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.
A n n u a l R e p o r t 2 02 4
FINANCIAL HIGHLIGHTS INSUR ANCE BUSINESS MIX 2024 net premiums written YEARS ENDED DECEMBER 31 2023 2024 $5,994 $6,237 $35 $426 $56 $486 Total assets $14,613 $15,275 Shareholders equity $2,466 $2,842 ($ in millions, except per share amounts) Revenues Net income 1 Operating income 21% $6.1B 15% 24% PER SHARE DATA Net income per share diluted $0.98 $11.70 Operating income per share diluted1 $1.56 $13.34 Book value per share $68.93 $79.18 1 17% 23% Operating income and operating income per diluted share are non-GAAP measures. The definitions and reconciliations to the most directly comparable GAAP measures of these and other non-GAAP measures used throughout this report can be found in the endnotes on the final pages of this document. COMBINED R ATIO Small commercial Middle market Specialty Personal auto Home and other NET PREMIUMS WRIT TEN ($ in billions) 94.4% 97.0% 88.1% 88.6% 99.8% 103.5% 92.1% 91.3% 94.8% 88.4% $4.6 2020 2021 2022 2023 2024 2020 $5.0 2021 $5.5 2022 $5.8 2023 $6.1 2024 Combined ratio, excluding catastrophes2 Total combined ratio See the final pages es of th his Ann Annual Rep port forr a d disccussion ssion and ca alculation on o of non-GA n n-GAAP financial measur mea res. Mr. Roche he e s lletter to sha areholders con on ntains forward nt d-looking stat tatte tements that a are subject to o risks r and unccertainties, inclu cl cluding those e set forth in nP Pa I Item 1A of the com Part Par mpa mp pany s Annua al Report on Form orm 10-K for the he ye year ended e ed Decem D mber 31, 2024, 2 , also o available ava e on the following g pages pa of o this docume doc ent and nd iin other docum ocumentss filed d by b The Hanover over Insu urance ce G Group,, Inc., with the e Securit curities and Exchan nge Commiss sssion si ( SEC ) and that are e also s available at a hanover.com com m under Inve estors. 2 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 4 A N N UA L R E P O R T
TO OUR SHAREHOLDERS, Our talented team drove our company forward The progress we made across our organization sets with skill and resolution in 2024, providing our the stage for an even brighter future as a premier agent partners and customers with high-quality, property and casualty franchise in the independent dependable insurance solutions while advancing agency channel, making good on our commitments our transformation, delivering exceptional financial to our shareholders and other stakeholders. performance and positioning our company for even greater future success. We are very pleased with all we accomplished during the year, including the outstanding execution of our margin recapture and catastrophe mitigation plans, diversification of our earnings base, expansion of our product and service capabilities, implementation of critical technology initiatives, and evolution of our inclusive culture. JOHN C. ROCHE P Pr Presiden nt and Ch h hief hi Execcutive Offf ffi cer ffic 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 4 A N N UA L R E P O R T 3
ORDINARY DIVIDENDS PER COMMON SHARE $3.45 2024 $3.28 2023 $3.06 2022 $2.85 2021 $2.65 2020 DELIVERING STRONG FINANCIAL PERFORMANCE Our financial performance in 2024 is a reflection of our distinctive strategy, our disciplined approach to risk selection, pricing, financial and exposure management, as well as the commitment of our team. For the year, we generated net income of $426.0 million, net operating income of $485.9 million, record BOOK VALUE PER SHARE $76.20 $83.50 $83.53 $81.86 net return on equity of 16.1%, record operating return $90.35 on equity5 of 15.8%, and net premiums written of $6.1 billion, with year-over-year premium growth of 4.7%, $87.96 87.96 6 $88.34 88.34 $79.18 79.18 8 $65.61 $65.61 1 despite the impact of profit improvement initiatives $68.93 $68.93 3 in several product lines. Each of our key business segments performed exceptionally well. We delivered a combined ratio of 94.8%, representing 2020* 2021 2022 2023 2024 Book value per share Book value per share, excluding net unrealized appreciation (depreciation) on xed maturity investments, net of tax3 * Per share shar a amoun ountss do not reflect ount flect th he ado adoption of o Account ountin ng Standards Stan Update te 201 2018 12, F Financial al Se Ser vices ces Insurrance (Topic Topic 944): 44): Targete ed improve rovem ments ents to the Accou th unting forr Lon ng-D Durati tion Conttractts, w which was effe ective Januar nuarry 1, 2023. an improvement of 8.7 points over 2023, and a combined ratio, excluding catastrophes, of 88.4%, representing an improvement of 2.9 points over the prior year, validating the effectiveness of our margin recapture initiatives. LOSS AND L AE R ATIO At the same time, we continued to generate strong 62.8% 56.8% 65.7% 58.5% 69.0% 73.0% 61.7% 63.5% 61.1% 58.2% net investment income, up 12.2% year-over-year, to $372.6 million, largely due to higher cash flows and interest rates, but also a reflection of our sound strategy and high-quality investment portfolio. We increased our book value per share by 14.9% during 2020 4 2021 2022 2023 2024 Current accident year loss and LAE ratio, excluding catastrophes4 Total loss and LAE ratio 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 4 A N N UA L R E P O R T the year, to $79.18.
INSUR ANCE PRODUCT MIX 2024 NET PREMIUMS WRIT TEN 6% 12% 32% 42% 19% $2.2B CORE COMMERCIAL 31% $2.5B 51% $1.4B PERSONAL LINES SPECIALT Y 58% 18% 31% Commercial multiple peril Commercial auto Workers compensation Other core commercial Personal auto Home and other Professional and executive lines Specialty property and casualty Marine Surety and other We maintained a strong balance sheet and capital We expect this will enable us to reduce the impact position as well, with statutory surplus of $3.0 billion of market volatility, better withstand economic at year-end, and excellent reserve strength, recording uncertainty and support long-term financial overall favorable development on the year. We sustainability. continued to return capital to our shareholders, in the form of robust dividend distributions and the resumption of share repurchases. In December 2024, PRE-TA X OPER ATING INCOME EXCLUDING CATASTROPHES, BY SEGMENT Illustrative we increased our dividend by 5.9%, marking 20 years SP M CORE CO M E Y LT With a proven strategy, a strong financial foundation AL IA DIVERSIFYING OUR EARNINGS BASE CI C confidence in our plan, our team and our prospects. ER of annual increases, and highlighting our board s 2024 and an improved competitive position, we continued to advance efforts in 2024 to diversify our earnings PER LIN SONAL ES base and deliver more balanced contributions from our three key business segments. 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 4 A N N UA L R E P O R T 5
 • shareholder letter icon 3/27/2025 Letter Continued (Full PDF)
 • stockholder letter icon 3/24/2023 THG Stockholder Letter
 • stockholder letter icon 3/28/2024 THG Stockholder Letter
 • stockholder letter icon More "Insurance Brokers" Category Stockholder Letters
 • Benford's Law Stocks icon THG Benford's Law Stock Score = 79


