.4				334.8				275.6				285.9

Amortization of deferred acquisition costs and other underwriting expenses			144.2				145.1				150.6				158.4				156.6

GAAP underwriting profit (loss)			(51.3	)			35.1				(25.7	)			34.4				32.2
		0				0				0				0
Net investment income			36.9				35.0				37.0				37.6				35.4
		0				0				0				0
Other income			0.8				0.8				0.9				0.8				1.0
		0				0				0				0
Other operating expenses			(1.2	)			(1.0	)			(1.2	)			(0.9	)			(1.1	)
		0				0				0				0
Operating income (loss) before income taxes	$		(14.8	)	$		69.9		$		11.0		$		71.9		$		67.5
			-				-				-				-
Loss and LAE ratio:
			-				-				-				-
Current year, excluding catastrophe losses			57.6	%			57.6	%			61.2	%			58.0	%			57.4	%
		0				0				0				0
Prior year favorable development, excluding catastrophe losses			(0.6	)%			(1.0	)%			(0.7	)%			(1.5	)%			(1.3	)%
		0				0				0				0
Current year catastrophe losses			21.7	%			5.0	%			12.5	%			2.3	%			4.1	%
		0				0				0				0
Prior year favorable catastrophe development			-				(1.9	)%			(0.2	)%			-				-
Total loss and LAE ratio			78.7	%			59.7	%			72.8	%			58.8	%			60.2	%
		0				0				0				0
Expense ratio			33.0	%			32.2	%			32.6	%			33.6	%			32.8	%
		0				0				0				0
Combined ratio			111.7	%			91.9	%			105.4	%			92.4	%			93.0	%
		0				0				0				0
Combined ratio, excluding catastrophe losses			90.0	%			88.8	%			93.1	%			90.1	%			88.9	%
		0				0				0				0
Combined ratio, excluding catastrophe losses and prior year development			90.6	%			89.8	%			93.8	%			91.6	%			90.2	%

THE HANOVER INSURANCE GROUP
PREMIUMS WRITTEN AND RELATED METRICS

CORE COMMERCIAL

		Q1				Q2				Q3				Q4				Q1
(In millions, except percentage data)		2021				2021				2021				2021				2022

Written Premium
Gross	$		539.9		$		473.6		$		601.1		$		484.9		$		591.9
Ceded			(59.3	)			(51.9	)			(66.5	)			(57.0	)			(65.3	)
Net	$		480.6		$		421.7		$		534.6		$		427.9		$		526.6
Growth			4.3	%			11.4	%			9.9	%			6.8	%			9.6	%

Net premiums written by segment
Small Commercial	$		257.1		$		246.8		$		256.3		$		243.2		$		283.7
Middle Market			223.5				174.9				278.3				184.7				242.9
Total	$		480.6		$		421.7		$		534.6		$		427.9		$		526.6
			-				-				-				-
Net premiums written by line of business
Commercial Multiple Peril	$		237.2		$		219.0		$		284.2		$		217.3		$		256.0
Commercial Automobile			90.0				80.6				92.9				77.3				96.1
Workers' Compensation			95.7				76.6				92.7				84.3				113.0
Other Core Commercial			57.7				45.5				64.8				49.0				61.5
Total	$		480.6		$		421.7		$		534.6		$		427.9		$		526.6

Related Metrics
Premium Retention			87.3	%			84.9	%			87.8	%			86.7	%			86.2	%
Renewal Price Change			6.3	%			9.3	%			9.4	%			9.5	%			9.7	%

THE HANOVER INSURANCE GROUP

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
SPECIALTY


		Q1				Q2				Q3				Q4				Q1
(In millions, except percentage data)		2021				2021				2021				2021				2022

Gross premiums written	$		344.1		$		332.1		$		327.2		$		346.0		$		379.1

Net premiums written	$		276.8		$		265.1		$		292.2		$		284.8		$		302.8

Net premiums earned	$		257.7		$		255.8		$		238.9		$		277.5		$		283.8

Losses and LAE:

Current year, excluding catastrophe losses			138.3				145.7				125.8				145.7				154.0

Prior year favorable development, excluding catastrophe losses			(0.6	)			(3.3	)			(8.1	)			(4.2	)			(13.2	)

Current year catastrophe losses			24.3				7.7				17.5				4.6				7.6

Prior year unfavorable (favorable) catastrophe development			0.1				(3.3	)			0.9				-				-

