On this page of StockholderLetter.com we present the latest annual shareholder letter from HANOVER INSURANCE GROUP, INC. — ticker symbol THG. Reading current and past THG letters to shareholders can bring important insights into the investment thesis.
RESPONDING TO CHANGE
EMBRACING OPPORTUNITY
A NNU
N NUA
NU
U A L R EP
P OR T 2 0 2 3
T H E H A N OV E R I N S U R A N C E G R O U P
2 0 2 3 A N N UA L R E P O R T
FINANCIAL HIGHLIGHTS
INSUR ANCE BUSINESS MIX
2023 Net premiums written
YEARS ENDED DECEMBER 31
2022
2023
$5,469
$5,994
Net income
$116
$35
Operating income1
$200
$56
Total assets
$13,995
$14,613
Shareholders    equity
$2,334
$2,466
Net income per share     diluted
$3.21
$0.98
Operating income per share     diluted1
$5.53
$1.56
Book value per share
$65.61
$68.93
($ in millions, except per share amounts)
Revenues
18%
20%
$5.8B
PER SHARE DATA
1
16%
24%
22%



Operating income and operating income per diluted share are non-GAAP measures. The definitions and
reconciliations to the most directly comparable GAAP measures of these and other non-GAAP measures
Small commercial
Middle market
Specialty
Personal auto
Home and other
used throughout this report can be found in the endnotes on the final pages of this document.
COMBINED R ATIO
95.6%
94.4%
97.0%
99.8%
91.3%
2023
91.8%
88.1%
88.6%
92.1%
2019
2020
2021
2022

Combined ratio, excluding catastrophes2
Total combined ratio
See the final pages of this Annual Report for a discussion and calculation of non-GAAP financial measures.
Mr. Roche   s letter to shareholders contains forward-looking statements that are subject to risks and uncertainties, including those
set forth in Part I     Item 1A of the company   s Annual Report on Form 10-K for the year ended December 31, 2023, also available
on the following pages of this document and in other documents filed by The Hanover Insurance Group, Inc. with the Securities
and Exchange Commission (   SEC   ) and that are also available at hanover.com under    Investors.   
2
NET PREMIUMS WRIT TEN
103.5%
($ in billions)
$4.6
$4.6
2019
2020
$5.0
2021
$5.5
2022
$5.8
2023
T H E H A N OV E R I N S U R A N C E G R O U P
2 0 2 3 A N N UA L R E P O R T
TO OUR SHAREHOLDERS,
Our company made important progress in 2023, responding to a
dramatically changing landscape and embracing opportunities across
our business, leveraging our broad and innovative products and services,
our unique agency distribution capability, and the strengths of our talented
team and unique culture. It was an extraordinarily dynamic year, with
our company and our industry impacted by macroeconomic volatility,
persistent property inflation, severe weather, and increased signs of
social inflation due to legal system abuse.
While the year proved to be challenging financially, it was a productive
one, as we rose to the occasion and positioned our company for an even
brighter future. We continued to invest in our business, while taking swift
and decisive action to further implement a multi-faceted margin recapture
plan, adjusting certain policy terms and conditions to respond to changing
market trends, increasing our pricing in targeted segments, and further
diversifying our business to mitigate catastrophe risks.
I am proud of the perseverance and ingenuity our team demonstrated,
JOHN C. ROCHE
President and Chief Executive Officer
as we regained positive momentum to better position our company
to deliver strong, sustainable growth going forward. We are already
beginning to see the benefit of the actions and investments we made,
and I am confident we will continue to see increasing benefits in our
go-forward results.
3
2 0 2 3 A N N UA L R E P O R T
T H E H A N OV E R I N S U R A N C E G R O U P
DELIVERING SOLID FINANCIAL PERFORMANCE
DESPITE EXTREME WEATHER CHALLENGES
ORDINARY DIVIDENDS
PER COMMON SHARE*
$3.28
2023
$3.06
2022
$2.85
2021
Despite the weather-related challenges, however, our ex-CAT results for
$2.45
2019
on record for our company, resulting in a 12.2% full-year CAT loss ratio,
a 103.5% combined ratio, and pre-tax operating income of $105.6 million1.
$2.65
2020
Our 2023 bottom line reflects the highest single-year catastrophe losses
the year were very strong and better than expectations.
* The company also declared a special dividend of $2.50 per
common share on December 5, 2019, as a result of the sale of the
Excluding catastrophes, we delivered pre-tax operating income of
company   s Chaucer business.
For more information, please see section    Dividends    in Part II    
Item 5 of the company   s Annual Report on Form 10-K for the year
ended December 31, 2023.
$795.7 million5, representing nearly 16% year-over-year growth, and net
investment income of $332.1 million, up 12% in the year. We delivered
BOOK VALUE PER SHARE
$70.32
$75.94
$76.20
an ex-CAT combined ratio of 91.3% and an expense ratio of 30.5%,
$83.50 $83.53 $81.86
representing year-over-year improvements of 80 and 30 basis points,
respectively. Net written premiums were $5.8 billion for the year,
$87.96 $88.34
$65.61 $68.93
representing growth of 6.1%.
Concurrently, we maintained a strong balance sheet and capital position.
With robust capital and ratings, and with a statutory surplus of $2.6 billion
2019**

