Price increases, a jump in net investment income and organic business growth helped give The Hanover Insurance Group a strong second quarter.
The Hanover booked $99.3 million in net income during Q2 2018, or $2.31 per diluted share. That’s a healthy increase from $78.4 million, or $1.83 per diluted share over the same period the year before.
The insurer said its net premiums written grew nearly 7 percent, with gains strongest in personal lines, small commercial and target specialty businesses. Net investment income is nearly 9 percent higher than in the 2017 second quarter. Also, the Hanover’s combined ratio of 95.5 was a tick better than the 95.6 reported in Q2 2017.
John Roche, The Hanover’s president and CEO, said that the Massachusetts-based insurer is succeeding, in part because of its focus on agents.
“We continued to demonstrate the value of our company’s agency-centered strategy and distinctive business model, generating an operating return on average equity of approximately 13 percent, and overall growth of 7 percent, notably, in our most profitable businesses,” Roche said in prepared remarks.
Some further result highlights:
- Net premiums written surpassed $1.36 billion for Q2 2018, compared to more than $1.27 billion the year before.
- Personal lines net premiums written were $464.6 million, up nearly 8 percent from the $430.5 million produced in the 2017 second quarter. The personal lines combined ratio was 97.6, compared to 91.8 a year ago.
- Commercial lines net premiums written landed at $629.6, compared to $591.6 in the 2017 second quarter. The business produced a 93.9 combined ratio, down from 99.4 a year ago.
- Net investment income hit $78.7 million, up from $72.3 million in Q2 2017, thanks in part to more partnership income.
- Catastrophe losses reached $63.6 million, about 5 points of the combined ratio, thanks to wind and hail events in the Northeast and Midwest (on the personal lines side).
- Chaucer’s combined ratio was 95.7, versus 91 in the same, year-ago period.
Source: The Hanover