Lower catastrophe losses led to a surge in net income for The Hanover Insurance Group Inc. during the first three months of 2016.
The Worcester, MA-based insurer reported net income of $78.2 million for the 2016 first quarter, a 42 percent increase from net income of $54.9 million in the first quarter of 2015. Lower catastrophe losses helped, according to the company.
The Hanover said its combined ratio for the first quarter was 95.0 percent, improving from 97.1 percent a year ago.
Operating income was $71.5 million for the first quarter, up 25 percent from $57.1 million in the prior-year quarter.
Net investment income for the f airst quarter was $68.3 million, down 2.6 percent from $70.1 million a year ago.
Overall net premiums written for the first quarter were $1.144 billion, down 5.8 percent from $1.215 billion a year ago. The Hanover said the decrease from the prior year was principally driven by the Chaucer unit’s disposal of its U.K. motor business in June 2015. The company said its U.S. net premiums written grew 3.6 percent.
In Commercial Lines, operating income before taxes was $42.7 million for the quarter, up 36.9 percent from $31.2 million a year ago. The Commercial Lines net premiums written were $604.3 million for the quarter, up 3.8 percent from $581.9 million a year ago. The Commercial Lines combined ratio improved to 99.2 percent, from 101.0 percent a year ago. Catastrophe losses in Commercial Lines were $18.9 million, compared to $33.9 million in the prior-year quarter.
In Personal Lines, operating income before taxes was $47.1 million for the quarter, up 111.2 percent from $22.3 million a year ago. The Personal Lines net premiums written were $337.0 million, up 3.2 percent from $326.4 million a year ago. The Personal Lines combined ratio improved to 91.4 percent, compared to 98.4 percent a year ago. Catastrophe losses in Personal Lines were $11.8 million, down from $25.5 million in the prior-year quarter.
The Hanover President and CEO Frederick H. Eppinger said the company had “a very strong quarter, setting up a solid start to the year.”
“We continue to successfully execute our strategy across all segments and improve the quality and mix of our business, allowing us to succeed in the current market environment, as well as in the long-term,” Eppinger said.
Eppinger also said the company saw continued price increases in both commercial and personal lines.
He said domestic businesses grew 4 percent in the quarter, benefiting from price increases of 4.3 percent in Core Commercial Lines, and 5 percent in Personal Lines.
Source: The Hanover Insurance Group
*A version of this story appeared previously in the Insurance Journal.