THE HANOVER INSURANCE GROUP, INC. FINANCIAL SUPPLEMENT
THIRD QUARTER 2021
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 25 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 general 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 (which may include flood), 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. Commercial automobile policies are often written in conjunction with other commercial policies.
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 management and professional liability, which covers primarily professional, management and medical liability, which provides protection for directors, officers and other employees of companies that may be sued in connection with their performance, and errors and omissions protection to companies and individuals against negligence or bad faith, as well as protection for employment practices liability; marine, which includes inland and ocean marine, and insures businesses against physical losses to property; Hanover Programs, which includes coverage to markets where there are specialty coverage or risk management needs related to groups of similar businesses; specialty industrial and commercial property, which provides insurance to small and medium-sized chemical, paint, solvent and other manufacturing and distribution companies; monoline general liability, which covers bodily injury, property damage and personal injury arising from products sold or accidents occurring on premises, or from operations; surety, which provides businesses with contract surety coverage in the event of claims for non- performance or non-payment and commercial surety coverage related to fiduciary or regulatory obligations; and other commercial lines, which includes umbrella, fidelity and crime.
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 (excluding flood), theft and vandalism, and against third-party liability claims.
Other Personal Lines are comprised of personal umbrella, inland marine (jewelry, art, etc.), fire, personal watercraft 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; holding company and other expenses and a discontinued run-off voluntary property and casualty pools business.
This report is for informational purposes only. It should be read in conjunction with documents filed with the Securities and Exchange Commission, including the Hanover Insurance Group's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
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THE HANOVER INSURANCE GROUP
FINANCIAL HIGHLIGHTS
Q3 | Q4 | Q1 | Q2 | Q3 | Sep-YTD | Sep-YTD | |||||||
(In millions, except earnings per share) | 2020 | 2020 | 2021 | 2021 | 2021 | 2020 | 2021 | ||||||
PREMIUMS | $ | 1,493.2 | $ | 4,173.6 | |||||||||
Gross premiums written | $ | 1,406.1 | $ | 1,235.5 | $ | 1,337.6 | $ | 1,342.8 | 3,919.0 | ||||
Net premiums written | 1,268.5 | 1,112.1 | 1,196.1 | 1,207.2 | 1,375.2 | 3,486.4 | 3,778.5 | ||||||
Net premiums earned | 1,135.4 | 1,154.0 | 1,161.8 | 1,179.8 | 1,186.0 | 3,373.4 | 3,527.6 | ||||||
EARNINGS | $ | 47.0 | $ | 269.4 | |||||||||
Operating income before interest and taxes | $ | 128.4 | $ | 150.3 | $ | 85.1 | $ | 137.3 | 334.4 | ||||
Operating income after taxes | 93.5 | 112.0 | 61.4 | 104.0 | 30.8 | 243.0 | 196.2 | ||||||
Income from continuing operations | 119.5 | 165.9 | 92.8 | 129.6 | 34.8 | 196.1 | 257.2 | ||||||
Net income | 118.9 | 164.6 | 92.7 | 128.5 | 34.0 | 194.1 | 255.2 | ||||||
PER SHARE DATA (DILUTED) | |||||||||||||
Operating income after taxes | $ | 2.46 | $ | 3.02 | $ | 1.66 | $ | 2.85 | $ | 0.85 | 6.33 | $ | 5.37 |
Income from continuing operations | 3.14 | 4.47 | 2.52 | 3.55 | 0.96 | 5.11 | 7.04 | ||||||
Net income | 3.13 | 4.43 | 2.51 | 3.52 | 0.94 | 5.05 | 6.98 | ||||||
Dilutive weighted average shares outstanding | 38.0 | 37.1 | 36.9 | 36.5 | 36.3 | 38.4 | 36.6 | ||||||