THG Shareholder/Stockholder Letter Transcript:

A n n u a l R e p o r t 2 02 4

FINANCIAL HIGHLIGHTS
INSUR ANCE BUSINESS MIX
2024 net premiums written
YEARS ENDED DECEMBER 31
2023
2024
$5,994
$6,237
$35
$426
$56
$486
Total assets
$14,613
$15,275
Shareholders    equity
$2,466
$2,842
($ in millions, except per share amounts)
Revenues
Net income
1
Operating income
21%
$6.1B
15%
24%
PER SHARE DATA
Net income per share     diluted
$0.98
$11.70
Operating income per share     diluted1
$1.56
$13.34
Book value per share
$68.93
$79.18
1
17%
23%



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 used throughout this report can be found in the endnotes on the final pages of this document.
COMBINED R ATIO
Small commercial
Middle market
Specialty
Personal auto
Home and other
NET PREMIUMS WRIT TEN
($ in billions)
94.4%
97.0%
88.1%
88.6%
99.8%
103.5%
92.1%
91.3%
94.8%
88.4%
$4.6
2020

2021
2022
2023
2024
2020
$5.0
2021
$5.5
2022
$5.8
2023
$6.1
2024
Combined ratio, excluding catastrophes2
Total combined ratio
See the final pages
es of th
his Ann
Annual Rep
port forr a d
disccussion
ssion and ca
alculation
on o
of non-GA
n n-GAAP financial measur
mea res.
Mr. Roche   
he
e   s lletter to sha
areholders con
on
ntains forward
nt
d-looking stat
tatte
tements that a
are subject to
o risks
r
and unccertainties, inclu
cl
cluding
those
e set forth in
nP
Pa I     Item 1A of the com
Part
Par
mpa
mp
pany   s Annua
al Report on
Form
orm 10-K for the
he ye
year ended
e ed Decem
D
mber 31, 2024,
2
, also
o available
ava
e on the following
g pages
pa
of
o this docume
doc ent and
nd iin other docum
ocumentss filed
d by
b The Hanover
over Insu
urance
ce G
Group,, Inc., with the
e Securit
curities
and Exchan
nge Commiss
sssion
si (   SEC   ) and that are
e also
s available at
a hanover.com
com
m under    Inve
estors.   
2
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 4 A N N UA L R E P O R T