2020**
2021
2022
2023
Book value per share, as reported
Book value per share, excluding net
unrealized appreciation (depreciation)
on fixed maturity investments, net of tax3
** Per share amounts do not reflect the adoption of Accounting
at year-end, we maintained our reserve strength and recorded overall
favorable development in 2023. We continued our track record of solid
dividend increases, boosting our quarterly dividend by 5% in December,
and returned $117 million to our shareholders through dividends over the
Standards Update 2018-12, Financial Services     Insurance
(Topic 944): Targeted improvements to the Accounting for
course of the year.
Long-Duration Contracts, which was effective January 1, 2023.
LEVER AGING OUR PROVEN STR ATEGY
AND DEMONSTR ATING RESILIENCE
EXPENSE R ATIO 4
31.6% 31.6%
31.3% 30.8%
30.5%
With a strong financial foundation in place, we continued to advance our
distinctive strategy and our vision to be the premier property and casualty
franchise in the independent agency channel. This strategy has proven
to be a winning formula, enabling us to respond to emerging challenges
while embracing opportunities to move our organization forward.
2019
4
2020
2021
2022
2023
2 0 2 3 A N N UA L R E P O R T
T H E H A N OV E R I N S U R A N C E G R O U P
The deep and broad relationships we have with our independent agents
INSUR ANCE PRODUC T MIX    
2023 NET PREMIUMS WRIT TEN
once again proved critical, helping us effectively navigate the dynamic
12%
market forces we faced during the year. Our consultative approach with
our agents allowed us to enhance our in-person, virtual and web-assisted
$2.1B
19%
communications, consumer education and customer interactions,
CORE
COMMERCIAL
51%
particularly in personal lines, where unprecedented price increases
18%
disrupted the market, producing an industry-wide surge in quoting and


remarketing activities. Our local, in-market field teams and our agency
and customer service centers were at the heart of our efforts to maintain
Commercial multiple peril
Commercial auto
Workers    compensation
Other core commercial
effective communications and deliver for our agents and customers,
making good on our promise to be there when they need us most,
6%
especially in a year marked by the highest number of catastrophe claims
33%
we have seen in over a decade     all while maintaining our strong claims
$1.3B
30%
satisfaction rating.
SPECIALT Y
Simultaneously, we selectively expanded our distribution channel of
31%
2,100 of the best agents in our business, adding 370 new agency locations,
largely in new or underrepresented markets. With the use of our
proprietary data and analytics, we helped our agents position themselves



Professional and executive lines
Specialty property and casualty
Marine
Surety and other
to grow their businesses, while increasing the number of agents who
write more than $5 million in annual premiums in multiple lines of
business with us.
$2.4B
42%
EXPANDING OUR CAPABILITIES
AND REPOSITIONING OUR BUSINESS
PERSONAL
LINES
58%
Over the past 10 years, we have developed a differentiated product set
across many areas of our business. We are committed to adding capabilities
to drive future growth while expanding our market share and making our


Personal auto
Home and other
company even more relevant to our agents and customers.
5
 • shareholder letter icon 3/28/2024 Letter Continued (Full PDF)
 • stockholder letter icon 3/24/2023 THG Stockholder Letter
 • stockholder letter icon More "Insurance Brokers" Category Stockholder Letters
 • Benford's Law Stocks icon THG Benford's Law Stock Score = 94


THG Shareholder/Stockholder Letter Transcript:

