The Hanover Insurance (US:THG)2025-10-30 20:05Financial Performance - Net income for the nine months ended September 30, 2025, was $464.0 million, an increase of 79.8% compared to $258.1 million for the same period in 2024[105]. - Operating income before interest expense and income taxes for the nine months ended September 30, 2025, was $644.0 million, up 62.7% from $395.7 million in the prior year[106]. - Operating income before interest expense and income taxes increased to $247.7 million for the three months ended September 30, 2025, compared to $150.6 million for the same period in 2024, an improvement of 64.4%[125]. - Total operating revenues for the three months ended September 30, 2025, were $1,674.0 million, up from $1,577.7 million in 2024, reflecting a 6.1% increase[124]. - The company reported a net favorable development on prior years' loss reserves of $50.3 million for the nine months ended September 30, 2025, compared to $41.8 million in the same period of 2024[107]. Premiums and Underwriting - Net premiums written in the Core Commercial segment increased by 3.9% in the first nine months of 2025, driven by renewal price increases and new business[109]. - Specialty segment net premiums written rose by 6.1% in the first nine months of 2025, primarily due to renewal price increases and new business[111]. - Personal Lines net premiums written increased by 3.4% in the first nine months of 2025, attributed to renewal price increases and increased new business[113]. - Operating income before interest expense and income taxes for the Personal Lines segment improved significantly to $252.7 million for the nine months ended September 30, 2025, compared to $10.2 million in the same period of 2024[112]. - Core Commercial net premiums written were $1,760.9 million for the nine months ended September 30, 2025, compared to $1,695.0 million in the same period of 2024, an increase of $65.9 million[153]. Catastrophe Losses - Pre-tax catastrophe losses decreased to $249.3 million for the nine months ended September 30, 2025, down 28.8% from $349.9 million in the same period of 2024[107]. - Catastrophe losses decreased to $17.8 million for the three months ended September 30, 2025, from $31.7 million in 2024, a reduction of 43.5%[133]. - Catastrophe losses for the nine months ended September 30, 2025, were $127.5 million, a decrease of $120.1 million from $247.6 million in the same period of 2024[160]. - Catastrophe loss development for the nine months ended September 30, 2025, was favorable at $18.0 million, down from $37.0 million in 2024, indicating a decrease of about 51.4%[168]. Investment Income - Net investment income increased to $117.0 million for the three months ended September 30, 2025, compared to $91.8 million in 2024, a growth of 27.4%[130]. - Net investment income for the nine months ended September 30, 2025, was $117.0 million, an increase of 27.4% from $91.8 million in 2024[182]. - The earned yield on fixed maturities increased to 4.33% for the three months ended September 30, 2025, up from 3.73% in 2024[182]. - Net impairment losses for the nine months ended September 30, 2025, were $3.0 million, down from $5.5 million in the same period of 2024[194]. Cash Flow and Capital Management - Net cash provided by operating activities was $799.9 million for the first nine months of 2025, an increase of $207.0 million from $592.9 million in the same period of 2024[221]. - Net cash used in investing activities was $642.6 million during the first nine months of 2025, compared to $390.8 million in the same period of 2024[222]. - Net cash provided by financing activities was $324.8 million during the first nine months of 2025, compared to net cash used of $90.7 million in the same period of 2024[223]. - Total statutory capital and surplus for insurance subsidiaries increased by $301.4 million to $3,273.1 million as of September 30, 2025, compared to $2,971.7 million at December 31, 2024[218]. Shareholder Returns and Stock Repurchase - The company paid $150.0 million in dividends to its parent company during the first nine months of 2025[219]. - During the first nine months of 2025, THG repurchased approximately 447,000 shares at an aggregate cost of $74.9 million, with a total of approximately 8.5 million shares repurchased under the $1.3 billion program[229]. - The Board of Directors authorized a stock repurchase program of up to $1.3 billion, with approximately 447,000 shares repurchased at a cost of $74.9 million during the first nine months of 2025[229]. Economic Environment - The U.S. economy showed resilience in Q3 2025, with strong consumer spending, while the Federal Reserve announced its first rate cut of the year, reducing the federal funds target to a range of 4.00% to 4.25%[203].