Hanover Reports $172.6 Million Net Income in Third Quarter Despite Catastrophe Losses

Key Facts

The Hanover Insurance Group reported on October 28 that net income was $172.6 million, or $4.86 per diluted share, in the third quarter of 2026, compared with $178.7 million and $4.90 per share in the same period a year earlier. Operating income was $183.1 million, or $5.15 per diluted share, versus $185.6 million and $5.09 per share a year earlier. Operating return on equity was 18.7% for the quarter. The results put the annual decline in net income alongside lower operating income in absolute terms, but higher on a per-share basis. The company attributed underwriting performance to execution quality and the benefits of prior portfolio actions, while catastrophe losses remained prominent in the quarter’s figures.

Catastrophe losses totaled $109.7 million and added 6.8 percentage points to the combined ratio, which reached 92.3%. Excluding those losses, the ratio fell to 85.5%, illustrating the difference between the result including catastrophes and underwriting performance without them. On claims, the loss and loss adjustment expense ratio was 61.4%, up 1.6 percentage points from the third quarter of 2025; the company said higher catastrophe losses drove the increase. The current accident-year loss and loss adjustment expense ratio, excluding catastrophes, was 55.7%, down 1.9 points from the comparable period. The indicators show a contrast between catastrophe pressure on the overall ratio and improvement in the current accident-year measure when those losses are excluded.

Net premiums written rose 3.1% from the year-earlier quarter. The company said average renewal rate increases were 8.7% in personal lines, 7.4% in core commercial and 4.3% in specialty. It also disclosed rate increases of 6.1% in core commercial, 4.9% in personal lines and 1.9% in specialty, measures separate from renewal rate increases. Chief Executive Officer John C. Roche said the business mix continued to support strong performance and stable renewal pricing. The figures combine premium growth with continued rate increases across all three business lines, with different rates for the renewal and reported pricing measures.

Net investment income rose 12.7% to $131.9 million in the third quarter, supported by higher earned yields, cash flows and partnership income, according to the company. The pretax earned yield on the investment portfolio was 4.60%, compared with 4.31% in the third quarter of 2025. Meanwhile, book value per share was $99.69 on September 30, down 5.4% from June 30. Excluding the after-tax effect of unrealized depreciation in fixed-maturity investments, book value was $114.26 per share, up 2.7% from the end of June. The two figures present different book-value measures, while the company linked investment income growth to improved yields, cash flows and partnership income.

Hanover repurchased about 386,000 shares for approximately $86 million during the third quarter. Its purchases from the start of the year through October 26 totaled about 1,334,000 shares, for approximately $263 million, according to the results statement. The figures form part of the capital allocation context the company provided alongside its results for the period. Roche had said prior portfolio actions supported results and the business mix supported stable renewal pricing, and also noted continued investment in technology and artificial intelligence. The repurchases and continued investment provide additional context for management’s comments on portfolio management and business development, without changing the reported quarterly profitability and underwriting measures.

Hanover scheduled the release of its third-quarter results after the market close on October 28 and announced a call to discuss them on October 29 at 10:00 a.m. Eastern time. The call follows the release of operating income, net income and underwriting and investment measures. Roche said the results reflected underwriting execution quality and the benefits of prior portfolio actions, and that the company continued to invest in technology and artificial intelligence. The call is scheduled to give management an opportunity to present and discuss the results, including the background to investment income growth and the renewal pricing reported by the company. The next announced event is focused on management’s discussion of the quarter’s published figures.