RESPONDING TO CHANGE
EMBRACING OPPORTUNITY
A NNU
N NUA
NU
U A L R EP
P OR T 2 0 2 3

T H E H A N OV E R I N S U R A N C E G R O U P
2 0 2 3 A N N UA L R E P O R T
FINANCIAL HIGHLIGHTS
INSUR ANCE BUSINESS MIX
2023 Net premiums written
YEARS ENDED DECEMBER 31
2022
2023
$5,469
$5,994
Net income
$116
$35
Operating income1
$200
$56
Total assets
$13,995
$14,613
Shareholders    equity
$2,334
$2,466
Net income per share     diluted
$3.21
$0.98
Operating income per share     diluted1
$5.53
$1.56
Book value per share
$65.61
$68.93
($ in millions, except per share amounts)
Revenues
18%
20%
$5.8B
PER SHARE DATA
1
16%
24%
22%



Operating income and operating income per diluted share are non-GAAP measures. The definitions and
reconciliations to the most directly comparable GAAP measures of these and other non-GAAP measures
Small commercial
Middle market
Specialty
Personal auto
Home and other
used throughout this report can be found in the endnotes on the final pages of this document.
COMBINED R ATIO
95.6%
94.4%
97.0%
99.8%
91.3%
2023
91.8%
88.1%
88.6%
92.1%
2019
2020
2021
2022

Combined ratio, excluding catastrophes2
Total combined ratio
See the final pages of this Annual Report for a discussion and calculation of non-GAAP financial measures.
Mr. Roche   s letter to shareholders contains forward-looking statements that are subject to risks and uncertainties, including those
set forth in Part I     Item 1A of the company   s Annual Report on Form 10-K for the year ended December 31, 2023, also available
on the following pages of this document and in other documents filed by The Hanover Insurance Group, Inc. with the Securities
and Exchange Commission (   SEC   ) and that are also available at hanover.com under    Investors.   
2
NET PREMIUMS WRIT TEN
103.5%
($ in billions)
$4.6
$4.6
2019
2020
$5.0
2021
$5.5
2022
$5.8
2023

T H E H A N OV E R I N S U R A N C E G R O U P
2 0 2 3 A N N UA L R E P O R T
TO OUR SHAREHOLDERS,
Our company made important progress in 2023, responding to a
dramatically changing landscape and embracing opportunities across
our business, leveraging our broad and innovative products and services,
our unique agency distribution capability, and the strengths of our talented
team and unique culture. It was an extraordinarily dynamic year, with
our company and our industry impacted by macroeconomic volatility,
persistent property inflation, severe weather, and increased signs of
social inflation due to legal system abuse.
While the year proved to be challenging financially, it was a productive
one, as we rose to the occasion and positioned our company for an even
brighter future. We continued to invest in our business, while taking swift
and decisive action to further implement a multi-faceted margin recapture
plan, adjusting certain policy terms and conditions to respond to changing
market trends, increasing our pricing in targeted segments, and further
diversifying our business to mitigate catastrophe risks.
I am proud of the perseverance and ingenuity our team demonstrated,
JOHN C. ROCHE
President and Chief Executive Officer
as we regained positive momentum to better position our company
to deliver strong, sustainable growth going forward. We are already
beginning to see the benefit of the actions and investments we made,
and I am confident we will continue to see increasing benefits in our
go-forward results.
3

2 0 2 3 A N N UA L R E P O R T
T H E H A N OV E R I N S U R A N C E G R O U P
DELIVERING SOLID FINANCIAL PERFORMANCE
DESPITE EXTREME WEATHER CHALLENGES
ORDINARY DIVIDENDS
PER COMMON SHARE*
$3.28
2023
$3.06
2022
$2.85
2021
Despite the weather-related challenges, however, our ex-CAT results for
$2.45
2019
on record for our company, resulting in a 12.2% full-year CAT loss ratio,
a 103.5% combined ratio, and pre-tax operating income of $105.6 million1.
$2.65
2020
Our 2023 bottom line reflects the highest single-year catastrophe losses
the year were very strong and better than expectations.
* The company also declared a special dividend of $2.50 per
common share on December 5, 2019, as a result of the sale of the
Excluding catastrophes, we delivered pre-tax operating income of
company   s Chaucer business.
For more information, please see section    Dividends    in Part II    
Item 5 of the company   s Annual Report on Form 10-K for the year
ended December 31, 2023.
$795.7 million5, representing nearly 16% year-over-year growth, and net
investment income of $332.1 million, up 12% in the year. We delivered
BOOK VALUE PER SHARE
$70.32
$75.94
$76.20
an ex-CAT combined ratio of 91.3% and an expense ratio of 30.5%,
$83.50 $83.53 $81.86
representing year-over-year improvements of 80 and 30 basis points,
respectively. Net written premiums were $5.8 billion for the year,
$87.96 $88.34
$65.61 $68.93
representing growth of 6.1%.
Concurrently, we maintained a strong balance sheet and capital position.
With robust capital and ratings, and with a statutory surplus of $2.6 billion
2019**