Total losses and LAE			162.1				146.8				136.1				146.1				148.4

Amortization of deferred acquisition costs and other underwriting expenses			93.6				90.3				87.3				98.2				101.5

GAAP underwriting profit			2.0				18.7				15.5				33.2				33.9

Net investment income			14.9				16.0				15.9				16.1				16.2

Other income			1.6				1.7				1.6				1.5				1.3

Other operating expenses			(1.5	)			(1.9	)			(1.6	)			(1.8	)			(1.4	)

Operating income before income taxes	$		17.0		$		34.5		$		31.4		$		49.0		$		50.0

Loss and LAE ratio:

Current year, excluding catastrophe losses			53.6	%			57.0	%			52.7	%			52.4	%			54.3	%

Prior year favorable development, excluding catastrophe losses			(0.2	)%			(1.3	)%			(3.4	)%			(1.5	)%			(4.7	)%

Current year catastrophe losses			9.5	%			3.0	%			7.3	%			1.7	%			2.7	%

Prior year unfavorable (favorable) catastrophe development			-				(1.3	)%			0.4	%			-				-

Total loss and LAE ratio			62.9	%			57.4	%			57.0	%			52.6	%			52.3	%
		0				0				0				0
Expense ratio			35.9	%			34.9	%			36.2	%			35.1	%			35.4	%
		0				0				0				0
Combined ratio			98.8	%			92.3	%			93.2	%			87.7	%			87.7	%
		0				0				0				0
Combined ratio, excluding catastrophe losses			89.3	%			90.6	%			85.5	%			86.0	%			85.0	%
		0				0				0				0
Combined ratio, excluding catastrophe losses and prior year development			89.5	%			91.9	%			88.9	%			87.5	%			89.7	%

THE HANOVER INSURANCE GROUP

PREMIUMS WRITTEN AND RELATED METRICS
SPECIALTY

		Q1				Q2				Q3				Q4				Q1
(In millions, except percentage data)		2021				2021				2021				2021				2022

Written Premiums
Gross	$		344.1		$		332.1		$		327.2		$		346.0		$		379.1
Ceded			(67.3	)			(67.0	)			(35.0	)			(61.2	)			(76.3	)
Net	$		276.8		$		265.1		$		292.2		$		284.8		$		302.8
Growth			12.1	%			12.2	%			6.6	%			14.1	%			9.4	%


Net premiums written by segment
Professional and Executive Lines	$		94.4		$		81.3		$		98.0		$		93.3		$		111.0
Specialty Property & Casualty			79.3				79.8				87.1				101.4				90.4
Marine			91.1				86.6				90.4				77.1				84.3
Surety and Other			12.0				17.4				16.7				13.0				17.1
Total	$		276.8		$		265.1		$		292.2		$		284.8		$		302.8


Related Metrics
Premium Retention			82.3	%			83.1	%			85.5	%			84.8	%			84.2	%
Renewal Price Change			8.7	%			11.3	%			10.8	%			12.7	%			12.6	%

THE HANOVER INSURANCE GROUP

GAAP UNDERWRITING AND OPERATING INCOME INFORMATION AND RATIOS
PERSONAL LINES

Three Months ended March 31

	2022												2021
(In millions, except percentage data)		Auto				Home & Other				Total				Auto				Home & Other				Total

Net premiums written	$		298.4		$		184.5		$		482.9		$		280.7		$		158.0		$		438.7

Net premiums earned	$		307.7		$		197.6		$		505.3		$		291.1		$		177.8		$		468.9

Losses and LAE:

Current year, excluding catastrophe losses			216.5				104.9				321.4				174.7				92.6				267.3

Prior year unfavorable (favorable) development, excluding catastrophe losses			(0.2	)			13.8				13.6				(5.3	)			0.1				(5.2	)

Current year catastrophe losses			0.4				17.8				18.2				0.6				13.9				14.5

Prior year unfavorable (favorable) catastrophe development			(0.4	)			0.4				-				-				-				-

Total losses and LAE			216.3				136.9				353.2				170.0				106.6				276.6

Amortization of deferred acquisition costs and other underwriting expenses											139.8												133.4

GAAP underwriting profit											12.3												58.9

Net investment income											22.6												22.1

Other income											2.8												2.3

Other operating expenses											(1.4	)											(1.5	)

