Q1 2024 Hanover Insurance Group Inc Earnings Call Transcript
Key Points
- The Hanover Insurance Group Inc (THG) reported a strong start to 2024 with a first quarter after-tax operating income of $112 million, or $3.08 per diluted share, and an operating return on equity of 15%.
- THG improved its ex-CAT combined ratio by more than 2 points in the quarter, demonstrating the effectiveness of its margin recapture initiatives.
- Specialty Lines delivered exceptional profitability with a combined ratio of 87.6%, and net written premium growth in Specialty is expected in the upper single digits for the full year of 2024.
- Core Commercial segment performed strongly, particularly in Small Commercial which grew by approximately 8% in the quarter, driven by the success of the TAP sales platform.
- Personal Lines showed improved profitability with a robust renewal price change of 22.8% in the quarter, and targeted new business adjustments are being implemented to enhance profitability.
- Overall growth was subdued at 2.3% in the quarter as THG continues to prioritize profitability over rapid expansion.
- The Specialty top line results were impacted by underwriting actions on specific underperforming programs within the Specialty P&C subsegment.
- Middle Market in the Core Commercial segment required aggressive nonrenewing of bottom decile property business to achieve better earnings performance.
- In Personal Lines, net written premium growth was flat year-over-year in the first quarter, with a deliberate reduction of exposure in the Midwest leading to a 4% decline in premiums in this region.
- THG's first quarter expense ratio of 30.9% was slightly above the full year target of 30.7%, primarily due to timing of certain expenses and increased investments in the Specialty business.
Good day, and welcome to The Hanover Insurance Group's First Quarter Earnings Conference Call. My name is Chuck, and I'll be your operator for today's call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Oksana Lukasheva. Please go ahead.
Thank you, operator. Good morning, and thank you for joining us for our quarterly conference call. We will begin today's call with prepared remarks from Jack Roche, our President and Chief Executive Officer; and Jeff Farber, our Chief Financial Officer. Available to answer your questions after our prepared remarks are Dick Lavey, President of Agency Markets; and Bryan Salvatore, President of Specialty Lines.
Before I turn the call over to Jack, let me note that our earnings press release, financial supplement and a complete slide presentation for today's call are available in the Investors section of our website at
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