Pricing ‘significantly better’ than expectations at mid-year reinsurance renewal: The Hanover CFO

Executive Vice President and Chief Financial Officer (CFO) of The Hanover Insurance Group, Jeffrey Farber, has revealed that pricing was “significantly better” than expected at the firm’s July reinsurance renewal.

During The Hanover’s Q2 2024 earnings call, Farber highlighted that the strong pricing was primarily driven by the company’s work in the property sector, especially in the middle market and specialty areas.

Farber stated, “We completed a successful renewal of our property treaties on July 1. We experienced very favourable market responses, which speak to the strength of our pricing, underwriting and data quality. The market was especially complementary of the underwriting work we have done with regard to commercial properties as well as our continued work on cat exposures.”

Regarding The Hanover’s property reinsurance program, Farber explained that both treaties were renewed, with property per risk and cat occurrence maintaining a very consistent structure from expiring treaties.

He noted, “We secured full capacity across our catastrophe occurrence program, maintaining our $200 million retention, and we purchased an additional $150 million in the traditional reinsurance market at the top of the existing cat occurrence tower.”

These adjustments have increased the reinsurance limits in the carrier’s catastrophe occurrence program that now exhaust at $1.9 billion, up from the previous $1.75 billion for its highest concentration states.

Farber concluded, “Overall, the success of these renewals provides third-party validation of our underwriting and catastrophe mitigation actions.”

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