Operating income before income taxes									$		36.3										$		81.8

Loss and LAE ratio:

Current year, excluding catastrophe losses			70.4	%			53.1	%			63.6	%			60.0	%			52.1	%			57.0	%

Prior year unfavorable (favorable) development, excluding catastrophe losses			(0.1	)%			7.0	%			2.7	%			(1.8	)%			0.1	%			(1.1	)%

Current year catastrophe losses			0.1	%			9.0	%			3.6	%			0.2	%			7.8	%			3.1	%

Prior year unfavorable (favorable) catastrophe development			(0.1	)%			0.2	%			-				-				-				-
Total loss and LAE ratio			70.3	%			69.3	%			69.9	%			58.4	%			60.0	%			59.0	%

Expense ratio											27.2	%											28.0	%

Combined ratio											97.1	%											87.0	%

THE HANOVER INSURANCE GROUP

GAAP UNDERWRITING INFORMATION AND RELATED RATIOS
PERSONAL LINES



		Q1				Q2				Q3				Q4				Q1
(In millions, except percentage data)		2021				2021				2021				2021				2022

Gross premiums written	$		453.6		$		537.1		$		564.9		$		339.8		$		499.1

Net premiums written	$		438.7		$		520.4		$		548.4		$		502.2		$		482.9

Net premiums earned	$		468.9		$		476.4		$		487.4		$		496.7		$		505.3

Losses and LAE:

Current year, excluding catastrophe losses			267.3				277.0				303.9				321.6				321.4

Prior year unfavorable (favorable) development, excluding catastrophe losses			(5.2	)			(5.0	)			(9.9	)			(3.0	)			13.6

Current year catastrophe losses			14.5				61.6				78.7				23.5				18.2

Prior year favorable catastrophe development			-				(3.0	)			-				-				-
			-				-				-				-
Total losses and LAE			276.6				330.6				372.7				342.1				353.2
			-				-				-				-
Amortization of deferred acquisition costs and other underwriting expenses			133.4				136.3				135.0				137.6				139.8
			-				-				-				-
GAAP underwriting profit (loss)			58.9				9.5				(20.3	)			17.0				12.3
			-				-				-				-
Net investment income			22.1				21.8				22.6				22.9				22.6

Other income			2.3				2.2				2.6				2.6				2.8

Other operating expenses			(1.5	)			(1.3	)			(1.3	)			(1.6	)			(1.4	)

Operating income before income taxes	$		81.8		$		32.2		$		3.6		$		40.9		$		36.3

Loss and LAE ratio:

Current year, excluding catastrophe losses			57.0	%			58.1	%			62.4	%			64.8	%			63.6	%
		0				0				0				0
Prior year unfavorable (favorable) development, excluding catastrophe losses			(1.1	)%			(1.0	)%			(2.0	)%			(0.6	)%			2.7	%
			-				-				-				-
Current year catastrophe losses			3.1	%			12.9	%			16.1	%			4.7	%			3.6	%
			-				-				-				-
Prior year favorable catastrophe development			-				(0.6	)%			-				-				-
			-				-				-				-
Total loss and LAE ratio			59.0	%			69.4	%			76.5	%			68.9	%			69.9	%
			-				-				-				-
Expense ratio			28.0	%			28.2	%			27.3	%			27.3	%			27.2	%
		0				0				0				0
Combined ratio			87.0	%			97.6	%			103.8	%			96.2	%			97.1	%
		0				0				0				0
Combined ratio, excluding catastrophe losses			83.9	%			85.3	%			87.7	%			91.5	%			93.5	%

Current accident year combined ratio, excluding catastrophe losses			85.0	%			86.3	%			89.7	%			92.1	%			90.8	%

THE HANOVER INSURANCE GROUP

PREMIUMS WRITTEN AND RELATED METRICS
PERSONAL LINES

		Q1				Q2				Q3				Q4				Q1
(In millions, except percentage data)		2021				2021				2021				2021				2022
Written Premiums
Gross	$		453.6		$		537.1		$		564.9		$		339.8		$		499.1
Ceded			(14.9	)			(16.7	)			(16.5	)			162.4				(16.2	)
Net	$		438.7		$		520.4		$		548.4		$		502.2		$		482.9
Growth			2.2	%			11.6	%			8.0	%			8.7	%			10.1	%

