29 July 2016 Insurance

The Hanover reports sharp net income decrease in Q2 of 2016 due to cat losses

The Hanover Insurance Group has said that its net income for the second quarter of 2016 was $2 million, a sharp fall from the $120.7 million it reported for the second quarter of 2015.

The company saw its combined ratio increase from 95.7 percent in the second quarter of 2015 to 97.3 percent in the same period of 2016.

The Hanover’s net written premiums (NWP) totalled $1.2 billion for the second quarter of this year, down slightly on the $1.3 billion it reported in the second quarter of 2015.

However, the most affected sector of the company was subsidiary Chaucer which reported a combined ratio of 103.2 percent. In 2015 it reported a combined ratio of 90.6 percent for the same period.

Chaucer’s NWP was $246.4 million for the second quarter of 2016, down on the $346 million NWP figure it made in the second quarter of 2015.

Chaucer’s results were impacted by catastrophe and large losses, as well as movement in foreign exchange rates.

"The underlying fundamentals of the business remain very strong despite some specific, but isolated operating challenges in the U.S. and global large loss volatility at Chaucer," said Joseph Zubretsky, president and chief executive officer at The Hanover.

"More broadly, The Hanover has an innovative underwriting platform, strong distribution plant and top-notch talent domestically and globally, which we will leverage for margin expansion, growth, and superior value creation."

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