The Hanover Insurance Group Inc. in Worcester, Massachusetts, said Thursday its 2014 second quarter net profit rose to $82.6 million, a 54.7 percent increase from $53.4 million profit during last year’s second quarter.
The second quarter operating income was $58.4 million, up 24.8 percent from $46.8 million one year ago. The net premiums written for the second quarter were $1.276 billion, a 2.7 percent increase from $1.243 billion one year ago.
The second quarter combined ratio improved to 96.8 percent (92.1 percent excluding catastrophes), compared to 98.4 percent (92.9 percent excluding catastrophes) last year.
Net investment income fell slightly to $67.0 million, compared to $67.9 million during prior-year second quarter.
In Commercial Lines, net premiums written were $541.0 million for the second quarter, up 3.7 percent from last year. The Commercial Lines combined ratio improved to 98.4 percent, from 101.8 percent one year ago. Operating income before taxes for Commercial Lines rose to $44.2 million in the quarter, up 68.7 percent from last year.
In Personal Lines, net premiums written were $370.8 million for the second quarter, similar to $370.6 million reported a year ago. The Personal Lines combined ratio improved to 98.3 percent, from 99.3 percent a year ago. Personal Lines operating income before taxes was $22.7 million in the quarter, up 14.1 percent.
The Chaucer unit had net premiums written of $364.4 million in the quarter, up 4.0 percent from last year. Chaucer’s operating income before taxes was $38.1 million in the quarter, up 3.3 percent. Its combined ratio was 92.1 percent, compared to 89.6 percent a year ago.
“We are very pleased with our second quarter results that produced an annualized operating ROE of 9.7 percent,” said President and CEO Frederick Eppinger.
“We are encouraged by the positive momentum shift in Personal Lines, where net written premiums grew modestly as rate increases and new business acceleration outpaced the effect of continued exposure management actions,” said Eppinger.
“At the same time, we continued to achieve healthy growth in Commercial Lines, in light of exposure and underwriting initiatives in middle market business,” said Eppinger. “As importantly, we achieved solid pricing increases with 7 percent in Core Commercial and 6 percent in Personal Lines with strong retention.”