The Hanover Insurance (US:THG)2025-02-22 00:16Premiums Written - The Hanover Insurance Group generated approximately $6.1 billion in net premiums written for 2024, reflecting a 4.7% increase from the prior year[11]. - The Core Commercial segment accounted for $2.2 billion, or 36.1%, of net premiums written, with commercial multiple peril coverage representing 50.9% of this segment[15][16]. - The Specialty segment generated $1.4 billion, or 22.6%, of net premiums written, with Professional and Executive Lines contributing 32.0% of this segment's total[23][24]. - The Personal Lines segment produced $2.5 billion, or 41.3%, of net premiums written, with personal automobile coverage making up 58.2% of this segment[28][29]. - The total net premiums written for Core Commercial, Specialty, and Personal Lines in 2024 amounted to $6,083.6 million[36]. Underwriting and Risk Management - The company maintains a disciplined underwriting and pricing strategy to improve overall business mix and underwriting profitability[11]. - The company focuses on diversifying its underwriting risks, with approximately 41% of its business in Personal Lines, 36% in Core Commercial, and 23% in Specialty[32]. - The company employs pricing teams that produce exposure and experience-based rating models to support underwriting and pricing decisions[44]. - The company utilizes a variety of reinsurance agreements to control exposure to large property and casualty losses and stabilize earnings[49]. - The company has diversified its exposure to credit risk by reinsuring with multiple reinsurers, requiring a minimum policyholder surplus of $500 million and a rating of "A" or better[81]. Geographic and Market Focus - The company is focused on increasing geographic diversification in its Personal Lines business to reduce risk concentrations in core states[30]. - In 2024, the company wrote 19.0% of its Core Commercial, Specialty, and Personal Lines business in Michigan, and 8.2% in Massachusetts[33]. - Approximately 88% of the company's policies in force are account business, with 50% of Personal Lines net premiums written generated in Michigan and Massachusetts combined[37]. - The company maintains 33 local offices across 23 states, focusing on strong agency relationships to secure and retain the best accounts[33]. - Independent agents account for nearly all sales in Core Commercial and Personal Lines, with performance monitored for profitability and growth[34]. Reinsurance and Catastrophe Protection - The property catastrophe occurrence excess of loss reinsurance program provides coverage up to $1.6 billion with a retention of $200 million, and Northeast named storm events coverage up to $1.9 billion with the same retention[54]. - The casualty excess of loss treaty for 2024 provides coverage up to $75 million with a retention of $2.5 million, and a co-participation of 3.5% in the $2.5 million to $5 million layer[63]. - As of December 31, 2024, total reinsurance recoverables from various sources amount to $1,994.5 million, including $874.8 million from mandatory residual markets[73]. - The Michigan Catastrophic Claims Association (MCCA) accounted for 52% of total personal automobile gross reserves as of December 31, 2024[74]. - The company intends to renew its reinsurance treaties in July 2025 with similar terms, but there is no assurance of maintaining current levels[56]. Financial Reserves - Statutory reserve for losses and loss adjustment expenses (LAE) was $5,733.2 million as of December 31, 2024, an increase from $5,618.7 million in 2023[93]. - The GAAP reserve for losses and LAE was $7,461.2 million as of December 31, 2024, compared to $7,308.1 million in 2023[93]. - The company established a reserve for uncollectible reinsurance of $6.5 million as of December 31, 2024, representing 0.3% of the total reinsurance recoverable balance[80]. - Total reserves for the assumed accident and health business were $107.2 million as of December 31, 2024, with long-term care accounting for approximately 72% of these reserves[94]. - The company has no significant exposure to uncollectible reinsurance balances from the MCCA, as no significant uncollectible balances have been identified during the past three years[74]. Employee Relations and Development - The company employs around 4,900 employees, all located in the United States, with positive employee relations evidenced by feedback from surveys[106]. - The company emphasizes employee development and succession planning through various learning and development programs, including mentorship and tuition reimbursement[110]. - The compensation philosophy is based on a merit system, with most employees receiving some form of short-term incentive compensation[112]. - The company has transitioned to a fully hybrid work environment to enhance employee engagement and retention[114]. - Management is focused on fostering an inclusive and diverse workforce, supported by a multi-year educational program on inclusive leadership[115].