WORCESTER, Mass., May 2, 2018 - The Hanover Insurance Group, Inc. (NYSE: THG) today reported net income of $67.7 million, or $1.57 per diluted share, in the first quarter of 2018, compared to $45.2 million, or $1.05 per diluted share, in the prior-year quarter. Operating income(1) was $84.0 million, or $1.95 per diluted share, for the first quarter of 2018, compared to operating income of $40.8 million, or $0.95 per diluted share, in the prior-year quarter. The difference between net and operating income in the first quarter of 2018 was primarily due to the decline in fair value of equity securities of $23.0 million, which is recognized in net income following a new accounting standard effective January 1, 2018.
First Quarter Highlights
- Combined ratio of 96.9%, including 5.6 points of catastrophe losses and 0.7 points of favorable prior year development
- Catastrophe losses of $71.2 million, or 5.6 points of the combined ratio, driven primarily by winter weather events in the Northeast and Midwest in January and March, in the domestic business
- Combined ratio, excluding catastrophes(2), of 91.3%, an improvement of 1.1 points over the prior-year quarter
- Net premiums written increased 6.6%, driven by strong growth in Personal and Commercial Lines
- Net investment income of $82.9 million, up 16.6% from the prior-year quarter, aided by growth in partnership income and higher operating cashflows
- Book value per share of $68.56, down 2.9% from December 31, 2017, primarily due to change in fair value of the fixed income portfolio due to interest rate movements, partially offset by earnings