Net premiums written by line of business
Personal Automobile	$		280.7		$		318.6		$		330.8		$		300.3		$		298.4
Homeowners and Other			158.0				201.8				217.6				201.9				184.5
Total	$		438.7		$		520.4		$		548.4		$		502.2		$		482.9

Related Metrics

Renewal Price Change
Personal Automobile			4.2	%			3.5	%			1.5	%			1.2	%			2.4	%
Homeowners			6.2	%			5.7	%			5.9	%			6.9	%			7.7	%
Total ⁽¹⁾			4.9	%			4.4	%			3.2	%			3.4	%			4.3	%

Policy Retention
Personal Automobile			84.0	%			85.8	%			88.0	%			88.4	%			88.5	%
Homeowners			84.2	%			86.9	%			89.3	%			89.6	%			89.2	%
Total ⁽¹⁾			84.1	%			86.4	%			88.6	%			89.0	%			88.8	%

PIF change from prior year period
Personal Automobile			(2.7	)%			(0.9	)%			2.7	%			6.1	%			8.0	%
Homeowners			(0.9	)%			0.6	%			3.4	%			6.0	%			7.5	%
Total ⁽¹⁾			(1.8	)%			(0.1	)%			3.1	%			6.1	%			7.8	%

(1) Related metrics exclude Other Personal Lines.

THE HANOVER INSURANCE GROUP

NET INVESTMENT INCOME AND YIELDS


		Q1			Q2			Q3			Q4			Q1
(In millions, except yields)		2021			2021			2021			2021			2022

Net Investment Income

	Fixed maturities	$	54.5		$	53.9		$	54.2		$	54.3		$	55.8
	Limited partnerships		15.1			15.5			18.9			18.7			15.2
	Mortgage loans		5.4			4.2			4.0			4.4			4.4
	Equity securities		3.8			3.8			3.7			4.3			3.6
	Other investments		0.7			0.9			0.7			0.7			0.8
	Investment expenses		(2.7	)		(2.7	)		(2.7	)		(2.9	)		(2.9	)
Total		$	76.8		$	75.6		$	78.8		$	79.5		$	76.9


Pre-tax Yields
	Fixed maturities		3.11	%		3.02	%		2.96	%		2.90	%		2.95	%
	Total		3.74	%		3.65	%		3.72	%		3.69	%		3.52	%


Pre-tax yields represent annualized net investment income for the period divided by the monthly average invested assets at amortized cost or cost, which excludes accumulated changes in fair value for fixed maturities and equity securities.

	THE HANOVER INSURANCE GROUP

	INVESTMENT PORTFOLIO
	March 31, 2022
(In millions)
													Change in
		Weighted	Amortized							Net			Net
		Average	Cost		Fair Value /		% of			Unrealized			Unrealized
Investment Type		Quality	or Cost (1)		Carry Value		Total			Gain (Loss)			YTD

Fixed maturities:
U.S. Treasury and government agencies		AAA	$	404.0	$	381.7		4.2	%	$	(22.3	)	$	(24.2	)
Foreign government		BBB+		2.2		2.3		-			0.1			(0.3	)
Municipals:
Taxable		AA		1,166.5		1,113.0		12.3	%		(53.5	)		(77.3	)
Tax-exempt		AA		23.1		22.9		0.3	%		(0.2	)		(1.0	)
Corporate:
NAIC 1		A		1,466.8		1,452.7		16.1	%		(14.1	)		(83.2	)
NAIC 2		BBB		2,155.2		2,092.2		23.1	%		(63.0	)		(141.9	)
NAIC 3 and below		BB-		377.4		366.6		4.1	%		(10.8	)		(21.7	)
Total corporate		BBB+		3,999.4		3,911.5		43.3	%		(87.9	)		(246.8	)
Asset-backed:
Residential mortgage-backed		AAA		1,060.2		999.0		11.0	%		(61.2	)		(62.6	)
Commercial mortgage-backed		AA+		824.1		796.4		8.8	%		(27.7	)		(49.7	)
Asset-backed		A		165.3		155.4		1.7	%		(9.9	)		(9.8	)
Total fixed maturities		A+		7,644.8		7,382.2		81.6	%		(262.6	)		(471.7	)
Equity securities				607.0		607.0		6.7	%		-			-
Mortgage and other loans				438.5		438.5		4.9	%		-			-
Other investments				347.6		347.6		3.8	%		-			-
Total investments				9,037.9		8,775.3		97.0	%		(262.6	)		(471.7	)
Cash and cash equivalents				272.0		272.0		3.0	%		-			-
Total			$	9,309.9	$	9,047.3		100.0	%	$	(262.6	)	$	(471.7	)

(1) Net of allowance for credit losses of $8.0 million.