2020**
2021
2022
2023
Book value per share, as reported
Book value per share, excluding net
unrealized appreciation (depreciation)
on fixed maturity investments, net of tax3
** Per share amounts do not reflect the adoption of Accounting
at year-end, we maintained our reserve strength and recorded overall
favorable development in 2023. We continued our track record of solid
dividend increases, boosting our quarterly dividend by 5% in December,
and returned $117 million to our shareholders through dividends over the
Standards Update 2018-12, Financial Services     Insurance
(Topic 944): Targeted improvements to the Accounting for
course of the year.
Long-Duration Contracts, which was effective January 1, 2023.
LEVER AGING OUR PROVEN STR ATEGY
AND DEMONSTR ATING RESILIENCE
EXPENSE R ATIO 4
31.6% 31.6%
31.3% 30.8%
30.5%
With a strong financial foundation in place, we continued to advance our
distinctive strategy and our vision to be the premier property and casualty
franchise in the independent agency channel. This strategy has proven
to be a winning formula, enabling us to respond to emerging challenges
while embracing opportunities to move our organization forward.
2019
4
2020
2021
2022
2023

2 0 2 3 A N N UA L R E P O R T
T H E H A N OV E R I N S U R A N C E G R O U P
The deep and broad relationships we have with our independent agents
INSUR ANCE PRODUC T MIX    
2023 NET PREMIUMS WRIT TEN
once again proved critical, helping us effectively navigate the dynamic
12%
market forces we faced during the year. Our consultative approach with
our agents allowed us to enhance our in-person, virtual and web-assisted
$2.1B
19%
communications, consumer education and customer interactions,
CORE
COMMERCIAL
51%
particularly in personal lines, where unprecedented price increases
18%
disrupted the market, producing an industry-wide surge in quoting and


remarketing activities. Our local, in-market field teams and our agency
and customer service centers were at the heart of our efforts to maintain
Commercial multiple peril
Commercial auto
Workers    compensation
Other core commercial
effective communications and deliver for our agents and customers,
making good on our promise to be there when they need us most,
6%
especially in a year marked by the highest number of catastrophe claims
33%
we have seen in over a decade     all while maintaining our strong claims
$1.3B
30%
satisfaction rating.
SPECIALT Y
Simultaneously, we selectively expanded our distribution channel of
31%
2,100 of the best agents in our business, adding 370 new agency locations,
largely in new or underrepresented markets. With the use of our
proprietary data and analytics, we helped our agents position themselves



Professional and executive lines
Specialty property and casualty
Marine
Surety and other
to grow their businesses, while increasing the number of agents who
write more than $5 million in annual premiums in multiple lines of
business with us.
$2.4B
42%
EXPANDING OUR CAPABILITIES
AND REPOSITIONING OUR BUSINESS
PERSONAL
LINES
58%
Over the past 10 years, we have developed a differentiated product set
across many areas of our business. We are committed to adding capabilities
to drive future growth while expanding our market share and making our


Personal auto
Home and other
company even more relevant to our agents and customers.
5



shareholder letter icon 3/28/2024 Letter Continued (Full PDF)
 

THG Stockholder/Shareholder Letter (HANOVER INSURANCE GROUP, INC.) | www.StockholderLetter.com
Copyright © 2023 - 2025, All Rights Reserved

Nothing in StockholderLetter.com is intended to be investment advice, nor does it represent the opinion of, counsel from, or recommendations by BNK Invest Inc. or any of its affiliates, subsidiaries or partners. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All viewers agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. By visiting, using or viewing this site, you agree to the following Full Disclaimer & Terms of Use and Privacy Policy.