The Hanover Insurance (US:THG)2026-02-03 23:35Financial Performance - Gross premiums written for Q4 2025 totaled $1,666.6 million, an increase from $1,596.2 million in Q4 2024, representing a growth of 4.4% year-over-year[8] - Net premiums earned for the full year 2025 reached $6,161.1 million, up from $5,912.6 million in 2024, indicating a year-over-year increase of 4.2%[8] - Operating income after taxes for Q4 2025 was $210.1 million, compared to $194.6 million in Q4 2024, reflecting an increase of 7.8%[8] - Net income for the full year 2025 was $662.5 million, a rise from $426.0 million in 2024, marking a significant increase of 55.5%[8] - Total revenues for Q4 2025 were $1,671.8 million, up 5.5% from $1,584.3 million in Q4 2024, and for the full year, total revenues increased by 5.7% to $6,594.4 million from $6,237.4 million[11] - Net income for Q4 2025 was $198.5 million, an 18.2% increase from $167.9 million in Q4 2024, and for the full year, net income rose by 55.5% to $662.5 million from $426.0 million[11] Assets and Equity - Total assets as of December 31, 2025, were $16,945.9 million, up from $15,274.5 million at the end of 2024, showing a growth of 10.9%[8] - Total shareholders' equity increased to $3,571.5 million in Q4 2025, compared to $2,841.8 million in Q4 2024, representing a growth of 25.8%[8] - The book value per share rose to $100.90 in Q4 2025, up from $79.18 in Q4 2024, indicating a year-over-year increase of 27.4%[8] Liabilities and Debt - Total liabilities increased by 7.6% to $13,374.4 million as of December 31, 2025, compared to $12,432.7 million in 2024[13] - Total debt to equity ratio decreased to 34.1% in Q4 2025 from 27.6% in Q4 2024, indicating a reduction in leverage[8] - The company experienced a 70.6% increase in interest expense for Q4 2025, amounting to $14.5 million compared to $8.5 million in Q4 2024[11] Investment Income - Net investment income for Q4 2025 was $125.8 million, a 24.9% increase from $100.7 million in Q4 2024, and for the full year, it increased by 22.0% to $454.4 million from $372.6 million[11] - Net investment income increased from $372.6 million in 2024 to $454.4 million in 2025, marking a growth of 21.9%[18] - Net investment income for Q1 2024 was $40.8 million, with a year-to-date total of $170.4 million, projected to rise to $202.5 million in 2025[21] Underwriting Performance - The combined ratio for Q4 2025 was 96.1%, compared to 89.0% in Q4 2024, indicating a deterioration in underwriting performance[15] - GAAP underwriting profit improved from $284.5 million in 2024 to $492.5 million in 2025, a significant increase of 73.1%[18] - The combined ratio improved from 94.8% in 2024 to 91.6% in 2025, indicating better operational efficiency[18] - The loss and LAE ratio for the current year, excluding catastrophe losses, was 57.1% in 2025, compared to 58.2% in 2024, indicating improved loss management[18] Catastrophe Losses - Current year catastrophe losses decreased from $417.9 million in 2024 to $302.3 million in 2025, a reduction of 27.6%[18] - Current year catastrophe losses were $139.8 million in 2025, a decrease from $256.2 million in 2024, showing a decline of 45.5%[33] Shareholder Returns - The quarterly cash dividend for December 31, 2025, was increased to $0.950 per share, up from $0.900 in the previous quarter[66] - The diluted earnings per share for the year ended December 31, 2025, was $18.16, compared to $11.70 in 2024, reflecting a 55.5% increase[53] Operational Efficiency - The company aims to maintain a combined ratio below 90% in the upcoming quarters, focusing on operational efficiency and cost management[25] - The expense ratio remained stable, slightly decreasing from 31.3% in 2024 to 31.1% in 2025[18] - The expense ratio remained stable at 25.7% in 2025 compared to 25.6% in 2024[33]