The Hanover Insurance Group reported record second-quarter net income of $191.6 million, supported by improved underwriting performance across all business segments and a consolidated combined ratio of 91.2%.
For the three months ended June 30, 2026, the insurer earned $5.38 per diluted share, compared with $157.1 million, or $4.30 per diluted share, in the same period last year. Net premiums written increased 4.6% year over year to $1.66 billion.
Operating income reached $189.2 million, or $5.31 per diluted share, while net and operating return on equity were 21.2% and 19.8%, respectively.
Underwriting performance strengthens
Hanover’s consolidated combined ratio of 91.2%, or 85.5% excluding catastrophe losses, reflected improved underwriting margins across the business.
Catastrophe losses totalled $91.8 million, equivalent to 5.7 percentage points of the combined ratio, down from seven points in the second quarter of 2025.
The results compare favourably with the broader U.S. property and casualty industry, which recorded a 92.4% combined ratio during the first quarter of 2026, according to Verisk and the American Property Casualty Insurance Association.
Investment performance also improved, with net investment income rising 13.4% to $119.6 million, driven by higher earned yields and strong operating cash flows. The pre-tax earned yield on fixed maturities increased to 4.45%, compared with 4.24% a year earlier.
Personal lines drives earnings growth
Hanover’s Personal Lines business delivered the strongest performance during the quarter.
Operating income before taxes increased to $104.9 million, up from $57.4 million in the prior-year period, while the combined ratio improved to 88.9% from 95.5%.
Net premiums written in the segment rose 2.6% to $697.6 million, supported by average renewal price increases of 8.7%.
Commercial and specialty performance
Core Commercial net premiums written increased 7.2% to $574.8 million, although the segment’s combined ratio rose to 95.7% from 93.0% a year earlier.
Operating income before taxes declined to $77.5 million, compared with $83.9 million in the second quarter of 2025, reflecting higher loss ratio selections in liability coverages.
Despite broader pricing pressure in the commercial insurance market, Hanover reported average renewal price increases of 7.8% within the segment.
Meanwhile, the Specialty business reported net premiums written of $384.4 million, up 4.4% year over year. The segment recorded a combined ratio of 88.3% and generated $10.8 million in favourable prior-year reserve development, excluding catastrophe losses.
Capital position and leadership transition
Book value per share increased to $105.40 at June 30, up 3.5% from the end of the first quarter.
The company also repurchased approximately 827,000 shares for $149 million year to date through July 24.
President and Chief Executive Officer John C. Roche said the results demonstrated “the strength of our business model, the durable earnings power we have built across The Hanover and the disciplined execution of our team.”
Roche is scheduled to retire on December 31, 2026, after nine years as CEO and a 40-year career in the insurance industry. Richard W. Lavey, currently Chief Operating Officer and President of Hanover Agency Markets, has been named CEO-elect.
Chief Financial Officer Jeffrey M. Farber said the company’s underwriting results and continued favourable reserve development reflected sustained underwriting discipline and reinforced confidence in Hanover’s reserve position.