Basic weighted average shares outstanding | 37.7 | 36.7 | 36.4 | 35.9 | 35.7 | 38.0 | 36.0 | ||||||
BALANCE SHEET | |||||||||||||
September 30 | December 31 | March 31 | June 30 | September 30 | |||||||||
(In millions, except per share data) | 2020 | 2020 | 2021 | 2021 | 2021 | ||||||||
Total assets | $ | 13,393.8 | $ | 13,443.7 | $ | 13,448.0 | $ | 13,728.1 | $ | 14,105.3 | |||
Total loss and loss adjustment expense reserves | 5,945.7 | 6,024.0 | 6,223.7 | 6,343.4 | 6,540.1 | ||||||||
Total shareholders' equity | 3,155.0 | 3,202.2 | 3,046.8 | 3,154.0 | 3,102.3 | ||||||||
Total shareholders' equity, excluding net unrealized appreciation | 2,845.5 | ||||||||||||
(depreciation) on fixed maturity investments, net of tax | 2,742.7 | 2,774.1 | 2,804.2 | 2,849.3 | |||||||||
Property and Casualty Companies | $ | 2,548.4 | |||||||||||
Statutory surplus | $ | 2,422.3 | $ | 2,588.5 | $ | 2,667.7 | $ | 2,547.1 | |||||
Premium to surplus ratio | 1.90:1 | 1.78:1 | 1.75:1 | 1.88:1 | 1.92:1 | ||||||||
Book value per share | $ | 84.32 | $ | 87.96 | $ | 84.21 | $ | 88.23 | $ | 87.04 | |||
Book value per share, excluding net unrealized appreciation | $ | 79.84 | |||||||||||
(depreciation) on fixed maturity investments, net of tax | $ | 73.30 | $ | 76.20 | $ | 77.50 | $ | 79.71 | |||||
Tangible book value per share (total book value excluding goodwill | $ | 81.54 | |||||||||||
and intangibles) | $ | 79.03 | $ | 82.55 | $ | 78.78 | $ | 82.76 | |||||
Shares outstanding | 37.4 | 36.4 | 36.2 | 35.8 | 35.6 | ||||||||
Total debt/equity | 24.7 % | 24.4 % | 25.6 % | 24.8 % | 25.2 % | ||||||||
Total debt/total capital | 19.8 % | 19.6 % | 20.4 % | 19.9 % | 20.1 % |
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THE HANOVER INSURANCE GROUP
CONSOLIDATED INCOME STATEMENTS
Three Months ended September 30 | Nine Months ended September 30 | ||||||||||
(In millions) | 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||
REVENUES | $ | 1,186.0 | $ | ||||||||
Premiums earned | $ | 1,135.4 | 4.5 | 3,527.6 | $ | 3,373.4 | 4.6 | ||||
Net investment income | 78.8 | 67.6 | 16.6 | 231.2 | 194.9 | 18.6 | |||||
Net realized and unrealized investment gains (losses): | 3.6 | 6.8 | |||||||||
Net realized gains from sales and other | 8.2 | N/M | 12.1 | (43.8) | |||||||
Net change in fair value of equity securities | 0.3 | 30.3 | (99.0) | 65.9 | (44.4) | N/M | |||||
Impairment recoveries (losses) on investments | 0.1 | (0.8) | N/M | (0.1) | (27.9) | N/M | |||||
Total net realized and unrealized investment gains (losses) | 4.0 | 37.7 | (89.3) | 72.6 | (60.2) | N/M | |||||
Fees and other income | 7.6 | 9.1 | (16.5) | 21.7 | 22.2 | (2.3) | |||||
Total revenues | 1,276.4 | 1,249.8 | 2.1 | 3,853.1 | 3,530.3 | 9.1 | |||||
LOSSES AND EXPENSES | 844.0 | 2,370.4 | |||||||||
Losses and loss adjustment expenses | 709.7 | 18.9 | 2,149.9 | 10.3 | |||||||
Amortization of deferred acquisition costs | 244.0 | 237.7 | 2.7 | 728.5 | 711.9 | 2.3 | |||||
Interest expense | 8.5 | 9.8 | (13.3) | 25.5 | 28.6 | (10.8) | |||||
Loss from repayment of debt | - | 6.1 | N/M | - | 6.2 | N/M | |||||
Other operating expenses | 137.4 | 137.9 | (0.4) | 412.2 | 395.9 | 4.1 | |||||
Total losses and expenses | 1,233.9 | 1,101.2 | 12.1 | 3,536.6 | 3,292.5 | 7.4 | |||||
Income from continuing operations before income taxes | 42.5 | 148.6 | (71.4) | 316.5 | 237.8 | N/M | |||||
Income tax expense | 7.7 | 29.1 | (73.5) | 59.3 | 41.7 | N/M | |||||
Income from continuing operations | 34.8 | 119.5 | (70.9) | 257.2 | 196.1 | N/M | |||||
Discontinued operations (net of taxes): | |||||||||||
Loss from discontinued life businesses | (0.8) | (0.6) | 33.3 | (2.0) | (2.0) | - | |||||
Net income | $ | 34.0 | $ | 118.9 | (71.4) | $ | 255.2 | $ | 194.1 | N/M | |
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The Hanover Insurance Group Inc. published this content on 27 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 October 2021 20:18:31 UTC.