TO OUR SHAREHOLDERS,
Our talented team drove our company forward
The progress we made across our organization sets
with skill and resolution in 2024, providing our
the stage for an even brighter future as a premier
agent partners and customers with high-quality,
property and casualty franchise in the independent
dependable insurance solutions while advancing
agency channel, making good on our commitments
our transformation, delivering exceptional financial
to our shareholders and other stakeholders.
performance and positioning our company for even
greater future success.
We are very pleased with all we accomplished during
the year, including the outstanding execution of our
margin recapture and catastrophe mitigation plans,
diversification of our earnings base, expansion of our
product and service capabilities, implementation of
critical technology initiatives, and evolution of our
inclusive culture.
JOHN C. ROCHE
P
Pr
Presiden
nt and Ch
h
hief
hi
Execcutive Offf
ffi cer
ffic
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 4 A N N UA L R E P O R T
3

ORDINARY DIVIDENDS PER COMMON SHARE
$3.45
2024
$3.28
2023
$3.06
2022
$2.85
2021
$2.65
2020
DELIVERING STRONG FINANCIAL
PERFORMANCE
Our financial performance in 2024 is a reflection of
our distinctive strategy, our disciplined approach
to risk selection, pricing, financial and exposure
management, as well as the commitment of our team.
For the year, we generated net income of $426.0
million, net operating income of $485.9 million, record
BOOK VALUE PER SHARE
$76.20
$83.50
$83.53
$81.86
net return on equity of 16.1%, record operating return
$90.35
on equity5 of 15.8%, and net premiums written of $6.1
billion, with year-over-year premium growth of 4.7%,
$87.96
87.96
6
$88.34
88.34
$79.18
79.18
8
$65.61
$65.61
1
despite the impact of profit improvement initiatives
$68.93
$68.93
3
in several product lines. Each of our key business
segments performed exceptionally well.
We delivered a combined ratio of 94.8%, representing
2020*

2021
2022
2023
2024
Book value per share
Book value per share, excluding net unrealized
appreciation (depreciation) on    xed maturity
investments, net of tax3
* Per share
shar a
amoun
ountss do not reflect
ount
flect th
he ado
adoption of
o Account
ountin
ng Standards
Stan
Update
te
201
2018   12,
F
Financial
al Se
Ser vices
ces     Insurrance (Topic
Topic 944):
44): Targete
ed improve
rovem
ments
ents to
the Accou
th
unting forr Lon
ng-D
Durati
tion Conttractts, w
which was effe
ective Januar
nuarry 1, 2023.
an improvement of 8.7 points over 2023, and a
combined ratio, excluding catastrophes, of 88.4%,
representing an improvement of 2.9 points over the
prior year, validating the effectiveness of our margin
recapture initiatives.
LOSS AND L AE R ATIO
At the same time, we continued to generate strong
62.8%
56.8%
65.7%
58.5%
69.0%
73.0%
61.7%
63.5%
61.1%
58.2%
net investment income, up 12.2% year-over-year,
to $372.6 million, largely due to higher cash flows
and interest rates, but also a reflection of our sound
strategy and high-quality investment portfolio. We
increased our book value per share by 14.9% during
2020

4
2021
2022
2023
2024
Current accident year loss and LAE ratio,
excluding catastrophes4
Total loss and LAE ratio
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 4 A N N UA L R E P O R T
the year, to $79.18.

INSUR ANCE PRODUCT MIX     2024 NET PREMIUMS WRIT TEN
6%
12%
32%
42%
19%
$2.2B
CORE
COMMERCIAL
31%
$2.5B
51%
$1.4B
PERSONAL
LINES
SPECIALT Y
58%
18%
31%



Commercial multiple peril
Commercial auto
Workers    compensation
Other core commercial




Personal auto
Home and other
Professional and executive lines
Specialty property and casualty
Marine
Surety and other
We maintained a strong balance sheet and capital
We expect this will enable us to reduce the impact
position as well, with statutory surplus of $3.0 billion
of market volatility, better withstand economic
at year-end, and excellent reserve strength, recording
uncertainty and support long-term financial
overall favorable development on the year. We
sustainability.
continued to return capital to our shareholders,
in the form of robust dividend distributions and the
resumption of share repurchases. In December 2024,
PRE-TA X OPER ATING INCOME
EXCLUDING CATASTROPHES, BY SEGMENT
Illustrative
we increased our dividend by 5.9%, marking 20 years
SP
M
CORE CO
M
E
Y
LT
With a proven strategy, a strong financial foundation
AL
IA
DIVERSIFYING OUR EARNINGS BASE
CI
C
confidence in our plan, our team and our prospects.
ER
of annual increases, and highlighting our board   s
2024
and an improved competitive position, we continued
to advance efforts in 2024 to diversify our earnings
PER
LIN
SONAL
ES
base and deliver more balanced contributions from
our three key business segments.
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 4 A N N UA L R E P O R T
5



shareholder letter icon 3/27/2025 Letter Continued (Full PDF)
 

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