The Hanover Sees Earnings Jump

February 4, 2010

Massachusetts-based insurer The Hanover Insurance Group Inc. saw fourth-quarter profits jump 68 percent to $57.3 million, up from $34.1 million in the year-ago quarter.

For the year, net income was $197.2 million, up from $20.6 in 2008, when The Hanover’s bottom line was battered by investment losses and the impact of the sale of its life insurance business.

For the fourth quarter, The Hanover has net premiums written of $626.9 million, up 5 percent from $597.3 million in the prior-year quarter. For the year, net premiums written were $2.6 billion, compared to $2.5 billion in the prior year, an increase of 3.6 percent.

Frederick H. Eppinger, chief executive officer at The Hanover, said that “2009 was a challenging year with difficult market and economic conditions and elevated non-catastrophe weather, all putting substantial pressure on industry results, including ours. While challenged, we continued to generate an underwriting profit, and have taken the pricing and underwriting actions to improve our position as we enter 2010.”

The Hanover’s Personal Lines segment has a combined ratio of 101.9 in the fourth quarter, compared to 97.6 in the prior-year quarter. For the full year, Personal Lines segment income was $76.4 million in 2009, compared to $123.5 million in 2008.

Personal Lines net premiums written were $356.5 million and $1.47 billion for the fourth quarter and the full year 2009, respectively. This compares to $361.3 million and $1.48 billion for the fourth quarter and the full year 2008, respectively, which represents a decline of 1.3 percent and 0.8 percent for the fourth quarter and the full year 2009, respectively.

The Hanover’s Commercial Lines pre-tax segment income was $52.5 million in the fourth quarter of 2009, compared to $55.6 million in the fourth quarter of 2008. For the full year, Commercial Lines segment income was $189.7 million, compared to $169.7 million in 2008. Higher expenses for the quarter and the full year 2009 resulted from continued investments in Commercial Lines businesses, The Hanover said.

Commercial Lines net premiums written were $270.4 million and $1.1 billion for the fourth quarter and the full year 2009, respectively. This compares to $235.9 million and $1 billion for the fourth quarter and the full year 2008, respectively, which represents growth of 14.6 percent and 9.9 percent for the fourth quarter and the full year.

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