WORCESTER, Mass., April 19,
2023 /PRNewswire/ -- The Hanover Insurance Group,
Inc. (NYSE: THG) today announced a preliminary estimate for first
quarter catastrophe losses of approximately $175 million, before taxes, or 12.7 points of net
earned premium. First quarter catastrophe losses stemmed from over
20 weather events, including severe freeze events in the Northeast
and Midwest in February, and widespread wind and tornadic activity
that impacted nearly half of the U.S. in mid-to-late March.
![The Hanover Insurance Group, Inc. Logo. (PRNewsFoto/The Hanover Insurance Group, Inc.) (PRNewsfoto/The Hanover Insurance Group, In) The Hanover Insurance Group, Inc. Logo. (PRNewsFoto/The Hanover Insurance Group, Inc.) (PRNewsfoto/The Hanover Insurance Group, In)](https://mma.prnewswire.com/media/511273/The_Hanover_Insurance_Group_Logo.jpg)
"Heightened catastrophe activity turned what was a very solid
quarter for The Hanover into one
of approximately break-even operating results," said John C. Roche, president and chief executive
officer at The Hanover. "The
recent severity of catastrophe losses, including winter weather and
convective storms, has our full attention. It commands a quick and
decisive response, with critical adjustments to exposure management
and risk mitigation strategies, both for our company and our
industry. We are moving with a sense of urgency as we execute on
our action plans. We fully expect the steps we have already taken,
and those we continue to take – accelerating price and deductible
increases in our property lines and applying even more disciplined
underwriting and risk prevention measures – will enable us to
adjust to the changing weather patterns and effectively manage our
catastrophe exposures consistent with our track record over the
last decade."
"As always, I'm very proud of the important work we do every day
to provide responsive service and support to our customers and
communities in their time of need. Our claims organization is
working hard to help those impacted recover as quickly as
possible," said Roche.
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 agent partners,
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.
Contacts:
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Investors:
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Media:
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Oksana
Lukasheva
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Abby M.
Clark
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Kyle
Tildsley
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(508)
525-6081
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(508)
855-3549
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(508)
855-3287
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Email:
olukasheva@hanover.com
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Email:
abclark@hanover.com
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Email:
ktildsley@hanover.com
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Forward-Looking Statements
The Hanover Insurance
Group, Inc.'s ("the company") estimate of catastrophe losses is
based on estimates and projections that are subject to revision and
uncertainty. Certain statements made in this document may be
forward-looking statements. All statements, other than statements
of historical facts, may be forward-looking statements. Such
estimates and statements are forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995.
Words such as, but not limited to, "believes," "anticipates,"
"expects," "may," "projects," "projections," "plan," "likely,"
"potential," "targeted," "forecasts," "confident," "should,"
"could," "continue," "outlook," "guidance," "target profitability,"
"modeling," "moving forward," "will," 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
judgment, 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.
Investors should consider the risks and uncertainties in the
company's business that may affect such estimates, including (i)
the inherent difficulties in arriving at such estimates; (ii)
variation in the company's current estimates that may change as the
company finalizes its financial results; (iii) the lingering
economic effects of the pandemic, as well as the significant
inflationary environment, on the company's financial and operating
results; (iv) legislative and regulatory actions, as well as
litigation and the possibility of adverse judicial decisions; and
(v) other risks and uncertainties that are discussed in readily
available documents, including the company's latest annual report
on Form 10-K, quarterly reports on Form 10-Q, and other documents
filed by the company with the Securities and Exchange Commission,
which are also available on hanover.com under "Investors –
Financials." The difficulties at arriving at estimates with regard
to catastrophes related to rain, wind, flooding, hail, tornados,
winter storms, and other losses may be caused by several factor,
including difficulties policyholders may experience when reporting
claims, The Hanover's ability to
adjust claims because of the devastation encountered or late
discovery of damages; difficulties accessing loss locations; the
challenge of making final estimates to repair or replace properties
during the early stages of examining damaged properties; applicable
cause of loss for certain policies; the effect of higher cost of
repairs due to, among other things, "demand surge" and supply chain
disruptions; potential latent damages, which are not discovered
until later; potential business interruption claims, the extent of
which cannot be known at the time, especially for customers who
have not fully resumed their operations; the inherent uncertainty
of estimating loss and loss adjustment reserves; uncertainties
related to litigation and policy interpretation; and other
factors.
Non-GAAP Financial Measures
As discussed on page 38 of the company's Annual Report on Form 10-K
for the year ended December 31, 2022,
the company uses non-GAAP financial measures as important measures
of its operating performance, including operating income (loss),
operating income (loss) before interest expense and income taxes,
operating income (loss) 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
2022 Annual Report on pages 63-66.
The company may also provide measures of operating income (loss)
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, freeze events, fire, explosions, civil unrest and
terrorism. 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 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.
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SOURCE The Hanover Insurance Group, Inc.