Hanover Reports Third-Quarter Earnings

The Hanover Insurance Group, Inc. today reported net income for the third quarter of $53.9 million, or $1.03 per share, compared to a net income of $33.4 million, or $0.65 per share, in the third quarter of last year. The current quarter's results include a $17.0 million pre-tax charge, or $0.21 per share of after-tax net losses related to 2005 Hurricane Katrina. Results for the third quarter of last year also include a pre-tax charge of $52.1 million for Hurricane Katrina losses, or $0.66 per share after taxes.

Source: Source: Hanover Insurance Group | Published on October 30, 2007

Income from continuing operations was $53.0 million for the third quarter, or $1.01 per share, compared to $28.5 million, or $0.56 per share, in the third quarter of last year. Results for both quarters include the impact of the aforementioned catastrophe losses related to Hurricane Katrina.

Total Property and Casualty pre-tax segment income was $92.8 million in the quarter, compared to $52.8 million in the third quarter of last year. The current quarter's results include $25.1 million of net pre-tax catastrophe losses and loss adjustment expenses, of which $17.0 million relate to a reserve increase attributable to Hurricane Katrina. Results from the third quarter of last year include pre-tax net catastrophe related losses and loss adjustment expenses of $64.2 million, $52.1 million of which relate to Hurricane Katrina reserve increases. Additionally, the third quarter of 2006 included the benefit of a $7.0 million litigation settlement related to Opus Investment Management, Inc.

The Personal Lines segment reported pre-tax segment earnings of $49.4 million in the third quarter of 2007, compared to $35.0 million in the third quarter of 2006, while the Commercial Lines segment reported pre-tax segment earnings of $39.4 million in the quarter, versus $7.7 million in the third quarter of 2006.

"We achieved very solid results in the quarter, and we continue to strengthen our competitive position with winning agents and in our target markets. We remain on track for another strong year," said Frederick H. Eppinger, chief executive officer of The Hanover Insurance Group, Inc. "At the same time, our plans to increase our annual dividend and to repurchase as much as $100 million of our common stock demonstrate the confidence we have in our overall financial position and our ability to continue to generate strong profitable growth."