The Hanover reports higher net income of $157m for Q2’25

The Hanover Insurance Group has announced its financial results for the second quarter of 2025, reporting a net income of $157.1 million, lower catastrophe losses of $107.5 million and an improved combined ratio of 92.5%.

Net income in Q2 2025 saw an increase compared to the $40.5 million reported in the same period the year prior. Operating income was $158.7 million, compared to $68.1 million in Q2 2024.

The company reported net and operating return on equity of 20.1% and 18.7%, respectively.

At 92.5% Q2 2025’s combined ratio saw an improvement compared to the 99.2% reported in the same period last year. Notably, catastrophe losses took 7.0 points of the combined ratio, compared with 10.7 a year earlier.

The Hanover also reported a 4.1% increase in net premium written to $1.584 billion for Q2 2025. Net premiums earned stood at $1.545 billion, an increase on last year’s $1.473 billion.

The quarter also experienced loss and loss adjustment expense (LAE) ratio of 1.9%, 6.5 points below the prior-year quarter.

Current accident year loss and LAE ratio, excluding catastrophes, of 56.1%, were 2.8 points below the prior-year quarter, driven by outstanding improvement in Personal Lines.

Core Commercial operating income before income taxes was $83.9 million in the second quarter of 2025, compared to $83.2 million in Q2 2024.

The segment’s combined ratio was 93%, compared to 91.8% in the prior-year quarter. Catastrophe losses in the second quarter of 2025 were $22.7 million, or 4.1 points of the combined ratio.

Net premiums written for Core Commercial were $536 million in this year’s Q2, up 4.4% from the prior year quarter, consisting of 5.6% growth in small commercial and 2.4% growth in middle market.

Core Commercial renewal price increases averaged 10.7%, including average rate increases of 9%.

Specialty operating income before income taxes was $71.2 million in Q2 2025, an improvement compared to the $42.6 million seen in the same period last year.

The segment’s combined ratio was 86.5%, compared to 93.1% in the prior-year quarter. Catastrophe losses were $14.6 million, or 4.1 points of the combined ratio, compared to $22.1 million, or 6.7 points, in the prior-year quarter.

Net premiums written were $368.2 million in the second quarter of 2025, up 4.6% from the prior-year quarter. Specialty renewal price increases averaged 7.8%, including average rate increases of 5.5%.

For its Personal Lines segment, the insurer reported $57.4 million for Q2 2025’s operating income before income taxes, which compares to an operating loss before income taxes of $30.4 million last year.

Personal Lines combined ratio was 95.5%, compared to 109.1% in the prior-year quarter. Catastrophe losses in the second quarter of 2025 were $70.2 million, or 11.1 points of the combined ratio.

Net premiums written were $679.6 million in Q2 2025, up 3.7% compared to the prior year quarter. The increase was primarily due to continued strong pricing increases, improving retention, and higher new business.

Renewal price increases averaged 12.3%, including average rate increases of 8.4%.

John C. Roche, president and chief executive officer at The Hanover, said: “Our outstanding second quarter results are a testament to disciplined underwriting and strong execution across the organization. With an operating ROE of 18.7% and operating earnings of $4.35 per diluted share, both second quarter records, we’re delivering excellent performance across all businesses.

“Our pricing remained firm and quite resilient across all three major business segments – underscoring our strategic focus on retail distribution and smaller accounts in Core Commercial and Specialty Lines, as well as the effectiveness of our account strategy in Personal Lines. We head into the second half of 2025 with strong, positive momentum and we’re excited about our prospects. We are intently focused on continuing to drive strong, profitable growth, leveraging our broad and innovative product portfolio and the investments we’ve made in our business.”

Jeffrey M. Farber, executive vice president and chief financial officer at The Hanover, added: “We’re thrilled with our Q2 performance, which reflects solid top-line growth and sustained earnings momentum across all segments. We achieved one of our best underwriting performances ever, with a combined ratio of 92.5%, and 85.5%, excluding catastrophes. Our reserves remain strong, supported by a disciplined methodology with favorable development in each segment.

“We increased net investment income by 16.7% year-over-year. We have also returned approximately $124 million to shareholders through dividends and share repurchases so far this year. We’re confident in our strategy and remain committed to delivering long-term value through consistent performance and thoughtful capital deployment.”