THE HANOVER INSURANCE GROUP

CREDIT QUALITY AND DURATION OF FIXED MATURITIES
March 31, 2022

(In millions)

CREDIT QUALITY OF FIXED MATURITIES
		Rating Agency		Amortized			Fair		% of Total
NAIC Designation		Equivalent Designation		Cost (1)			Value		Fair Value
1		Aaa/Aa/A	$		5,010.9	$		4,829.3		65.4	%
2		Baa			2,256.5			2,186.2		29.6	%
3		Ba			230.2			223.4		3.0	%
4		B			140.8			136.4		1.9	%
5		Caa and lower			6.4			6.9		0.1	%
Total fixed maturities			$		7,644.8	$		7,382.2		100.0	%


DURATION OF FIXED MATURITIES

				Amortized			Fair		% of Total
				Cost (1)			Value		Fair Value
	0-2 Years		$		1,036.5	$		1,044.8		14.2	%
	2-4 Years				1,535.3			1,539.4		20.8	%
	4-6 Years				2,230.1			2,176.7		29.5	%
	6-8 Years				2,162.9			2,001.9		27.1	%
	8-10 Years				570.7			517.5		7.0	%
	10+ Years				109.3			101.9		1.4	%
Total fixed maturities			$		7,644.8	$		7,382.2		100.0	%
Weighted Average Duration					4.9

(1) Net of allowance for credit losses of $0.9 million.

THE HANOVER INSURANCE GROUP

TOP 25 CORPORATE AND MUNICIPAL FIXED MATURITY HOLDINGS
March 31, 2022

(In millions, except percentage data)
Issuer	Amortized Cost		Fair Value		As a Percent of Invested Assets	Ratings (1)
Minnesota Housing Finance Agency	$	39.4	$	37.3	0.41%	AAA
Morgan Stanley		34.4		33.8	0.37%	BBB+
State of Ohio		34.2		30.0	0.33%	AA+
Goldman Sachs		31.9		31.3	0.35%	BBB+
Charles Schwab		29.6		29.4	0.32%	A
JP Morgan Chase		28.0		27.5	0.30%	A-
AbbVie		27.1		27.2	0.30%	BBB+
Massachusetts School Building Authority		26.3		23.6	0.26%	AA+
Bank of America		26.2		26.7	0.29%	A-
Capital One Financial		25.9		25.2	0.28%	BBB
Citigroup		25.7		25.1	0.28%	BBB+
State of Oregon		25.5		23.2	0.26%	AA+
Sumitomo Mitsui Financial		25.4		24.2	0.27%	A-
California State University		25.3		24.1	0.27%	AA-
UBS Group		25.0		24.1	0.27%	A-
PNC Bank		24.7		24.7	0.27%	A
National Grid		24.2		23.6	0.26%	BBB+
Westpac Banking		23.9		23.5	0.26%	A
US Bancorp		23.9		24.0	0.27%	A
Cigna		23.6		22.8	0.25%	A-
District of Columbia		23.0		20.5	0.23%	AAA
Truist Financial		22.5		22.8	0.25%	A-
State of Wisconsin		22.5		20.3	0.22%	AA+
Citizens Financial Group		22.3		21.4	0.24%	BBB+
Bank of New York Mellon		22.1		22.2	0.25%	A
Top 25 Corporate and Municipal	$	662.6	$	638.5	7.06%

(1) - Represents nationally recognized rating agency sources.

