31 October 2014 Insurance

Cat losses cause profits fall at The Hanover

The Hanover Insurance Group has seen a tough third quarter as heightened catastrophe losses took their toll.

The group’s profits fell to $54.9 million in the third quarter of 2014, compared with $61.3 million in the third quarter of 2013.

Its net written premiums increased to $1.24 billion in the quarter, compared with $1.18 billion in the third quarter of 2013. Its Chaucer business hit $289.1 million in net written premiums in the quarter, up from $278.5 million in the same period of the prior year. The Hanover’s commercial lines saw $576.6 million in net written premiums in the third quarter of 2014, compared with $530.5 million in the third quarter of 2013.

The group’s combined deteriorated slightly to 98.2 percent, compared with 96 percent in the third quarter of 2013.

"We are very pleased with our third quarter results and underlying business trends, which produced operating income of $1.06 per share," said Frederick Eppinger, president and chief executive officer at The Hanover. "The strength of our earnings this quarter, particularly in light of higher-than-expected catastrophe losses, demonstrates that our company is more resilient than ever before and is well-positioned to profitably grow despite industry headwinds.

"We delivered significant underlying improvement in domestic businesses and strong results from Chaucer, which together drove a 2.5-point improvement in our ex-catastrophe combined ratio. Net premiums written increased by 5 percent, reflecting solid growth in all of our business segments.

“We are especially encouraged by the continued growth momentum in personal lines, since growth of almost 2 percent was driven by strong new business writings and rate increases, which outpaced tapering exposure management actions. Growth in commercial lines and at Chaucer was robust and in line with our expectations.”

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