Hanover battered by heavy nat cat, braces for $11.6m Q4 net loss
US property/casualty insurer Hanover Insurance Group anticipates an $11.6 million net loss in the fourth quarter 2022 driven by substantially elevated catastrophe losses that primarily impacted the company's core commercial business segment.
According to the preliminary estimates, the insurer expects Q4 catastrophe losses of approximately $190 million pre-tax, or 13.9 points of net earned premiums, taking its combined ratio to 108 percentage points.
The estimate is approximately $137 million higher than its expectation for the period, driven by the effects of Winter Storm Elliott, which accounted for approximately $165 million, before taxes, of overall catastrophe losses in the quarter and primarily impacted the company's core commercial business.
"Winter Storm Elliott battered the majority of the United States, bringing blizzard conditions with heavy snow, freezing rain, dangerous winds, and well below-freezing temperatures, resulting in significant damage to commercial and residential property during the December holiday season," said John Roche, president and chief executive officer at The Hanover.
"We believe the unfortunate timing of the storm, occurring when many were away from their homes and businesses, likely delayed the discovery and remediation of water damage, increasing losses in our core commercial lines," Roche noted.
"We are working swiftly and diligently to process claims in the wake of this storm, intent on helping our policyholders recover as much and as quickly as possible, and we are grateful for the tireless work of our dedicated team."
Roche highlighted that the company's "robust track record of successful catastrophe exposure management, risk modeling and portfolio diversification initiatives" means it is confident of its ability to address winter weather and water-related events through "pricing, risk management and other innovative tools effectively."
"Looking beyond catastrophes, we successfully advanced our action plans towards recapturing target margins in property lines, achieving double digit renewal price increases in all three business segments in the fourth quarter," he concluded.
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