THE HANOVER INSURANCE GROUP

RECONCILIATION OF OPERATING INCOME TO NET INCOME


	Three Months ended March 31
	2022							2021
(In millions, except per share data)		$			Per Share (Diluted)				$			Per Share (Diluted)
OPERATING INCOME (LOSS)
Core Commercial	$		67.5					$		(14.8	)
Specialty			50.0							17.0
Personal Lines			36.3							81.8
Other			0.6							1.1
Total			154.4							85.1

Interest expense			(8.5	)						(8.5	)

Operating income before income taxes			145.9		$	4.04				76.6		$	2.07

Income tax expense on operating income			(28.2	)		(0.78	)			(15.2	)		(0.41	)
													-
Operating income after income taxes			117.7			3.26				61.4			1.66
													-
Non-operating items:
Net realized gains (losses) from sales and other			3.0			0.08				(1.6	)		(0.04	)
Net change in fair value of equity securities			(18.0	)		(0.50	)			39.1			1.06
Impairment losses on investments			(0.9	)		(0.02	)			-			-
Income tax benefit (expense) on non-operating items			3.5			0.09				(6.1	)		(0.16	)
Income from continuing operations, net of taxes			105.3			2.91				92.8			2.52
Discontinued operations (net of taxes):													-
Loss from discontinued life businesses			(0.5	)		(0.01	)			(0.1	)		(0.01	)
NET INCOME	$		104.8		$	2.90		$		92.7		$	2.51

THE HANOVER INSURANCE GROUP

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.

Operating income before interest expense and taxes is net income (loss), 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 (loss) from: Commercial Lines, Personal Lines, and Other. After-tax operating income EPS (sometimes referred to as “after-tax operating income per share”) is also 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 and other non-operating items for a period divided by the average number of diluted shares of common stock. 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 (loss) 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, among others, hurricanes, tornadoes and other windstorms, earthquakes, hail, severe winter weather, fire, explosions and terrorism. 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 (loss) determined in accordance with GAAP. A reconciliation of income (loss) from continuing operations to operating income before interest expense and taxes and income (loss) from continuing operations per share to operating income after taxes per share for the three months ended March 31, 2022 and 2021 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.

Additional reconciliations are provided in the press release relating to the current period(s) financial results, which is available on the Company's website, www.hanover.com

THE HANOVER INSURANCE GROUP

PREMIUM RELATED METRIC DEFINITIONS

Renewal Price Change

●

Core Commercial and Specialty: Represents the average change in premium on renewed policies caused by the estimated net effect of base rate changes, discretionary pricing, specific inflationary changes or changes in policy level exposure or insured risks.

●

Personal Lines: Represents the average change in premium on policies charged at renewal caused by the net effects of filed rate, inflation adjustments or other changes in policy level exposure or insured risks. Actual written price changes may differ, as not all policies are retained.

Rate

●

Core Commercial and Specialty: Represents the average change in premium on renewed policies caused by the base rate changes, discretionary pricing, and inflation, excluding the impact of changes in policy level exposure or insured risks.

●

Personal Lines: Represents the estimated cumulative premium effect of approved rate actions applied to policies at renewal. Actual written rate changes may differ, as not all policies are retained. Personal Lines rate changes do not include inflation or changes in policy level exposure or insured risks.

Retention

●

Core Commercial and Specialty: Represents the ratio of net retained premium for the noted period to the premium available to renew over the same period.

●

Personal Lines: Represents the ratio of net retained policies for the noted period to those policies available to renew over the same period and includes policies that were canceled and rewritten.

Policies in Force (PIF) Change

●

Represents the change in the number of policies in force at the end of a given period from the end of the same period in the prior year.

CORPORATE OFFICES AND

INDUSTRY RATINGS AS OF May 3, 2022

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

1-800-317-4454

The Hanover Insurance Company

Citizens Insurance Company

440 Lincoln Street

of America

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, Inc. 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

bbb-

BB+

Baa3

MARKET AND DIVIDEND INFORMATION

INQUIRIES

The following tables set forth the high and low closing

The above ratings are accurate as of May 3, 2022, and may be

Oksana Lukasheva

sales prices of our common stock and quarterly cash

revised, superseded or withdrawn by the respective rating agency

Senior Vice President

dividends for the periods indicated:

at any time. For the most current information concerning the financial

Corporate Finance

ratings of The Hanover Insurance Group and its subsidiaries, please

olukasheva@hanover.com

Quarter Ended

2022

visit the websites of the respective rating agencies.

Price Range

Dividends

High

Low

Per Share

March 31

150.95

131.19

0.750

Quarter Ended

2021

Price Range

Dividends

High

Low

Per Share

March 31

133.12

112.47

0.700

June 30

142.80

129.83

0.700

September 30

142.35

127.33

0.700

December 31

136.97

121.75

0.750